Congressional

Budget

Justification 

Fiscal Year

2018

Overseas Private Investment

Corporation
1

President’s Budget Proposal: Wind‐Down of OPIC

Overview of the Proposal

The Administration’s 2018 Budget prioritizes rebuilding the military and making critical 

investments in the Nation’s security. It also identifies the savings and efficiencies needed to 

keep the Nation on a responsible fiscal path. To do so, the Administration seeks to redefine the 

proper role of the Federal Government by streamlining government programs and reducing 

unnecessary Federal interventions that distort the free market. As part of this effort, the 

Administration has decided to cease new business operations and proceed with the wind-down of 

the Overseas Private Investment Corporation (OPIC) starting in FY 2018. The Budget requests 

$60.8 million to manage the agency's remaining $22 billion portfolio and initiate orderly winddown activities beginning in FY 2018. 

Because of the long-term nature of OPIC’s portfolio, the wind-down of OPIC’s operations will 

happen over several years, beginning with no new origination or promotion of new credit and 

insurance activities starting October 1, 2017. 

Overview of the Costs and Logistics Associated with Wind‐down

Table: Fiscal Year 2018 Budget Request

    2016 2017 2018 

    Actual 

FY 17 CR1

Annualized Enacted 

President’s 

Budget 

Appropriations 

Administrative Expenses 62.8 62.7 70.0 60.8 

Credit Program 20.0 20.0 20.0 - 

Appropriations, Gross Total 82.8 82.7 90.0 60.8 

Net Collections (318.0) (519.0) (519.0) (367.0) 

TOTAL, Net Budget Authority (235.2) (436.3) (429.0) (306.2) 

Memo: FTE 282 281 281 197 1 Due to the timing of the passage of the Consolidated Appropriations Act, 2017 (PL 115‐31), the FY 2018 Budget uses the FY

2017 Annualized Continuing Resolution as its FY 2017 baseline. P.L. 115‐31 provided $70 million in budget authority for OPIC's

administrative expenses and $20 million in budget authority for credit program subsidy.   

Investing in Portfolio Monitoring and Evaluation   

The Consolidated Appropriations Act, 2017 provides a $7.2 million increase over OPIC’s FY 

2016 appropriation for administrative expenses. OPIC will prioritize the use of these additional 

resources to improve OPIC’s capabilities in the monitoring and evaluation of projects. Since 

OPIC's portfolio is currently greater than $22 billion, it will be critical to maintain active 

monitoring to preserve the financial and developmental value of the portfolio and avoid any 

losses to the taxpayer. 

A recent report from the Government Accountability Office (GAO)1

 recommended that OPIC 

further strengthen its project monitoring for compliance with OPIC’s policies. OPIC agreed with 

                                                            

1 http://www.gao.gov/assets/680/674142.pdf#page=68
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the recommendations and will be implementing them with the additional resources provided in 

the FY 2017 appropriations. OPIC has also determined to use its FY 2017 funding to implement 

other recommendations to increase site monitoring and to add a new element of strategic 

evaluations for development outcomes related to projects nearing the end of their OPIC support. 

Even as OPIC prepares for a wind-down beginning in FY 2018, OPIC will continue to upgrade 

its information technology to attain and maintain modern industry standard practices in data 

management. This will benefit OPIC’s internal monitoring and evaluation, as well as OPIC’s 

customers, co-lenders and insurers, its external co-financers, auditors, and its Congressional 

oversight panels as OPIC seeks to wind-down its existing portfolio while still protecting the 

taxpayer against portfolio risks.

Reporting Systems – Treasury, OMB, OECD, and external audit requirements necessitate 

continuing operating systems and technology management upgrades. Compliance with various 

government-wide requirements, continuous operations and maintenance, and a needed rolling 

replacement of obsolete and unreliable equipment require continued investment, even under a 

wind-down scenario. Meeting new reporting requirements that are already mandated will 

necessitate the development of new reporting solutions that include data analytics and 

visualization to enable accurate corporate reporting and more informed evaluation of exposures.

Analysis of OPIC’s Portfolio

Growth and Composition

As of March 30, 2017, the Corporation had combined total exposure of $22.5 billion. This 

amount includes undisbursed commitments (obligations), outstanding balances on OPIC’s loans, 

and maximum contingent liability under OPIC’s insurance contracts. The graph below shows 

the growth and composition of the portfolio since 2014. 

Figure 1 Growth and Composition of OPIC Portfolio (2014‐2017)

Geographic and Sector Composition of OPIC’s Portfolio.   

OPIC’s geographic and sector breakdowns are below. OPIC’s investments in fragile and 

conflict-affected countries represents roughly one-third of the agency’s total portfolio. 
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Figure 2 Portfolio by Geographic Region

Longevity of portfolio.   

OPIC’s portfolio contains more than 500 active projects in almost 100 countries that will require 

financial and policy monitoring for years following the start of a wind-down in FY 2018 in order 

to minimize the risk to American taxpayers. 

Figure 4 Estimated wind‐down of OPIC portfolio

Functions that Continue under Wind‐Down

$0

$5,000

$10,000

$15,000

$20,000

$25,000

2020 2024 2028 2032 2036 2040 2044

Millions

Wind‐down of OPIC Portfolio

Insurance Direct Loans Guaranteed Loans

Figure 3 Portfolio by Sector
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Loan documentation – The President’s Budget assumes that OPIC will cease all new origination 

and promotion of new credit and insurance activities starting October 1, 2017. However, OPIC 

will continue to authorize new financing via commitment letters through September 30, 2017, 

consistent with its current Congressional authorization. After OPIC has executed a commitment 

letter, at which point OPIC is legally committed to provide financing, OPIC proceeds to 

negotiate and execute final transaction documentation which then implements OPIC's 

commitments. Those documents include finance agreements and insurance contracts as well as a 

wide variety of ancillary agreements that relate to such critical elements. These include 

agreements that lay out the terms of project completion support, collateral security, other credit 

support, inter-creditor relationships and many other key components of the underlying 

transaction. 

Portfolio management – OPIC’s $22.5 billion portfolio will need ongoing management for years 

into the future to protect taxpayers’ investments. Management of the portfolio includes 

everything involving protecting the rights of OPIC in the transaction – this means routine 

invoicing and collection, minor waivers, amendments and changes in project structure or 

ownership, workouts and ultimate collection or charge-off amounts due or guaranteed. When 

OPIC works through third party lenders, service providers or other intermediaries, it must 

maintain adequate oversight to confirm that these counterparts are implementing sound credit 

and administrative procedures, generating adequate underwriting documentation and achieving 

expected performance and impact.   

Project monitoring – OPIC performs comprehensive and integrated monitoring to evaluate the 

U.S. and host-country economic effects as well as the environmental, social, health and safety, 

and general working conditions of the projects it supports. OPIC complies with all statutory and 

contractual requirements by monitoring projects throughout their lifecycle. OPIC monitors its 

projects to ensure that its statute and policies are implemented across all OPIC-supported 

projects. This includes congressionally mandated statutory requirements and general OPIC 

policy requirements. Specifically, OPIC strives to ensure that all OPIC-supported projects: 

 Apply consistent and sound environmental standards 

 Apply consistent and sound worker rights standards 

 Observe and respect human rights 

 Have no negative impact on the U.S. economy, and 

 Encourages positive host country development effects 

Disbursements – All OPIC disbursements require close coordination between the 

Origination/Monitoring Officer, Legal Affairs, Office of Investment Policy, the credit reviewing 

official and Financial Management. Proper and sufficient disbursement documentation and 

procedures are critical to ensuring that OPIC can disburse funds in a timely manner and has the 

legal recourse and protection envisioned when credit is approved. Due to the complexity and 

structure of OPIC projects, OPIC projects sometimes disburse over several years. 
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Ongoing Agency Operations  

Agency operations staff ensure OPIC funds are being used as efficiently as possible by planning 

for and coordinating with all OPIC departments. Many of the critical operational functions have 

been assessed for potential efficiencies and cost savings through shared services options. 

However, there are mandated compliance requirements that must continue to be met to support 

functions including human resources, security and strategic operations, facility and 

administrative services, procurement, information technology (operations, maintenance, and 

security), and financial management services, such as accounting, budget and resource planning 

and risk management. It is also a priority to dedicate capital improvement funding for 

depreciating assets to ensure that OPIC remains on fully supported operating systems and 

platforms, thereby reducing the risk of cybersecurity disruptions. 

Functions Not Continuing

As OPIC initiates a wind-down in FY 2018, OPIC will seek to reduce its staffing footprint 

significantly consistent with the vision of the President’s Budget through attrition and other 

workforce restructuring tools as necessary. Functions involved with new-transaction origination 

and business outreach will be phased down initially. Transaction staffing will be shifted to 

documenting and completing action on obligations. Thereafter, staffing will be reduced or 

reallocated so as to implement the wind-down while ensuring the Corporation takes necessary 

and proper steps to protect the taxpayer interest.

Consistent with wind-down, the President’s Budget proposes no appropriation to the Program 

Account for the budget cost of new loans and loan guarantees. Similarly, the President’s Budget 

proposes no collections from future loans and loan guarantees. 

These steps will result in gross savings, as well as a reduction in net offsets. Both factors are 

presented in the President’s Budget, and will be updated in future releases and the forthcoming 

Mid-Session Review. 
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Mission

In 1971, OPIC was created to mobilize and 

facilitate the participation of U.S. private capital 

and skills in the economic and social 

development of less developed countries. In 

doing so, OPIC has created jobs both at home 

and abroad, leveraging private investment to 

support U.S. business as a force for good to 

reduce poverty, create opportunity, and improve lives. OPIC has done all of this while operating 

on a self-sustaining basis as mandated by Congress. Indeed, for almost 40 years, OPIC has not 

only covered all its costs on an annual basis, but it has generated significant additional revenue 

(by approximately $200-400 million per year), contributed to the 150 function, and helped 

reduce the Federal deficit. 

To achieve its mission, OPIC has provided financial products--including debt financing, 

insurance, and support for private equity investment funds--to American businesses operating 

throughout the developing world, including many frontier and post-conflict countries. By 

operating in strategically important countries that may be emerging from years of conflict or 

important political transformations, OPIC has served the national security and foreign policy 

goals of the United States while at the same time complementing U.S. development objectives. 

OPIC’s support has helped small farmers grow more food, encouraged lending to female 

entrepreneurs, and allowed low income countries to build more modern infrastructure—all of 

which has benefited the American businesses who have increased their revenue streams from 

new markets and expanded their employment here at home. 
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APPENDIX A: Appropriations Legislation

Waiver of Requirement to Reauthorize during FY 2017

A waiver to continue OPIC’s core programs was enacted under Section 7061(b) of PL 115-31 

(link). The waiver provides as follows: 

Sec. 7061(b) AUTHORITY - Notwithstanding section 235(a)(2) of the Foreign Assistance Act of 

1961, the authority of subsections (a) through (c) of section 234 of such Act shall remain in effect 

until September 30, 2017. 

  

Appropriations Legislation: Noncredit Account

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

year limitations, as provided by section 9104 of title 31, United States Code, 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 shall not exceed $60,800,000: Provided further, That projectspecific 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. 

Appropriations Legislation: Program account

Amounts available from prior year appropriations for the cost of direct and guaranteed loans 

may be used for the cost of modifying such loans, as defined in section 502 of the Congressional 

Budget Act of 1974. 

In addition, such sums as may be necessary for administrative expenses to carry out the credit 

program may be derived from amounts available for administrative expenses to carry out the 

credit and insurance programs in the Overseas Private Investment Corporation Noncredit 

Account and merged with said account. 

 
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Appendix B: Government Performance Results Act (GPRA) Annual Performance

Plan/Report

                                                            

2

  Projects that receive a score in the range of 60‐100 are considered highly developmental.

3 All dollar numbers in millions. 4 Targets are based on an anticipated reduction in CO2 emissions, from 2008 baseline levels by 2018.

GPRA Strategic

Goal

Strategic

Objective

Performance Plan

Outputs and

Outcomes

FY 2016      FY 2016 FY 2017 FY 2017 FY 2018

     Target Actual Target Actual Target

Grow Portfolio

Impact

Aim for high

development

impact

Projects with

development scores

evidencing high

development impact2

  

50 57 50  ‐  N/A

Increase

commitments

Millions of dollars in

finance and insurance

project commitments3

$4,300 $3,691 $3,500  ‐  N/A

Minimize GHG

emissions across

portfolio

Millions of tons of CO2

emitted by projects in

the OPIC portfolio4

≤ 49.8 7.7 ≤ 49.8  ‐  ≤ 34.8