TABLE OF CONTENTS

BUDGET REQUEST OF THE OVERSEAS PRIVATE INVESTMENT CORPORATION 

FISCAL YEAR 2009 

EXECUTIVE SUMMARY ............................................................................................................. i 

INTRODUCTION ...........................................................................................................................1 

FY 2009 REQUEST ........................................................................................................................3

Administrative Expenses .............................................................................................................3

Technology ..............................................................................................................................3 

Human Resources ....................................................................................................................4

Credit Funding Request ...............................................................................................................5 

Strategies, Goals and Outcomes ..................................................................................................6

Developmental Quality of Projects – Aligning Budget to Performance..................................6 

Serving the Customer Efficiently.............................................................................................6 

Assuring a Level Playing Field for Lawful Business Activities..............................................7 

Strengthening Management Practices......................................................................................9 

Regional Foreign Policy Priorities: Broader Middle East, Selected Latin American Countries, 

& Sub-Saharan Africa..................................................................................................................9 

Rapid Economic Development Initiative (REDI)..................................................................10 

Sectoral Priorities – Housing, Access to Credit by Small and Medium Enterprises, 

Microfinance, and Renewable Energy.......................................................................................11 

OPIC Support for Housing.....................................................................................................12

Channeling U.S. Private Sector Capital to Financial Institutions that Lend to Local Small 

and Medium Enterprises (SMEs) in Developing Countries ..................................................13 

OPIC Support for Microfinance.............................................................................................15 

Renewable Energy .................................................................................................................16

Strategic Goals...........................................................................................................................17 

OPIC Focus on U.S. Small Business Investors......................................................................17 

Leveraging U.S. Government Resources...............................................................................18 

Continued Importance of OPIC Insurance.............................................................................18 

Increased Use by OPIC of Financial Intermediaries..............................................................19 

Investment Funds Support Administration Summit Initiatives .............................................20 

APPENDIX....................................................................................................................................23 

Appendix A: Appropriations Language.....................................................................................23 

Non-Credit Account...............................................................................................................23

Program Account ...................................................................................................................23 

OPIC Transfer Authority .......................................................................................................24 

Export Financing Transfer Authorities ..................................................................................24 

Appendix B: Budget and Analysis Tables.................................................................................25 

Appendix C: GPRA Annual Performance Plan/Report and Program Assessment Rating Tool 

(PART) Metrics .........................................................................................................................27

Appendix D: Development Matrix ............................................................................................28 

Appendix E: Program Assessment Rating Tool ........................................................................30 
EXECUTIVE SUMMARY 

OPIC’s mission is to help mobilize and facilitate U.S. private capital investment in 

developing and emerging market countries. Recognizing that only the private sector can drive 

sustained economic development, OPIC supports private investment in challenging environments 

through political risk insurance, investment guarantees, and direct loans. 

While OPIC was created to help U.S. businesses compete in these challenging environments, it 

was also created to help support and advance American foreign policy. It is in that regard that 

OPIC has renewed its focus. Helping create economic hope and opportunity in countries in 

which conflict is either still underway, or recently ended, must be an integral part of any policy 

aimed at stabilization and peace. That means adding quick and discernable economic growth 

through private capital investment as a tool deployed simultaneously with other initiatives 

undertaken in support of freedom and democracy. 

OPIC has worked closely with other departments and agencies of the Executive Branch to 

augment U. S. foreign policy objectives with catalytic, and often transformational, 

economic investments. Whether it is long-term, fixed rate mortgages for low- and moderateincome home buyers in Latin America, a $228 million small business lending facility in the West 

Bank, a 

 OPIC is making a valuable contribution to the achievement of U.S. 

foreign policy objectives in critical regions of the world. 

Coordinating and collaborating with other departments of the Government enables OPIC to use 

limited public resources to leverage billions of dollars of private capital investment in support of 

job creation and economic growth. This is not only consistent with OPIC’s mandate to advance 

U. S. foreign policy, but it is also entirely consistent with its mission as a developmental agency. 

OPIC’s principal geographic priorities are the Broader Middle East, selected countries in 

Latin America, and Sub-Saharan Africa. OPIC seeks to concentrate its support in these 

countries in sectors where it will have the greatest impact on economic growth and poverty 

reduction. By helping facilitate economic opportunities for low and moderate income citizens, 

OPIC hopes to help broaden political support for market-oriented policies. Consequently, OPIC 

has placed particular focus on low and moderate income home ownership and access to credit for 

small and medium-sized businesses (SMEs). 

In order to fulfill its mission to leverage private sector investments in support of Administration 

foreign policy priorities, and to do so in a responsible and accountable manner, OPIC requests 

the following resources for FY 2009 all to be funded from OPIC’s own offsetting 

collections:

Appropriated Resources 

(Dollars, Millions) 

2007

Actual

2008

Enacted

2009

Request 

Administration $ 42.1 $ 47.5 $ 50.6 

Subsidy 20.1 23.0 29.0 

Net Offsetting Collections (254.2) (235.0) (249.6)

Net Negative Budget Authority $ (192.0) $ (164.5) $ (170.0) 

Transfer Authority Up to $20m Up to $20 m Up to $20m 

*

* Information has been Redacted in accordance with the two principled exceptions of the Foreign Aid Transparency and 

Accountability Act (FATAA) of 2016; including the health and security of implementing partners, as well as national interest of the 

United States.
INTRODUCTION

OPIC facilitates U.S. private investment in developing countries and transition economies 

to spur their economic development. Private investment is the most effective engine of 

economic growth. Advancing the economic growth of poor countries through private 

investment is in the interest of the United States because it will strengthen support for 

market-oriented economic policies worldwide, achieve greater political stability in 

countries that have suffered from a history of conflict, and create dependable trading 

partners for the United States. 

In countries where the United States is fighting terrorism, private sector driven economic 

growth has to be a core part of any solution, and the U.S. private sector can play an 

important role alongside the government in making it happen. 

OPIC has a solid, 36-year track record of supporting U.S. private investment in the 

developing world through political risk insurance and financing. This support has 

been provided at no net cost to the taxpayer, since OPIC generates more in fees and 

insurance premiums than it spends in administrative expenses and payments on claims. 

OPIC has been able to achieve this outcome through financially sound credit and 

insurance underwriting decisions and judicious use of the leverage OPIC can exert as an 

arm of the U.S. government. OPIC’s favorable track record can be seen in the budget in 

the $4.5 billion accumulated in its Noncredit Account and in OPIC’s $5.4 billion in 

GAAP reserves.

OPIC has continued its efforts to ensure that its investment projects have a 

significant developmental benefit in host countries and that OPIC insurance and 

financing does not displace the private market. OPIC concentrates its support on 

highly developmental projects in challenging economic environments. But these projects 

would not be pursued by the private investors on their own because of the higher risks 

involved. OPIC support can make such projects commercially viable by reducing the 

political risk through insurance or by reducing the commercial risk through guarantees.

OPIC uses rigorous analytical methods to determine the developmental quality and 

degree of additionality of any project. 

While OPIC is ready to support highly developmental investment projects in any 

OPIC-eligible country, it proactively seeks out projects in high priority areas and 

countries that are important from a U.S. foreign policy perspective or countries and 

sectors where OPIC support can make a real difference. OPIC’s regional priorities 

are the Broader Middle East (including Afghanistan and Pakistan), select countries in 

Latin America, and Sub-Saharan Africa. OPIC’s focus on the Broader Middle East is 

driven by a belief that an improvement in economic conditions is a requirement for 

greater peace, stability, and democratic reform in the region. OPIC’s focus on Central 

America/Mexico and Peru/Colombia is driven by a desire to demonstrate that the policy 

choice these countries have made to pursue a closer economic relationship with the 

United States will yield economic benefits. OPIC’s focus on Sub-Saharan Africa is 

driven by a global recognition that Africa needs to further engage with the global 

economy to overcome its history of poverty and lack of economic progress. 
OPIC has identified three sectors in particular where OPIC can make a real 

difference: housing, access to credit for small and medium enterprises, and 

renewable energy.

Housing meets a fundamental human need and is a major generator of jobs, but it 

also creates a framework for the accumulation of capital. Most notably, home 

ownership creates an asset that the homeowner can use to secure small business loans and 

other investments such as training or education. This supports grass roots capitalism by 

increasing the supply of loan capital that can be made available to new entrepreneurs and 

small businesses. An increase in the supply of credit to small enterprises ensures that 

individuals with entrepreneurial skills have the ability to grow a business. Together, 

investment in housing, and in financial institutions willing to extend credit to small 

businesses and grass roots entrepreneurs, can make a real difference in the lives of the 

people at the lower end of the income scale. It is vital that the poor realize the benefits of 

economic growth in order to create broad political acceptance of open, market oriented 

policies, and to blunt the terrorist message. Helping small business to get off the ground 

is one of the most effective ways of accomplishing that goal. 

OPIC has also been successful in supporting small U.S. businesses interested in 

investing in developing countries. By helping small American businesses to invest, 

OPIC benefits both the U.S. economy and the economies of the host countries. The U.S. 

economy will benefit because small businesses have to become engaged in global 

markets to remain competitive, and by helping them to invest abroad, OPIC helps them to 

succeed in the highly competitive global economy. The opportunities open to small 

businesses have always been one of the major sources of the strength and success of the 

U.S. economy. Similarly, the host country economy will benefit because small businesses 

are likely to provide effective peer transfer of managerial know-how, entrepreneurial 

spirit and business practices.

OPIC considers clean energy a strong complement to its developmental activities.

The emergent public interest in cleaner sources of energy complements OPIC’s capability 

to mobilize private investment and its mission to promote economic development. OPIC 

is exploring ways to contribute in this sector. 

OPIC in recent years has reinforced its focus on its core mission of economic 

development by developing and applying a comprehensive tool to measure the 

development impact of projects. Using these tools, OPIC holds individuals and the 

organization as a whole accountable for the developmental impact of OPIC supported 

projects. OPIC assesses the anticipated development impact of projects as they go 

through the approval process and monitors the actual impact after the project has been in 

operation for a period of time. 

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FY 2009 REQUEST 

OPIC requests the following FY 2009 appropriations to be self-funded from its 

offsetting collections: 

$50.6 million to support program administration 

$29.0 million in credit subsidy funding 

Administrative Expenses

The President’s Budget requests a FY 2009 appropriation of $50.6 million for 

administrative expenses. This $3.1 million increase over the FY 2008 level includes 

resources to be used for capital investments in information technology to address 

postponed technology infrastructure projects. 

OPIC’s administrative resources request comes in the context of a growing workload 

which results from the following: 

o Successful past efforts at developing small business transactions have moved past 

the point of commitment and are now rapidly disbursing. 

o The new Rapid Economic Development Initiative (REDI) which seeks to achieve 

tangible economic progress over the near term in selected high foreign policy 

priority countries. 

o New monitoring and reporting requirements of transactions. The number of loans 

and loan guarantees outstanding have grown at a far faster rate than OPIC’s 

resources.

These requirements cannot be met without additional personnel and technology 

resources. OPIC expects to be able to meet many of these requirements in the enacted 

FY 2008 budget; however, the FY 2009 request is necessary to continue work on all of 

the above requirements. 

Technology

OPIC recognizes that an effective Information Technology (IT) System requires good 

integration of information resources, processes and people. The IT strategic plan focuses 

on an effective integration of these components to support OPIC’s strategic objectives.

OPIC’s IT strategy is designed to serve customers better by streamlining the application 

procedures, enhancing the value of information provided to customers, and improving the 

overall experience of working with OPIC. 

OPIC’s technology request for FY 2009 consists of two elements: Follow-on efforts with 

OPIC’s Application Integration and Migration (AIM) program and several supporting 

projects.

3
OPIC’s core technology system is built on an antiquated software architecture which 

limits operational reliability and flexibility. To address these limitations and to keep pace 

with evolving financial audit and internal controls standards, OPIC is updating its core 

systems. OPIC is evaluating all alternatives, in particular Credit Reform compliant 

products that have recently entered the market. These products present opportunities to 

minimize the technical implementation risk, reduce future maintenance costs, and 

enhance reporting tools.

Within the AIM program, OPIC is working on multiple projects, including projects to 

improve the loan origination process, to modernize the insurance system, and to improve 

the accounting, budget, and procurement processing systems. These projects are intended 

to upgrade and integrate a patchwork of stand-alone systems that do not adequately 

support workflow, track documents, or analyze outstanding commitments. These planned 

improvements within the AIM program will make it possible to achieve a much closer 

integration with OPIC’s financial, risk, and reporting systems. 

OPIC also has several IT projects that are necessary for modernization of existing 

software and ensuring future integration with new systems. For example: 

Improvements to meet existing and new OMB regulations for records 

management, protection of personal information, and information security. 

Improving business analysis capabilities through reporting tools which integrate 

balkanized databases. 

Strengthening capacity to support foreign currency transactions, which are 

important to lending for housing and microfinance. 

While OPIC is pursuing these improvements, OPIC is also strengthening its institutional 

capability to develop, manage, and maintain its technology projects. This will help to 

ensure that resources provided to OPIC will be used efficiently. 

Human Resources 

OPIC expects to use new resources made available in FY 2008 to strengthen its staff 

resources dedicated to: 

Protecting and responsibly managing the financial risks of the portfolio. 

Delivering more transparency to the interagency community and to the public. 

Focusing origination in policy priority countries and sectors.

As OPIC continues to grow its portfolio, both in size and scope, it is also realizing a 

greater return on the investments it is making in human capital. 

4
For example, OPIC has developed a workforce strategy that:

Trains personnel in critical skills to meet new challenges in capital markets 

development, policy priority areas, and in small business lending. 

Realigns the skill set of OPIC’s workforce through new hires to better meet 

OPIC’s evolving priorities. 

Credit Funding Request

The President’s FY 2009 Budget requests a credit reform funding level of $29 million to 

meet both normal subsidy requirements as well as to give OPIC greater flexibility to 

address foreign policy priorities in areas such as Afghanistan, Pakistan, West Bank, 

Lebanon, and Sub-Saharan Africa. OPIC requests three-year availability as provided in 

the FY 2008 appropriation. 

OPIC is requesting an increase in FY 2009 to reflect the expected subsidy costs of: 

Continuing to support foreign policy priorities through lower fees and interest 

spreads on transactions where necessary. 

A robust housing pipeline focused on lower and middle income homeowners. 

Small business lending, which generally draws relatively high levels of subsidy, 

even with small transaction sizes. 

OPIC is also requesting continuation of $20 million in transfer authority first enacted in 

FY 2006. This authority provides an important flexibility to allow OPIC to respond to 

foreign policy priorities.

OPIC forecasts that the requested budget can support estimated lending levels of 

$1.8 billion dollars in direct and guaranteed loans. 

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Strategies, Goals and Outcomes

Developmental Quality of Projects – Aligning Budget to Performance 

OPIC management places a high priority on the developmental quality of the 

projects it supports. The Agency has a comprehensive analytical tool for measuring the 

developmental impact of individual OPIC supported projects - the Development Matrix. 

The Development Matrix provides objective benchmarks for quantifying the 

developmental impact of projects with respect to job creation, technology transfer, human 

resource development, social benefits, private sector development, infrastructure 

development, and national benefits. OPIC calculates an anticipated (ex ante) 

development score to assist top management in its consideration of a project, and it 

calculates an actual (ex post) development score after a project has been implemented. 

A development matrix score between 40 and 100 is considered developmental and a 

score above 100 is considered highly developmental. OPIC evaluates both its overall 

performance and the performance of the individual line departments on the basis of the 

average development scores of all projects. 

Table 1 below summarizes the anticipated developmental impact scores for projects 

through Fiscal Year 2007, as well as the targets set by OPIC for projects through 2009. 

Table 1 Development Scores 

2006 2007 2008 2009

Actual Target Estimate Target Target 

Number of Projects1 70 NA 55 NA NA

Un-weighted Average 97 95 99 98 100

Weighted by Dollar Investment 94 95 105 98 100

Serving the Customer Efficiently 

OPIC management has made efficient customer service one of its key priorities. In

FY 2007, OPIC supported $1.6 billion in total project investments with an administrative 

expenses budget of $42.1 million. On this basis, OPIC’s “overhead” is 2%, which 

compares very favorably with other economic assistance programs. 

By meeting customer needs, OPIC can better achieve its core mission of supporting 

private investment with a highly developmental payoff. To pinpoint the reforms and 

initiatives that would enable the corporation to meet the needs of its customers more 

effectively, OPIC carried out a comprehensive customer survey. 

1

 The number of Projects as reported in this table does not include sub-projects under framework 

agreements and investment funds. If sub-projects are included, the total number of projects would be 139. 

See Appendix C for further detail. 

6
In response to the survey, OPIC initiated a number of reforms. For example, OPIC has 

overhauled its website, to make it more efficient, user-friendly, and accessible. OPIC has 

also put the finance application on-line and made it more user friendly by putting it into 

plainer language. OPIC has also reduced the burden on applicants by adopting a two 

stage application process. Applicants are first asked to respond to a set of questions in 

Part I designed to establish whether the project is eligible for OPIC support. They do not 

need to fill out the more detailed questions in Part II until their answers in Part I have 

established that they meet the eligibility criteria. This will save time for both the 

applicant and for OPIC, when projects do not fit OPIC’s program criteria. 

Assuring a Level Playing Field for Lawful Business Activities 

Fighting corruption and assuring transparency is deeply tied to OPIC’s 

developmental mission. Research shows that foreign investment is lower in countries 

perceived to be corrupt, while countries that improve governance and reduce corruption 

reap a “development dividend.” For OPIC, this means its developmental mission – and 

the U.S. foreign economic policy objectives the agency is directed to support – can only 

be achieved when the benefits of OPIC supported projects are openly channeled to 

promote host countries’ economic growth and not corruptly diverted to anyone’s personal 

enrichment. 

OPIC’s Anti-Corruption and Transparency Initiative is designed to support a level 

playing field for lawful business activities, promote evolving best practices and corporate 

social responsibility, and improve the transparency of OPIC operations – all while 

preserving the confidential business information and commercial efficiency of project 

sponsors.2

Chief among the reforms of the Anti-Corruption and Transparency Initiative is 

OPIC’s endorsement of the Extractive Industries Transparency Initiative (EITI) 

and its insistence that its sponsors disclose amounts they paid to governments. In 

this and other ways, EITI supports better governance through improved accountability.

Full publication and verification of company payments and government revenues from 

oil, gas, mining, and chemical ventures will counter bribery, extortion, and coercion. 

EITI will ensure that project benefits flow to host countries and their populations.

Participation in EITI can reduce project risks, improve the likelihood of project success, 

and reduce costs. OPIC encourages sponsors to agree to EITI guidelines on projects 

receiving OPIC support. 

OPIC has historically worked to ensure that OPIC-supported projects are in full 

compliance with the Foreign Corrupt Practices Act (FCPA) and other anticorruption laws. In September 2007, for example, OPIC worked with the Department of 

Commerce Commercial Law Development Program to provide a training seminar on 

anti-corruption efforts. As another element of the new initiative, OPIC has published an 

Anti-Corruption Handbook describing the FCPA and how it applies to OPIC-supported 

2 See <http://www.opic.gov/about/Transparency/index.asp> 

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projects and sponsors.3

 For example, the handbook clearly notifies sponsors of their 

obligation to certify their compliance with anti-corruption laws at various stages of the 

OPIC-supported project application, review, and approval process. 

As a practical tool, the handbook provides project sponsors with an easy-to-follow guide 

for developing an effective compliance program and a comprehensive approach to 

fighting corruption. Sponsors are cautioned that OPIC will evaluate every allegation of 

fraud or corruption and make appropriate referrals to the Department of Justice. OPIC 

has also established a corruption hotline, which anyone may call either to report potential 

irregularities in OPIC-sponsored projects or to ask compliance questions. 

To increase the transparency of OPIC operations, OPIC has taken steps to identify and to 

make public earlier in the review process issues that potentially have adverse 

consequences. Going forward, OPIC will require enhanced consultation with locally 

affected communities on what the agency calls ‘Category A’ projects – those with the 

potential for significant environmental impact. 

OPIC has redesigned its web site to increase and better organize the information 

available to the public. The site now includes non-business confidential summaries of 

major OPIC-sponsored projects and non-business confidential versions of certain 

environmental documents on Category A projects. 4

The Anti-Corruption and Transparency Initiative is the product of extensive efforts to 

reach out to stakeholders in Congress and the nongovernmental community. It is a 

significant step to ensure that OPIC-supported projects meet a high standard of 

accountability. Transparency International-USA, part of the global civil society 

organization leading the worldwide fight against corruption, welcomed OPIC’s AntiCorruption and Transparency Initiative as an important element of the Administration's 

anticorruption agenda. 

3 See <http://www.opic.gov/about/Transparency/documents/opicanticorruptionhandbook0906.pdf> 

4 See <https://www2.opic.gov/environasp/environtable.asp> and 

<http://www.opic.gov/news/project_profiles/index.asp>

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Strengthening Management Practices 

OPIC has also taken steps to strengthen its management practices. For example, 

OPIC has established a Senior Management Council (SMC) of OPIC’s leadership, and a 

Senior Assessment Team (SAT) at the working level. OPIC has also established an 

Audit Committee under the Board of Directors. The purpose of the committee is to: 

Provide assistance to the Board of Directors in fulfilling its accounting and 

financial oversight responsibilities. 

Determine that OPIC has adequate administrative and financial control. 

Review the financial statements. 

Provide oversight regarding the Corporation’s internal audit functions and 

its independent public accountants. 

The Audit Committee is currently conducting a risk assessment and three-year audit plan.

In FY 2008 they will issue their first internal control audit report. 

Regional Foreign Policy Priorities: Broader Middle East, Selected Latin American 

Countries, & Sub-Saharan Africa

OPIC’s economic development mission is guided by the U.S. foreign policy objectives.

Within those objectives, OPIC has identified three regions of the world where its 

programs could have the greatest impact in supporting U.S. foreign policy objectives - 

the Broader Middle East, selected countries in Latin America, and Sub-Saharan Africa.

OPIC-supported private investment in the three priority regions can advance U.S. 

foreign policy objectives in the following ways: 

Broader Middle East - OPIC supported private investments can create 

hope through increased employment and demonstrate economic benefits 

of reduced conflict, greater democracy and increased openness.

Selected Countries in Latin America - strategically positioned U.S. 

private investments can improve local economic opportunities and thus 

reduce the pressure to migrate. It will also help demonstrate that the free 

trade agreements with the United States have real economic value. This 

can help bolster political support for governments that favor a good 

relationship with the United States, and can help build a breakwater 

against potentially destabilizing influences.

Sub-Saharan Africa - OPIC-supported U.S. private investment plants the 

seeds of economic progress, which can put Africa on the path toward 

greater economic growth and full integration into the global economy.

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Rapid Economic Development Initiative (REDI) 

In order to energize economic activity in countries that need to overcome the legacy of 

conflict, OPIC has developed what it calls the Rapid Economic Development Initiative 

(REDI). REDI is aimed at countries such as Afghanistan and the West Bank, torn 

by current conflict, and countries such as Lebanon and Liberia seeking to recover 

from recent conflict. The suffering from violence in such countries is compounded by a 

loss of jobs, income, and basic infrastructure services, which in turn fuels further 

instability. What is needed in such countries is investment that can rapidly create jobs, 

raise incomes, and increase the popular stake in peace and stability. 

REDI aims to achieve tangible economic progress over the near term by expediting 

the implementation of OPIC supported projects. In these countries, OPIC proactively 

seeks out and works with investors and partner organizations to launch projects that 

together will help the country to jumpstart economic growth. 

OPIC’s new approach under the REDI program is best illustrated by its Liberia program. 

To help give the democratically elected new leader of that country, President Ellen 

Johnson-Sirleaf, the early economic successes she needs to put the country on a sound 

path toward peaceful and stable growth, OPIC developed a comprehensive strategy for 

attracting private investment. To identify the strategic challenges and opportunities in 

that country, OPIC sent a multi-disciplinary team to Liberia to evaluate potential 

investments and the obstacles to their success. OPIC then organized a meeting with 

representatives of over 40 government agencies, private foundations, NGOs, private 

corporations and academics involved in Liberia. Participants shared their insights on the 

economic conditions and problems facing the country and exchanged information on 

planned economic development projects and private investment proposals. 

Following the meeting, OPIC helped organize a private sector investment forum for 

Liberia in collaboration with the IFC, and the Corporate Council for Africa. OPIC 

subsequently worked with a number of the organizations and corporations that attended 

these functions to launch joint initiatives. For example, OPIC launched a joint 

initiative with CHF International and RLJ Companies LLC to establish the Liberia 

Enterprise Development Finance Company. This new financial institution will provide 

over $50 million in financing for small and medium sized enterprises over 15 years. 

In Liberia, OPIC also provided PRI coverage to the International Rescue Committee 

(humanitarian assistance) and Lachamco (leasing of construction equipment and tools), 

and is pursuing discussions with a number of other investors. For example, OPIC 

is working with USAID and the IFC to revive a rubber plantation that failed as a result of 

the civil war, and OPIC is pursuing discussions with a private investor interested in using 

wood-chips from fallow rubber trees as fuel for renewable power. Beyond these 

initiatives, OPIC is in discussion with a number of corporations and NGOs on projects it 

could support through guarantees or direct loans, including a microfinance project, heavy 

equipment leasing project, and several housing deals. 

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OPIC has also used the REDI approach to launch projects in Lebanon and the West 

Bank. In Lebanon, OPIC and Citigroup Corporate and Investment Bank are working 

together to aid the country’s recovery by channeling private capital to Lebanese banks to 

fund $120 million in loans. OPIC has also helped rebuild the Cooperative Housing 

Foundation’s (CHF) AMEEN Finance Company in Lebanon with a disbursement of a 

$24 million loan. This loan has enabled CHF to support lending by Lebanese banks to 

small businesses and homeowners who needed to rebuild in the aftermath of the recent 

conflict. OPIC was able to mobilize and complete this facility within six months of the 

cessation of hostilities. In the West Bank, OPIC teamed up in 2007 with the Aspen 

Institute and the Palestinian Investment Fund to create a small business lending facility of 

$228 million.5 This facility will make capital available to local financial institutions, so 

they can lend to downstream Palestinian borrowers on affordable terms. OPIC also is 

working with the Palestinian Investment Fund and the Aspen Institute on a $250 million 

mortgage facility, half of which we would plan to commit in FY 2008, and the other half 

in FY 2009. 

OPIC is also using the REDI approach to support innovative investments in Afghanistan 

and Pakistan, where a lack of economic opportunity is creating a breeding ground for 

terrorists. 

Sectoral Priorities – Housing, Access to Credit by Small and Medium Enterprises, 

Microfinance, and Renewable Energy

OPIC is prepared to support projects in almost any sector, provided it does not create 

adverse economic effects in the U.S., and meets other statutory requirements. OPIC has 

designated the following sectors – housing, access to credit for micro, small and 

medium enterprises, and renewable energy – as priority sectors where OPIC is 

playing an important leadership role in attracting private investment. OPIC believes 

that its support for U.S. private investment in these sectors can have a proportionally 

large economic development impact by: stimulating economic activity and 

entrepreneurship at the grass roots level – enabling individuals at the lower levels of the 

income scale to obtain the financial resources needed to start and grow a small business 

or the education of family members, or by renewable energy which can provide 

developing countries with cleaner options to power their development. 

Mortgage-financed owner occupied housing not only offers shelter and labor intensive 

jobs but also creates a platform for saving that can become the means to start a business. 

The establishment of small business finance facilities and microfinance institutions 

functionally complements the initiatives in housing by providing the institutional capacity 

to finance the growth of a small business. These OPIC initiatives expand the pool of 

primary mortgages; help create secondary markets; and brings the power of credit and 

global capital markets to financial institutions involved in housing, SME credit, and 

microfinance to dramatically improve the lives of the poor. 

5 See <http://www.opic.gov/news/pressreleases/2007/pr072507.asp> 

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OPIC Support for Housing 

In FY 2007, OPIC continued to expand its support for low- and- medium-income, 

housing in Africa, Central America and the Middle East. 

Africa

During the past three years OPIC has built an African housing portfolio of nearly 

$400 million. As a result of outreach efforts over the past year, including a very 

successful investor housing conference in South Africa, OPIC has now generated a 

significant additional pipeline of projects and investor relationships that is expected to 

result in a steady volume of new projects in 2008 and beyond.

Countries in which OPIC has supported housing projects include South Africa, 

Ghana, Kenya, Zambia, Uganda, and Tanzania. Some upcoming projects in Africa 

include: 

Liberia – there are three projects pending that will help to jump start both housing 

construction and mortgage industries. 

Africa and the Middle East – International Housing Solutions (IHS) manages the 

new Emerging Markets Housing Fund, a targeted $300 million fund that will 

provide private investment capital and affordable housing finance experience to 

markets experiencing rapid growth in housing demand with acute housing needs 

at the lower end of the income spectrum. The fund will have a primary focus on 

the supply constrained housing markets in South Africa and Jordan. OPIC will 

provide up to one-third of the total capital of the fund. 

OPIC has also completed a feasibility study for the creation of a mortgage insurance 

entity in Kenya, which could become a ‘demonstration’ project for other countries in 

Africa.

Central America 

OPIC launched a number of new initiatives in the housing sector in Central 

America over the past few years, and an investment conference OPIC organized in El 

Salvador is generating additional new housing opportunities in Guatemala, El Salvador, 

Honduras, Nicaragua, and elsewhere. Overall, OPIC has received $350 million in new 

housing project applications in Central America over the past year. 

OPIC’s signature Central American project is Inter-Mac International, which will provide 

$70 million in lease purchase and mortgage financing for low income homebuyers 

throughout Central America, enabling, for example, workers in Honduras to leasepurchase $10,000 homes. 

OPIC has also joined forces with the U.S. owner of a group of banks in the region known 

as the Lafise Group to help fill the shortfall in long-term, fixed-rate financing for housing 

mortgages in Honduras, Costa Rica, and Nicaragua. This model of working through 

12
established, local financial institutions has proved both successful and efficient. To date, 

OPIC has committed or approved a total of $152 million, through nine separate corporate 

finance loans and political risk insurance. All of the operational cash flow is available to 

repay loans, and the debt is collateralized by the defined pool of mortgages generated by 

the OPIC financing. OPIC’s loan terms have ranged from 15 to 25 years, thus enabling 

the bank to make long-term fixed rate mortgages available mostly for low-to-middleincome home owners. 

OPIC has also signed an MOU with the Commission for Export and Investment in the 

Dominican Republic, to help develop a national low income housing construction and 

mortgage initiative, which is expected to finance more than 10,000 new houses in the 

coming three years. 

OPIC will provide up to one third of the capital for the Alsis Latin American Mortgage 

Fund (Alsis). This targeted $300 million fund will seek to stimulate new housing by 

originating and investing in residential mortgages in Latin America. Alsis will expand 

and advance local capital markets by securitizing mortgage pools targeted at both 

domestic and international investors. The fund will invest in OPIC eligible countries 

with initial focus on Mexico and Central America. This fund had its first closing in July 

2007.

Middle East 

OPIC has been able to generate significant interest in opportunities for housing 

projects in the Middle East. Two housing/mortgage facilities were approved in 

FY 2007 for Lebanon, and applications are pending for mortgage finance programs in the 

West Bank. OPIC also closed the first construction loan for a 385 unit housing project in 

Erbil, Iraq and is processing a $35 million mortgage and construction facility in the same 

region. Another program approved in 2007, the Israeli Mortgage Bond Securitization 

project, will support the development of long term capital markets funding for mortgages 

in Israel with an OPIC commitment of $120 million. The OPIC supported new Emerging 

Markets Housing Fund will invest a total of $60 million in Jordan. 

Channeling U.S. Private Sector Capital to Financial Institutions that Lend to Local 

Small and Medium Enterprises (SMEs) in Developing Countries 

Many developing countries lack financial institutions that are prepared to take the risk of 

lending to small and medium sized enterprises without excessive collateral. The 

economic development community has come to recognize the importance of filling this 

gap since SMEs are the principal creators of jobs. Supporting SMEs is a key element in 

any strategy to energize private sector driven economic growth in these countries.

As part of its overall strategy to support grass roots capitalism, OPIC has taken on a 

pioneering role in this area by developing a number of different business models for 

supporting SME lending in developing countries on reasonable terms and attractive 

maturities. 

13
OPIC has used framework agreements to persuade banks to expand lending to priority 

sectors such as housing and SMEs. Under a framework agreement OPIC commits itself 

to support loans up to a value and under conditions spelled out in the agreement. For 

example, under the recent expansion of OPIC’s framework agreement with Citibank, 

$45 million of the $150 million in loans guaranteed by OPIC is reserved for loans to 

qualified SMEs. Under another loan agreement, OPIC is making available $100 million 

to ZAO Europlan to support the leasing of equipment and vehicles to small and medium 

enterprises in the Russian Federation. 

OPIC has launched a major and innovative new initiative to increase lending to 

SMEs in Latin America. OPIC has partnered with the Treasury Department and the 

Multilateral Investment Fund (MIF) of the Inter-American Development Bank (IDB) to 

tackle a number of interrelated problems that currently block lending to SMEs. The 

Treasury Department will provide technical assistance to Latin American governments 

for legal and regulatory reforms designed to facilitate small business lending. The IDB 

will provide technical assistance to local financial institutions in Latin America to 

enhance their ability to evaluate the credit quality of small business loans and to 

strengthen their institutional capacity to make SME loans. OPIC anticipates making 

$150 million available to support SME lending in Latin America through a number of 

different business models, including: 

OPIC guarantees of loans made by U.S. banks to local financial 

institution in the host countries for the purpose of funding SME loans 

OPIC guarantees of bonds issued by U.S. owned local financial 

institutions in the host countries to fund SME loans 

OPIC commitments to share the risk of specified SME loan portfolios of 

U.S. owned local financial institution in the host countries. 

OPIC has also used special purpose lending facilities in particular countries to support 

lending to SMEs. In the Trade Bank of Iraq project, OPIC worked with private sponsors 

to develop a special facility for guaranteeing letters of credit issued by the Trade Bank of 

Iraq to Iraqi enterprises importing goods or services. This facility will substantially 

enhance the ability of small Iraqi enterprises to import essential capital equipment and 

other inputs. 

14
OPIC Support for Microfinance 

Microfinance institutions (MFIs) provide a broad range of financial services, including 

access to credit by the un-banked and under-banked populations in developing countries. 

By offering high quality, financial services to grassroots entrepreneurs that do not have 

normal access to credit, MFIs enable individuals with little capital to start and expand a 

business. It also helps those with modest means to finance home improvements, health 

care and education for family members. Women represent the majority of MFI clients, 

which is particularly important since women in emerging markets must overcome many 

barriers to participate in the formal economy. 

As of December 31, 2007, OPIC has provided financing in the amount of $250 million to 

31 microfinance projects. Examples of some innovative transactions include: 

Global Partnerships Microfinance Fund 2006 – In 2006 OPIC made a 

$4.4 million loan to help capitalize Global Partnerships Microfinance 

Fund, a US$8.5 million microfinance investment vehicle (MIV) sponsored 

by Global Partnerships, a Seattle-based non-profit organization. This fund 

has now made loans to 14 MFIs in Bolivia, El Salvador, Guatemala, 

Honduras, Nicaragua, and Peru. It leverages philanthropic giving with the 

investment of private capital. By investing capital and management 

expertise in high-performing MFIs in the region, Global Partnerships 

supports their growth so that financial services can be made available to 

hundreds of thousands of new borrowers.

Calvert Social Investment Foundation – OPIC made a $10 million 

commitment to provide a senior subordinated standby facility to Calvert 

Social Investment Foundation. The OPIC guaranty facility will support 

the Calvert Social Investment Foundation as it expands the sale of its 

Calvert Community Investment Notes through MicroPlace. MicroPlace is 

a wholly owned subsidiary of eBay and provides an on-line system 

connecting social investors with microfinance projects overseas. It is 

expected to grow to hundreds of millions of dollars over time. With the 

launch of MicroPlace.com, consumers in the U.S. can use the internet to 

make microfinance investments that simultaneously provide a financial 

return while addressing global poverty.

Citigroup Microfinance Framework – Through a framework agreement 

with Citigroup, OPIC as of December 2007, has committed over $25 

million to 11 microfinance institutions in 9 different countries 

(El Salvador, Philippines, Honduras, Morocco, Mexico, Kenya, 

Kazakhstan, and Uganda). This is a facility of up to $100 million, of 

which up to $70 million will be from OPIC. 

15
OPIC is working on new and innovative projects to address microfinance needs in 

global emerging markets. OPIC is considering the following business models to 

expand its support of microfinance institutions: 

Participating in transactions that will encourage greater participation by 

capital market investors through a strong demonstration effect - showing 

investors that it is a safe and potentially profitable investment opportunity 

Taking some of the riskier tranches of risk to encourage greater capital 

flows from the private sector 

Partnering with financial institutions that can lend in local currency or 

provide local currency hedging products 

Attracting private capital through securitizations – which give investors a 

more liquid and standardized product for their portfolios 

Supporting umbrella funds that finance smaller MFIs with more limited 

access to capital 

Providing political risk insurance to microfinance institutions and their 

investments abroad. 

Renewable Energy 

OPIC considers environmental improvement and the use of cleaner forms of energy 

a strong part of its developmental activities. OPIC’s portfolio includes renewable 

energy projects generating a cumulative total of more than 2,200 MW of clean power, 

including hydro and wind. Many of these renewable energy projects involve U.S. small 

businesses. In addition, OPIC supports projects that incorporate highly efficient energy 

technology. Looking ahead, OPIC hopes to do more clean energy projects including 

biomass and wind projects. 

OPIC’s Investment Funds program is inviting proposals from qualified private sector 

fund managers for the formation and management of one or more private equity funds 

that will invest a majority of its capital in companies or projects within the Renewable 

Energy sector. While OPIC is primarily interested in supporting funds that will focus on 

investing in renewable energy companies or projects, funds may also invest in other 

related sectors in the field of energy and environmental sustainability, including energy 

efficiency systems and equipment, and water, waste and emissions control and treatment. 

OPIC will consider providing up to $100 million in capital to one or more selected 

managers, and expects to select one or more managers to present to the September 2008 

Board.

16
Strategic Goals

OPIC Focus on U.S. Small Business Investors 

OPIC continues to place a special emphasis on helping small businesses become 

investors in the developing world. Helping small businesses to invest overseas is an 

important way to distribute the benefits of international commerce more broadly 

throughout the U.S. economy. Small business is a part of nearly every U.S. community: 

the SBA reports that small businesses employ about 50 percent of all private sector 

workers and create 75 percent of the net new jobs in the American economy.

As a vital source of innovation and economic growth, U.S. small businesses are 

increasingly looking for opportunities in the global marketplace. But for a U.S. small 

business looking to engage globally, the obstacles can be formidable: limited access to 

capital, perceived investment risk, and lack of knowledge about opportunities in 

international markets. One of OPIC’s ongoing goals is to increase small business 

participation in global markets by reducing the obstacles to investment and by cultivating 

better small business projects. 

For example, Insurance has increasingly focused on supporting U.S. small businesses that 

want protection against political risks as well as the support and advocacy of the U.S. 

government in the event that the rules change. Insurance provides a streamlined 

application and underwriting process for companies that qualify for OPIC’s Small 

Business Center. 

The ideal OPIC-supported small business project is not any different than the largest 

projects the agency supports. A good OPIC project addresses an important developmental 

need in the host community, transfers technology and skills from a successful American 

company to a nascent industry in an emerging market, and supports the same industry 

here in the United States. It delivers lasting economic effects because it is funded not by 

grant but by investment with the expectation of return. 

In FY 2006, OPIC supported 61 projects involving small- and medium sized enterprises, 

which accounted for 87 percent of the 70 projects OPIC approved that year. In FY 2007, 

OPIC supported 110 projects involving small enterprises, which accounted for 79 percent 

of the 139 projects that year. 

In OPIC’s portfolio of active projects, there are 13 small businesses that are selfidentified as being owned by women or minorities. To increase that number further, 

OPIC has appointed an Outreach Coordinator for Minority and Women-Owned 

Businesses, who has organized an active program of workshops and speakers to reach out 

to women and minority entrepreneurs around the country.

OPIC’s Expanding Horizons workshop series helped hundreds of U.S. minority and 

women small business owners to learn how OPIC can help them to invest in 

emerging markets successfully. Wide-ranging one-day programs attracted over 500 

participants in workshops in Atlanta, Miami, Chicago, Los Angeles, Newark, Houston, 

and San Francisco. These workshops helped participants to deepen their understanding 

17
of overseas investment opportunities and challenges, financial issues such as political risk 

insurance and access to capital, and federal assistance programs available to minorityand women-owned businesses from OPIC and other agencies. OPIC organized the 

Expanding Horizons workshops in cooperation with the U.S. Department of Commerce’s 

Minority Business Development Agency and the National Women’s Business Council. 

Leveraging U.S. Government Resources 

OPIC recognizes that it can better achieve its developmental mandates if it pursues 

its mission in close collaboration with its sister agencies in the government, rather 

than in isolation. Policy reforms and social investments supported by grant-funded 

technical assistance provided by the Millennium Challenge Corporation (MCC), the U.S. 

Agency for International Development (USAID), the Department of the Treasury, the 

Department of State, or the Trade and Development Agency complement OPIC backed 

private investments. 

For example, grant-funded technical assistance for the reform of laws underpinning 

property titles, title insurance, and consumer mortgages help reinforce OPIC supported 

private investment in housing, title insurance and mortgages. Private investment 

supported by OPIC is similarly enhanced through the services provided by the Foreign 

Commercial Service of the Department of Commerce. Similarly, trade agreements 

negotiated by the U.S. Trade Representative remove obstacles to such investments. 

Trade agreements signal to investors that a market is now ‘open for business’. By the 

same token, OPIC supported investments that build trade capacity reinforce MCC 

compacts and complement USAID grants. OPIC has made every effort to seek out 

opportunities for interagency collaboration and to establish channels of communication 

between OPIC’s top managers and their counterparts in other agencies. 

OPIC believes that interagency collaboration could have particular value in smoothing 

the path from grant-funded economic assistance to private investment led economic 

growth. OPIC is working closely with MCC on how the two agencies can help MCC 

countries graduate from government-financed development assistance grants to 

government-enhanced private investment. 

Continued Importance of OPIC Insurance 

OPIC’s Political Risk Insurance continues to be an important element of OPIC’s 

capability to mobilize capital in developing countries. OPIC provides coverage for a 

range of investors, large and small, against the risks of inconvertibility, expropriation and 

political violence.

OPIC Insurance works with the private insurance industry to find ways to provide 

complementary forms of coverage that will encourage U.S. businesses to make 

investments with a high developmental impact in countries judged too risky on a purely 

commercial basis. As a government agency OPIC can take risks that the private political 

risk insurance industry on its own would be otherwise unwilling to take. OPIC has also 

traditionally played an important role as an innovator, taking the lead where it can shape 

18
the policy framework in developing innovative political risk insurance products that have 

not been tested in the market. 

One such product is regulatory risk insurance, which OPIC is seeking to develop in 

consultation with investors, private insurers and other U.S. government agencies. While 

OPIC has covered regulatory risk under its existing expropriation coverage, a more 

clearly defined regulatory risk contract could play a significant role in facilitating private 

financing for infrastructure projects in the developing world.

Another area of innovation by OPIC is the use of the political risk insurance program to 

support the activities of non-profit organizations in developing countries, particularly in 

countries in post-conflict situations or recovering from natural disasters. For example: 

OPIC has also recently developed an Evacuation Insurance product designed to aid 

Schools and non-profit organizations that are required to evacuate their facilities due to 

political violence. The coverage is an add-on to OPIC’s business interruption coverage 

and will cover expenses such as employee salaries, transportation, security, and other 

evacuation costs.

Increased Use by OPIC of Financial Intermediaries 

Framework Agreements 

OPIC has been making extensive use of framework agreements with banks, other 

financial intermediaries, and non-profits. In the framework agreements OPIC has 

negotiated with a number of U.S. banks, under which these banks channel funds to 

correspondent banks in recipient countries, one of OPIC’s overarching goals has been to 

channel some of the money to lower income market segments. The framework 

agreements with OPIC provide that the correspondent banks will allocate a percentage of 

the funds to specific priority sectors, regions, and lower income segments of the market. 

OPIC’s Structured Finance Department thus continues to strengthen the developmental 

quality of all these projects by ensuring that a targeted portion of funds are targeting the 

more highly developmental segments of the specific markets. 

Enterprise Development Network 

OPIC in June 2007 launched the Enterprise Development Network (EDN), a strategic 

alliance between OPIC and the private sector. EDN significantly extends OPIC’s 

ability to provide financing and political risk insurance (PRI) to more SMEs doing 

business in developing countries. Through the support of participating financial 

institutions, business consultants, associations, law firms, state/regional promotion and 

sister agencies, EDN will increase the access of small businesses to OPIC products and 

services. By empowering such service providers, the network will result in more 

efficient, cost-effective delivery of services to American and local businesses. 

19
Initially, EDN will include the following participants: 

EDN Originators, comprised of business consultants and not-for-profit 

organizations worldwide, will be trained by OPIC to advise SMEs in 

drafting business plans, enhancing market strategies and completing 

application material that meet OPIC’s standards and policy conditions for 

both OPIC Finance and Insurance programs. 

EDN Designated Lenders, financial institutions which establish OPICbacked lending facilities, will provide loans to SMEs or their affiliates for 

projects in OPIC-eligible countries. 

EDN Advisers, specialists in particular business sectors and geographic 

areas, will assist OPIC in credit underwriting and due diligence on OPICfunded loans. 

In May, OPIC announced that Wells Fargo HSBC Trade Bank (the ‘Trade Bank’) would 

serve as an EDN designated lender through an agreement with OPIC to establish a 

$100 million lending facility. This initial facility is expected to generate up to 50 loans 

over the life of the facility, as well as more than 1,000 host country jobs by its fifth year.

Loans will range from $3 million to $15 million. The facility established with the 

Trade Bank is expected to be the first of a number of such facilities that will be sought to 

encourage significant growth through the network.

Twenty-one organizations collectively covering a broad range of industry sectors have 

agreed to serve as EDN Loan/Insurance Originators largely throughout the U.S. with 

some additional representation in Africa and Asia. The launching of EDN began with a 

two-day conference last June, which provided in-depth training to EDN Originators on 

OPIC policies and investment criteria. They were also taught how to improve their 

effectiveness in packaging applications in order to expedite the review and approval 

process for financing by OPIC or the other designated lenders. 

Investment Funds Support Administration Summit Initiatives 

At the Heiligendamm G-8 Summit, President Bush committed OPIC to support the 

creation of new private equity funds to mobilize up to $1 billion of additional investment 

in Africa. These funds, part of the overall Africa Financial Sector Initiative (AFSI), will 

offer new financial instruments and services to African businesses, and new investment 

vehicles for investors. OPIC will provide financing between $25 million and $150 

million for one or more investment funds to broaden and deepen capital markets in SubSaharan Africa.

20
Africa Capital Markets Fund 

OPIC will provide financing of around $100 million in financing for each fund to 

seed a number of new investment funds that will broaden and deepen capital 

markets in Sub-Saharan Africa. OPIC’s primary interest is to support funds that will 

provide African companies with new financing vehicles such as corporate bonds, 

mezzanine and convertible debt, as well as early stage capital. These funds were 

approved by OPIC’s board in either September 2007 or January 2008. 

Africa Catalyst Fund, L.P has a targeted total Fund capitalization of $300 

million, with an OPIC guarantee of up to $100 million. The Fund will invest 

in a portfolio of mezzanine finance, public and private equity, public debt, 

convertible bonds, and private loans to provide growth capital to small and 

mid sized enterprises (“SMEs”) in Africa.

Africa Debt Fund has a targeted total Fund capitalization of $300 million, 

with an OPIC guarantee of up to $100 million. The Fund plans to invest in a 

wide range of public and private debt instruments in Africa.

Atlantic Coast Regional Fund has a targeted total Fund capitalization of 

$150 million with an OPIC guarantee of up to $50 million. The Fund plans to 

invest growth equity into companies in West and Central Africa, with a core 

focus in Angola, Cameroon, Cote d’Ivoire, Democratic Republic of Congo, 

Gabon, Ghana, Nigeria and Senegal.

Millennium Global Africa Opportunities has a targeted total Fund 

capitalization of $300 million with an OPIC guarantee of up to $100 million. 

The Fund will invest in a wide range of public and private, debt and equity 

strategies in Africa, focusing on Anglophone East Africa and Francophone 

West Africa.

Africa Social Development Fund 

To tap the growing pool of investment capital seeking both social and financial returns,

OPIC announced a call for proposals seeking to finance one or more selected funds to

invest in companies that will make a significant contribution to improve 

employment opportunities and the social well-being of people in Africa while

delivering positive financial returns for investors. The purpose of this Call was to 

identify qualified fund managers who are able to accomplish both of these objectives. 

Proposals could include, but were not limited to, any of the following: (a) small and 

medium-sized enterprises across all sectors, including social sectors described below; (b) 

enterprises of any size that advance social development or improve social infrastructure 

by investing in sectors such as water and sanitation, health, education, agribusiness 

(excluding biofuels), and energy access (e.g., green technologies, rural and renewable 

energy); and (c) enterprises of any size that provide goods and services to rural and other 

underserved markets (i.e., bottom of the pyramid delivery models). There were an 

overwhelming number of responses with fund proposals covering the call sector range 

21
African Telecoms Media and Technology Fund has a targeted total Fund 

capitalization of $100 million, with an OPIC guarantee of up to $50 million. 

The Fund plans to invest in East African technology, media and 

communications companies. 

Africa Healthcare Fund has a targeted total Fund capitalization of 

$100 million, with an OPIC guarantee of up to $50 million. The Fund plans to 

invest in small and medium sized private healthcare delivery businesses in 

Sub-Saharan Africa. 

AfricInvest II Ltd has a targeted total Fund capitalization of $175 million with 

and OPIC guarantee of up to $60 million. The Fund plans to invest in small 

and medium sized enterprises in OPIC-eligible countries in North Africa and 

Sub-Saharan Africa.

22
APPENDIX

Appendix A: Appropriations Language

Non-Credit Account 

The Overseas Private Investment Corporation is authorized to make, without regard to 

fiscal year limitations, as provided by 31 U.S.C. 9104, such expenditures and 

commitments within the limits of funds available to it and in accordance with law as may 

be necessary: Provided, That the amount available for administrative expenses to carry 

out the credit and insurance programs (including an amount for official reception and 

representation expenses which shall not exceed $35,000) shall not exceed $50,600,000: 

Provided further, That project-specific transaction costs, including direct and indirect 

costs incurred in claims settlements, and other direct costs associated with services 

provided to specific investors or potential investors pursuant to section 234 of the Foreign 

Assistance Act of 1961, shall not be considered administrative expenses for the purposes 

of this heading. 

Program Account 

For the cost of direct and guaranteed loans, $29,000,000, as authorized by section 234 of 

the Foreign Assistance Act of 1961, to be derived by transfer from the Overseas Private 

Investment Corporation Non-Credit Account: Provided, That such costs, including the 

cost of modifying such loans, shall be as defined in section 502 of the Congressional 

Budget Act of 1974: Provided further, That such sums shall be available for direct loan 

obligations and loan guaranty commitments incurred or made during fiscal years 2009,

2010, and 2011: Provided further, That funds so obligated in fiscal year 2009 remain 

available for disbursement through 2017; funds obligated in fiscal year 2010 remain 

available for disbursement through 2018; funds obligated in fiscal year 2011 remain 

available for disbursement through 2019: Provided further, That notwithstanding any 

other provision of law, the Overseas Private Investment Corporation is authorized to 

undertake any program authorized by title IV of the Foreign Assistance Act of 1961 in 

Iraq: Provided further, That funds made available pursuant to the authority of the 

previous proviso shall be subject to the regular notification procedures of the Committees 

on Appropriations. 

23
OPIC Transfer Authority 

(Including Transfer of Funds) 

Whenever the Secretary of State determines that it is in furtherance of the purposes of the 

Foreign Assistance Act of 1961, up to a total of $20,000,000 of the funds appropriated 

under title III of this Act may be transferred to and merged with funds appropriated by 

this Act for the Overseas Private Investment Corporation Program Account, to be subject 

to the terms and conditions of that account: Provided, That such funds shall not be 

available for administrative expenses of the Overseas Private Investment Corporation: 

Provided further, That designated funding levels in this Act shall not be transferred 

pursuant to this section: Provided further, That the exercise of such authority shall be 

subject to the regular notification procedures of the Committees on Appropriations. 

Export Financing Transfer Authorities 

Not to exceed 5 percent of any appropriation other than for administrative expenses made 

available for fiscal year 2009, for programs under title II of this Act may be transferred 

between such appropriations for use for any of the purposes, programs, and activities for 

which the funds in such receiving account may be used, but no such appropriation, except 

as otherwise specifically provided, shall be increased by more than 25 percent by any 

such transfer: Provided, That the exercise of such authority shall be subject to the regular 

notification procedures of the Committees on Appropriations. 

24
Appendix B: Budget and Analysis Tables

Table B-1 FY 2009 Request 

Appropriated Resources FY 2007 FY 2008 FY 2009 

(Dollars, Millions) Actual Enacted Request

Gross Budget Authority

Administrative Expenses $ 42.1 $ 47.5 $ 50.6

Credit Subsidy 20.1 23.0 29.0

TOTAL, Gross Appropriations $ 62.2 $ 70.5 $ 79.6

Net Offsetting Collections (254.2) (235.0) (249.6)

Net (Negative) Budget Authority $ (192.0) $ (164.5) $ (170.0)

Memo: Transfer Authority $ 20.0 $ 20.0 $ 20.0

 Table B-2 Summary of Credit Funding Request 

(Dollars, Millions) 2007

Actual

2008

Enacted 

2009

Request 

Credit Subsidy Appropriation $ 20.0 $ 23.0 $ 29.0

Carry-forward from Prior Year 12.4 1.0 -

Transfers 5.0 - -

Total Resources $ 37.4 $ 24.0 $ 29.0

Projected Activity 

 Finance 1,446 1,330 1,350

 Investment Funds 180 350 500

New Commitments $ 1,626 $ 1,680 $ 1,850

Subsidy obligations are projections based on current pipeline and indicative cash flows. 

Subsidy is obligated on an individual transaction basis; therefore, individual transactions may 

vary widely from rates published in the President’s Credit Supplement. 

See <http://www.whitehouse.gov/omb/budget/fy2009/pdf/cr_supp.pdf>

Transfer of $5 million in 2007 is related to OPIC’s Middle East Investment Initiative project in 

the West Bank. 

Carry-forward amounts are related to: base appropriations resources still within the 

appropriated availability to obligate, and also no-year appropriations related to Assistance for 

New Independent States of the Former Soviet Union.

25
Table B-3 Insurance Program Activities 

(Millions of dollars) 2006

Actual 

2007

Actual 

2008

Projected 

2009

Projected 

Aggregate Maximum Insured 

Amount

 Start of year $ 7,495 $ 6,585 $ 6,268 $ 5,693 

 Issuance during the year 476 613 625 650

 Reductions/Cancellations (1,386) (930) (1,200) (1,200)

 Outstanding end of year $ 6,585 $ 6,268 $ 5,410 $ 4,860 

Maximum Contingent Liability 

 Statutory limitation** $ 29,000 $ 29,000 $ 29,000 $ 29,000 

 End of year 3,680 3,391 3,138 2,819

Current exposure to Claims 

(CEC), end of year 

2,490 2,410 2,110 1,895

Insurance Premium Revenue $ 22 $ 24 $ 24 $ 25 

Notes and Definitions

**This is a combined insurance and finance limitation; OPIC monitors issuance and runoff to stay 

within this limitation on an aggregate basis. 

Aggregate Maximum Insured Amounts (MIA): Aggregate MIA is OPIC’s primary measurement of 

issuance. It reflects the face value of all coverage issued. Premiums are generally computed 

based on this amount. 

Maximum Contingent Liability (MCL): MCL is the basis used to measure the maximum amount of 

compensation for which OPIC would be liable, which is limited statute in the Foreign Assistance 

Act. Under most active OPIC contracts, investors may obtain all three coverages – 

inconvertibility, expropriation, and political violence – but aggregate claim payments may not 

exceed the single highest maximum insured amount for each contract. 

Current Exposure to Claims (CEC): Actual exposure to claim payments is less than total 

outstanding insurance as measured by MCL, because insured investors elect "current" coverage 

levels that reflect the current value of their investment, which may be significantly below their 

maximum insured amount. Current exposure to claims is based on the assumption that the 

coverage under which a claim would be brought would be the coverage with the highest amount 

of current insurance in force. 

26
27

Appendix C: GPRA Annual Performance Plan/Report and Program Assessment 

Rating Tool (PART) Metrics

GPRA PART PERFORMANCE GOALS FY 2007 

 Outputs & Outcomes 

Target Actual 

FY 2008 

Target

FY 2009 

Target

Projects Finance Projects 95 99 98 100

 Insurance Projects 95 91 98 100

Sub-Projects6 Investment Fund Sub-Projects n/a 71 n/a 100

 Finance Sub-Projects n/a 77 n/a 100

Development

Effects

Development

Matrix score

(Unweighted 

Average)

Average Projects & Sub-Projects n/a 87 n/a 100

SBC Cycle Time Insurance 70 57 70 70

 Finance 75 55 70 70

Efficiency 

Operate in a businesslike manner. 

Improvement Action: 

Application Integration Migration (AIM Phases I 

and II) will improve support of integrated 

business processes and internal controls by 

replacing legacy systems / technology. 

Internal

Controls

COOP

Phase I AIM Phase I AIM 

Phase II AIM

Maintain or improve monitoring tempo of existing 

deals for issues which would affect OPIC’s 

development mission and risk of repayment. 

Mitigate risk through sound portfolio management, 

project development practices, and incentives to 

encourage good corporate citizenship. 

Ensure self-monitoring on all active projects. 

Site monitor sensitive projects no later than 3rd year of 

operation.

Risk

Mitigation

and

Corporate 

Citizenship

% of on-going OPIC Projects monitored for 

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

and worker rights standards. 

100% 89% 100% 100%

Additionality Ensure additionality and private sector participation 

to ensure that OPIC leverages, but does not 

compete with, the private sector. 

Refine Framework for financial transactions. 

Policy 

priority 

sectors 

(See FY 2009 Budget narrative) West-Bank Gaza Housing

Cen America 

Microfinance

Renewable 

Energy 

Trade Capacity

Small

Business

Ensure that OPIC support is provided to small U.S. 

businesses. Increase Outreach to SMEs; Especially 

those owned by women and minorities. 

Implementation of EDN 

concept

Expand

Outreach 

6 Sub-Projects are investments or loans made under an OPIC facility and evaluated by OPIC. FY 2007 is the first year of 

data collection and reporting for sub-projects. As a result, the depth of available information is still maturing. Scores are

indicative of development impact, but OPIC expects that this population will, in time, progress to a level on par with 

OPIC’s other projects. 
Appendix D: Development Matrix

EXPANDED DEVELOPMENT IMPACT MATRIX (XDIP) 

OPIC’s core mission is to promote private U.S. investment that will contribute to the 

economic development of the world’s less developed countries. OPIC selects projects that 

are likely to serve as foundations for long-term economic growth, especially those that 

improve upon the host country’s infrastructure and provide the basic human necessities of 

shelter, food, water and health care. To support its developmental mission, OPIC evaluates 

and scores every proposed project in 26 key areas across three broad categories that 

objectively quantify its expected contribution to host-country development.

o Category I covers job creation, training, local procurement, corporate social 

responsibility, and equal employment opportunity – five highly-weighted impacts 

that should be demonstrated by any project, regardless of sector or the level of 

economic development within the host country. 

o Category II covers 20 additional development indicators within such broad areas as 

human capacity building (degree of training), private sector development, resource 

leveraging, social effects, infrastructure improvements, macroeconomic and 

institutional effects, and technology/knowledge transfer. The degree to which 

projects demonstrate these additional developmental benefits depends significantly 

on the features of a given project.

o Category III adjusts for the host country’s per capita GNP, reflecting both OPIC’s 

priority to steer investment into the poorest countries and the reality that nations 

most in need often lack the capacity to support more developmentally sophisticated 

investments. 

A project must score at least 40 on the matrix to be considered developmental and clearly 

eligible for OPIC support. A score of 100 or more qualifies a project as highly

developmental. OPIC’s long-term goal is to achieve an average development rating of 100 

across all business lines. 

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FINANCIAL SERVICES DEVELOPMENT IMPACT MATRIX (finDIP) 

Over the past several years, OPIC support of financial sector projects has increased 

steadily. In order to capture accurately the developmental impact of these projects, OPIC 

developed the financial services development impact matrix (finDIP), using the XDIP 

framework and information gathered from other U.S. and multilateral agencies. The 

finDIP matrix consists of four Core Development Indicators, six Supplemental 

Development Indicators, and a GNP Per Capita Indicator: 

o The four Core Development Indicators are financial instrument 

innovation/augmentation, capital mobilization, multiplier effects, and corporate 

governance.

o The six Supplemental Development Indicators are sustainability, economic 

diversification, macroeconomic and institutional impacts, corporate social 

responsibility, human capital improvements, and transfer of technology and 

knowledge.

o The GNP per Capita Indicator takes into account the host country’s level of 

development and reflects OPIC’s priority to steer investment into the poorest 

countries.

For the sake of consistency and uniformity, the finDIP and XDIP score ranges are the 

same. Scores range from 0 to 160 and are divided into three possible ratings. A score of 1

to 39 is Minimally Developmental, 40 to 99 is Developmental, and 100 to 160 is Highly

Developmental. Projects with a score of 0 are Not Rated. In general, OPIC refrains from 

supporting projects in which the development score falls below 40, unless the project 

serves a foreign policy priority or another priority of the Agency as determined by the 

President’s office. The tool was implemented in Fiscal Year 2007, and data from the 

financial services development matrix will be reported in the 2007 Policy Report.

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30

Appendix E: Program Assessment Rating Tool

OPIC has been evaluated as “moderately effective”, and marked improvement across the board 

on a range of issues. Links to the assessment are available below. 

OPIC Insurance Program

See <http://www.whitehouse.gov/omb/expectmore/summary/10001169.2006.html>

OPIC Finance Program

See <http://www.whitehouse.gov/omb/expectmore/summary/10000388.2006.html>