REFOCUSED ON

DEVELOPMENT AND

ADDITIONALITY

 Overseas Private Investment Corporation

 An Agency of the U.S. Government

 www.opic.gov

March 2003

 

 Strategic Plan 2003-2008
OPIC STRATEGIC PLAN 2003 - 2008

Table of Contents

Introduction ............................................................................... 1

Mission Statement ...................................................................... 3

General Goals, General Objectives, and Performance Indicators ............. 4

General Goal #1: Developmental Effects ........................................ 4

Strategies ..................................................................... 9

General Goal #2: Risk Mitigation and Corporate Citizenship.................... 6

Strategies ...................................................................... 10

General Goal #3: Additionality ........................................................ 7

Strategies ...................................................................... 11

General Goal #4: Small Business ...................................................... 7

Strategies ...................................................................... 12

General Goal #5: Operating in a Businesslike Manner............................ 8

Strategies ...................................................................... 13

Resources Needed to Meet Performance Goals .................................. 14

Relationship between General Goals/Objectives and Annual

Performance Indicators via Inputs, Outputs, and Outcomes....................... 15

Identification of Key Factors, External to the Agency that 

Could Affect Achievement of Goals ..................................................... 19

Program Evaluations to be Used ...................................................... 20

Appendix A: Developmental Impact Matrix ........................................... 22
1

INTRODUCTION

A COMMITMENT TO SOLIDIFYING AND

BUILDING UPON RECENT GAINS

Development is OPIC’s primary mission. OPIC has come a long way in refocusing its activities on projects 

that are more developmental, based both on the types of projects and the location of those projects. In the 

period covered by this strategic plan, special emphasis will continue to be placed on the following priority 

developmental areas:

• Small Business

• Housing 

• Russia and Central Asia (including Afghanistan and Pakistan)

• Sub-Saharan Africa

• Mexico

It is noteworthy that “small business” is at the top of the list. In the United States, small business has been a 

primary engine for growth. Similarly, small business is an important developmental tool overseas. 

American small businesses can be uniquely effective in entering markets that are difficult to access and in 

providing disproportionally large developmental impacts. 

Over the next 5 years, OPIC will continue to place renewed emphasis on the development aspect of its 

mission by focusing on the critical needs in these areas. This Strategic Plan is especially significant in that it 

incorporates new developmental measures and a supporting scoring matrix that have been developed through 

extensive consultation with other developmental organizations and with our stakeholders (See General Goal 

#1 and Appendix A: Developmental Impact Matrix.)

Ensuring additionality on every transaction. “Additionality” is the term used to describe the “added value” 

brought to a project by OPIC participation. It means that a developmental project can only be completed 

with OPIC assistance, because adequate financing and insurance cannot be found in the private market. It 

means that OPIC participation leveraged the participation of other investors or finance institutions, who 

otherwise would not have participated. It signifies that a host country receives developmental benefits 

(increased employment and tax revenues; improved infrastructure) that would not have occurred without 

OPIC participation in a project. Additionality also conveys the idea that, thanks to OPIC’s participation, the 

project has been structured to meet OPIC’s worker rights and environmental requirements, thereby 

mitigating certain long-term risk factors. This Strategic Plan contains goals and measures that will enable 

OPIC to track its progress regarding additionality. (See General Goal #3)

Risk management that supports OPIC’s developmental mission. Supporting projects that are more 

developmental also means that OPIC must be prepared to take on more risk. This is because highly 

developmental projects are often in riskier locations or involve sectors or types of projects that may not 

generate the robust cash flows associated with more traditional overseas investments. Because OPIC is 

conscious of its obligation to match its developmental mission with its responsibility to operate in the most 

prudent manner financially, the agency has taken major steps to enhance its risk management capability and 

integrate risk management into the decision-making process. This Strategic Plan includes risk mitigation as 

one of its key elements. (See General Goal #2.)
2

Responsible financial management remains a key OPIC goal. In this Strategic Plan, OPIC has set itself the 

goal of continuing to operate in a responsible and businesslike manner. (See General Goal #5.) Strong and 

responsible financial management must remain a hallmark of OPIC, and the agency must exercise its use of 

the full faith and credit of the United States in a manner that protects taxpayers. The fact that OPIC has 

received a clean audit opinion from its outside independent auditors for every year of its history is 

convincing evidence of OPIC’s ability to meet this pledge. OPIC will ensure that prudent financial 

management remains an important priority over the next 5 years.

Conclusion. Since FY 2001, OPIC has made fundamental changes in the way it conducts business. Most 

importantly, this has meant that OPIC has refocused itself on its developmental mission and on ensuring that 

each project OPIC supports is additional to what the private sector could provide on its own. Over the next 5 

years –with the help of this Strategic Plan-- OPIC will build on this success by continuing to refine its ability 

to prioritize projects based on projected developmental impact, by establishing additionality baselines, and 

by using sophisticated risk management techniques as an integral part of the agency’s on-going commitment 

to responsible financial management. 
3

I. Strategic Plan 2003-2008

OPIC’s Strategic Plan, as mandated by the Government Performance and Results Act (GPRA), was drafted 

by Federal employees only.

Mission Statement

OPIC’s mission is to mobilize and facilitate the participation of United States private 

capital and skills in the economic and social development of less developed countries and 

areas, and countries in transition from nonmarket to market economies. 

Primary Statutory Mandates

In accomplishing its mission, OPIC will promote positive U.S. effects and host country 

developmental effects. OPIC will assure that the projects it supports are consistent with 

sound environmental and worker rights standards. In conducting its programs, OPIC will 

also take into account guidance from the Administration and Congress on a country’s 

observance of, and respect for, human rights. In accomplishing its mission, OPIC will 

operate on a self-sustaining basis.
4

Summary of General Goals, General Objectives, and Performance Indicators

General Goals General 

Objectives

Performance Indicators

#1. Quantitatively measure and 

demonstrate the developmental 

impact of OPIC’s products.

Over the 5 years covered by this 

plan, OPIC will attain 

measurable results in the 

following areas:

A. PRIMARY OUTCOME 

GOALS:

1. Human capacity building

2. Private sector development 

3. Leveraging of foreign direct 

investment into the developing 

world

1. Implement new 

methodology for 

measuring and 

tracking 

developmental 

impact. 

2. Quantitative 

measurements will 

rely on scores 

developed using 

OPIC’s expanded 

developmental 

impact profile 

matrix.

3. OPIC will give 

priority to projects 

which score 100 

or more and 

decline projects 

which score below 

10

4. OPIC will support 

projects scoring 

from 10 to 39 

(“Minimally 

Developmental”) 

only in the event 

that such projects 

meet significant 

foreign policy 

priorities of the 

Administration. 

A. Primary outcome developmental indicators (See also Appendix A: Developmental Impact 

Scoring Matrix)

1. Human Capacity Building

GOAL Job Creation

MEASURE Number of jobs per $1,000,000 invested.

Target 28 jobs per $1,000,000 of total project investment (Finance)

Target 28 jobs per $1,000,000 of total project investment (Insurance)

GOAL Job Complexity

MEASURE 1 Managerial and Professional jobs as a proportion of total jobs created. 

Target An average of 50% managerial or professional jobs as a (Finance) proportion 

of total jobs created per project

Target An average of 50% managerial or professional jobs as a (Insurance) 

proportion of total jobs created per project

MEASURE 2 Training: Percentage of staff that will receive formal training

Target An average of 50% staff training per project (Finance)

Target An average of 50% staff training per project (Insurance)

2. Private Sector Development

GOAL Local Project Ownership

MEASURE Percentage of local ownership of project

Target An average of 30% of local private ownership of the project (Finance)

Target An average of 30% of local private ownership of the project (Insurance)

GOAL Host country small and medium enterprises (SME) development

MEASURE Project ownership by local SME

Target An average 15% local SME ownership of project. (Finance)

Target An average 15% local SME ownership of project. (Insurance)

3. Leveraging Impacts 

GOAL: Mobilization of the maximum amount of capital into a host country per dollar of 

OPIC support. (Increased levels of Small Business support may impact this goal.)

MEASURE The ratio of OPIC’s contribution to total project cost.

Target To mobilize FDI so that at least 50% of total project funding (Finance)is 

provided by non-OPIC-related sources.

Target To mobilize FDI so that at least 40% of total project funding (Insurance)

is provided by non-OPIC related sources
5

Summary of General Goals, General Objectives, and Performance Indicators (continued)

General 

Goals

General 

Objectives

Performance Indicators

Goal #1 

continued;

See previous

page.

B. 

SECONDARY 

GOALS:

4. Social Effects

5. Development 

Infrastructure 

Improvements

6. Macroecon. 

and Institutional 

Effects

7. Technology 

& Knowledge 

Transfer

Objectives

For Goal #1

continued;

See previous

page.

B. Secondary Developmental Indicators (Matrix Score)

4. Social Effects

Promote equal opportunity policies, encourage corporate social responsibility initiatives, and preserve 

the environment

Target Matrix Score of 15 (Finance)

Target Matrix Score of 15 (Insurance)

5. Developmental Infrastructure Improvements

Contribute to the improvement of the physical, financial, and social infrastructure of the developing 

world

Target Matrix Score of 9 (Finance)

Target Matrix Score of 9 (Insurance)

6. Macroeconomic & Institutional Effects

Promote investments in less developed countries and generate host country government revenues

Target Matrix Score of 9 (Finance)

Target Matrix Score of 9 (Insurance)

7. Technology & Knowledge Transfer

Encourage the transfer of technology and know-how to the developing world

Target Matrix Score of 9 (Finance)

Target Matrix Score of 9 (Insurance)

C. Matrix Score

Aggregate the seven developmental goals into one score.

GOAL Average development index score of 100 for each of OPIC’s programs.

Target: Score Average of 100, per product line.

(Finance & Insurance)

Extremely Developmental 130-160

Highly 100-129

Moderately 70-99

Slightly 40-69

Minimally 10-39

Not < 10
6

General Goals General Objectives Performance Indicators

#2. Mitigate risk 

through sound 

portfolio 

management 

practices, and by 

encouraging good 

corporate 

citizenship. 

1. Implement risk mitigation 

strategy, including by 

establishing portfolio and 

line-of-business 

diversification targets. 

2. Develop methodology for 

rating projects on a “good 

corporate citizenship” 

scale.

3. Negotiate/renegotiate 

bilateral agreements to 

improve host country 

investment environment. 

4. Continue to screen 

projects prior to 

commitment/contract 

signing and to monitor 

active projects to ensure 

that they are in 

compliance with

requirements regarding 

U.S. effects, 

environmental and 

worker rights standards.

GOAL: Mitigate Risk

MEASURES:

8. Actual risk variance from projected risk.

Target: Variance of 5 percent or less for 

both finance and insurance. 

9. Number of on-going OPIC projects 

monitored for compliance with OPIC’s U.S. 

effects, environmental, and worker rights 

standards. 

Target: All active projects will be selfmonitored each year, and all sensitive 

projects will be site monitored by 3rd year of 

operation. Due diligence will occur before 

project approval for environmentally 

sensitive projects. 

10. Number of monitored on-going projects 

that meet OPIC’s U.S. effects, 

environmental, and worker rights standards. 

Target: 100% compliance. 
7

Summary of General Goals, General Objectives, and Performance 

Indicators (continued.)

General Goals General Objectives Performance Indicators

#3. Ensure 

additionality 

and private 

sector 

participation to 

ensure that 

OPIC leverages, 

but does not 

compete with, 

the private 

sector.

1. Implementation of 

additionality 

tracking.

GOAL: Ensure Additionality

MEASURES:

11. Evaluate new projects to ensure that they 

would not have gone forward but for OPIC’s 

participation. Elements of evaluation may 

include:

 ̧ Tenor

 ̧ Pricing compared to sovereign benchmarks

 ̧ Country Risk

 ̧ Sector Risk

 ̧ Foreign Direct Investment (FDI) Measures.

Target: Develop methodology in FY 2003; 

establish baseline in FY 2004; set targets for 

FYs 2005-2008.

#4. Ensure that 

OPIC support is 

provided to 

small U.S. 

businesses. 

1. Place emphasis on 

meeting the needs 

of American small 

businesses.

2. Continue to 

implement OPIC’s 

new Small 

Business Center 

(SBC). 

Track/measure 

progress that can be 

attributed to the 

SBC. 

GOAL: Ensure support to small sized businesses.

MEASURES:

12. Number of small business projects 

resulting from the SBC. 

Target: In FY 2003, establish baseline 

regarding the number of small business 

projects resulting from OPIC’s SBC. By the 

end of FY04 the SBC target is to finalize 1 

small business finance agreement and 1 

insurance contract per week

13. Efficiency of small business projects as 

measured by cycle time. 

Target: Reduce SBC small business 

cycle time to 60 days from time 

completed application is received.

General Goals, Objectives, and Performance Indicators are continued on following page.
8

Summary of General Goals, General Objectives, and Performance Indicators 

(continued.)

General Goals General Objectives Performance Indicators

#5. Operate in 

a businesslike 

manner.

1. Operate in a selfsustaining manner. 

Maintain 

sufficiency of 

reserves.

2. Improve 

efficiency.

3. Enhance 

performancebased 

management.

GOAL: Operate in a self-sustaining manner.

MEASURES:

14. Operating revenue is equal to or greater 

than operating expenses.

Target: Operating expenses do not exceed 

operating revenue.

GOAL: Increased efficiency.

MEASURES:

15. Reduced cycle time. 

Target: Achieve a 20 percent improvement 

by the end of FY 2008 for both insurance and 

finance projects based on baseline cycle time 

in FY 2002.

GOAL: High Productivity of new two-year pilot

Moscow Office

MEASURES:

16. Number of executed loan agreements and 

insurance contracts that occur as a result of 

Moscow Office. 

Moscow Office Target: 10 new executed 

loan agreements or insurance contracts in FY 

2004.

End of General Goals, Objectives and Indicators.
9

Means and Strategies to be Used to Achieve Goals and Objectives. 

General Goals & Objectives Means and Strategies 

General goal #1:

Quantitatively measure and 

demonstrate the developmental 

impact of OPIC’s products.

Over the 5 years covered by this 

plan, OPIC will attain measurable 

results in the following areas:

 Primary Outcome Goals:

 ̧ Human capacity building

 ̧ Private sector dev.

 ̧ Leveraging of foreign 

direct investment

 Secondary Outcome Goals:

 ̧ Social effects

 ̧ Infrastructure 

improvements

 ̧ Macroeconomic & 

institutional effects

 ̧ Technology & 

knowledge transfer.

Objectives:

1. Implement new methodology 

for measuring and tracking 

developmental impact. 

2. Quantitative measurements will 

rely on scores developed using 

OPIC’s expanded developmental 

impact profile matrix.

3. OPIC will give priority to 

projects which score 100 or more 

and refuse projects which score 

below 10.

4. OPIC will support projects 

scoring from 10 to 39 (“Minimally 

Developmental”) only in the event 

that such projects meet significant 

foreign policy priorities of the 

Administration.

• Develop better understanding of developmental needs and trends 

through closer ties with bilateral and multilateral organizations that 

are concerned with development issues.

• Focus resources to encourage additional investment in less-developed 

countries/regions/sectors or geographic/regional areas identified as 

foreign policy priorities. 

• Work closely with multilateral finance/insurance agencies, other 

development organizations, and the private sector to leverage the 

impact of OPIC’s programs. 

• Coordinate closely with other U.S. government entities such as the 

U.S. Agency for International Development, the Export-Import Bank, 

the U.S. Trade and Development Agency, the State Department, the 

Treasury Department, the Commerce Department, and the Trade 

Promotion Coordinating Committee (TPCC) by working jointly on 

transactions and issues of concern to the U.S. business community to 

ensure maximum development impact.

• Work closely with foreign government officials in emerging markets 

to minimize risk and ensure maximum flow of private resources to 

developmental projects. 

• Work with clients and other U.S. government entities to develop 

appropriate products that respond to needs of eligible businesses 

(especially small businesses) desiring to invest in developing 

countries.

• Provide information at conferences and via OPIC’s Website on 

OPIC’s programs and on investing in emerging markets, with special 

attention to the needs of the small business community.

• Provide financing and political risk insurance to support U.S. private 

sector investment in developmental projects in poorer countries and 

countries in transition.
10

Means and Strategies to be Used to Achieve Goals and Objectives (cont.)

General Goals & 

Objectives

Means and Strategies

General goal #2:

Mitigate risk through sound 

portfolio management practices, 

and by encouraging good 

corporate citizenship. 

Objectives:

• Implement risk mitigation 

strategy, including by 

establishing portfolio and 

line-of-business 

diversification targets.

• Develop methodology for 

rating projects on a “good 

corporate citizenship” 

scale.

• Negotiate/renegotiate 

bilateral agreements to 

improve host country 

investment environment. 

• Continue to screen projects 

prior to 

commitment/contract 

signing and to monitor 

active projects to ensure 

that they are in compliance 

with requirements 

regarding U.S. effects, 

environmental and worker 

rights standards.

• Identify opportunities to negotiate/renegotiate bilateral agreements 

to improve host country investment environment. 

• Maintain a diverse portfolio geographically and by sectors to ensure 

balance. Preserve OPIC’s portfolio of well-diversified commercial 

entities and individual sponsors.

• Develop new risk management tools. Provide and analyze 

information on emerging markets to narrow gap between perceived 

and real risk. Integrate risk analysis into the decision-making 

process. Stress the importance of corporate citizenship as a longterm risk mitigation tool.

• Develop definition and characteristics of good corporate citizenship 

through discussions with bilateral and multilateral organizations 

that are concerned with development issues, and the private sector.

• Continue to monitor active projects on an ongoing basis, through 

both site visits and internal reviews, to assure that credit quality 

remains sound, collections are timely, and reporting requirements 

are fulfilled. Continually review and refine corporate credit 

policies and underwriting procedures to maintain high quality of 

portfolio.

• Maintain OPIC monitoring of project compliance regarding 

environmental and worker rights requirements.

• Increase the level of public participation in evaluating the 

environmental impact of proposed projects.

• Participate in international forums and conferences focusing on 

environmental issues, worker rights, and sound commercial 

practices.

• Support only projects that are not likely to cause a significant 

reduction in U.S. jobs or adversely affect the U.S. economy. 

Decline to support projects that have a potential negative impact on 

a U.S. industry or its employment. Monitor projects once 

operations begin to verify that investors fulfill original 

representations regarding impact on the U.S. economy.

• Provide advocacy to OPIC-supported investments that are 

experiencing difficulties with foreign governments. Coordinate 

these efforts with other U.S. government entities, as appropriate.
11

Means and Strategies to be Used to Achieve Goals and Objectives (cont.)

General Goals & 

Objectives

Means and Strategies

General goal #3:

Ensure additionality and 

private sector participation 

to ensure that OPIC 

leverages, but does not 

compete with, the private 

sector.

Objectives:

Implementation of 

additionality tracking.

• Develop baselines to track average scores of new projects in areas 

that may include:

 ̧ Tenor

 ̧ Pricing compared to sovereign benchmarks

 ̧ Country risk

 ̧ Sector risk

 ̧ Foreign Direct Investment (FDI) measures

• Ensure that the pricing of OPIC products adequately reflects policy 

considerations as well as the risks and costs assumed by the agency.

• Developing specific proposals for how financing and insurance 

decisions will incorporate tests of additionality. These tests will 

enable OPIC to ensure and document that the agency only enters 

into finance and insurance agreements after verifying that the 

proposed project encountered a lack of access to, or availability of, 

private financing or insurance on terms sufficient to encourage or 

allow new investment or development to occur. 

• Co-Insurance, Co-Financing: In order to more fully achieve the 

goal of leveraging private sector participation, OPIC will formalize 

communications with the private sector regarding co-insurance and 

co-financing opportunities.
12

Means and Strategies to be Used to Achieve Goals and Objectives (cont.)

General Goals & 

Objectives

Means and Strategies

General goal #4:

Ensure that OPIC support 

is provided to small U.S. 

businesses. 

Objectives:

• Place emphasis on 

meeting the needs of 

American small 

businesses.

• Continue to implement 

OPIC’s new Small 

Business Center (SBC). 

Track/measure progress 

that can be attributed to 

the SBC.

• Focus activities in accordance with guidance in OPIC’s authorizing 

legislation (Foreign Assistance Act of 1961, as amended, Title IV, 

Sec. 231(e) and Sec. 240) that states that OPIC shall pay special 

attention to the needs of small business and small business 

development.

• Develop policies and procedures for OPIC Small Business Center.

• Conduct outreach specifically targeted at small businesses.

• Pursue strategies to complement and leverage the work of the U.S. 

Small Business Administration (SBA).

• Streamline OPIC’s application process where appropriate.

• Streamline the administration of OPIC statutory requirements 

where appropriate.

• Pursue on-line technology to simplify and expedite all OPIC/client 

information exchanges.

• Reduce small business cycle time, from completed application to 

closing, to an average of 60 days per project.
13

Means and Strategies to be Used to Achieve Goals and Objectives (cont.)

General Goals & 

Objectives

Means and Strategies

General Goal #5:

Operate in a 

businesslike manner.

Objective:

• Operate in a selfsustaining manner. 

• Improve efficiency.

• Enhance 

performance-based 

management.

 

• Manage existing insurance portfolio by prudent underwriting and 

documentation of insurance contracts and monitoring exposure, as 

needed. Provide advocacy on behalf of insurance clients in order to 

avert claims and when claims are paid, aggressively pursue recoveries 

from foreign governments.

• Develop models to assess the sufficiency of reserves.

 

• Continue to engage independent auditors on an annual basis.

• Improve efficiency by identifying procedures that may be streamlined, 

eliminating bottle necks, and improving communications in order that 

project cycle time may be reduced.

• Develop and utilize departmental operating plans, including 

performance targets, to enhance performance based management 

throughout the organization. 

• Improve efficiency and effectiveness of systems technology and 

processes to support thoughtful management decision making. 

Implement IT Investment Review Board (IRB). 

• Promote a healthy and productive work environment that attracts and 

retains highly qualified and motivated staff, and creates an atmosphere 

of professionalism, integrity and flexibility. Provide staff with high 

levels of training and support. 
14

Resources Needed to Meet Performance Goals

In FY’s 2003-2008 OPIC will continue to refocus its efforts on providing support to U.S. private 

investments in locations and sectors where it can expect the greatest developmental impact. OPIC’s 

emphasis will be on ensuring that its participation in an investment contributes to improvements in host 

country employment, infrastructure, and best business practices — including promoting free markets and 

rule of law and encouraging good corporate citizenship by sponsoring U.S. interests. OPIC’s 

commitment to focus on countries and sectors that are more highly developmental and cannot obtain 

commercial support will mean that OPIC will shoulder more risk. Its capacity to do so will rest on its 

diverse portfolio of projects, on proven management practices that mitigate risk, and on the development, 

where appropriate, of new financial products that will leverage U.S. private investment in areas of high 

developmental priority. 

Resources which OPIC will utilize to accomplish these strategies will include annual amounts that 

are, at minimum, equal to OPIC’s baseline (unchanged since FY 2000) of $24 million annually in 

credit funding (subsidy) to support OPIC direct loans and loan guaranties as required by the Credit 

Reform Act of 1991. In addition, OPIC will require resources to support up to 220 FTE to ensure 

that its administrative and lending functions are properly carried out during this time period, to 

ensure that the high standards that OPIC attaches to its name continue to not only be met but more 

importantly, to exceed the expectation of both current and future international clients. In FY 2003, 

OPIC’s appropriated amount for administrative expenses is $39,885,000.

OPIC will become more client focused. Especially important will be increasing the level of support to 

small businesses. In part, OPIC will accomplish this by streamlining the amount of paperwork required 

from clients and reducing the complexity of the approval process. In all areas of activity, OPIC will 

improve its administrative effectiveness and efficiency by opening clear lines of communication with its 

clients and stakeholders and by being open to new ideas and responsive to their needs when appropriate. 

In addition to the above stated goals, OPIC will continue to maintain strong portfolio management, 

operate in a self-sustaining manner, and support jobs and growth at home. 
15

Relationship between the long-term goals/objectives, requested budgetary inputs and the annual performance indicators for FY 2003-8

General Goals Requested 

Inputs 

Expected Outputs Expected Outcomes Annual Performance Indicators

General goal #1: 

Quantitatively measure and 

demonstrate the 

developmental impact of 

OPIC’s products.

Over the 5 years covered by this 

plan, OPIC will attain 

measurable results in the 

following areas: Primary 

Outcome Goals:

1. Human capacity building

2. Private sector dev.

3. Leveraging of foreign direct 

investment

Secondary Outcome Goals:

4. Social effects

5. Infrastructure improvements

6. Macroeconomic & 

institutional effects

7. Technology & knowledge 

transfer.

Objectives:

1. Implement new methodology 

for measuring and tracking 

developmental impact.

2. Quantitative measurement 

will rely on scores developed 

using OPIC’s expanded 

developmental impact profile 

matrix.

3. OPIC will give priority to 

projects which score 100 or 

more and decline projects which 

score below 10.

4. OPIC will support projects 

scoring 10 to 39 only in the 

event that such projects meet 

significant foreign policy 

priorities of the Administration.

• Up to 220 

Full time 

equivalent 

employees 

• OPIC 

yearly 

administrat

ive budget. 

to support 

credit 

programs 

and to 

support 

non-credit 

activities)

• plus credit 

funding

• Approximate 

amount of 

finance 

commitments

• Political risk 

insurance 

issuance (MIA); 

• New finance 

commitments

• New insurance 

contracts

• Dollars invested 

by host country 

• Dollars invested 

by the U.S. 

• Dollars invested 

by third country 

• Dollars invested 

on a multilateral 

basis 

• Total project 

investment from all 

sources

• Host Country 

Developmental Effects:

 ̧ Local jobs

 ̧ Managerial & 

professional jobs

 ̧ Job training

 ̧ Local ownership

 ̧ Benefits to small & 

medium enterprises 

(SME)

 ̧ Leveraging impacts

 ̧ Social effects

 ̧ Developmental 

Infrastructure 

improvements

 ̧ Macroeconomic & 

Institutional effects

 ̧ Transfer of knowledge 

& technology

• Percentage of small 

business projects 

(estimated 50%+)

• U.S. exports & jobs

• Positive net U.S. trade 

effect

• Positive net U.S. 

financial flows

• Positive U.S. balance of 

payments effects

• Net negative budget 

authority

• Net negative outlays

A. Primary Outcome Indicators:

1. Measure: Human Capacity Building

Target A: 28 jobs per $1m of total project investment. 

Same target for Finance and Insurance.

Target B: An average of 50% managerial or 

professional jobs as a proportion of total jobs created per 

project. Same target for Finance and Insurance.

 Target C: An average of 50% staff training per project. 

Same target for Finance and Insurance.

2. Measure: Private Sector Development

Target A: An average of 30% of local private ownership 

of the project. Same target for Finance and Insurance.

Target B: An average 15% local SME ownership of 

project. Same target for Finance and Insurance.

3. Measure: Leveraging Impacts

Target: To mobilize FDI so that at least 50% of total 

project funding is provided by non-OPIC –related sources 

for OPIC Finance projects; For OPIC Insurance projects 

the target is 40%.

B. Secondary Outcome Developmental Indicators:

MATRIX MEASURES: (See Appendix A)

4. Measure: Social Effects

Target: Matrix Score of 15. Same target for Finance and 

Insurance.

5. Measure: Developmental Infrastructure Improvements

Target: Matrix Score of 9. Same target for Finance and 

Insurance.

6. Measure: Macro-econ & Institutional Effects

Target: Matrix Score of 9. Same target for Finance and 

Insurance.

7. Measure: Technology & Knowledge Transfer

Target: Matrix Score of 9. Same target for Finance and 

Insurance.

C. Aggregate Matrix Score:

Target: Average developmental index score of 100 for each 

of OPIC’s programs.
16

Relationship between the long-term goals/objectives, requested budgetary inputs and the annual performance indicators for FY 2003-8

General Goals Requested Inputs Expected Outputs Expected Outcomes Annual Performance Indicators

General Goal #2,

Mitigate risk through sound 

portfolio management 

practices and by encouraging

good corporate citizenship.

Objectives:

1. Implement risk mitigation 

strategy, including by 

establishing portfolio and 

line-of-business 

diversification targets.

2. Develop methodology for 

rating projects on a “good 

corporate citizenship” scale.

3. Negotiate/renegotiate 

bilateral agreements to 

improve host country 

investment environment. 

4. Continue to screen projects 

prior to commitment/contract 

signing and to monitor active 

projects to ensure that they 

are in compliance with 

requirements regarding U.S.

effects, environmental and 

worker rights standards.

• Up to 220 Full time 

equivalent 

employees 

• OPIC yearly 

administrative 

budget. to support 

credit programs 

and to support noncredit activities)

• plus credit funding

• Approximate 

amount of 

finance 

commitments

• Political risk 

insurance 

issuance 

(MIA); 

• New finance 

commitments

• New insurance 

contracts

• Dollars 

invested by 

host country 

• Dollars 

invested by the 

U.S. 

• Dollars 

invested by 

third country 

• Dollars 

invested on a 

multilateral 

basis 

• Total project 

investment from all 

sources

• Host Country 

Developmental 

Effects:

 ̧ Local jobs

 ̧ Managerial & 

professional jobs

 ̧ Job training

 ̧ Local ownership

 ̧ Benefits to small & 

medium enterprises 

(SME)

 ̧ Leveraging impacts

 ̧ Social effects

 ̧ Developmental 

Infrastructure 

improvements

 ̧ Macroeconomic & 

Institutional effects

 ̧ Transfer of knowledge 

& technology

• Percentage of small 

business projects 

(estimated 50%+)

• U.S. exports & jobs

• Positive net U.S. trade 

effect

• Positive net U.S. 

financial flows

• Positive U.S. balance 

of payments effects

• Net negative budget 

authority

• Net negative outlays

MEASURES:

8. Actual risk variance from projected risk.

Target: Variance of 5 percent or less for both 

finance and insurance.

9. Number of on-going OPIC projects monitored 

for compliance with OPIC’s U.S. effects, 

environmental, and worker rights standards. 

Target: All active projects will be selfmonitored each year, and all sensitive projects 

will be site monitored by 3rd year of operation. 

Due diligence will occur before project 

approval for environmentally sensitive projects. 

10. Number of monitored on-going projects that 

meet OPIC’s U.S. effects, environmental, and 

worker rights standards. 

Target: 100% compliance. 
17

Relationship between the long-term goals/objectives, requested budgetary inputs and the annual performance indicators for FY 2003-8

General Goals → Requested Inputs → Expected Outputs → Expected Outcomes → Annual Performance Indicators 

General Goal #3,

Ensure additionality and 

private sector participation 

to ensure that OPIC 

leverages, but does not 

compete with, the private 

sector.

Objective:

Implementation of 

additionality tracking.

General Goal #4

Ensure that OPIC support is 

provided to small U.S. 

businesses. 

Objectives.

1. Place emphasis on 

meeting the needs of 

American small businesses.

2. Continue to implement 

OPIC’s new Small Business 

Center (SBC). 

Track/measure progress that 

can be attributed top the 

SBC.

• Up to 220 Full time 

equivalent 

employees 

• OPIC yearly 

administrative 

budget. to support 

credit programs 

and to support noncredit activities)

• plus credit funding

• Approximate 

amount of finance 

commitments

• Political risk 

insurance issuance 

(MIA); 

• New finance 

commitments

• New insurance 

contracts

• Dollars invested by 

host country 

• Dollars invested by 

the U.S. 

• Dollars invested by 

third country 

• Dollars invested on 

a multilateral basis 

• Total project 

investment from all 

sources

• Host Country 

Developmental 

Effects:

 ̧ Local jobs

 ̧ Managerial & 

professional jobs

 ̧ Job training

 ̧ Local ownership

 ̧ Benefits to small & 

medium enterprises 

(SME)

 ̧ Leveraging impacts

 ̧ Social effects

 ̧ Developmental 

Infrastructure 

improvements

 ̧ Macroeconomic & 

Institutional effects

 ̧ Transfer of knowledge 

& technology

• Percentage of small 

business projects 

(estimated 50%+)

• U.S. exports & jobs

• Positive net U.S. trade 

effect

• Positive net U.S. 

financial flows

• Positive U.S. balance 

of payments effects

• Net negative budget 

authority

• Net negative outlays

General Goal #3 Performance Indicator:

11. Measure: Evaluate new projects to ensure 

that they would not have gone forward but 

for OPIC’s participation. Elements of 

evaluation may include:

 ̧ Tenor

 ̧ Pricing compared to sovereign 

benchmarks

 ̧ Country Risk

 ̧ Sector Risk

 ̧ Foreign Direct Investment (FDI) 

Measures.

Target: Develop methodology in FY 

2003; establish baseline in FY 2004; set 

targets for FYs 2005-2008.

General Goal #4 Performance Indicator:

12. Measure: Number of small business 

projects resulting from SBC. 

Target: In FY 2003, establish baseline 

regarding the number of small business 

projects resulting from OPIC’s SBC. By 

the end of FY04 the SBC target is to 

finalize 1 small business finance 

agreement and 1 insurance contract per 

week.

13. Measure: Efficiency of small business 

projects as measured by cycle time. 

Target: Reduce SBC small business cycle 

time to 60 days from time completed 

application is received.
18

Relationship between the long-term goals/objectives, requested budgetary inputs and the annual performance indicators for FY 2003-8

General Goals → Requested Inputs → Expected Outputs → Expected Outcomes → Annual Performance Indicators 

General Goal 5

Operate in a businesslike 

manner.

Objectives.

• Operate in a selfsustaining manner. 

• Improve efficiency.

• Enhance 

performance-based 

management.

• Up to 220 Full time 

equivalent 

employees 

• OPIC yearly 

administrative 

budget. to support 

credit programs and 

to support noncredit activities)

• plus credit funding

• Approximate 

amount of 

finance 

commitments

• Political risk 

insurance 

issuance (MIA); 

• New finance 

commitments

• New insurance 

contracts

• Dollars invested 

by host country 

• Dollars invested 

by the U.S. 

• Dollars invested 

by third country 

• Dollars invested 

on a multilateral 

basis 

• Total project investment 

from all sources

• Host Country 

Developmental Effects:

 ̧ Local jobs

 ̧ Managerial & professional 

jobs

 ̧ Job training

 ̧ Local ownership

 ̧ Benefits to small & 

medium enterprises (SME)

 ̧ Leveraging impacts

 ̧ Social effects

 ̧ Developmental 

Infrastructure 

improvements

 ̧ Macroeconomic & 

Institutional effects

 ̧ Transfer of knowledge & 

technology

• Percentage of small 

business projects 

(estimated 50%+)

• U.S. exports & jobs

• Positive net U.S. trade 

effect

• Positive net U.S. financial 

flows

• Positive U.S. balance of 

payments effects

• Net negative budget 

authority

• Net negative outlays

General Goal #5 Performance Indicator:

14. Measure: Operating revenue is equal to 

or greater than operating expenses.

Target: Operating expenses do not 

exceed operating revenue.

15. Measure: Reduced cycle time.

Target: Achieve a 20 percent 

improvement by the end of FY 2008 for 

both insurance and finance projects based 

on baseline cycle time in FY 2002.

16. Measure: High productivity of new twoyear pilot Moscow office. Track the 

number of executed loan agreements and 

insurance contracts that occur as a result 

of the Moscow office. 

Target: 10 new executed loan 

agreements or insurance contracts in FY 

2004.
19

Identification of key factors, external to the agency, that could 

significantly affect achievement of general goals and objectives

• Revised foreign policy guidance.

• Changes in market demand.

• Significant change in the investment climate in host countries due to political or 

economic events.

• Changes in regional economic climates that can have widespread effects. For 

example, the Southeast Asian financial crisis that occurred in 1998 and subsequently 

spread to other regions. 

• U.S. or American regional economic recession.

• Increased competition from foreign businesses that are heavily subsidized by their 

governments.

• Major decrease in the ability of American businesses to compete abroad.

• Major change in OPIC's budget or authorization limit.

• Change in legislation or imposition of sanctions that affect the list of countries where 

OPIC can operate. 
20

Program Evaluations to be Used to Verify Results (Including 

Approximate Timing of Evaluations.) 

• Strategic Goal 1: Quantitatively measure and demonstrate that OPIC’S 

products and services are raising living standards and increasing productivity. 

Over the 5 years covered by this plan OPIC will attain measurable results in the 

following areas: A) Human capacity building, B) Private sector development, 

and C) Leveraging of foreign direct investment into the developing world.

Means to verify and validate performance indicators: In consultation with its 

stakeholders and with other development organizations, OPIC has developed a matrix for 

measuring the developmental impact of the projects that it supports (See Appendix A). 

On an annual basis, OPIC will report on the results of this matrix and include its findings 

in both the GPRA mandated Annual Performance Report, but also in the annual 

Development Report that is due to Congress. OPIC will also verify and validate the 

measures associated with this goal by means of its development impact monitoring 

program. OPIC employs standard monitoring procedures to review project commitments 

and track the progress made fulfilling those commitments. OPIC’s site monitoring 

process involves one-time visits to randomly selected projects and annual self-monitoring 

submissions by all projects. These procedures have been evaluated by outside experts 

and OPIC has 15 years of experience with the site-monitoring program and 10 years 

experience with the self-monitoring program. Through questionnaires and site-visits, 

OPIC gathers and verifies information provided by the investor regarding the original 

estimates of the developmental impact of the project. Through this process, OPIC is able 

to measure and verify whether its projects are meeting their original development 

objectives.

• Strategic Goal 2: Mitigate risk through sound portfolio management practices, 

by encouraging good corporate citizenship, and by continuing to improve 

bilateral agreements.

Means to verify and validate performance indicators: Regarding the number of ongoing OPIC projects monitored for compliance with OPIC’s U.S. effects, environmental, 

and worker rights standards, (ie- corporate citizenship) and the number of monitored ongoing projects that meet OPIC’s U.S. effects, environmental, and worker rights standards, 

OPIC has been tracking and reporting on these numbers for several years and will 

continue to do so. 

OPIC monitors compliance with these requirements through a two-part process. First, all 

projects must complete a questionnaire annually providing data on their actual 

performance in the identified areas. The second part of the monitoring process involves 

taking a closer look at selected projects. Those projects, which are subject to more 

detailed monitoring, come from three groups: 1) all projects that potentially impact 

sensitive U.S. economic sectors; 2) all environmentally sensitive projects; and 3) 

projects selected using random sampling methodology. The projects to be monitored are 
21

examined during a site visit by an OPIC staff member as well as through additional data 

received from the project. 

Regarding sound portfolio management practices, OPIC has been monitoring and making 

available its claim payment/recovery ratio, sector and country concentrations, and project 

“watch list” for several years. 

• Strategic Goal 3: Ensure additionality and private sector participation to ensure 

that OPIC leverages, but does not compete with, the private sector. 

Means to verify and validate performance indicators: OPIC is in the process of 

developing procedures to formalize additionality into the decision-making process. In 

FY 2003 and FY 2004, OPIC will establish a methodology for quantifying the 

additionality review process.

• Strategic Goal 4: Ensure that OPIC support is provided to small, as well as 

large, U.S. businesses.

Means to verify and validate performance indicators: OPIC’s small business 

definition is in accordance with Congressional guidance, and OPIC has been tracking the 

number of small business projects that it supports for many years. The trend of OPIC 

support for small business is definitely moving in an upward direction. Of the 40 new 

projects that OPIC supported in FY 2000, 40 percent involved small business. In 

FY 2001, 57 percent of the new projects supported by OPIC involved small business. In 

FY 2002 the number climbed to 69 percent. OPIC recently finalized a memorandum of 

agreement to work closely with the Small Business Administration (SBA.) Additionally, 

OPIC recently created an in-house Small Business Center to further support smaller 

enterprises. The fruit of these efforts will be reflected annually in OPIC’s yearly 

Performance Reports that are mandated by GPRA. 

• Strategic Goal 5: Operate in a responsible and businesslike manner. 

Means to verify and validate performance indicators: The annual audit of OPIC’s 

operations, conducted by the independent accounting firm of KPMG LLP, verifies 

OPIC’s self-sustaining status. OPIC has generated net income in every year since its 

creation in 1971. In FY 2003 and FY 2004, OPIC will develop mechanisms and 

guidelines to ensure that reserve levels are adequate, but not excessive and that the risk 

reserve/net exposure ratio remains reasonable. OPIC’s current total reserve stand at $4.3 

billion. However calculated, OPIC’s reserve ratio currently exceeds equivalent ratios in 

the private sector and compares favorably with those multilaterals with similar missions.

23

APPENDIX A: Developmental Impact Matrix [Point allocations in brackets]

Indicator NEGATIVE 

IMPACT

NO IMPACT SOME IMPACT STRONG IMPACT

Human Capacity Building = [30]

Job Creation [10] Causes a loss 

of local jobs. 

[-10]

No jobs created. [0] Creates fewer than 28 jobs per $1,000,000 

of total project investment. [5]

Creates 28 or more jobs per $1,000,000 of 

total project investment. [10]

Job Complexity [10] No local 

managerial or 

professional 

jobs created

[-10]

Managerial and 

professional jobs as 

a proportion of 

total jobs created 

do not exceed 25%. 

[0]

Managerial and professional jobs as a 

proportion of total jobs created exceeds 

25% (but does not reach 50%). [5]

Managerial and professional jobs as a 

proportion of total jobs is 50% or higher. [10]

Training [6] NA No [0] Greater than zero but less than 50% [3] Proportion of receiving formal training is 50% 

or higher [6]

Training Abroad [4] NA No training abroad 

[0]

Training in another developing country [2] Training in a developed country [4]

Private Sector Development = [30]

Local ownership stake [10] 0% local 

private 

ownership 

[-10]

Greater than 0% 

(but less than 15%) 

local private 

ownership [0]

At least 15% but less than 30% local private 

ownership of project resources. [5]

30% or greater local private ownership of 

project resources. [10]

Benefits to local SME [10] Project 

displaces SME 

[-10]

No local SME 

project ownership 

[0]

At least 1% but less than 15% local project 

ownership by SME. [5]

15% or greater local project ownership by 

SME. [10]

Encouragement of private 

ownership [10]

NA No [0] NA Project involves privatization or the creation 

of opportunities for property/home ownership. 

[10]

Leveraging Impacts = [30]

Leveraging other investments 

[20]

OPIC finances 

76%-100% of 

total project 

investment, or 

insures 86%-

100% of total 

project invest. 

[-20]

OPIC finances 

67%- 75% of total 

project investment,

or insures 77%-

85% of total project 

investment. [0]

OPIC finances 51% to 66% of total project 

investment, or insures 61% to 76% of total 

project investment [10]

OPIC finances 50% or less of total project 

investment, or insures 60% or less of total 

project investment [20]

Complementing other 

development institutions [5]

NA None [0] Project involves a development institution

[2.5]

Project involves more than one development 

institution [5]

Public-Private Partnerships 

[5]

NA None [0] NA Local development bank, ministry, or NGO 

[5]
24

INDICATOR NEGATIVE 

IMPACT

NO IMPACT SOME IMPACT STRONG IMPACT

Social Effects (Good Corporate Citizenship) 

Equal Employment Policy Discriminatory 

policy or 

practice 

No formal EEO 

policy 

Informal policy prohibiting discrimination Formal, written EEO that is 

communicated to all employees and 

supervisors 

Benefits for Women in the 

Workplace 

Discriminatory 

policy or 

practice 

No relevant 

policies 

Maternity leave or child care Policies for maternity leave and 

childcare 

Benefit to Poor (Rural) 

Region 

Project harms 

poor or rural 

region 

No rural benefit Indirect benefit to rural communities 

through procurement or other linkage 

Direct investment in a rural area 

Social Responsibility Project causes 

a negative 

social impact 

No social or 

community benefit 

Benefits limited to company employees (eg, 

company-paid meals) 

Investment directly benefiting local 

community (eg, housing, transportation 

development) 

Environmental

Preservation 

Project takes 

no step to 

mitigate 

negative 

environmental 

impact

Project takes steps 

to mitigate an 

identified negative 

environmental 

impact 

Project generates a moderate environmental 

benefit 

Project focus is to preserve, enhance or 

restore the local environment (eg, ecotourism, reforestation, water treatment) 

Developmental Infrastructure Improvements

Physical, Financial or Social 

Infrastructure 

NA Not an 

infrastructure 

project 

Lower income levels of the population have 

limited access to the infrastructure 

Infrastructure is accessible and 

affordable to all segments of the 

population 

Macroeconomic and Institutional Effects 

Level of Economic 

Developmenti

(GNP per capita)

NA High Income 

Country (H) 

Medium Income Country (M) Low Income Country (L) 

Project resulting from or 

causing government reform 

Government 

concessions 

tied to project 

have anticompetitive 

impact on 

macroeconomy 

No project 

relationship to 

government reform 

Project investment directly resulting from 

or causing a government regulatory, 

judicial, or other institutional reform 

applicable only to the project 

Project investment directly resulting 

from or causing a government 

regulatory, judicial, or other institutional 

reform applicable to the entire sector or 

economy 
25

INDICATOR NEGATIVE 

IMPACT

NO IMPACT SOME IMPACT STRONG IMPACT

Fiscal Impacts Project pays 

too little (zero) 

or too much (> 

35%) in taxes 

over the first 5 

years of 

operations 

Project pays 1-5% 

of revenues in taxes 

over the first 5 

years of operations 

Project pays 6- 20% of revenues in taxes 

over the first 5 years of operations 

Project pays 21-35% of revenues in 

taxes over the first 5 years of operations 

Technology & Knowledge Transfer / Productivity Enhancement Initiatives 

Innovative Management 

Practices 

NA None Implements managerial practices that are 

relatively uncommon in the local economy 

Introduces managerial practices that are 

new to the local economy 

Marketing & Distribution 

Expertise 

NA None Implements marketing and distribution 

strategies that are relatively uncommon in 

the local economy or project sector 

Introduces marketing and distribution 

strategies that are new to the local 

economy or project sector 

New Production 

Technologies 

NA None Implements technologies that are relatively 

uncommon in the local economy or project 

sector 

Introduces technologies that are new to 

the local economy or project sector 

New Product/Service NA None Produces a product or service that is not 

widely available in the local market 

Produces a product or service that is not 

at all available in the local market 

Lower local prices Project 

increases local 

prices 

No reduction to 

local prices 

Product may have some impact on lowering 

local prices due to increased supply in 

market 

Product planned for introduction at a 

substantially lower price than 

competition 

Foreign Exchange Earnings Net foreign 

exchange is 

negative 

Net foreign 

exchange is zero 

Moderate positive net foreign exchange Substantial net foreign exchange 

Economic Diversification Project is in 

saturated sector

None Project involves an underdeveloped sector 

of the local economy 

Project involves an economic sector that 

is essentially nonexistent in the local 

economy 

Note: A detailed guideline to these matrices to ensure consistency in scoring is under development.

 

i

Low $984 or less; Medium $985-$4,268; High $4,269 or more, according to 1999 per capita GNP data from the World Bank Atlas 2002