Making 

a difference 

by supporting

investment in

developing 

countries 

re

2001 Annual Report focused

Overseas

Private 

Investment 

Corporation
Table of contents

President’s message . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

A sharper agenda that matters more than ever . . . . . . . . . 7

Creating opportunities abroad . . . . . . . . . . . . . . . . . 9

Putting America’s best face forward. . . . . . . . . . . . . 15

Fostering entrepreneurial success at home . . . . . . . . 19

Leveraging investments and results . . . . . . . . . . . . . 23

2001 investment projects . . . . . . . . . . . . . . . . . . . . . . . . 25

2001 investment funds’ projects . . . . . . . . . . . . . . . . . . . 28

OPIC countries and areas. . . . . . . . . . . . . . . . . . . . . . . . 30

Financial statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Board of directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

Officers and management. . . . . . . . . . . . . . . . . . . . . . . . 41

Photography credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
ing private U.S. capital to spur sustainable development in new and

emerging markets. OPIC’s success in

fulfilling this mandate has given life

to the proposition that government

leadership in managing the risks associated with foreign direct investment

could effectively mobilize capital and

human resources for development.

These resources would not otherwise

have been made available. One measure of OPIC’s success is the growth 

of some of the countries

that OPIC has helped

develop into mature,

open and democratic

market economies. 

OPIC has accomplished this

mandate on a self-sustaining basis,

with room to spare. OPIC now is in 

a strong position to face the continuing challenges wrought by the tragic

events of September 11 and the economic uncertainties exacerbated by

those events. 

My key priority in refocusing

OPIC is to strengthen the agency’s

consciousness of its developmental

mission and to ensure that OPIC’s

products are complementary, not

competitive, with the private sector.

The challenge is not static. Not every

investment in a developing country 

is developmental per se. The type of 

investment that is effective in one

country may not provide the same 

balance of costs and benefits in

another. What works in one phase 

page 1

Having originally

served OPIC in

the early days of

the first Bush

administration, I

joined anew last

year with a firm belief in the agency’s

possibilities. It was a belief that took

root a decade ago from the perspective of that experience, and one that

has only grown stronger as I have

had ample opportunity to observe

OPIC from other vantage points.

This agency has had a long-standing

impact in fostering economic development abroad while helping to

strengthen the U.S. economy at

home. When President George W.

Bush asked me to serve his administration as president and CEO of

OPIC, I accepted the assignment with

enthusiasm. I rejoined OPIC with an

appreciation of the organization’s

outstanding record of accomplishments as well as a belief that the

agency can do more and, with a refocused strategic plan, can do it even

better.

During the past 30 years, OPIC

has demonstrated its unique value as

an instrument of U.S. international

economic policy. First and foremost,

OPIC has been a catalyst for mobilizMy key priority 

in refocusing 

OPIC is to

strengthen 

the agency’s

consciousness of 

its developmental

mission and 

to ensure that

OPIC’s products

are complementary,

not competitive,

with the 

private sector. 

A refocused strategic plan 

President’s message
page 2

of a country’s economic development

may not be as effective in other circumstances. I intend to strengthen

OPIC’s developmental mandate by

examining critically each proposed

investment in terms of its developmental impact, using the most

advanced methodologies and the benefit of OPIC’s experience and portfolio. With that knowledge, we will

refocus OPIC’s outreach toward

underserved regions like sub-Saharan

Africa, as well as countries and sectors where the developmental benefits

are likely to be the greatest. 

I recognize that using our

resources to support more developmental projects may pose some

added risks. This means that OPIC

continually must improve its understanding of and capacity to manage

risk. Toward that end, I am

strengthening the risk management

function at OPIC by bringing in

new staff resources and technology

to better manage OPIC’s exposure

on both a portfolio and a project

level. I also am exploring how

OPIC’s policies on corporate social

responsibility and its agreements

with host governments can further

reduce risk.

While some of the risks that

OPIC faces can be identified readily

as political or commercial in origin,

other sources of risk may arise from

unintended environmental and social

impacts. With guidance from the

U.S. Congress and successive administrations, OPIC has exercised leadership in finding ways to promote

economic and social development,

while at the same time protecting the

environment, workers rights and

human rights in developing countries. OPIC’s leadership in this area

has been recognized by other official

and private lenders and insurers that

have come to see the value of integrating environmental and social

considerations into their lending and

insurance policies. Now that the private markets have “gotten the message,” many private companies are

going beyond the requirements of

law and are taking proactive measures to enhance their relationships

with local communities.

Exercising leadership in this

area means that OPIC must strive to

learn from the best practices of the

Outreach toward underserved regions 
page 3

most progressive companies and to

use those practices in its approach to

issues of corporate social responsibility. The practice of corporate

social responsibility is an integral

part of risk management. As part of

the reallocation of OPIC’s staff

resources, I have combined the risk

management, environmental and

labor rights, and economic analysis

and project monitoring units into a

new office headed by a vice president for investment policy. This

office will have the same status as

OPIC’s product divisions.

OPIC recognizes that the private

sector is in the best position to recognize and respond to business opportunities and risks in developing and

emerging markets. OPIC therefore

needs to work in tandem with private

business to leverage private sources of

financing and insurance to the maximum extent possible, while functioning as the “market of last resort” for

projects that private investors and

insurers would not or could not support on their own.

To enhance OPIC’s cooperation

with the private market, I have taken

steps to initiate a much greater level

of cooperation between OPIC and 

the private insurance markets. OPIC

needs to do things that the private

market will not — such as offering

greater tolerance for risky countries

1996

1981

1986

1991

1974

2001

64,684

52,782

28,919

19,158

6,310

687

U.S. Exports

cumulative in millions

of dollars

253,128

221,878

147,201

115,508

72,765

4,712

1996

1981

1986

1991

1974

2001

U.S. Job

Creation

cumulative

number of

jobs created
page 4

or projects, longer tenor, or larger 

per project capacity. 

To show our good faith in

demonstrating that we are not competing with the private market, we

plan to initiate a program that will

help to ensure that OPIC’s involvement is necessary — not a substitute

for what already is available in the

private market. From now on,

anyone applying for OPIC insurance

will have to demonstrate that a valid

attempt was made to place the coverage in the private market and that

such coverage was either not available at all or not available at terms,

conditions or rates that would allow

the investment to proceed. 

This new test of additionality

will help to fulfill OPIC’s responsibility to find avenues for cooperation

with the private market. It will

respond to OPIC’s need to complement, not compete with, the private

sector. And it will provide an opportunity to refocus our activities to

better reflect our mission by helping

to mitigate risk and support investment in the emerging markets. In

other words, everyone will win.

Both overseas development and

U.S. economic growth increasingly

are dependent on the vital role of

the small and entrepreneurial business sector. Despite its small staff,

OPIC has done remarkably well in

reaching out to small and mediumsized enterprises (SMEs), which constitute a growing percentage of

project participants. In addition,

thousands of SMEs participate as

suppliers to OPIC-supported projects. However, OPIC’s location in

our nation’s capital does not leave 

it well positioned to support companies that are geographically remote

from Washington and are at the

smaller end of the SME spectrum.

Therefore, one of my first actions 

at OPIC has been to create a structured arrangement with the U.S.

Small Business Administration

(SBA). This arrangement is designed

to complement SBA’s capacity to

reach and support small business

with OPIC’s international expertise. 

Finally, as both a government

agency and a business, OPIC has an

increasing obligation toward its stakeholders to operate in a fully transparent manner. New telecommunications

82

61

45

25

12

2001

1998

1999

2000

1997

Number

of Small

Business

Projects
page 5

technologies, including but not limited

to the Internet, have created greater

expectations among the public for

increased disclosure of all information, with the important exception of

that which is vital to national security

or business confidentiality. I am committed to enhancing the transparency

of OPIC’s reporting and disclosures,

as should be evident in this annual

report.

Peter S. Watson 

President and CEO

OPIC has

exercised

leadership in

finding ways to

promote economic

and social

development,

while at the same

time protecting the

environment,

workers rights and

human rights in

developing

countries.
Our work is

well aligned

with U.S.

economic,

foreign,

environmental

and labor

policies.

page 6

Streamlining the agency

OPIC has taken measures to make our work more transparent to

the public and to make it easier for businesses to access resources

and results. We responded to customer satisfaction surveys by

making more information available electronically, including

publications, press releases and application forms. Now, businesspeople can learn about OPIC products and services in a matter of

minutes. And they can use the investor’s gateway section of our

Web site to link to other sources of information about the countries

in which OPIC operates. Online training programs for small

businesses supply customized information. Doing business with

OPIC has never been easier. www.opic.gov
Know this about OPIC: No other

American public or private organization invests in developing countries

with the scope and focus that we do.

We operate in more than 140 countries — financing economic development projects large and small and

mitigating economic and political

risks. And we operate at no net cost

to American taxpayers. Over our 

30-year history, OPIC has built up

reserves of more than $4 billion and

has recovered or settled more than 94

percent of our insurance claims.

We make it possible for parched

communities in Kenya to drill for

potable water and meet a basic human

need. We enable farmers in Guatemala

to cultivate a new coffee plant, build a

family-owned business, provide training and health care to workers, and

transport children to school. In Central

Europe, we pave the way for advanced

medical diagnostic facilities and skilled

jobs, while in Asia and Latin America,

our support leads to affordable housing and the new beginnings it offers.

We make it possible for emerging markets to develop the infrastructure of

airports, utilities and telecommunications that will bring millions of people

into the global economy. We accomplished this and much more in 2001.

OPIC plays an uncommon and

indispensable leadership role

in developing emerging markets, 

expanding global commerce and fostering democratic values worldwide.

The unprecedented events of 2001

brought a fresh relevance to our

work. People who have the economic

and social opportunities that lead 

to prosperity are far less likely to

become estranged from society or

engage in violence than people without these opportunities. A strong

defense against terrorism, then, is

investing in the developing countries

that may harbor terrorists and forging strong, positive bonds with those

nations. For 30 years, this has been

our core mission, and it matters more

than ever in today’s uncertain times.

In 2001, we sharpened our

focus, renewing our commitment to

economic development in places

where it makes a profound difference

to human welfare. We are well positioned to strengthen this impact in

the future. Our work is well aligned

with U.S. economic, foreign, environmental and labor policies. In short,

OPIC is good for the world and good

for America.

page 7

A sharper agenda that matters more than ever
Economic

opportunity can

lift people out

of poverty,

improve their

quality of life,

and steer them

toward

productivity

and prosperity.

page 8

Economic development in emerging

markets around the world 
page 9

The essence of OPIC 

is mobilizing private

investments in economic development,

which creates opportunities for the underprivileged of the world. There are

compelling political, economic and

social reasons to make these investments. 

For many, the concept of a

“land of opportunity” is utterly

unfathomable. Millions of people

who share the planet with us live 

in poverty or economic uncertainty,

with few prospects for improving

their lot. The fruits of the global

economy are beyond their reach —

an increasingly untenable condition

in a world with widening gaps

between the haves in advanced

nations and the have-nots in the

Third World. The United States must

find ways to help developing countries participate in the global economy — or risk contempt and unrest

from their growing populations. 

Americans know well that business is the engine of economic opportunity. Only free market forces can

sustain a trajectory of genuine economic progress. Private enterprise

creates jobs and fosters hard work,

ingenuity and entrepreneurial spirit.

OPIC brings this familiar formula for

economic growth to developing countries through political risk insurance,

investment guaranty and funds programs. OPIC itself makes no equity

investments, and except for some

projects involving U.S. small businesses, OPIC does not directly lend

money for investment purposes.

Rather, we create incentives for 

private investment by insuring or

guaranteeing such investments in

developing countries. Economic

opportunity can lift people out of

poverty, improve their quality of life,

and steer them toward productivity

and prosperity.

Leadership and landmark

agreements

OPIC plays a leadership role in creating the economic and political conditions for economic development

abroad. In 2001, for example, OPIC

for the first time began offering

financing to U.S. businesses investing

in Mexico. This historic breakthrough was hailed on both sides 

of the border for its potential to

strengthen America’s second-largest

trading partner. At the same time,

SMEs in the United States now have

access to OPIC financing for investment projects in Mexico. 

To facilitate such projects, OPIC

also agreed to cooperate with the

largest development bank in Mexico

and Latin America, Nacional

Financiera (NAFIN). The principles

of cooperation recognize the importance of sharing information about

private investment opportunities;

Creating opportunities abroad
page 10

sharing technical knowledge, particularly concerning risk mitigation and

management; and encouraging joint

ventures in developing economies.

OPIC and NAFIN also recognize that

all OPIC-supported investments must

respect the environment, human

rights and worker safety.

Also in 2001, OPIC reached an

agreement with Yugoslavia permitting

OPIC to support U.S. investment —

an important first step that will lead

to economic development projects.

The agreement underscores OPIC’s

critical role in rebuilding countries

ravaged by war or political upheaval.

Already, OPIC is setting the stage for

a similar role in Afghanistan, working in partnership with U.S. companies to participate in a post-Taliban

economy, and is supporting investment in Pakistan. 

Moreover, OPIC is working

aggressively to mobilize private-sector

investment. In 2001, we convened

forums to outline investment opportunities in both Yugoslavia and

Afghanistan for high-level government officials and senior business

leaders. This unparalleled outreach 

is helping to chart the course for

reconstruction and economic growth

in these countries. 

The value of U.S. involvement 

on the ground in emerging market

economies cannot be overstated.

Through highly developmental projects, countries reap benefits that go

far beyond tangible dollars and cents

or bricks and mortar. Equally important, people in these countries acquire

new, marketable skills. They gain an

understanding of business principles

and practices by working collaboratively with American businesspeople

and OPIC professionals. They are

empowered to build productive businesses and thriving communities.

Indeed, economic activity enables

businesses to make socially responsible investments — in education,

training, health facilities and child

care, for example.

Magnifying positive results

OPIC projects produce a ripple effect

in local economies — and, in the best

of circumstances, the U.S. and global

economies as well. Expanding the

number of routes serviced by Nevis

Express Airport on the island nation

of Saint Christopher and Nevis in the

Caribbean, for example, should be 

a catalyst for economic growth. An

increase in the availability of air 

673,691

598,810

446,344

352,925

243,192

61,763

1996

1981

1986

1991

1974

2001

Host Country

Job Creation cumulative
page 11

service will attract more tourists,

which should result in eventual

expansion of the airport. Contractors

will procure supplies from local and

U.S. businesses to build new facilities

to accommodate growth. 

OPIC’s initial support, then,

helps leverage more investments,

commitments and growth. OPIC

projects often bring important benefits to U.S. business as well — opening new markets, developing new

trade partners and creating U.S. jobs.

OPIC analyzes project proposals and

conducts follow-up monitoring to

ensure that the projects we invest in

do not displace U.S. jobs.

OPIC paves the way for U.S.

businesses to operate in emerging

nations. By nature, there are risks

and challenges to investing abroad,

particularly in developing countries.

American companies are taking a

chance in unknown territories with

often unpredictable political climates

that can determine whether any

business undertaking will work. The

potential for losses from currency

controls, seizure of assets, political

unrest or other unpredictable events

remains. Not surprisingly, U.S.

investors and insurance companies

view these risks and challenges 

with trepidation. That’s why OPIC 

is the lender and insurer of last

resort — we will not compete with

private-sector investment or risk mitigation providers when we help fill

this need. 

Often, doing business in developing countries takes special knowledge

and expertise that potential investors

do not have. OPIC can be instrumental in bridging the gap between U.S.

businesses and host-country governments. Many companies simply could

not afford to undertake the challenges of investing in developing

countries without this critical support

from OPIC. 

In Africa, OPIC

committed a

$227.5 million

loan guaranty to

the new Africa

Millennium Fund,

a private equity

fund that will

enable U.S. companies and others to

invest in sorely

needed infrastructure projects in subSaharan Africa. OPIC selected Africa

Millennium Managers, a consortium

of private investment firms, to manage

the fund and raise $122.5 million 

in equity to meet our goal of $350 

million in capital. This fund replaces

the New Africa Infrastructure Fund,

which was approved in 1999 but never

consummated. 

The fund, mandated by the

Africa Growth and Opportunity Act

of 2000, demonstrates deep U.S.

commitment to strengthening trade

and investment, increasing prosperity,

and combating poverty in Africa. The

Making a

difference

Project 

highlights 

in economic

development
page 12

Africa Millennium Fund will target

sectors such as telecommunications,

transportation, electricity, water and

sanitation — the essential foundations for economic growth.

Also in Africa, OPIC provided

political risk insurance to privatized

flour mills in Lesotho and Mozambique. Seaboard Overseas Limited 

— a subsidiary of Seaboard Corporation, an agribusiness and ocean

transportation company headquartered in Shawnee Mission, Kansas 

— has been taking advantage of

opportunities to privatize formerly

state-run facilities in Africa. Over the

years, OPIC has supported Seaboard

with insurance coverage in several

African locations.

With this insurance in place,

Seaboard has been able to join with

African business partners to modernize and provide working capital for

the flour mills. The company also

trains local workers to operate new

equipment safely and manage the

plants in an environmentally responsible manner. Expanded production

of wheat and maize flour and manufactured animal feed in Lesotho,

Mozambique and Zambia has

increased the availability of basic

food products in local markets.

In Latin America, OPIC 

continued its critical role in fulfilling

the dream of home ownership, which

enhances sustainable growth and longterm stability in emerging economies.

However, interest rates vary widely

throughout Latin America, the 

mortgage market is unpredictable 

and loans sometimes are not easily 

available. Without affordable and 

accessible mortgages, home ownership

is impossible for the vast majority of

people in the developing world. 

OPIC is helping to improve this

situation by bringing U.S. capital and

experience to bear on mortgage markets in Latin America. OPIC’s support gives Latin American banks an

incentive to offer construction loans.

OPIC support for mortgage lending

will increase home ownership in the

developing world — and this will

create an untapped and potentially

attractive market for U.S. investors

and the U.S. homebuilding industry. 

Specific OPIC projects in 2001

include: 

• $22.5 million for residential 

housing and mortgages in the

Dominican Republic. The OPIC

loan will add mortgage loan origination capacity to this small market.

• $2.5 million for microcredit loans

to low-income homeowners in

Mexico for home improvements.

The North American Free Trade

Agreement (NAFTA) presents

tremendous opportunity for fueling 

Investing strategically
page 13

economic growth on the border with

Mexico; with increasing employment,

housing is necessary for those workers. CHF, through Fundacion Habitat

y Vivienda A.C., continues to address

the current situation of substandard

housing for Mexican workers.

Also in Latin America, OPIC

invested strategically in bringing adequate power to developing nations.

Affordable, reliable sources of energy

and telecommunications services are

prerequisites for economic growth.

Specific projects include:

• $190 million in insurance to Bank

of America, N.A., as trustee for a

syndicated loan to a gas pipeline

expansion in Argentina.

• $85 million in inconvertibility

insurance and a Foreign Exchange

Liquidity Facility Guaranty, which

allowed a subsidiary of The AES

Corporation of Arlington, Virginia,

to refinance the high-cost midterm

debt that it used to acquire a privatized hydroelectric generation business in Sao Paulo, Brazil.

• $50 million in insurance to BankBoston, N.A., to support more reliable Internet services, including

Web hosting and dial-up access

services, in Brazil. BankBoston,

N.A., is the corporate name under

which Fleet National Bank,

FleetBoston Financial’s principal

banking subsidiary, operates in

Latin America.

In Europe and Central Asia,

OPIC’s New Century Capital

Partners, L.P., invested in several

regional telecommunications companies in Russia to assist with their

ongoing privatization. The fund’s

investment will help to capitalize

these companies, enabling them to

upgrade the communications infrastructure throughout Russia. The

fund made a similar investment in

Lithuanian Telecom, with the same

developmental benefit anticipated. 

OPIC also provided $15 million

in insurance to a group of ArmenianAmericans to privatize the Marriott

Hotel Armenia, a historic hotel in the

Caucasus region. OPIC has supported

similar hotel projects, such as restoring the Ritz-Carlton Istanbul and the

Hotel Tbilisi Marriott in Georgia, a

hotel built in the early 20th century

and destroyed during the Georgian

civil war of the 1990s. The Tbilisi

privatization project will provide the

first Western-owned and -operated

five-star accommodations for business travelers interested in investing

in Georgia — and it will expand the

country’s capacity to accommodate

tourists.

“We welcome 

OPIC’s participation

in fostering joint

ventures between

Mexican and U.S.

companies. This will

allow Mexico and

the United States 

to deepen an already

thriving economic

relationship [and]

creat[e] new jobs 

for more Mexicans.”

— President Vicente Fox

Quesada of Mexico
page 14

OPIC staff

members 

and U.S.

businesspeople

effectively serve

as ambassadors

for American

business

practices,

putting a

human face on

capitalism and

democracy. 

Good corporate citizenship 

and host-country governance
page 15

Putting America’s best face forward

Done well and done

right, economic

development projects

in developing nations

showcase American

leadership and stewardship in the world. Done badly,

otherwise beneficial projects actually

can hinder development. For this

reason, OPIC strongly encourages all

project participants in the United

States and abroad to follow best

industry practices. We back up our

words with actions. 

With OPIC as a partner, U.S.

companies, host-country firms and

government officials conduct business

with scrupulous attention to international standards that protect the environment, human rights and labor

rights. We maintain a highly qualified

staff of professionals who conduct

due diligence work on these issues

before projects are approved. In their

work abroad, OPIC staff members

and U.S. businesspeople effectively

serve as ambassadors for American

business practices, putting a human

face on capitalism and democracy. 

In Panama, for example, OPIC

provided insurance coverage to the El

Paso Energy Corporation for a hydroelectric power plant acquired through

privatization, which provides affordable and reliable electricity to local

residents. Given the sensitivity of the

project’s location — within a tropical

forest reserve — OPIC, prior to issuing coverage, conducted an in-depth

evaluation of the environmental

impacts of the project on the area,

including an environmental audit of

the power plant’s operations and a

safety evaluation of the dam. To

ensure that the biodiversity of the area

was protected, the sponsors agreed to

take corrective actions to bring the

facility up to international standards

for environmental protection.

Public advocacy, 

successful results

When necessary, OPIC acts as a

public advocate, stepping in to

encourage good corporate citizenship

and good host-country governance.

OPIC has extensive experience in

resolving disputes that may arise in

its projects. 

In 2001, for example, OPIC 

successfully negotiated with the 

government of the Philippines to

encourage a government-chartered

corporation to fulfill its obligations

concerning a project sponsored by

Bechtel Enterprises. The Filipino 

corporation had failed to adhere to

its agreement on the rate structure 

for water and sewerage rates and 

had declined to honor an international arbitration award requiring 

it to do so. OPIC communicated its

concerns to the Philippine ministry 

of finance, and the problem ultimately was resolved to the satisfaction of all parties. 

OPIC also maintains an extensive

monitoring program, conducting site
page 16

visits for projects all over the world.

Through these visits, we monitor

progress over the long term, noting

whether companies and host countries

are following the letter and the spirit

of their agreements with OPIC. 

In Central Asia

in 2001, OPIC

encouraged

Uzbekistan to

continue economic

reforms to help

attract additional

U.S. investment.

Specifically, OPIC

urged senior Uzbek

government

officials to abolish

the dual exchange

rates and to offer

full currency

convertibility for

SMEs. In recommending this course

of action, OPIC underscored the

increased investment that could

result, particularly as Uzbekistan

moves to privatize large parts of its

economy. 

OPIC, which has provided over

$200 million in insurance to projects

in Uzbekistan over the past few years,

signed a bilateral investment agreement with the emerging nation in

1992. OPIC is a joint-venture partner

with the U.S. Trade and Development

Agency and the Export-Import Bank

of the United States at the Caspian

Finance Center, a regional office

based in Ankara, Turkey, that is

responsible for the Caucasus and

Central Asia, including Uzbekistan.

Also this year, OPIC’s Global

Environment Emerging Markets

Fund, II, is involved in significant

development activities. An investment

commitment to a Southeast Asian

entity, for example, provided the capital to upgrade and expand the only

nonhazardous waste disposal facility

in Indonesia and to develop a new

industrial waste disposal facility in

Thailand — the only environmentally

compliant one in the country.

Several smaller projects exemplify the spirit of good corporate citizenship and host-country governance

as well, including:

• A $300,000 OPIC loan for a pilot

program to market solar ovens in

Uganda — and train women to

use them. The Global Sun Oven

®

,

manufactured by Sun Ovens

International of Elburn, Illinois, is

an alternate, environmentally

friendly cooking technology for

families who normally rely on

scarce wood or expensive oil as

their fuel sources. An organization

for rural women, founded by First

Lady of Uganda Janet Museveni,

will promote use of the solar ovens.

Transferring this technology to a

developing nation addresses the

rapidly expanding problems of

deforestation and population

growth with solar approaches to

everyday living. 

• A $300,000 OPIC loan for improving production at a family-owned

Making a

difference

Project

highlights

demonstrating

good 

corporate

citizenship 

and hostcountry

governance
page 17

coffee farm in Guatemala. The

Oriflama Coffee Farm will expand

existing coffee production and

switch to a new, improved variety

of high-quality arabica coffee, a

move expected to increase revenues

by 20 percent and create 133 jobs

in the local economy within five

years. The business is environmentally friendly, using an innovative

recycling and conservation process

for water used in growing and

cleaning the coffee and the parchment used to dry it. It also uses cultivation techniques that support

habitats for resident and migratory

birds, amphibians, and other

wildlife. The business treats workers and their families with dignity,

providing training and supporting

medical services for workers and

making sure they are registered for

Guatemalan social security. The

business also has provided transportation to school for children.

Oriflama is a model farm that

received international recognition

for its excellent coffee in the 2001

Cup of Excellence competition. 

• A $200,000 OPIC loan for drilling

of potable water wells in Kenya.

A serious shortage of drinking

water in Kenya makes drilling

equipment from Living Water

International (LWI) a vital component of basic survival. OPIC’s loan

to LWI will enable LWI’s affiliate,

Living Water Kenya, to drill an

additional 20 water wells per year.

In the past decade, Living Water

has drilled 125 water wells in

Kenya for a fee, and such fees are

the primary source of repayment 

of OPIC’s loan. Local citizens are

trained to maintain the wells,

pumps and storage tanks — and

they learn about basic hygiene and

food preparation to prevent contamination of the wells. Water committees, generally made up of

women, are encouraged to sell the

water for about a penny a gallon to

raise funds for maintenance and to

give people a sense of ownership of

the wells.

“The comfort that

comes from this

insurance induces

many American

exporters, small 

or large, to bid on

projects they would

otherwise avoid . . .

OPIC’s prestige 

goes a long way in

ensuring that foreign

governments treat

American exporters

fairly.”

— Peter A. Bowe, 

president, 

Ellicott International, 

a small business in 

Baltimore, Maryland
OPIC financing

and insurance

give small

businesses the

support they

need to conduct

business in

developing

nations with

confidence. 

page 18

Benefits to U.S. small business
page 19

B

y design, OPIC’s most

significant results rest

beyond U.S. borders.

Significantly, however,

OPIC projects also contribute to the success of

U.S. companies — particularly SMEs.

A growing percentage of our project

portfolio involves U.S. companies

with annual revenues of less than

$250 million. In 2001, 57 percent of

our new projects were small business

projects.

We make it possible for small

and medium-sized firms to break into

foreign markets. This is important in

the global economy, with companies

increasingly relying on foreign markets to grow their businesses. A

fiercely competitive business environment requires even small companies

to gain new footholds in international markets to survive. 

The many barriers and risks to

doing business in developing nations

can seem insurmountable for small

businesses, which often do not have

the resources or expertise to explore

ventures in unknown lands. The political, economic and cultural laws and

practices may be profoundly different

in countries without the traditions and

Fostering entrepreneurial success at home

An OPIC loan in 2000 to a Fort Worth, Texas, company paid off

with a top industry award for the firm in 2001. 

Abamedia, L.P., an international

media development and production

company, developed an electronic catalog and Web site to preserve multimedia

works in the Russian archives. A

searchable database puts once-secret

historical information, precious documents, works of art and more

at the fingertips of students, teachers, historians, artists and others

interested in this treasure trove of resources. 

OPIC supported this multiyear venture, which included a PBS

documentary film, The Red Files, Secrets of the Russian Archive.

The film won the 2000 International Documentary Association

Award for a limited series, which was screened at the Director’s

Guild of America in Los Angeles, California, after the awards ceremony last October. 

Long-term results 

1981

57%

18%

30%

45%

31%

1996

1986

1991

2001

Percentage of OPIC

Projects That Are

Small Businesses

1981–2001
page 20

systems that exist in more established

economies. And, unlike large corporations, small companies will find it

more difficult to meet any unexpected

challenges brought on by the uncertainty of the political climate. 

OPIC financing and insurance

give small businesses the support they

need to conduct business in developing nations with confidence. In 2001,

OPIC took this message to minorityowned businesses in Washington, DC,

in a forum that encouraged overseas

investments and introduced OPIC’s

services.

An OPIC loan 

to DVI, Inc., 

of Jamison,

Pennsylvania, 

will bring more

sophisticated medical care to people

in Central and

Eastern Europe

and Turkey. DVI

specializes in leasing and installing

state-of-the-art diagnostic medical

equipment — such as magnetic resonance imaging (MRI scans), computerized tomography (CT scans),

ultrasound, radiation and gamma

knife equipment — in hospitals, 

clinics and other specialized patient

centers. With private sector funding

unavailable, OPIC’s loan helps DVI

meet its corporate strategy of

responding to growing international

markets. 

At the same time, OPIC financing fills a need in developing countries, where financing for high-tech

medical equipment is inadequate or

nonexistent. Doctors and technicians

will receive professional training to

use the equipment, which is expected

to result in better preventive health

care, lower medical costs and fewer

procedures for patients. 

Moreover, the project furthers

OPIC’s pivotal role in mobilizing private investment and implementing

U.S. foreign policy in the region. The

Southeast Europe Initiative seeks to

achieve a peaceful and stable region

by promoting investment, trade and

economic growth. Already, OPIC has

established an office in the region and

a $150 million Southeast Europe

Equity Fund, which invests in

Albania, Bulgaria, Bosnia 

and Herzegovina, Croatia,

Macedonia, Romania, Slovenia,

Montenegro, and Turkey.

In 2001, this fund made its first 

commitment — $20 million for the 

privatization of the largest telecommunications provider in Macedonia.

Elsewhere, OPIC provided $1.5

million in political risk insurance to a

small U.S. company providing life and

health insurance to previously uninsured local companies and individuals

in Venezuela. BMI Venezuela, a subsidiary of BMI Financial Group, Inc.,

of Coral Gables, Florida, is using

political risk insurance to cover its

investment. In addition, the OPIC

Making a

difference

Project 

highlights 

for small 

business
page 21

insurance is enabling another subsidiary, BMI Services, Inc., to provide

training to BMI Venezuela employees

in cost management techniques, systems expertise and health coverage

enhancement programs. This OPIC

project continues a trend of foreign

investment that has turned around 

the insurance industry in Venezuela,

which experienced a crisis caused 

by severe problems in the banking

industry in 1994.

Dexter Safety & Industrial

Products, Inc., in Brownsville, Texas,

meanwhile, will use a $100,000

OPIC loan to distribute safety equipment to companies in Mexico. Its

gloves, protective garments, uniforms,

respirators, facemasks and eyeglasses

will protect industrial workers and

enable companies to comply with

health and safety standards.

Solar Electric Light Company,

Inc., of Chevy Chase, Maryland, will

provide solar electric systems for

homes and businesses in Sri Lanka

with a $100,000 OPIC loan. The

small power systems provide electricity to people who otherwise would

have none.

The civil war in Rwanda in the early 1990s devastated the country.

After the war, an OPIC-supported tea factory was well positioned

to make a comeback. This

factory was one of the first

to resume production,

paying taxes to the country

and providing the only

source of cash income to

some 35,000 people. The project supports 3,500 independent tea

growers and employs 200 permanent staff and 1,000 seasonal

workers. 

Joseph H. Wertheim, president of Tea Importers, Inc., a small

business in Westport, Connecticut, credits OPIC with enabling his

company to make investments in tea plantations in Rwanda and

Ecuador. During the Rwandan civil war, the company’s tea processing factory was shelled and looted, but OPIC’s payment of political

violence claims for losses of nearly $250,000 enabled the company

to stay and rebuild. 

As a result, Rwanda continues to benefit from the economic

contribution made by the Tea Importers project, and the Tea

Importers company continues to benefit from the improving situation in Rwanda. In the post-civil war period, schools have been

built, health care is provided, housing is improved and, according

to a World Bank study, the farmers in the area have a better income

per acre of land than in other parts of the country.

Long-term results 
Acting as the

steadying

anchor, OPIC

can attract

private-sector

partners willing

to share the

risk and

potential

rewards of

investing in

fledgling

economies. 

page 22

Partnerships with

the private sector 
page 23

OPIC’s willingness

and ability to 

support high-risk

investments enable

us to mobilize 

private-sector

financing that would not otherwise

be available. Our history and performance in highly developmental

projects inspire confidence from 

private-sector partners in the United

States, in host countries and throughout the world. Acting as the steadying

anchor, OPIC can attract privatesector partners willing to share the

risk and potential rewards of investing in fledgling economies. 

In 2001, OPIC committed to

redoubling its efforts on this front.

There is strength in numbers. We are

actively seeking partnerships with

businesses and organizations that can

increase U.S. investments in developing nations. To that end, we forged

an important partnership in 2001

with the Inter-American Agency for

Cooperation and Development

(IACD). Together, OPIC and IACD

are promoting private-sector investment and participation in social and

economic development projects in

Latin America and the Caribbean.

Already, countries in this region represent the biggest portion of OPIC’s

portfolio. This pioneering agreement

has the potential to leverage more

investment and launch more projects

in our hemisphere. 

An example of a project using

public-private partnerships is the privatization and expansion of the wireless telecommunications sector in

Brazil. In fiscal year 2000, OPIC

provided $200 million of insurance

coverage to BCP, S.A., one of the

largest wireless operators in Latin

America, whose major shareholders

are the BellSouth Corporation of

Atlanta, Georgia, and the Safra

Group of Brazil. In 1999, tenors for

bank loans in Brazil were limited to

one to two years, and the total

amount of financing available was

severely constrained. A consortium

of public and private insurers, which

consisted of OPIC, the Multilateral

Sources

of Project

Investment

fiscal year 2001

66%

18%

14%

2%

United

States

Host

Country

Third

Country

Multilateral

Institutions

Leveraging investments and results
Investment Guarantee Agency

(MIGA), American International

Group (AIG) and the Export

Development Corporation (EDC),

provided more than $800 million in

political risk insurance. This enabled

BCP to raise the necessary long-term

capital through a syndicate of private

banks to meet its financing needs.

In Latin

America, a 

$106 million

OPIC loan will

support the privatization, rehabilitation and

expansion of the

Jorge Chavez

International

Airport in Lima,

Peru. The airport is the largest and

most active in the nation, accounting

for virtually all of the international

air traffic and cargo and one-third of

the domestic passengers. 

Alterra Partners Ltd., an affiliate

of Bechtel Enterprises, Inc., of San

Francisco, California, is working in

partnership with Frankfurt Airport in

Germany and COSAPI, a Peruvian

construction company, to implement

the project. The project will generate

$65 million in annual revenue for the

Peruvian government and 70 permanent local jobs. In addition, it will

generate a positive net impact on the

U.S. balance of payments of $64.2

million — and help leverage additional investment for the airport and

Peru. 

In this project, OPIC is supporting the growth of the physical infrastructure necessary for the economic

development of our partners in

emerging markets. Promoting transportation not only assists the development of Peru, but also sends a

strong message of confidence in the

long-term investment climate to U.S.

investors. 

In Asia, OPIC launched a joint

trade and finance initiative with the

Export-Import (Ex-Im) Bank of the

United States and the U.S. Trade and

Development Agency (TDA) to support U.S. investments in and exports

to Indonesia. 

The three agencies will provide

financing to promote trade and 

investment opportunities in Indonesia.

Ex-Im Bank will provide financing 

to support U.S. exports of goods and

services in the oil and gas sector.

OPIC will provide loans, guaranties

and insurance for projects in the oil

and gas sector, and TDA funds will

be used to identify and develop projects in various industry sectors for

Ex-Im Bank and OPIC loans and

guaranties. 

page 24

Making a

difference

Project 

highlights 

with 

private-sector

partnerships
page 25

Africa and the Middle East

Cote d’Ivoire

Mondoil Enterprises LLC Oil and gas field exploration, $25,000,000 Insurance

(Foxtrot International LDC) development and production

Kenya

Living Water International Drilling potable water wells $200,000 Finance

(Living Water International)

Nigeria

Atlanta Global Resources, Inc. Import and marketing of cement $4,770,000 Insurance 

(Atlanta Global Resources Nigeria Limited)

Uganda

Tucson Transatlantic Trade, Inc. Assembly and sale of solar ovens $300,000 Finance

(Tucson Transatlantic Trade, Inc.)

Zambia

Quarry Investment Partners, LLC Agribusiness $1,512,000 Insurance

(Best Value Zambia, Limited)

The Americas

Argentina

Bank of America, N.A. Gas pipeline expansion $190,000,000 Insurance

(Transportadora se Gas del Sur, S.A.)

Citibank, N.A. Mortgage lending $50,000,000 Insurance

(Banco Rio de la Plata, S.A.)

Eligible U.S. Investors Mortgage-backed bond issuance $60,000,000 Finance

(BACS II Mortgage Trust, Series 2001–02)

Tishman Speyer/Travelers Office and retail complex $40,950,000 Finance

Real Estate Venture III, LLC

(Tishman Speyer/Travelers 

and Austral Financial)

Bolivia

Accion International Financing of microloans $1,000,000 Finance

(Banco Solidario, S.A.)

Brazil

The AES Corporation Hydroelectric power $85,000,000 Insurance 

(Companhia de Geração de $50,000,000 Finance

Energia Electrica Tietê)

BankBoston, N.A. Internet service $50,000,000 Insurance

(BankBoston, N.A. Sao Paulo Branch)

2001 investment projects*

COMPANY PROJECT DESCRIPTION SUPPORT

AMOUNT TYPE

*The status of the projects listed here may change in the future.
page 26

COMPANY PROJECT DESCRIPTION SUPPORT

AMOUNT TYPE

Citibank, N.A. Upgrade and expansion of cellular service $49,000,000 Insurance

(Tele Norte Celular Participacoes S.A.)

El Paso Energy Corporation Combined gas-fired power plant $36,000,000 Insurance 

(UEG Araucária Ltda.) $100,000,000 Finance

Enron Corp. Simple-cycle gas-fired power plant $190,000,000 Finance

(Sociedade Fluminense de Energia Ltda.)

Marriott International, Inc. Business/tourist hotel $45,439,200 Insurance

(Renaissance do Brazil Hotelaria Ltda.)

Signs Now Corporation (Franchisor) Franchise sign printer $1,055,000 Finance

(NH Serviços de Sinalização Ltda.)

Colombia

Chase Manhattan Bank Cellular telecommunications $99,500,000 Insurance

(Celummovil S.A.) expansion and refinancing

Kimberly-Clark Corporation Disposable tissue products $10,000,000 Insurance

(Colombiana Kimberly Colpapel S.A.)

Costa Rica

Colite Outdoor, LLC Billboard advertising $500,000 Insurance

(Colite Costa Rica, S.A.)

Dominican Republic

Fort Point Real Estate Company Residential housing/mortgages $22,500,000 Finance

(World Mortgage)

El Salvador

Colite Outdoor, LLC Billboard advertising $1,080,000 Insurance

(Colite El Salvador, S.A.)

Guatemala

Walter Randolph Adams, et al. Production/introduction $300,000 Finance

(Flama de Oro, S.A.) of new coffee variety

Mexico

Accion International Financing of microloans $1,000,000 Finance

(Financiera Compartamos S.A. de C.V., 

Societdad Financiera de Objeto Limitado)

Agroenlinea.com, Inc. Online agricultural commodity exchange $1,200,000 Finance

(Agroenlinea.com S.A. de C.V.)

Cooperative Housing Foundation Microcredit loans to individual $2,500,000 Finance

(Cooperative Housing Foundation) homeowners for home improvements

Dexter Safety and Industrial Products, Inc. Industrial protection products $100,000 Finance

(Dexter Safety and Industrial Products, Inc.)

Panama

El Paso Energy Corporation Hydroelectric power project privatization $24,300,000 Insurance

(Empresa de Generacion 

Electrica Fortuna, S.A.)
page 27

Peru

Bechtel Enterprises Inc. Airport privatization $106,000,000 Finance

(Alterra Partners Ltd.) 

(Lima Airport Partners S.R.L.)

Kimberly-Clark Corporation Expansion of diaper $2,430,000 Insurance

(Kimberly-Clark Peru S.A.) manufacturing facility

St. Christopher-Nevis 

Allen Haddadi Airline expansion, construction $735,000 Finance

(Daystar Airways Ltd. [DBA Nevis Express]) of airport hangar facilities

Venezuela

BMI Financial Group, Inc. Life and health insurance $1,380,000 Insurance

(BMI Compania de Seguros de Venezuela, C.A.)

The Williams Companies, Inc. Gas compression facility $140,000,000 Finance

(Wilpro Energy Services [Pigap II] Ltd.)

Asia and the Pacific

Sri Lanka

Solar Electric Light Company, Inc. Solar energy home system $100,000 Finance

(Solar Electric Light Company)

Europe and the New Independent States

Armenia

Marriott International, Inc. Business/tourist hotel $15,344,171 Insurance

(Armenia Hotel Complex)

Europe Regional

DVI, Inc. Diagnostic medical equipment $28,000,000 Finance 

(DVI-Poland) leasing and financing operation

Russia

API Glass Partners L.P. Glass bottle manufacturing expansion $29,500,000 Finance

(Russian American Glass Company)

Global

Great Circle Capital, LLC Private equity investment $130,000,000 Funds

(The Great Circle Fund L.P.) fund — maritime industry

COMPANY PROJECT DESCRIPTION SUPPORT

AMOUNT TYPE
OPIC-supported, privately managed, private equity investment funds provide

long-term growth capital, management expertise and new technologies while

supporting adoption of international standards of reporting, transparency, and

environmental and workers rights sensitivity. They promote private-sector

enhancement fundamental to the development of emerging market economies.

OPIC’s funds operate in every region of the world. Current OPIC funds

include:*

page 28

Africa Millennium Fund

Agribusiness Partners International

AIG Brunswick Millennium Fund

Allied Small Business Fund

Aqua International Partners

Asia Development Partners, L.P. 

Asia Pacific Growth Fund

Bancroft Eastern Europe Fund

Caucasus Fund

Draper International India

Emerging Europe Fund 

Global Environment Emerging Markets Fund

Global Environment Emerging Markets Fund, II 

Great Circle Fund

India Private Equity Fund 

InterArab Investment Fund

Israel Growth Fund

Modern Africa Growth and Investment Fund 

New Century Capital Partners, L.P.

Newbridge Andean Partners, L.P.

Poland Partners, L.P.

Russia Partners

South America Private Equity Growth Fund

Southeast Europe Equity Fund

West Bank/Gaza & Jordan Fund

ZM Africa Investment Fund 

*This list does not include two OPIC funds that have

completed operations. 

2001 investment funds’ projects 
In 2001, OPIC-supported funds invested $251 million in 124 projects 

worldwide, with an average investment of more than $2 million per project.

Highlights from these projects are:*

Africa and the Middle East 

Songhai Financial Holdings Ghana Investment banking 

and brokerage 

Bayt.com, Inc. Jordan Internet portal 

Flamingo Holdings Ltd. Kenya Horticultural company 

Africa Broadcast Network South Africa Media/communications 

South Africa Plywood (Pty) Ltd. South Africa Wood products 

The Americas

America Latina Logistica Brazil Railroad transportation 

International Hospital Corporation N.V. Brazil Healthcare services 

Modulo Security Solutions Brazil Information retrieval services 

Sanepar PN Brazil Water and utility 

Newbridge Telebright Investors Chile Computer 

Renewable Resources Holding Chile Power generation/ natural 

Co. of Chile resources 

Asia and the Pacific

Niko Resources Ltd India Natural gas 

Verdaine Indonesia Palm oil plantation 

First Pacific Company Limited Philippines, Thailand Consumer goods

and Indonesia 

Modern Asia Environmental Holdings, Inc. Southeast Asia Waste management 

Metering Technology Corporation Thailand Utility meters and counters 

Europe and the New Independent States 

Kabelovna Decin-Podmokly, a.s. Czech Republic Cable wire producer 

Euromedic International, N.V. Eastern Europe Healthcare services 

Lithuanian Telecom Lithuania Telecommunications 

Makedonski Telekomunikacil AD Macedonia Telecommunications 

MobiFon, S.A. Romania Wireless communication 

Telerus Russia Telecommunications 

*This is a sampling of projects in which OPIC-supported investment funds were invested during fiscal year 2001.

page 29

PORTFOLIO COMPANY COUNTRY DESCRIPTION
page 30

Africa and the

Middle East 

Algeria

Angola

Bahrain

Benin

Botswana

Burkina Faso

Cameroon

Cape Verde

Central African Republic

Chad

Congo

Congo, Democratic 

Republic of 

Djibouti

Egypt

Equatorial Guinea

Eritrea

Ethiopia

Gabon

Ghana

Guinea

Israel

Jordan

Kenya

Kuwait

Lebanon

Lesotho

Madagascar

Malawi

Mali

Mauritania

Mauritius

Morocco

Mozambique

Namibia

Niger

Nigeria

Oman

Rwanda

São Tomé and Príncipe

Senegal

Sierra Leone

Somalia

South Africa

Swaziland

Tanzania

Togo

Tunisia

Uganda

West Bank and Gaza

Yemen

Zambia

Zimbabwe

The Americas

Anguilla

Antigua and Barbuda

Argentina

Aruba 

Bahamas

Barbados

Belize

Bolivia

Brazil

Chile

Colombia

Costa Rica

Dominica

Dominican Republic

Ecuador

El Salvador

French Guiana

Grenada

Guatemala

Guyana

Haiti

Honduras

Jamaica

Mexico*

Netherlands Antilles

Nicaragua

Panama

Paraguay

Peru

St. Kitts and Nevis

St. Lucia

St. Vincent and The 

Grenadines

Suriname

Trinidad and Tobago

Turks and Caicos

Uruguay

Venezuela

Asia and the

Pacific

Afghanistan

Bangladesh

Cambodia

Cook Islands

Fiji

India 

Indonesia

Kiribati

Korea

Laos

Malaysia

Marshall Islands

Micronesia, Federated 

States of

Mongolia

Nepal

Pakistan

Papua New Guinea

Philippines

Singapore

Sri Lanka

Taiwan

Thailand

Tonga

Vietnam

Western Samoa

Europe and 

the New

Independent

States

Albania 

Armenia

Azerbaijan

Bosnia and Herzegovina

Bulgaria

Croatia

Cyprus

Czech Republic

Estonia 

Georgia

Greece

Hungary

Ireland

Kazakhstan

Kyrgyzstan

Latvia

Lithuania

Macedonia, Former 

Yugoslav Republic of

Malta

Moldova

Montenegro

Northern Ireland

Poland

Portugal

Romania

Russia

Slovakia

Slovenia

Tajikistan

Turkey

Turkmenistan

Ukraine

Uzbekistan

Yugoslavia, Federal 

Republic of

OPIC programs encourage U.S. private investment in some 140 countries

and areas around the world, contributing to economic growth at home

and abroad.

OPIC programs generally are available in the approximately 140

countries and areas listed below. From time to time, statutory and policy

constraints may limit the availability of OPIC programs in certain countries, or countries where programs previously were unavailable may

become eligible. Investors are urged to contact OPIC directly for up-todate information on the availability of OPIC services in specific countries,

as well as information on program availability in countries not listed.

OPIC countries and areas

*In Mexico, OPIC’s programs are limited to direct loans to projects that significantly involve U.S. small businesses

or cooperatives.
page 31
page 32

OVERSEAS PRIVATE INVESTMENT CORPORATION

At September 30 ($ in thousands)

2001 2000

ASSETS

Fund Balance with U.S. Treasury (Notes 2 and 4) $ 678,570 $ 594,544 

U.S. Treasury securities, at amortized cost plus related receivables (Notes 2 and 7) 3,524,168 3,302,888 

Direct loans outstanding of $74,385 and $52,987 less allowance for uncollectible 

loans of $9,085 and $9,202 in FY 2001 and FY 2000 (Notes 2 and 10) 65,300 43,785 

Accounts receivable resulting from investment guaranties of $69,808 and $57,366 less

allowance for doubtful recoveries of $29,576 and $26,935 in FY 2001 and FY 2000 

(Notes 2 and 11) 40,232 30,431 

Assets acquired in insurance claims settlements of $239,776 and $246,014 less 

allowance for doubtful recoveries of $97,690 and $102,284 in FY 2001 and

FY 2000 (Notes 2 and 11) 142,086 143,730 

Accrued interest and fees 19,176 15,073 

Accounts receivable 61 122 

Furniture, equipment and leasehold improvements at cost less accumulated 

depreciation and amortization of $10,201 in FY 2001 and $8,257 in 

FY 2000 (Notes 2, 14 and 19) 8,273 10,516 

TOTAL ASSETS $4,477,866 $4,141,089 

LIABILITIES, CAPITAL AND RETAINED EARNINGS

Liabilities:

Reserve for political risk insurance (Note 2) $ 260,000 $ 220,000 

Reserve for investment guaranties (Note 2) 550,000 460,000 

Accounts payable and accrued expenses 8,475 8,916 

Customer deposits and deferred income 35,717 35,447

Borrowings from U.S. Treasury (Note 6) 57,763 62,926 

Unearned premiums 18,565 20,390 

Deferred rent and rent incentives from lessor of $20,486 and $20,525 

net of accumulated amortization of $9,618 and $8,324 in FY 2001 

and FY 2000 (Note 14) 10,868 12,201

941,388 819,880 

Contingent liabilities (Notes 9, 10, 17 and 18)

Capital and retained earnings:

Contributed capital 50,000 50,000 

Credit funding (Note 5) 79,896 96,308 

Interagency transfers 1,147 1,085 

Retained earnings statutorily reserved:

Insurance (Notes 9 and 12) 1,846,826 1,883,973 

Guaranty (Notes 10 and 12) 1,558,609 1,289,843 

3,536,478 3,321,209

TOTAL LIABILITIES, CAPITAL AND RETAINED EARNINGS $4,477,866 $4,141,089 

See accompanying notes to the financial statements.

Balance sheets
page 33

OVERSEAS PRIVATE INVESTMENT CORPORATION

For the years ended September 30 ($ in thousands)

2001 2000

REVENUES

Political risk insurance (Note 9) $ 66,577 $ 84,385 

Investment financing 93,501 87,850 

Other operating income 30,958 25,287 

Interest on U.S. Treasury securities 227,557 212,103 

418,593 409,625 

EXPENSES

Provisions for reserves:

Political risk insurance (Note 2) 43,848 102,968 

Investment financing (Notes 2 and 10) 103,411 68,429 

Salaries and benefits (Notes 15 and 16) 19,078 18,950 

Rent, communications and utilities (Note 14) 5,126 5,464 

Contractual services 23,814 14,123 

Travel 1,431 1,583 

Interest on borrowings from U.S. Treasury (Note 6) 3,738 3,815 

Depreciation and amortization (Note 2) 1,965 1,944 

Writedown of internally developed software (Note 19) 0 5,098 

Other general and administrative expenses 1,563 2,101 

203,974 224,475 

NET INCOME $214,619 $185,150 

See accompanying notes to the financial statements.

Statements of income
page 34

Statements of capital and retained earnings

OVERSEAS PRIVATE INVESTMENT CORPORATION

For the years ended September 30 ($ in thousands)

Contributed Credit Interagency Retained

Capital Funding Transfers Statutory Reserves Earnings Total

Insurance Guaranty

(Notes 9 and 12) (Notes 10 and 12)

Balance September 30, 1999 $50,000 $190,569 $3,525 $1,974,828 $1,017,336 $ 0 $3,236,258

Net income (93,870) 271,998 7,022 185,150

Return of expired credit funding (83,998) (83,998)

Credit funding received from:

Accumulated earnings 28,022 (28,022) 0

Credit funding used (38,085) 17,085 21,000 0

Dividend to Treasury (16,576) (16,576)

Interagency transfers (200) (2,440) 3,015 375

Balance September 30, 2000 $50,000 $ 96,308 $1,085 $1,883,973 $1,289,843 $ 0 $3,321,209

Net income (36,935) 251,554 214,619

Credit funding received from:

Accumulated earnings 23,750 (1,000) (22,750) 0

Credit funding used (39,962) 17,212 22,750 0

Interagency transfers (200) 62 788 650

Balance September 30, 2001 $50,000 $ 79,896 $1,147 $1,846,826 $1,558,609 $ 0 $3,536,478

See accompanying notes to the financial statements.
page 35

OVERSEAS PRIVATE INVESTMENT CORPORATION

For the years ended September 30 ($ in thousands)

2001 2000

Cash Flows from Operating Activities:

Net Income $214,619 $185,150 

Adjustments to reconcile net income to net cash provided by operating activities:

Provisions for:

Political risk insurance 43,848 102,968

Investment financing 103,411 68,429

Amortization of premiums on U.S. securities 18,205 18,506

Accretion of discounts on U.S. securities (4,064) (3,688)

Depreciation and amortization of furniture, equipment and leasehold improvements 2,043 1,944

Write down of internally developed software 0 5,098

Increase (Decrease) in assets:

Accrued interest and fees (6,520) (5,213)

Accounts receivable 61 814 

Assets acquired in claims settlements (32,817) (51,817)

Recoveries on assets acquired in claims settlements 8,464 6,792 

Increase (Decrease) in liabilities:

Accounts payable and accrued expenses (441) 1,660 

Customer deposits and deferred income 270 1,170

Unearned premiums (1,825) (8,267)

Deferred rent and rental incentives (1,333) (571)

Insurance claim payments (2,812) (219,340)

Recoveries against insurance nonspecific reserve claim payments 270 0

Cash Provided by Operating Activities 341,379 103,635

Cash Flows from Investing Activities: 

Sale and maturity of U.S. securities 401,190 337,062 

Purchase of U.S. securities (634,194) (379,631)

Repayment of direct loans 27,844 10,116 

Disbursement of direct loans (47,880) (3,900)

Acquisition of furniture and equipment 200 (544)

Cash Used in Investing Activities (252,840) (36,897)

Cash Flows from Financing Activities:

Dividend to U.S. Treasury 0 (16,576)

Interagency transfers 650 375 

Return of expired credit funding 0 (83,998)

Credit Reform (repayments to) borrowings from U.S. Treasury (5,163) 379 

Cash Provided by Financing Activities (4,513) (99,820)

NET INCREASE (DECREASE) IN CASH 84,026 (33,082)

CASH AT BEGINNING OF YEAR 594,544 627,626 

CASH AT END OF PERIOD $678,570 $594,544 

See accompanying notes to the financial statements.

Statements of cash flows
page 36

OVERSEAS PRIVATE INVESTMENT CORPORATION

September 30, 2001 and 2000

1. Statement of Corporate Purpose

The Overseas Private Investment Corporation (OPIC) is a selfsustaining U.S. Government corporation created under the Foreign

Assistance Act of 1961 (FAA), as amended, to facilitate U.S. 

private investment in developing countries and emerging market

economies, primarily by offering political risk insurance, investment guaranties, and direct loans. As a government corporation,

OPIC is not subject to income tax.

2. Summary of Significant Accounting Policies

BASIS OF PRESENTATION: These financial statements have been prepared to report the financial position, results of operations, and

cash flows of OPIC. OPIC’s accounting policies conform to generally accepted accounting principles. OPIC’s financial statements are

presented on the accrual basis of accounting. Under the accrual

basis, revenues are recognized when earned and expenses are recognized when a liability is incurred, without regard to receipt or payment of cash.

REVENUE RECOGNITION: Facility fees are received in advance and

recognized as deferred income, then amortized over the applicable

loan period. Interest on loans and guaranty fees on investment

guaranties are accrued based on the principal amount outstanding.

Revenue from both loan interest payments and guaranty fees that 

is more than 90 days past due is recognized only when cash is

received. Revenue from political risk insurance premiums is recognized on a pro-rata basis over the contract coverage period.

Accretion of premium and discount on investment securities is

amortized into income under a method approximating the effective

yield method.

RESERVES FOR POLITICAL RISK INSURANCE AND INVESTMENT

GUARANTIES: The reserves for political risk insurance and investment guaranties provide for losses inherent in those operations.

These reserves are general reserves, available to absorb losses

related to the total insurance and guaranties outstanding, which are

off-balance-sheet commitments. The reserves are increased by provisions charged to expense and decreased for claims settlements.

The provisions for political risk insurance and investment guaranties are based on management’s evaluation of the adequacy of

the related reserves. This evaluation encompasses consideration of

past loss experience, changes in the composition and volume of the

insurance and guaranties outstanding, worldwide economic and

political conditions, and project-specific risk factors.

ALLOWANCE FOR UNCOLLECTIBLE LOANS: The allowance for

uncollectible loan amounts and related accounts receivable is

based on management’s periodic evaluations of the loan portfolio.

In its evaluation, management considers numerous factors,

including, but not limited to, general economic conditions, loan

portfolio composition, prior loan loss experience, the estimated

fair value of any collateral, and the present value of expected

future cash flows.

FUND BALANCE WITH U.S. TREASURY: Substantially all of OPIC’s

receipts and disbursements are processed by the U.S. Treasury

which, in effect, maintains OPIC’s bank accounts. For purposes of

the Statement of Cash Flows, fund balance with U.S. Treasury is

considered cash.

INVESTMENT IN U.S. TREASURY SECURITIES: By statute, OPIC is

authorized to invest funds derived from fees and other revenues

related to its insurance and preinvestment programs in U.S.

Treasury securities. Investments are carried at face value, net of

unamortized discount or premium, and are generally held to maturity. OPIC has the ability and intent to hold its investments until

maturity or until the carrying cost can be otherwise recovered.

VALUATION OF ASSETS ACQUIRED IN CLAIMS SETTLEMENTS: Assets

acquired in claims settlements are valued at the lower of management’s estimate of the net realizable value of recovery or the cost of

acquisition. 

OPIC acquires foreign currency in settlement of inconvertibility

claims when an insured foreign enterprise is unable to convert foreign currency into U.S. dollars as well as in some direct loan and

investment guaranty collection efforts. The U.S. dollar equivalent is

recorded until the foreign currency is utilized by OPIC or other

agencies of the United States Government or until it is exchanged

for U.S. dollars by the foreign government.

DEPRECIATION AND AMORTIZATION: OPIC capitalizes property and

equipment at historical cost for acquisitions exceeding $5 thousand.

Depreciation and amortization of fixed assets, leasehold improvements, and lease incentives are computed using the straight-line

method over the estimated useful life of the asset or lease term,

whichever is shorter, with periods ranging from 5 to 15 years. 

ACQUISITION COSTS: Costs of acquiring new insurance or finance

business are expensed in the year incurred as such costs are not

considered material.

RECLASSIFICATIONS: Certain FY 2000 balances have been reclassified to conform to FY 2001 financial statement presentations.

USE OF ESTIMATES: The preparation of financial statements requires

management to make estimates and assumptions that affect the

reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and

the reported amounts of revenue and expenses during the reporting

period. Actual results could differ from these estimates.

3. Intragovernmental Financial Activities

OPIC, as a U.S. Government corporation, is subject to financial

decisions and management controls of the Office of Management

and Budget. As a result of this relationship, OPIC’s operations may

not be conducted nor its financial position reported as they would

be if OPIC were not a government corporation. Furthermore, in

accordance with international agreements relating to its programs,

as well as internal U.S. Government operating procedures, foreign

currency acquired by OPIC can be used for U.S. Government

expenses. This facility constitutes an additional means, which would

otherwise be unavailable, by which OPIC can recover U.S. dollars

with respect to its insurance and investment financing programs.

4. Fund Balance with U.S. Treasury

OPIC is restricted in its uses of certain cash balances, as described

below. The fund balance with U.S. Treasury as of September 30,

2001 and 2000 consists of the following (dollars in thousands):

Fund Balance with U.S. Treasury

2001 2000

Restricted:

Pre-Credit Reform $ 861 $ 3,694

Credit Reform 661,041 589,728

Interagency fund transfers 2 252

Unrestricted: 16,666 870

Total $678,570 $594,544

The Federal Credit Reform Act of 1990 established separate

accounts for cash flows associated with investment financing activity approved prior to implementation of the Act and investment

financing activity subject to the Act. With the advent of Credit

Reform, OPIC is not permitted to invest its pre-Credit Reform cash

balances. These balances grow over time, and when they are determined to be no longer needed for the liquidation of the remaining

pre-Credit Reform direct loans and investment guaranties, they are

transferred to OPIC’s noncredit insurance account. During 2001

and 2000, OPIC transferred $5 million and $4.5 million to the

noncredit insurance account. Credit Reform balances are also

maintained in the form of uninvested funds. The U.S. Treasury

pays OPIC interest on those cash balances except for undisbursed

credit funding. Those balances are also expected to grow as the

volume of Credit Reform financings grows over time.

From time to time the Agency for International Development

(A.I.D.) has entered into various memoranda of understanding with

OPIC that provide for the transfer of funds from A.I.D. to OPIC to

Notes to financial statements
page 37

carry out specific programs. These cash balances may not be commingled with other OPIC cash and are available solely for the purposes of the individual agreements.

5. Credit Funding

OPIC’s finance activities are subject to the Federal Credit Reform

Act of 1990, which was implemented as of October 1, 1991.

Credit Reform requires agencies to estimate the long-term cost to

the government of each fiscal year’s new credit transactions and to

obtain funding through the appropriations process equal to the net

present value of such costs at the beginning of the year. OPIC’s

credit funding is available for two years. In addition, the Act

requires the administrative costs related to its credit program to 

be displayed.

In fiscal year 2001, OPIC’s appropriations legislation authorized

the corporation to use $24 million of its accumulated earnings to

cover the future costs of credit transactions committed in fiscal

years 2001 and 2002. In addition to the credit funding allocated

directly to OPIC through the appropriations process, OPIC has

received a total of $67 million in net transfers from other agencies

to be used exclusively to finance projects in the New Independent

States (NIS).

The following table shows the status of funding for credit activities

(dollars in thousands):

2001 2000

Balance carried forward $96,308 $190,569

Return of expired credit funding 0 (83,998)

Transferred from earnings 23,750 28,022

Interagency transfers (net) (200) (200) 

Credit funding used (39,962) (38,085)

Credit Funding Remaining $79,896 $ 96,308

In fiscal year 2000, OPIC paid a dividend to the U.S. Treasury of

$16.6 million. With this dividend and dividends paid in prior years,

OPIC had returned to the General Fund an amount equal to all the

direct appropriations used for credit funding since the inception of

credit reform. These dividends were paid because although OPIC

had been required in certain years to fund its credit activities

through direct appropriations, it has been able to meet the costs of

those activities from current operations. Also in FY 2000, OPIC

returned the balance of unused direct appropriations, totaling $84

million, to the General Fund. 

6. Borrowings From the U.S. Treasury

In accordance with the Federal Credit Reform Act of 1990, the

portion of investment financing activities not funded through the

appropriations process must be funded by borrowings from the

U.S. Treasury. Borrowings for Credit Reform financings totaled

$41.9 million in 2001 and $3.4 million in 2000, all of which have

been disbursed. OPIC paid a total of $3.7 million and $3.8 million

in interest to the U.S. Treasury during fiscal years 2001 and 2000,

respectively, and principal repayments of $47.1 million and $3.1

million were made in 2001 and 2000 under OPIC’s borrowing

agreement with the U.S. Treasury. Future payments and interest

rates for borrowings outstanding at September 30, 2001 are as follows (dollars in thousands):

Principal

Payment due in: Interest Rate Amount Due

Fiscal year 2002 n/a $ 0

Fiscal year 2003 n/a 0

Fiscal year 2004 n/a 0

Fiscal year 2005 6.5% 1,823

Fiscal year 2006 4.76%–6.53% 15,143

Thereafter 4.89%–6.38% 40,797 ea

Total $57,763

7. Investment in U.S. Treasury Securities

The composition of investments and related receivables at

September 30, 2001 and 2000 is as follows (dollars in thousands):

2001 2000

Investments, amortized cost $3,447,289 $3,244,147

Matured investment receivables 15,721 0

Interest receivable 61,158 58,741

Total $3,524,168 $3,302,888

The investment receivable at year end includes two investments that

matured on Saturday, September 30, 2001, but were not redeemed

by the U.S. Treasury until the first business day of fiscal year 2002.

The amortized cost and estimated fair value of investments in U.S.

Treasury securities are as follows (dollars in thousands):

Gross Gross Gross Estimated

Amortized Unrealized Unrealized Fair

Cost Gains Losses Value

At September 30, 2000

$3,244,147 $130,676 $(10,735) $3,364,088

At September 30, 2001

$3,447,289 $323,070 $ (1,121) $3,769,238

At September 30, 2001, the securities held at year end had an interest range of 5 percent to 13.8 percent and a maturity period from

about 4 days to almost 23 years.

The amortized cost and estimated fair value of U.S. Treasury securities at September 30, 2001, by contractual maturity, are shown

below. OPIC generally holds its securities to maturity. Expected

maturities would differ from contractual maturities if OPIC were to

sell securities prior to maturity (dollars in thousands):

Estimated

Amortized Fair

Cost Value

Due in one year or less $ 359,361 $ 365,466 

Due after one year through five years 1,180,974 1,278,080

Due after five years through ten years 1,136,772 1,207,737

Due after ten years 770,182 917,955

Total $3,447,289 $3,769,238

8. Statutory Limitations on the Issuance of Insurance and Finance

OPIC issues insurance and financing under a single limit for both

programs fixed by statute in the Foreign Assistance Act (FAA). At

September 30, 2001, this combined limit was $29 billion, of which

combined insurance and finance utilization was $15.2 billion. 

9. Political Risk Insurance 

Insurance revenues include the following components (dollars in

thousands):

As of September 30 2001 2000

Political risk insurance premiums $66,212 $83,909

Miscellaneous insurance income 365 476

Total Insurance Revenue $66,577 $84,385

OPIC’s capital, retained earnings, and reserves available for insurance at September 30, 2001 and 2000 totaled $2.3 billion and $2.2

billion, respectively. Charges against retained earnings could arise

from (A) outstanding political risk insurance contracts, (B) pending

claims under insurance contracts, and (C) guaranties issued in settlement of claims arising under insurance contracts.

(A) POLITICAL RISK INVESTMENT INSURANCE: OPIC insures investments for up to 20 years against three different risks: inconvertibility of currency, expropriation, and political violence. Insurance

coverage against inconvertibility protects the investor from

increased restrictions on the investor’s ability to convert local currency into U.S. dollars. Inconvertibility insurance does not protect

against devaluation of a country’s currency.
page 38

Expropriation coverage provides compensation for losses due to

confiscation, nationalization, or other governmental actions that

deprive investors of their fundamental rights in the investment.

Insurance against political violence insures investors against losses

caused by politically motivated acts of violence (war, revolution,

insurrection, or civil strife, including terrorism and sabotage).

Under most OPIC insurance contracts, investors may obtain all

three coverages, but claim payments may not exceed the single

highest coverage amount. Claim payments are limited by the value

of the investment and the amount of current coverage in force at

the time of the loss and may be reduced by the insured’s recoveries

from other sources. In addition, in certain contracts, OPIC’s

requirement to pay up to the single highest coverage amount is further reduced by stop-loss agreements. Finally, losses on insurance

claims may be reduced by recoveries by OPIC as subrogee of the

insured’s claim against the host government.

OPIC’s Maximum Contingent Liability at September 30, 2001 and

2000 was $8.2 billion and $9.96 billion. This amount is OPIC’s

estimate of maximum exposure to insurance claims, which includes

standby coverage for which OPIC is committed but not currently at

risk. A more realistic measure of OPIC’s actual exposure to insurance claims is the sum of each single highest “current” coverage 

for all contracts in force, or Current Exposure to Claims (CEC).

OPIC’s CEC at September 30, 2001 and 2000 was $5.3 billion and

$6.4 billion.

(B) PENDING CLAIMS: At September 30, 2001, the total amount of

compensation formally requested in insurance claims for which no

determination of specific liability had yet been made was approximately $19.5 million. In addition to requiring formal applications

for claimed compensation, OPIC’s contracts generally require

investors to notify OPIC promptly of host government action that

the investor has reason to believe is or may become a claim.

Compliance with this notice provision sometimes results in the

filing of notice of events that do not mature into claims.

The highly speculative nature of such notice, both as to the likelihood that the event referred to will ripen into a claim and the

amount, if any, of compensation that may become due, leads OPIC

to follow a policy of not recording a specific liability related to

such notices in its financial statements. Any claims that might arise

from these situations are factored into the reserves for political risk

insurance.

(C) CLAIMS SETTLEMENT GUARANTIES AND INDEMNITIES: OPIC also

has off-balance-sheet risk in connection with one claim settlement.

OPIC settled a claim in 1991 through a guaranty of $30 million of

host government obligations. Payments by the host government

have reduced OPIC’s exposure to $12.4 million at September 30,

2001. Any claims that might arise from these situations are factored into the nonspecific reserve for political risk insurance.

10. Investment Financing

OPIC provides investment financing through both project and corporate finance and investment funds. Project financing provides

medium- to long-term funding through direct loans and investment

guaranties to ventures involving significant equity and/or management participation by U.S. businesses. Project financing looks for

repayment from the cash flows generated by projects, and as such,

sponsors need not pledge their own general credit beyond the

required project completion period.

Investment funds use direct loans and investment guaranties to support the creation and capitalization of investment funds that make

direct equity and equity-related investments in new, expanding, or

privatizing companies in emerging market economies. The fund

managers, selected by OPIC, are experienced, private investment

professionals. OPIC’s participation in a fund takes the form of

long-term, secured loans and loan guaranties that supplement the

fund’s privately raised equity. OPIC’s guaranty may be applied only

to the debt portion of the fund’s capital and, for certain funds, to

accrued interest on that debt. OPIC does not guarantee any of the

fund’s equity, and all equity investments in OPIC-backed funds are

fully at risk.

OPIC’s authorization to make direct loans and investment guaranties can be found in sections 234(c) and 234(b) of the Foreign

Assistance Act (FAA), respectively. Direct loans and investment

guaranties are committed in accordance with the Federal Credit

Reform Act of 1990, pursuant to which loan disbursements and

any claim payments for these commitments have been funded

through appropriations actions, borrowings from the U.S. Treasury,

and the accumulation of earnings or collection of fees. In fiscal

years 2001 and 2000, $24 million was made available for credit

funding costs. OPIC is in compliance with all relevant limitations

and credit funding appropriations guidance. OPIC’s capital,

retained earnings, and reserves available for claims on its investment financing at September 30, 2001 and 2000 totaled $2.1 

billion and $1.8 billion, respectively.

DIRECT LOANS: Direct loans are made for projects in developing

and other eligible countries involving U.S. small business or cooperatives, on terms and conditions established by OPIC. Direct loan

exposure including capitalized interest at September 30, 2001

totaled $392 million, of which $75 million was outstanding.

Interest income is not accrued on direct loans that have payments

that are more than 90 days past due. Loans with payments more

than 90 days past due totaled $12.8 million at September 30, 2001

and $18.2 million at September 30, 2000. If interest income had

been accrued on those loans, it would have approximated

$600,000 during fiscal year 2001 and $1.1 million during fiscal

year 2000. Interest collected on delinquent loans and recorded as

income when received amounted to $1.3 million and $471,000 for

fiscal years 2001 and 2000, respectively.

Changes in the allowance for uncollectible loans during fiscal years

2001 and 2000 were as follows (dollars in thousands):

As of September 30 2001 2000

Beginning balance $9,202 $16,953

Charge-offs (1,880) (7,010)

Recoveries 3,242 68

Reduction in provisions (1,479) (809)

Ending Balance $9,085 $ 9,202

INVESTMENT GUARANTIES: OPIC’s investment guaranty covers the

risk of default for any reason. In the event of a claim on OPIC’s

guaranty, OPIC makes payments of principal and interest to the

lender. The loans that are guaranteed can bear either fixed or floating rates of interest and are payable in U.S. dollars. OPIC’s losses

on payment of a guaranty are reduced by the amount of any recovery from the borrower, the host government, or through disposition

of assets acquired upon payment of a claim. Guaranties extend

from 5 to 17 years for project finance and from 10 to 12 years for

investment funds.

Credit risk represents the maximum potential loss due to possible

nonperformance by borrowers under terms of the contracts. OPIC’s

exposure to credit risk under investment guaranties was $6.6 billion at September 30, 2001, of which $3.4 billion was outstanding.

Of the $6.6 billion, $3.6 billion related to project finance and $3.0

billion related to investment fund guaranties. Included in the $3.0

billion of investment fund exposure is $824 million of estimated

interest that could accrue to the guaranteed lender. This interest

generally accrues over a 10-year period, payable upon maturity.

Upon complete nonperformance by the borrower, OPIC would be

liable for principal outstanding and interest accrued on disbursed

investment funds. At September 30, 2001, $239 million of the

$824 million had actually accrued to the guaranteed lender on disbursed investment funds; the remainder represents an estimate of

interest that could accrue to the guaranteed lender over the remaining investment fund term.

Section 235 of the FAA requires OPIC to maintain a Guaranty

Reserve, which is reflected in the Capital and Retained Earnings

section of the balance sheet under the heading “Retained earnings

statutorily reserved.” 
page 39

11. Assets Acquired in Claim Settlements

Claim related assets may result from payments on claims under

either the insurance program or the investment financing program.

Under the financing program, when OPIC pays a guaranteed party

a receivable is created. Under the insurance program, similar

receivables reflect the value of assets, generally shares of stock,

local currency, or host country notes, that may be acquired as a

result of a claim settlement. These receivables are generally collected over a period of 5 to 15 years. On November 17, 1999,

OPIC paid two insurance claims totaling $217.5 million. OPIC’s

potential loss on these claims is included in allowance for doubtful

recoveries at September 30, 2001 and 2000. In fiscal year 2001,

OPIC entered into an agreement related to these claims with the

host government of Indonesia to recover, over a 14-year period,

the outstanding receivable plus interest that is due on these two

claims. Collections scheduled to commence in August of 2002 are

to be received semi-annually.

12. Statutory Reserves and Full Faith and Credit 

Section 235(c) of the FAA established a fund with separate accounts

known as the Insurance Reserve and the Guaranty Reserve for the

respective discharge of liabilities arising from investment insurance

or from guaranties issued under Section 234(b) of the FAA. These

reserves are reflected on the balance sheet under “Retained earnings

statutorily reserved.” These amounts may be increased by transfers

from retained earnings or by appropriations. In FY 2001, OPIC’s

Board of Directors authorized the allocation of all retained earnings

to these statutory reserves, thereby reflecting OPIC’s increased ability to absorb potential losses without having to seek appropriated

funds. The allocation of retained earnings to the Insurance Reserve

and the Guaranty Reserve is based on the amount of maximum

exposure outstanding for insurance and guaranties, respectively.

All valid claims arising from investment insurance and guaranties

issued by OPIC constitute obligations on which the full faith and

credit of the United States of America is pledged for full payment.

At September 30, 2001 and 2000, the statutory Insurance Reserve

totaled $1.8 billion and $1.9 billion, respectively, and the statutory

Guaranty Reserve totaled $1.6 billion and $1.3 billion respectively.

Should funds in OPIC’s reserves not be sufficient to discharge obligations arising under investment insurance, and if OPIC exceeds its

$100 million borrowing authority authorized by statute for its

insurance program, funds would have to be appropriated to fulfill

the pledge of full faith and credit to which such obligations are

entitled. Standing authority for such appropriations is contained in

Section 235(f) of the FAA. The Federal Credit Reform Act of 1990

authorizes permanent, indefinite appropriations and borrowings

from the U.S. Treasury, as appropriate, to carry out all obligations

resulting from the investment financing program.

13. Disclosures About Fair Value of Financial Instruments

The estimated values of each class of financial instrument for

which it is practicable to estimate a fair value at September 30,

2001 are as follows (dollars in thousands):

Carrying Fair

Amount Value

Financial Assets

Cash $ 678,570 $ 678,570

U.S. Treasury securities 3,447,289 3,769,238

Interest receivable on securities 61,158 61,158

Direct loans 65,300 65,300

Accounts receivable from

investment guaranties 40,232 40,232

Assets acquired in insurance

claims settlements 142,086 142,086

Financial Liabilities

Borrowings from the U.S. Treasury 57,763 57,763

The methods and assumptions used to estimate the fair value of

each class of financial instrument are described below:

CASH: The carrying amount approximates fair value because of the

liquid nature of the cash, including restricted cash.

U.S. TREASURY SECURITIES: The fair values of the U.S. Treasury

Securities are estimated based on quoted prices for Treasury securities of the same maturity available to the public. (OPIC is not

authorized, however, to sell its securities to the public, but is

instead restricted to direct transactions with the U.S. Treasury.)

Interest receivable on the securities is due within 6 months and is

considered to be stated at its fair value.

DIRECT LOANS, ACCOUNTS RECEIVABLE RESULTING FROM

INVESTMENT GUARANTIES, AND ASSETS ACQUIRED IN INSURANCE

CLAIMS SETTLEMENTS: These assets are stated on the balance sheet

at the present value of the amount expected to be realized. This

value is based on management’s quarterly review of the portfolio

and considers specific factors related to each individual receivable

and its collateral. The stated value on the balance sheet is also

management’s best estimate of fair value for these instruments.

BORROWINGS FROM THE U.S. TREASURY: The fair value of borrowings from the U.S. Treasury is estimated based on the face value of

borrowings discounted over their term at year-end rates. These borrowings were required by the Federal Credit Reform Act, and

repayment terms are fixed by the U.S. Treasury in accordance with

that Act.

INVESTMENT GUARANTIES COMMITTED AND OUTSTANDING: OPIC’s

investment guaranties are intended to provide a means of mobilizing private capital in markets where private lenders would be

unwilling to lend without the full faith and credit of the U.S.

Government. Given the absence of a market for comparable instruments, it is not meaningful to calculate their fair value.

14. Operating Lease

Minimum future rental expenses under the 15-year lease at 1100

New York Avenue, N.W. will be approximately $5.1 million annually, with additional adjustments tied to the consumer price index.

Lease incentives related to OPIC’s 1992 move to this location

totaled $16.7 million. The value of these incentives is deferred in

the balance sheets and is being amortized to reduce rent expense 

on a straight-line basis over the 15-year life of the lease. Rental

expense for 2001 and 2000 was approximately $4.5 million and

$4.3 million.

15. Pensions

OPIC’s permanent employees are covered by the Civil Service

Retirement System (CSRS) or the Federal Employee Retirement

System (FERS). For CSRS, OPIC withheld 7.0 percent of employees’ gross 2001 earnings. In 2001, OPIC contributed 8.51 percent

of employees’ gross earnings, and the sum was transferred to the

Civil Service Retirement Fund from which this employee group will

receive retirement benefits. For FERS, OPIC withheld 0.80 percent

of employees’ gross earnings. In 2001, OPIC contributed 10.7 percent of employees’ gross earnings. This sum is transferred to the

FERS fund from which the employee group will receive retirement

benefits. An additional 6.2 percent of the FERS employees’ gross

earnings is withheld; that plus matching contributions by OPIC are

sent to the Social Security System from which the FERS employee

group will receive social security benefits. OPIC occasionally hires

employees on temporary appointments, and those employees are

covered by the Social Security System under which 6.2 percent of

earnings is withheld and matched by OPIC.

FERS (after an initial eligibility period) and CSRS employees may

elect to participate in the Thrift Savings Plan (TSP). Based on

employee elections, 0 to 6 percent of gross CSRS earnings is withheld and 0 to 11 percent of gross FERS earnings is withheld.

FERS employees receive an automatic 1 percent contribution

from OPIC. Amounts withheld for FERS employees are matched

by OPIC, up to an additional 4 percent, for a total of 5 percent.

Although OPIC funds a portion of employee pension benefits under

the CSRS, the FERS, and the TSP, and makes necessary payroll

withholdings, it has no liability for future payments to employees

under these programs. Furthermore, separate information related to

OPIC’s participation in these plans is not available for disclosure in

the financial statements. Paying retirement benefits and reporting

plan assets and actuarial information is the responsibility of the U.S.
page 40

Office of Personnel Management and the Federal Retirement Thrift

Investment Board, which administer these plans. Data regarding the

CSRS and FERS actuarial present value of accumulated benefits,

assets available for benefits, and unfunded pension liability are not

allocated to individual departments and agencies.

16. Postretirement Benefits 

OPIC sponsors three defined benefit postretirement plans that

cover qualifying employees. The three plans provide major medical

coverage, dental and vision coverage, and life insurance. The medical and the dental and vision plans are both contributory plans.

The life insurance plan includes options that are contributory and

noncontributory.

Shown below is disclosure information for the years ended

September 30, 2001 and 2000 (dollars in thousands):

2001 2000

Reconciliation of Accrued Benefit Cost

Benefit liability at end of year $(3,324) $(3,032)

Fair value of plan assets at end of year 0 0

Funded Status at year end $(3,324) $(3,032) 

Unrecognized net actuarial gain (812) (942)

Accrued benefit cost $(4,136) $(3,974)

Components of Net Periodic Benefit Cost

Service cost $ 107 $ 117 

Interest cost 228 224

Expected return on plan assets 0 0 

Recognized net actuarial loss (69) (43) 

Net periodic benefit cost $ 266 $ 298

Effect of Health Care Trend

Assumed health care cost trend rates have a significant effect on the

amounts reported for the health care plans. A one-percentage-point

change in assumed health care cost trend rates would have the following effects as of or for the year ended September 30, 2001 (dollars in thousands):

1 Percentage 1 Percentage

Point Increase Point Decrease

Effects on total service cost and 

interest cost components $ 50 $ (41)

Effect on postretirement benefit 

liability 474 (371)

Change in Benefit Liability 2001 2000

Benefit liability at beginning of year $(3,032) $(3,049) 

Service cost (107) (118) 

Interest cost (228) (224) 

Actuarial gain/(loss) (62) 247

Benefits paid 105 112

Benefit liability at end of year $(3,324) $(3,032)

Weighted-average discount rate

assumption as of September 30 7.50% 8.00%

For measurement purposes, a 10 percent annual rate of increase in

the per capita cost of medical benefits was assumed for 2001. The

rate was assumed to decrease gradually to 9 percent for 2002, 8

percent in 2003, 7 percent in 2004, 6 percent in 2005, 5.5 percent

in 2006 and remain at that level thereafter. The per capita cost for

dental benefits was assumed to increase by 5.5 percent for each year.

17. Concentration of Risk

OPIC is subject to certain risks associated with financial instruments

not reflected in its balance sheet. These financial instruments include

political risk insurance, loan guaranties, and committed-butundisbursed direct loans. 

With respect to political risk insurance, OPIC insures against currency inconvertibility, expropriation of assets, and political violence. Additionally, OPIC provides investment financing through

direct loans and investment guaranties.

OPIC’s credit policy is to take a senior security position in the

assets of the projects or transactions it guarantees. The nature and

recoverable value of the collateral pledged to OPIC varies from

transaction to transaction and may include tangible assets, cash

collateral or equivalents, and/or a pledge of shares in the project

company as well as personal and corporate guaranties. OPIC takes

all necessary steps to protect its position in such collateral and

retains the ability to enforce its rights as a secured lender if such

action becomes necessary. 

The following is a summary of OPIC’s off-balance-sheet risk at

September 30, 2001 and 2000 (dollars in thousands):

2001 Unused

Total Outstanding Commitments

Guaranties $6,498,216 $3,378,881 $3,119,335

Undisbursed direct loans 317,590 ------- 317,590

Insurance 8,246,003 5,323,861 2,922,142

2000 Unused

Total Outstanding Commitments

Guaranties $6,521,979 $3,199,636 $3,322,343

Undisbursed direct loans 186,024 ------- 186,024

Insurance 9,957,534 6,363,020 3,594,514

OPIC’s off-balance-sheet finance and insurance exposure involves

coverage outside of the United States. The following is a breakdown of such total commitments at September 30, 2001 by major

geographical area (dollars in thousands):

Undisbursed

Loan Portion on

Guaranties Direct Loans Insurance

Africa $ 713,825 $ 26,000 $ 274,868

Asia 732,712 111,932 1,371,853

Europe 860,914 29,979 634,653

Latin America 2,549,479 67,179 5,287,285

Middle East 160,807 8,000 378,862

NIS (New Independent States) 865,816 72,000 548,722

Worldwide 614,663 2,500 0

Insurance Stop-loss Adjustment 0 0 

$6,498,216 $317,590 $8,246,003

OPIC has several client-specific contracts with stop-loss limits 

that are less than the aggregate coverage amounts. The insurance

stop-loss adjustment represents the difference between the aggregate coverage amount and OPIC’s actual exposure under these 

contracts.

At September 30, 2001, OPIC’s largest finance and insurance 

exposure was in the following countries and sectors (dollars in

thousands):

Country Sector

Brazil $2,330,384 Power Generation $4,740,442

Argentina 1,636,462 Financial Services 4,422,046

Turkey 1,048,148 Oil & Gas Services 1,895,008

Venezuela 999,625 Manufacturing 1,567,435

Colombia 690,036 Communications 1,129,548

18. Other Contingencies

OPIC is currently involved in certain legal claims and has received

notifications of potential claims in the normal course of business.

Management believes that the resolution of these matters will not

have a material adverse impact on OPIC.

19. Writedown of Internally Developed Software

In fiscal year 2000, management analyzed previously capitalized

costs associated with internally developed software and determined

that a portion of those costs would no longer be of future benefit

and should be written down by $5.1 million. The writedown was

calculated as the difference between the carrying amount less costs

identified by management as having future economic benefit, in

accordance with FAS 121, “Accounting for Impairment of Longlived Assets.” There was no writedown in fiscal year 2001.

20. Statutory Covenants

OPIC’s enabling statute stipulates both operating and financial

requirements with which OPIC must comply. In management’s

opinion, OPIC is in compliance with all such requirements.

(250,240)
page 41

BOARD OFDIRECTORS

ANDREW S. NATSIOS

Administrator

Agency for International 

Development

JON M. HUNTSMAN, J

R.

Deputy U.S. Trade 

Representative

Office of the U.S. Trade 

Representative

PETER S. WATSON

President and CEO

Overseas Private Investment 

Corporation

VACANT VACANT ALAN P. LARSON

Under Secretary of State for 

Economic, Business

and Agricultural Affairs

U.S. Department of State VACANT

U.S. Department of Labor LOTTIE L. SHACKELFORD

Executive Vice President

Global USA, Inc.

Little Rock, AR

GEORGE J. KOURPIAS

Retired President

International Association of 

Machinists and Aerospace 

Workers

Silver Spring, MD JOHN J. PIKARSKI, J

R.

Gordon and Pikarski

Chicago, IL MELVIN E. CLARK, J

R.

President and CEO

Metroplex Corporation

Washington, DC GARY A. BARRON

President

Strategic Alliance Partners

Aventura, FL

GEORGE

DARDEN

Partner

Long, Aldridge and Norman, 

LLP

Atlanta, GA MIGUEL D. LAUSELL

Attorney and Counselor at Law

San Juan, Puerto Rico ROBERT M. LYFORD

Senior Vice President and 

General Counsel

Arkansas Electric Cooperative 

Corporation

Little Rock, AR

OFFICERS AND

MANAGEMENT

Office of the President PETER S. WATSON

President and CEO ROSS J. CONNELLY

Executive Vice President 

& COO

JOSEPH E. FLYNN

Chief of Staff DULCE A. ZAHNISER

Senior Advisor to the President

Insurance Department ROD MORRIS

Vice President EDITH P. QUINTRELL

Manager — Technical 

Operations

MARK A. STUCKART

Regional Manager — Asia, 

South America, Central 

America, Latin America and 

Caribbean

JAMES C. WILLIAMS

Regional Manager — Africa, 

Europe, Eurasia, Middle 

East, Russia, NIS

Finance Department ROBERT B. DRUMHELLER

Vice President JOHN R. ALDONAS

Director — Project Management

and Special Assets

RALPH A. MATHEUS

Director — Small Business 

Programs

ALFREDO M. RODRIGUEZ

Director — Credit Policy and 

Analysis

DAVID G. FRANTZ

Manager — Project Finance JAMES C. POLAN

Manager — Project Finance NANCY A. RIVERA

Manager — Project Finance

BRIAN W. TREADWELL

Manager — Project Finance TRACEY L. WEBB

Manager — Project Finance DAVID C. SCHMITZER

Manager — Project Monitoring OVE B. WESTERHEIM

Manager — Project Monitoring CHRISTINA K. HALPERN

Administrative Manager

Investment Funds Department CYNTHIA L. HOSTETLER

Vice President BARBARA F. BRERETON

Manager — Investment Funds STEVEN J. COWAN

Manager — Investment Funds JAMES F. HANSLEY

Manager — Investment Funds EUGENE V. POHREN

Manager — Investment Funds 

Investment Development and

Economic Growth Department DANIEL A. NICHOLS

Vice President PETER H. BALLINGER

Director — Investment Services

(Ankara, Turkey)

JOAN J. EDWARDS

Director — Investment Services

Program Development

F. CARL

REINHARDT

Director — Investment Services JAMES E. GALE

Manager — Investment 

Development

DEBORAH S. MORONESE

Manager — Investment 

Development

SAMUEL D. SMOOTS

Manager — Investment 

Development

ABED R. TARBUSH

Manager — Investment 

Development

Office of the Chief 

Financial Office

r

GARY A. KEEL

Vice President ROSEMARY G. ALLEN

Director — Human Resources MARTHA C. EDMONDSON

Director — Financial 

Management

THOMAS H. ENGE

Budget Officer LENA M. PAULSEN

Manager — Information Center SHERYL S. SWISHER

Manager — Financial 

Accounting

CAROLINE M. TUNISON

Manager — Portfolio Services GREGORY Q. WILLIAMS

Manager — Contract and 

Administrative Services

Legal Affairs Department MARK A. GARFINKEL

Vice President and General 

Counsel

W. GEOFFREY

ANDERSON, JR.

Deputy General Counsel JANE H. CHALMERS

Associate General Counsel — 

Special Assets

LAURA H. HILLS

Associate General Counsel — 

Finance

MARC H. MONHEIMER

Associate General Counsel — 

Insurance

MELISSA D. OBEGI

Associate General Counsel — 

Investment Funds

ROBERT C. O’SULLIVAN

Associate General Counsel — 

Insurance Claims

DEV

JAGADESAN

Assistant General Counsel — 

Operational Evaluations

RUMU

SARKAR

Assistant General Counsel — 

Administrative Affairs

BRIAN

CHRISTALDI

Assistant General Counsel RONALD N. JONKERS

Assistant General Counsel MERLIN LIU

Assistant General Counsel THOMAS J. MAHAFFEY

Assistant General Counsel ELI H. LANDY

Counsel for Administrative 

Affairs and FOIA Director

CONNIE M. DOWNS

Corporate Secretary and Office 

Manager

Office of External Affairs CHRISTOPHER COUGHLIN

Vice President RICHARD C. HORANBURG

Director — Congressional 

Affairs

LAWRENCE

SPINELLI

Director — Communications

Office of Investment Policy VIRGINIA D. GREEN

Vice President HARVEY HIMBERG

Deputy Vice President

Director — Environmental 

Affairs

RICHARD

CORRIGAN

Director — Risk Management ANTHONY N. IERONIMO

Director — Economic Analysis 

and Project Monitoring
page 42

Cover

Gregory Maggio (Guatemala)

page 1

Chris Astriab

page 2

Gregory Maggio (top, Guatemala)

Ruth Stern (middle, Cartagena, Colombia)

Michael Messer (bottom, India)

page 5

Gregory Maggio (middle, Syktyvkar, Komi

Republic, Russia; bottom, Guatemala)

page 6

Gregory Maggio (top, Guatemala)

Lori Leonard (middle, Vilnius, Lithuania)

Sue Bush (bottom, Cottonwood, Arizona)

Michael Messer (large, Ulaanbaatar, Mongolia)

page 8

Gregory Maggio (top, Guatemala; middle,

Yaroslave, Russia )

Deborah Smith (bottom, Dominican

Republic)

page 11

(top, Barranquilla, Colombia)

Nora Petkovich (middle, Johannesburg, South

Africa; bottom, Rabale, Uganda)

page 12

David C. Schmitzer (top, Botswana; middle,

Esenyurt, Turkey)

Gregory Maggio (bottom, Syktyvkar, Komi

Republic, Russia)

page 14

Nora Petkovich (top, Singapore)

William Silverman (middle, Quito, Ecuador)

David C. Schmitzer (bottom, Island of Leyte,

Philippines)

Gregory Maggio (large, Equatorial Guinea)

page 16

David C. Schmitzer (top, Botswana)

Andrew McCabe (middle, Maturin,

Venezuela)

Michael Messer (bottom, India)

page 17

Gregory Maggio (all, Guatemala)

page 18

Gregory Maggio (top, Guatemala)

Nora Petkovich (middle, Johannesburg, South

Africa; bottom, KaioShung, Taiwan)

Michael Messer (large, Moscow, Russia)

page 20

Michele Pereira (top, San Pedro, Dominican

Republic)

Nora Petkovich (middle, Manila, Philippines)

Lynn Nguyen (bottom, Island of Leyte,

Philippines)

page 22

Michael Messer (top, Borisoglebsky, Russia)

(middle, Barranquilla, Colombia)

Nora Petkovich (bottom, Valasske Mezirici,

Czech Republic)

Gregory Maggio (large, Guatemala)

page 24

Nora Petkovich (top, KaioShung, Taiwan;

middle, Singapore; bottom, Valasske

Mezirici, Czech Republic)

Photography credits
This annual report is printed on

kenaf “tree-free” paper. Kenaf, a

member of the hibiscus family

related to cotton and okra, is a

4,000-year-old “new” crop with

roots in ancient Africa. 

Now grown on farms in the

United States, kenaf was chosen by

the U.S. Department of Agriculture

as “the most viable replacement for

trees for commercial pulp and paper

making in the United States.” Kenaf

provides opportunities for new

business development in rural

communities in an environmentally

sound manner.

Vision Paper of Albuquerque,

New Mexico, manufactures kenaf

without dioxins or other chlorine

compounds in strict compliance with

U.S. Environmental Protection

Agency regulations. 

Editorial and design by KSA-Plus Communications, Inc.

Printing by Fontana Lithograph, Inc.
Overseas Private 

Investment Corporation

An agency of the United States Government

1100 New York Avenue, N.W.

Washington, D.C. 20527

InfoLine: 202-336-8799

www.opic.gov