OPIC 2012 ANNUAL REPORT

By the time a child born today reaches the age of 18, 

our planet will be home to more than eight billion 

people and an additional three billion people will have 

joined the middle class. They will be more educated, 

and more mobile than any generation in history. 

Increased demand for natural resources, goods and 

services will require new approaches to agriculture, 

sustainable power generation and infrastructure. The 

Overseas Private Investment Corporation is committed 

to supporting the global transformation to a more 

sustainable, equitable and lower-carbon economy 

that supports job creation, greater resource effi ciency, 

healthier populations and a cleaner, more secure 

energy supply.

As I refl ect on what was another banner year for OPIC, 

I am pleased to report that the U.S. Government’s 

development fi nance institution was again a powerful 

force in catalyzing private investment for sustainable 

development around the world. Our innovative loans, 

guarantees, and insurance supported investments 

in critical infrastructure, agriculture, education and 

fi nancial services, expanding access to clean energy, 

reducing poverty, improving lives, advancing U.S. 

foreign policy and creating new markets for American 

businesses.

In 2012, OPIC:

 Dramatically expanded commitments 

in renewable resources to $1.6 billion, 

up more than 50-fold since 2008.

 Redoubled efforts in Africa, in support of Obama 

Administration priorities. Today, projects in Africa 

account for nearly a quarter of OPIC’s global 

portfolio, up from six percent a decade ago.

 Supported projects in the Middle East that will 

drive investment and boost small business. 

To date, OPIC has committed nearly half the 

amount the Obama Administration pledged 

to the region in the wake of the Arab Spring.

 Generated a net profi t of $272 million, 

enabling the Agency to be fully self 

sustaining and to help reduce the federal 

defi cit for the 35th consecutive year. 

OPIC’s high-quality, high-impact $16.4 billion portfolio 

is spread across 103 developing and post-confl ict 

countries. Each project applies innovative fi nancial 

solutions to help h large 

small — invest and grow in emerging markets. From 

$185 million in fi nancing to support construction of 

twin 20-megawatt solar power plants in Peru, to a 

$2 million loan to a Tennessee-based horticulture 

business introducing modern plant propagation 

technology in Rwanda, OPIC in 2012 helped our 

clients contribute to development while growing their 

businesses, creating jobs both at home and abroad.

Innovative organizations seek continually to explore 

new tools, partnerships and frontiers. Last summer, I 

joined Secretary of State Clinton in announcing the 

U.S.-Africa Clean Energy Finance Initiative, a new 

partnership of several U.S. Government agencies, that 

will help stimulate clean energy investment in Africa. 

Later in the year, I traveled to South Sudan, the world’s 

newest nation, to help identify the investment urgently 

needed to begin to build infrastructure and establish a 

manufacturing capacity in that fl edgling state.

Innovating to improve effi ciency and performance 

has reaped powerful gains in OPIC’s internal 

operations as well. These successes are evident not 

only in our fi nancial results and the quality of projects 

supported, but in a streamlined application system 

that has reduced processing time for clients. OPIC’s 

effectiveness and effi ciency is refl ected in the fact that 

every dollar invested in OPIC’s budget supports $155 

in private investment for development.

I often say OPIC is living proof that private investment 

for the public good can work and does work. This 

is particularly vital at a time when private capital is 

needed to address so many critical world challenges, 

from hunger to energy security, urbanization and the 

growth of the consumer class.

My heartfelt thanks go out to all of the OPIC clients 

and project sponsors who worked with us over the past 

year. It is a privilege to support such extra-ordinarily 

committed global change agents.

Elizabeth L. Littlefi eld

President and CEO

Overseas Private Investment Corporation

letter from the














VERSEAS PRIVATE INVESTMENT CORPORATION

 IMPROVING COMMUNICATIONS AND 

TRANSPARENCY

As part of its ongoing efforts to highlight the 

Agency’s work and improve transparency and 

interaction with customers, OPIC in 2012 unveiled a 

new public website at OPIC.gov. The new site offers 

detailed descriptions of all the Agency’s products 

and services and links to all customer forms and 

applications. It also features an interactive map 

highlighting many key OPIC projects around the 

world and regular updates on The OPIC Blog.

OPIC has also made information about its products 

and services available on the BusinessUSA.gov 

website, created in response to President Obama’s 

directive to build a centralized, one-stop platform 

of the government programs available to American 

businesses. The BusinessUSA website compiles 

information about the services of 14 U.S. 

Government Agencies, including OPIC, the ExportImport Bank of the United States, the Small 

Business Administration and the U.S. Trade and 

Development Agency.

 INNOVATING PRODUCTS TO BETTER 

SERVE CLIENTS

Environmental Finance magazine in 2012 named 

an OPIC forest carbon project in Cambodia as 

its “Sustainable Forestry Transaction of the Year” 

for excellence in addressing world environmental 

problems and bringing a solution to investors in this 

new sector.

The award recognized OPIC’s contract to provide 

political risk insurance to Terra Global in a REDD 

project (Reduced Emissions from Deforestation 

and Degradation), which uses market incentives 

to promote sustainable forest management. The 

Terra Global project will help protect large swaths 

of forest in Cambodia through the sale of carbon 

credits in international markets. OPIC’s insurance 

protects Terra Global’s investment from potential 

expropriatory changes in national and local 

government laws over the life of the project.

OPIC in 2012 also introduced another new political 

risk insurance product aimed at protecting private 

equity fund investments in emerging markets. The 

coverage provided under the new facilities can be 

applied in multiple ways and will be available for 

either a specifi c fund’s investment or all of a fund’s 

individual investments.

 SOUTH SUDAN: THE WORLD’S NEWEST 

DEVELOPING COUNTRY

In October 2012, OPIC opened for business in 

one-year-old South Sudan, the newly formed 

African country that separated from Sudan in 2011. 

The young country faces formidable development 

challenges, including a lack of basic infrastructure, 

but also boasts vast natural resources, including oil, 

rich farmland and abundant wildlife.

For OPIC, which has a long history of helping 

businesses operate in some of the world’s most 

challenging places, South Sudan — like the rest 

of the developing world — is a place of great 

opportunity. By opening for business in South 

Sudan, OPIC hopes to attract U.S. investment to 

help create jobs and spur economic development in 

the young country.








OPIC 2012 ANNUAL REPO

US SPONSOR/

INSURED INVESTOR PROJECT NAME PROJECT DESCRIPTION AMOUNT NOTE

AFRICA AND THE MIDDLE EAST

EGYPT

Citibank, N.A. Citadel Capital Loan Facility Expansion of debt opportunities by Citibank $125,000,000 Finance

GHANA

Belstar Capital Limited Ghana National Agriculture Supply an installation of modern agricultural equipment $190,154,375 Insurance 

 Development Project 

Belstar Capital Limited Ghana National Water Rehabilitation of water system $286,425,000 Insurance 

 Infrastructure 

Three E Kumasi Investment International Community Construction of new dormitories for school in $950,000 Finance

Company LLC School Limited Kumasi, Ghana

Belstar Development LLC Ministry of Health of Ghana Medical equipment and supplies $9,700,000 Insurance

IRAQ

A. Alexander Lari, Stephen Lari Claremont Erbil LLC/Atlantic Village Construction and lease purchase fi nancing for $26,808,000 Finance

& John Lari affordable housing in Erbil

JORDAN

AES AES Levant Psc 250MW heavy fuel oil peaking power project $270,000,000 Finance 

Citibank, N.A. Jordan Micro Credit Company Expansion of microfi nance portfolio $1,555,400 Finance

 (Tamweelcom)

CHF Arab Bank Expansion of SME portfolio $15,000,000 Finance

CHF Bank al Etihad Expansion of SME portfolio $10,000,000 Finance

CHF Cairo Amman Bank Expansion of SME portfolio $40,000,000 Finance

CHF Jordan Ahli Bank Expansion of SME portfolio $15,000,000 Finance

LEBANON

CHF International CHF Lebanon Replacement Facility Expansion of microfi ance and SME portfolio $25,000,000 Finance

LIBERIA

Broad Cove Ecohomes Ecohomes Liberia Residential real estate development $1,000,000 Insurance

Liberia, Inc 

Nu Strata Logistics, LLC Nu Strata Logistics Expansion of municipal transportation services in Monrovia $1,059,266 Finance

NIGERIA

Citibank N.A. First City Monument Bank PLC Expansion of SME lending for a local mall $15,000,000 Finance

 (FCMB)

PAKISTAN/JORDAN/EGYPT

Citibank N.A.* Citibank, N.A. Pakistan Branch Branch banking services $150,000,000 Insurance 

RWANDA 

Steve Jones Forestry & Agricultural Investment Plant propagation facility $2,000,000 Finance

 Management USA 

SOUTH AFRICA

Sunedison Firefl y Investments 230 (Pty) 60MW utility-scale solar photovoltaic project in Free State $250,000,000 Finance

 Limited

SOUTH SUDAN

International Rescue Committee International Rescue Committee Humanitarian activities $4,680,664 Insurance

TANZANIA

Alistair James & Alden James Alistair James Company Limited Expansion of a regional logistics company that provides $7,000,000 Finance

 transport services to infrastructure projects, heavy industry

 and aid and peacekeeping operations 

UGANDA

Access Africa Fund, LLC Pearl Microfi nance Limited (PEARL) Political risk insurance to a microfi nance institution $1,500,000 Insurance

 for the purpose of microfi nance on-lending

investment activities 2012

This list represents projects to which OPIC committed in Fiscal Year 2012.

*

*Information has temporarily been redacted, including to protect the safety of implementing partners.
VERSEAS PRIVATE INVESTMENT CORPORATION

ECUADOR

Micro Vest Short Duration Banco ProCredit Ecuador Political risk insurance to a microfi nance institution $1,500,000 Insurance 

Fund, LP for the purpose of microfi nance on-lending

Micro Vest Short Duration Banco ProCredit Ecuador Political risk insurance to a microfi nance institution $1,000,000 Insurance 

Fund, LP for the purpose of microfi nance on-lending

Micro Vest Short Duration Fund Banco Solidario S.A. Political risk insurance to a microfi nance institution $450,000 Insurance 

Fund, LP for the purpose of microfi nance on-lending

Micro Vest Short Duration Fund Banco Solidario S.A. Political risk insurance to a microfi nance institution $450,000 Insurance 

Fund, LP for the purpose of microfi nance on-lending

GUATEMALA 

Citibank N.A. Asesoría en Telecomunicaciones Expansion of mobil communications network $30,000,000 Finance

Citibank N.A. Banco Reformador S.A. Expansion of SME portfolio $30,000,000 Finance

HAITI

Development Innovations DIG Capital, LLC Haiti Housing Finance Facility $17,000,000 Finance

Group

Continental Grain Les Moulins d’Haiti SEM (LMH) Reconstruction of a fl our mill expansion project $13,962,287 Insurance

HONDURAS

Citibank, N.A. Banco Ficohsa Expansion of SME Portfolio $22,500,000 Finance

Wells Fargo Financiera Comercial Hondurena Expansion of SME portfolio $15,000,000 Finance

MEXICO

Principal Plus Group, LLC Bancash Mexico Expansion of a micro-lending company that serves $50,000,000 Finance 

members of the national teachers union 

Andrew & Williamson TB-Andrew y Williamson Expansion/improvement of produce packing facilities $10,000,000 Finance

Sales Co., Inc. 

PANAMA 

Citibank, N.A. Banco Aliado, S.A. Expansion of SME portfolio $30,000,000 Finance

Wells Fargo W3-Credicorp Bank Expansion of SME portfolio $7,500,000 Finance

Wells Fargo W3-Multibank, Inc. Expansion of SME portfolio $10,000,000 Finance

PERU

Lucente Family Properties, LLC Financiera TFC S.A. Consumer lending $500,000 Insurance

Accion International Mibanco-IFC Syndication Expansion of SME and microfi nance lending portfolios $20,000,000 Finance

Conduit Capital Partners, LLC Tacna Solar S.A.C. and Two 20MW polycrystalline photovoltaic solar power plants $179,600,000 Finance 

Panamericana Solar S.A.C.

Lucente Family Properties, LLC Total Artefactos S.A. Operation & expansion of retail stores $500,000 Insurance

LATIN AMERICA REGIONAL

Calvert Foundation Higher Education Finance Fund Financing facility for microfi nance institutions to provide $10,000,000 Finance (HEFF) higher-education loans 

JBR, Inc. dba TB-JBR, Inc. (II) Organic coffee farms in Panama and Mexico $15,700,000 Finance

Rogers Family Company

ALL OPIC COUNTRIES

Deutsche Bank Global Commercial Microfi nance Global microfi nance fund focused on customer care $4,500,000 Finance

 Consortium II – Junior Note and client protection one project, two commitments

 Tranche 

Deutsche Bank Global Commercial Microfi nance Global microfi nance fund focused on customer care $15,500,000 Finance

 Consortium II – Senior Note and client protection one project, two commitments

 Tranche 

Grameen Foundation Grameen Foundation Debt fund focused on improving the livelihoods $10,000,000 Finance

 Fairtrade Fund of smallholder farmers 

Habitat for Humanity Microbuild I, LLC Housing microfi nance $45,000,000 Finance

International

MicroCredit Enterprises MicroCredit Enterprises Lending facility for microfi nance $15,000,000 Finance

MicroEnergy Credits MicroEnergy Credits Scale clean energy programs with microfi nance institutions $10,000,000 Finance

 to aggregate and sell carbon credits 

Sarona Asset Management Inc Sarona Frontier Markets Fund 2 LP Impact “fund of funds” focused on high-growth companies $87,500,000 Investment 

 in frontier markets Fund

US SPONSOR/

INSURED INVESTOR PROJECT NAME PROJECT DESCRIPTION AMOUNT NOTE
OPIC 2012 ANNUAL REPO

investment fund

portfolio activities 2012

Asia Development Partners III, L.P. DM Healthcare Private Ltd. Healthcare services India

Karur Vysya Bank Financial Services/Banking India

ECP Africa FIII Investments, LLC IHS Plc Cell Phone Towers Pan-Africa

Java House Casual Dining Kenya

SAWHF PVE (SA) Sugar Creek 289 (Theresa Park) Housing South Africa

Stockbell BFN (Unilofts) Housing South Africa

Orion Properties 14 (Dainfern) Housing South Africa

Clidet No 947 (Eerste Rivier) Housing South Africa

Aquarella Investments 265 (Jabulani) Housing South Africa

SAWHF SA Rental 3 Trust Housing South Africa

Clidet No 946 (Stellendale) Housing South Africa

Alsis Mexico Opportunities Fund Grupo Alde Housing Mexico

Grupo Constructor Gori Y Asociados Housing Mexico

Arquitectos Aguayo y Asociados Housing Mexico

Promotora Hogares SM Housing Mexico

Integradora de Apoyo Municipal, S.A. de C.V. Specialty Finance Company Mexico

FCP Fund Siniora Food Industries PLC Food Production Jordan and West Bank

Jordan Dubai Islamic Bank Banking Jordan

AIC Caribbean Fund InterEnergy Holdings Electricity Generation - Wind Power Dominican Republic

Latin Power Trust III Eolica Santa Catarina Electricity Generation - Wind Power Mexico

FUND NAME PORTFOLIO COMPANY DESCRIPTION COUNTRY/REGION

This list refl ects the investments made by OPIC-supported funds in Fiscal Year 2012.

2

Our consideration of internal control was for the limited purpose described above and was not 

designed to identify all deficiencies in internal control that might be significant deficiencies or 

material weaknesses. 

We noted certain matters that we reported to OPICʼs management in a separate letter dated 

November 14, 2012. 

Report on Compliance and Other Matters 

In connection with our audit, we performed tests of OPICʼs compliance with certain provisions of 

laws, regulations, contracts, and grant agreements. The results of our tests disclosed no 

instances of noncompliance that are required to be reported in accordance with Government 

Auditing Standards, issued by the Comptroller General of the United States or Office of 

Management and Budget (OMB) Bulletin No. 07-04, Audit Requirements for Federal Financial 

Statements, as amended (OMB Bulletin 07-04). However, the objective of our audit was not to 

provide an opinion on compliance with laws, regulations, contracts, and grant agreements. 

Accordingly, we do not express such an opinion. 

Under FFMIA, we are required to report whether the financial management systems used by 

OPIC substantially comply with the (1) Federal financial management systems requirements, (2) 

applicable Federal accounting standards, and (3) the United States Standard General Ledger 

(USSGL) at the transaction level. To meet this requirement, we performed tests of compliance 

with FFMIA Section 803(a) requirements. 

The objective of our audit was not to provide an opinion on OPICʼs compliance with FFMIA. 

Accordingly, we do not express such an opinion. However, our work disclosed no instances in 

which OPICʼs financial management systems did not substantially comply with (1) Federal 

financial management systems requirements, (2) Federal accounting standards, or (3) the 

USSGL at the transaction level.

Managementʼs Responsibility for the Financial Statements 

OPICʼs management is responsible for (1) preparing the financial statements in conformity with 

accounting principles generally accepted in the U.S., (2) designing, implementing, and 

maintaining internal control to provide reasonable assurance that the broad control objectives of 

Federal managerʼs Financial Integrity Act (FMFIA) are met, (3) ensuring that OPICʼs financial 

management systems substantially comply with FFMIA requirements, and (4) complying with 

other applicable laws, regulations, contracts, and grant agreements. 

Auditorʼs Responsibility 

We are responsible for conducting our audit in accordance with auditing standards generally 

accepted in the U.S.; the standards applicable to the financial audits contained in Government 

Auditing Standards, issued by the Comptroller General of the United States; and OMB Bulletin 

07-04. Those standards require that we plan and perform the audit to obtain reasonable 

assurance about whether the financial statements are presented fairly, in all material respects, 

in conformity with accounting principles generally accepted in the U.S. We are also responsible 

for: (1) obtaining a sufficient understanding of internal control over financial reporting and 

compliance to plan the audit, (2) testing whether OPICʼs financial management systems 

substantially comply with the FFMIA requirements referred to above, and (3) testing compliance 
3

with selected provisions of laws and regulations that have a direct and material effect on the 

financial statements and laws for which OMB Bulletin 07-04 requires testing. 

In order to fulfill these responsibilities, we (1) examined, on a test basis, evidence supporting the 

amounts and disclosures in the financial statements; (2) assessed the appropriateness of the 

accounting policies used and the reasonableness of significant estimates made by 

management; (3) evaluated the overall presentation of the financial statements; (4) obtained an 

understanding of OPIC and its operations, including its internal control related to financial 

reporting (including safeguarding of assets) and compliance with laws, regulations, contracts, 

and grant agreements (including execution of transactions in accordance with budget authority); 

(5) evaluated the effectiveness of the design of internal control; (6) tested the operating 

effectiveness of relevant internal controls over financial reporting and compliance; (7) 

considered the design of the process for evaluating and reporting on internal control and 

financial management systems under FMFIA; (8) tested whether OPICʼs financial management 

systems substantially complied with the FFMIA requirements referred to above; and (9) tested 

compliance with selected provisions of certain laws, regulations, contracts, and grant 

agreements. The procedures selected depend on the auditorsʼ judgment, including our 

assessment of risks of material misstatement of the financial statements, whether due to fraud 

or error. We believe we obtained sufficient and appropriate audit evidence on which to base our 

opinion. 

We did not evaluate all internal controls relevant to operating objectives as broadly defined by 

the FMFIA, such as those controls relevant to preparing statistical reports and ensuring efficient 

operations. We limited our internal control testing to controls over financial reporting and 

compliance. Because of inherent limitations in internal control, misstatements due to error or 

fraud, losses, or noncompliance may nevertheless occur and not be detected. We also caution 

that projecting our audit results to future periods is subject to risk that controls may become 

inadequate because of changes in conditions or that the degree of compliance with controls 

may deteriorate. In addition, we caution that our internal control testing may not be sufficient for 

other purposes. 

We did not test compliance with all laws and regulations applicable to OPIC. We limited our 

tests of compliance to selected provisions of laws and regulations that have a direct and 

material effect on the financial statements and those required by OMB Bulletin 07-04 that we 

deemed applicable to OPICʼs financial statements for the fiscal year ended September 30, 

2012. We caution that noncompliance with laws and regulations may occur and not be detected 

by these tests and that such testing may not be sufficient for other purposes. 

This report is intended solely for the information and use of OPICʼs management, OPICʼs Board 

of Directors, OMB, the U.S. Government Accountability Office, and the U.S. Congress, and is 

not intended to be, and should not be, used by anyone other than these specified parties. 

Calverton, Maryland 

November 14, 2012 
OPIC 2012 ANNUAL REPO

Assets 2012 2011

Fund Balance with U.S. Treasury (notes 2 and 4) $1,076,559 $ 707,257

U.S. Treasury securities, at amortized cost plus related receivables (notes 2 and 7) 5,320,325 5,188,527

Direct loans outstanding, net (notes 2 and 10) 1,363,216 1,326,292

Accounts receivable resulting from investment guaranties, net (notes 2 and 11) 42,394 59,602

Assets acquired in insurance claims settlements, net (notes 2 and 11) 1,507 1,507

Guaranty receivable (notes 2 and 19) 692,000 456,130

Accrued interest and fees and other, net (notes 2 and 10) 32,843 29,481

Furniture, equipment and leasehold improvements at cost less accumulated depreciation and 

 amortization of $17,255 in FY2012 and $15,742 in FY2011 (note 2) 6,223 6,649

 Total assets $8,535,067 $7,775,445

Liabilities, Capital, and Retained Earnings

Liabilities:

 Reserve for political risk insurance (note 9) $278,000 $275,000

 Reserve for investment guaranties (notes 10) 489,320 573,331

 Accounts payable and accrued expenses 5,515 4,984

 Guaranty liability (notes 2 and 19) 692,000 456,130

 Customer deposits and deferred income 52,196 47,465

 Borrowings from U.S. Treasury, and related interest (note 6) 2,241,224 1,827,691

 Unearned premiums 26,382 8,144

 Deferred rent & rent incentives from lessor of $6,413 and $5,779 net of accumulated 

 amortization of $2,660 and $2,421 in FY2012 and FY2011 (note 14) 3,753 3,358

 Total liabilities 3,788,390 3,196,103

Contingent liabilities (notes 2 and 17)

Capital and retained earnings:

 Contributed capital 50,000 50,000

 Credit funding (note 5) 107,484 105,788

 Interagency transfers (Note 2) 16,312 16,354

 Retained earnings and reserves:

 Insurance (notes 9 and 12) 858,251 790,887

 Guaranty (notes 10 and 12) 3,714,630 3,616,313

Total capital and retained earnings 4,746,677 4,579,342

Total liabilities, capital, and retained earnings $8,535,067 $7,775,445

BALANCE SHEETS

Overseas Private Investment Corporation—Years ended September 30, 2012 and 2011 ($ in thousands)

See accompanying notes to fi nancial statements.
VERSEAS PRIVATE INVESTMENT CORPORATION

Revenues 2012 2011

Political risk insurance premiums and fees (note 9) $ 15,452 $ 14,281

Investment fi nancing interest and fees 198,699 218,164

Interest on fi nance program deposits 36,124 31,059

Interest on U.S. Treasury securities 162,113 170,364

 Total revenues 412,388 433,868

Expenses

Provisions for reserves:

 Political risk insurance (notes 2 and 9) (23,021) (9,750)

 Investment fi nancing (notes 2, 10 and 11) 4,721 34,720

Salaries and benefi ts (note 15) 33,320 31,608

Rent, communications and utilities (note 14) 7,005 6,953

Contractual services 19,146 13,596

Travel 4,739 3,949

Interest on borrowings from U.S. Treasury (note 6) 90,547 80,824

Depreciation and amortization (note 2) 1,513 885

Other general and administrative expenses 1,848 1,627

 Total expenses 139,818 164,412

 Net income $272,570 $269,456

STATEMENTS OF INCOME

Overseas Private Investment Corporation—Years ended September 30, 2012 and 2011 ($ in thousands)

See accompanying notes to fi nancial statements.
OPIC 2012 ANNUAL REPO

See accompanying notes to fi nancial statements.

STATEMENTS OF CAPITAL AND RETAINED EARNINGS

Overseas Private Investment Corporation—Years ended September 30, 2012 and 2011 ($ in thousands)

Equity reserves

 Contributed

 Capital

 Credit

 Funding

 Interagency

 Transfers

 Insurance 

(Notes 9 & 12)

Guaranty 

(Notes 10 & 12)

Retained 

Earnings

Total

Balance, Sept. 30, 2010 $50,000 $ 106,338 $ 8,902 $ 705,410 $ 3,539,596 $ — $4,410,246

Net income — — — 101,008 168,448 — 269,456

Return credit funding

 to U.S. Treasury — — — — (292,376) — (292,376) 

Credit funding (net) received from:

 Accumulated earnings — 49,465 — (18,079) — (31,386) —

 Credit appropriations — 182,016 — — — — 182,016

Credit funding used — (232,031) — — 200,645 31,386 —

Interagency transfers — — 7,452 2,548 — — 10,000

Balance, Sept. 30, 2011 $50,000 $ 105,788 $ 16,354 $ 790,887 $ 3,616,313 $ — $4,579,342

Net income — — — 78,082 194,488 — 272,570

Return credit funding

 to U.S. Treasury — — — — (225,561) — (225,561) 

Credit funding (net) received from:

 Accumulated earnings — 45,754 — (12,760) — (32,994) —

 Credit appropriations — 118,326 — — — — 118,326

Credit funding used — (162,384) — — 129,390 32,994 —

Interagency transfers — — (42) 2,042 — — 2,000

Balance, Sept. 30, 2012 $50,000 $ 107,484 $ 16,312 $ 858,251 $ 3,714,630 $ — $4,746,677
VERSEAS PRIVATE INVESTMENT CORPORATION

See accompanying notes to fi nancial statements.

 2012 2011

Cash fl ows from operating activities:

 Net income $272,570 $269,456

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

 Provisions for:

 Political risk insurance (23,021) (9,750)

 Investment fi nancing 4,721 34,720

 Amortization of premiums on U.S. securities 15,908 15,023

 Accretion of discounts on U.S. securities (5,750) (5,302)

 Amortization of deferred rent and rental incentives (295) 2

 Increase in rent incentives 689 5

 Depreciation and amortization 1,513 885

 (Increase) decrease in operating assets:

 Accrued interest and fees and other (18,481) (33,596)

 Guaranty receivable (235,871) (182,444) 

 Assets acquired in insurance claims settlements (38) (1,034)

 Recoveries on assets acquired in insurance claims settlements 26,059 26,059

 Assets acquired in fi nance claims settlements (23,422) (59,787)

 Recoveries on assets acquired in fi nance claims settlements 21,592 15,891

 Increase (decrease) in operating liabilities:

 Accounts payable and accrued expenses 533 (2,041)

 Customer deposits and deferred income 4,731 1,690

 Guaranty liability 235,871 182,444

 Unearned premiums 18,238 (1,518)

 Cash provided by operating activities 295,547 250,703

Cash fl ows from investing activities:

 Sale and maturity of U.S. Treasury securities 810,893 512,025

 Purchase of U.S. Treasury securities (946,040) (661,646)

 Repayment of direct loans 164,840 135,670

 Disbursement of direct loans (263,148) (418,560)

 Acquisition of furniture and equipment (1,088) (1,523)

 Cash used in investing activities (234,543) (434,034)

Cash fl ows from fi nancing activities:

 Return credit funding to U.S. Treasury (225,561) (292,376)

 Interagency transfers 2,000 10,000

 Credit appropriations 118,326 182,016

 Credit reform borrowings from U.S. Treasury 413,533 424,776

 Cash provided by fi nancing activities 308,298 324,416

Net increase in cash 369,302 141,085

Fund Balance with U.S. Treasury at beginning of year 707,257 566,172

Fund Balance with U.S. Treasury at end of year $1,076,559 $707,257

STATEMENTS OF CASH FLOWS

Overseas Private Investment Corporation—Years ended September 30, 2012 and 2011 ($ in thousands)
OPIC 2012 ANNUAL REPO

NOTES TO FINANCIAL STATEMENTS 

Overseas Private Investment Corporation—Years ended September 30, 2012 and 2011

(1) Statement of Corporate Purpose

The Overseas Private Investment Corporation (OPIC) is a selfsustaining U.S. Government corporation created under the Foreign Assistance Act of 1961 (FAA), as amended. OPIC facilitates 

U.S. private investment in developing countries and emerging 

market economies, primarily by offering political risk insurance, 

investment guaranties, and direct loans. As a government corporation, OPIC is not subject to income tax. 

(2) Summary of Signifi cant Accounting Policies

Basis of Presentation: These fi nancial statements have been 

prepared to report the fi nancial position, results of operations, 

and cash fl ows of OPIC. OPIC’s accounting policies conform 

to accounting principles generally accepted in the United States 

of America. OPIC’s fi nancial statements are presented on the accrual basis of accounting. Under the accrual basis, revenues are 

recognized when earned, and expenses are recognized when a 

liability is incurred, without regard to receipt or payment of cash.

Fund Balance with U.S. Treasury: Substantially all of OPIC’s 

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

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

of the Statement of Cash Flows, Fund Balance with U.S. Treasury 

is considered cash.

Investment in U.S. Treasury Securities: By statute, OPIC is 

authorized to invest funds derived from fees and other revenues 

related to its insurance and preinvestment programs in U.S. Treasury securities. Investments are carried at face value, net of unamortized discount or premium, and are held to maturity. OPIC 

has the ability and intent to hold its investments until maturity or 

until the carrying cost can be otherwise recovered.

Assets Acquired in Investment Guaranty and Insurance 

Claims Settlements: Assets acquired in claims settlements are 

valued at the lower of management’s estimate of the net realizable value of recovery or the cost of acquisition.

OPIC acquires foreign currency in settlement of inconvertibility 

claims when an insured foreign enterprise is unable to convert 

foreign currency into U.S. dollars, as well as in some direct loan 

and investment guaranty collection efforts. The initial U.S. dollar 

equivalent is recorded and revalued annually until the foreign 

currency is utilized by OPIC or other agencies of the United 

States Government, or until it is exchanged for U.S. dollars by 

the foreign government.

Allowances: The allowances are based on management’s 

periodic evaluations of the underlying assets. In its evaluation, 

management considers numerous factors, including, but not 

limited to, general economic conditions, asset composition, prior 

loss experience, the estimated fair value of any collateral, and 

the present value of expected future cash fl ows. OPIC writes off 

a loan when it believes that viable collection efforts have been 

exhausted and no further recovery is expected.

Depreciation and Amortization: OPIC capitalizes property 

and equipment at historical cost for acquisitions exceeding 

$5,000. Depreciation and amortization of fi xed assets, leasehold 

improvements, and lease incentives are computed using the 

straight-line method over the estimated useful life of the asset or 

lease term, whichever is shorter, with periods ranging from 5 to 

15 years.

Reserves for Political Risk Insurance and Investment Guaranties: The reserves for political risk insurance and investment 

guaranties provide for losses inherent in those operations using 

the straight-line method. These reserves are general reserves, 

available to absorb losses related to the total insurance and 

guaranties outstanding, which are off-balance-sheet commitments. The reserves are increased by provisions charged to 

expense and decreased for claims settlements. The provisions 

for political risk insurance and investment guaranties are based 

on management’s evaluation of the adequacy of the related 

reserves. This evaluation encompasses consideration of past 

loss experience, changes in the composition and volume of 

the insurance and guaranties outstanding, worldwide economic 

and political conditions, and project-specifi c risk factors. Also, 

in the political risk insurance reserve evaluation, OPIC takes into 

consideration losses incurred but not yet reported.

FASB Accounting Standards Codifi cation Topic 460 for the 

Guarantee Topic (FASB ASC 460): FASB ASC 460 requires that 

upon issuance of a guaranty, the guarantor must disclose and 

recognize a liability for the fair value of the obligation it assumes 

under that guaranty. The initial recognition and measurement 

requirement of FASB ASC 460 applies only to guaranties issued 

or modifi ed after December 31, 2002. OPIC’s initial guarantee 

obligation reported, represents the fair value of the investment 

guaranties. This obligation is reduced over the term of the 

investment guarantee agreements, as OPIC is released from its 

obligation.

Revenue Recognition: Facility fees are received in advance and 

recognized as deferred income, then amortized over the applicable loan period using the straight-line method. Interest on loans 

and guaranty fees on investment guaranties are accrued based 

on the principal amount outstanding, for both performing and 

non-performing (aging more than 90 days past due) projects. 

Revenue from political risk insurance premiums is recognized 

over the contract coverage period. Accretion of premium and 

discount on investment securities is amortized into income under 

a method approximating the effective yield method.
VERSEAS PRIVATE INVESTMENT CORPORATION

Interagency transfers: OPIC periodically receives funding from 

other U.S. Government agencies to be used to support various 

programs and initiatives.

Use of Estimates: The preparation of fi nancial statements 

requires management to make estimates and assumptions 

that affect the reported amounts of assets and liabilities, the 

disclosure of contingent assets and liabilities at the date of the 

fi nancial statements, and the reported amounts of revenue and 

expenses during the reporting period. Actual results could differ 

from these estimates.

Commitments and Contingencies: Liabilities from loss contingencies, other than those related to political risk insurance 

and investment guaranties, arising from claims, assessments, 

litigation, fi nes and penalties, and other sources, are recorded 

when it is probable that a liability has been incurred and the 

amount of the assessment and/or remediation can be reasonably 

estimated. Loss contingencies that do not meet these criteria, 

but are reasonably possible and estimable are not accrued, but 

are disclosed in Note 17.

(3) Intragovernmental Financial Activities

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

decisions and management controls of the Offi ce of Management and Budget. As a result of this relationship, OPIC’s 

operations may not be conducted, nor its fi nancial position 

reported, as they would be if OPIC were not a government corporation. Furthermore, in accordance with international 

agreements relating to its programs, foreign currency acquired 

by OPIC can be used for U.S. Government expenses. This constitutes an additional means, which would otherwise be unavailable, by which OPIC can recover U.S. dollars with respect to its 

insurance and investment fi nancing programs.

(4) Fund Balance with U.S. Treasury 

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

described below. The fund balance with U.S. Treasury as of 

September 30, 2012 and 2011 consists of the following (dollars in 

thousands):

 2012 2011 

Restricted:

 Pre-Credit reform $ 3 10

 Credit reform 1,041,206 692,712

 Interagency fund transfers 11,010 10,000

 Unrestricted 24,340 4,535

 Total $1,076,559 707,257

The Federal Credit Reform Act of 1990 established separate 

accounts for cash fl ows associated with investment fi nancing activity approved prior to implementation of the Act and 

investment fi nancing activity subject to the Act. With the advent 

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

Reform cash balances. These balances grow over time, and when 

they are determined to be no longer needed for the liquidation 

of the remaining pre-Credit Reform direct loans and investment 

guaranties, they are transferred to OPIC’s unrestricted noncredit 

insurance account. OPIC made transfers totaling $30,000 to the 

noncredit insurance account in 2012 and in 2011. Credit Reform 

balances are also maintained in the form of uninvested funds. 

The U.S. Treasury pays OPIC interest on those cash balances 

except for undisbursed credit funding.

(5) Credit Funding 

OPIC’s fi nance activities are subject to the Federal Credit Reform 

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

Credit Reform requires agencies to estimate the long-term cost 

to the government of each fi scal year’s new credit transactions 

and to obtain funding through the appropriations process equal 

to the net present value of such costs at the beginning of the 

year. OPIC’s credit funding is available for three years. In addition, the Act requires the administrative costs related to its credit 

program to be displayed.

In fi scal year 2012, OPIC’s appropriations legislation authorized 

the corporation to use $25 million of its accumulated earnings to 

cover the future costs of credit transactions committed in fi scal 

years 2012 through 2014. In fi scal year 2011, OPIC was authorized to use $18.1 million to cover commitments in fi scal years 

2011 through 2013. In addition to the credit funding allocated 

directly to OPIC through the appropriations process, OPIC received a total of $67 million in net transfers from other agencies 

to be used exclusively to fi nance projects in the New Independent States (NIS).

The following table shows the status of funding for credit activities (dollars in thousands): 

2012 2011

Balance carried forward $105,788 106,338

Upward reestimates 118,326 182,016

Transferred from earnings (net of returns) 45,754 49,465

Credit funding used (162,384) (232,031)

 Credit funding remaining $107,484 105,788

Changes in fi nancial and economic factors over time can affect 

the subsidy estimates made at the time of loan and guaranty 

commitments. Therefore, in accordance with OMB guidelines, 

OPIC reestimates subsidy costs for each group of loans and 

guaranties obligated in a given fi scal year to account for those 

changing factors. Reestimates that result in increases to subsidy 

costs are funded with additional appropriated funds that are 

made automatically available, while decreases to subsidy costs 

result in excess funds that are transferred to the U.S. Treasury. 

OPIC incurred increased subsidy costs of $118.3 million and 

$182 million and decreases in subsidy costs of $99.5 million and 

$216.6 million in fi scal years 2012 and 2011, respectively. During 

fi scal year 2010, OPIC received permission from OMB to return 

expired credit funding to the source of the original funds, OPIC’s 
OPIC 2012 ANNUAL REPO

unrestricted noncredit insurance account, rather than to the U.S. 

Treasury. Expired credit funding of $12.2 million was transferred 

back to the noncredit account earnings during fi scal year 2012. 

No credit funding expired during fi scal year 2011. 

(6) Borrowings From the U.S. Treasury

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

portion of investment fi nancing activities not funded through the 

appropriations process must be funded by borrowings from the 

U.S. Treasury. Borrowings for Credit Reform fi nancings totaled 

$426.7 million in 2012 and $578 million in 2011, all of which have 

been disbursed. OPIC paid a total of $90.5 million and $80.8 

million in interest to the U.S. Treasury during fi scal years 2012 

and 2011, respectively. Repayments of borrowings from the U.S. 

Treasury totaled $13.2 million in 2012 and $153.2 million in 2011. 

Future payments for borrowing outstanding at September 30, 

2012 are as follows (dollars in thousands): 

Amount Due

Payment due in: 

 Fiscal year 2013 $51,258

 Fiscal year 2014 138,483

 Fiscal year 2015 439,533

 Fiscal year 2016 141,122

 Fiscal year 2017 117,230

 Thereafter 1,353,598

 Total $2,241,224

(7) Investment in U.S. Treasury Securities 

The composition of investments and related receivables at September 30, 2012 and 2011 is as follows (dollars in thousands):

2012 2011

Investments, amortized cost $5,276,250 5,151,261

Interest receivable 44,075 37,266 

 Total $5,320,325 5,188,527

The amortized cost and estimated fair value of investments in 

U.S. Treasury securities are as follows (dollars in thousands): 

Amortized Unrealized Unrealized Estimated 

 Cost Gains Losses Fair Value

At September 30, 2012 $5,276,250 455,842 — 5,732,092

At September 30, 2011 $5,151,261 488,780 — 5,640,041 

At September 30, 2012, the securities held had an interest 

range of .875% to 10.625% and a maturity period from 31 days 

to almost 16 years.

OPIC holds its securities to maturity. The amortized cost and estimated fair value of U.S. Treasury securities at September 30, 2012, 

by contractual maturity, are shown below (dollars in thousands):

Amortized Estimated 

 Cost Fair Value

Due in one year or less $1,097,014 1,113,363 

Due after one year through fi ve years 2,593,118 2,786,952 

Due after fi ve years through 10 years 1,463,476 1,654,886 

Due after 10 years 122,642 176,891 

 Total $5,276,250 5,732,092

(8) Statutory Limitations on the Issuance of 

Insurance and Finance

OPIC issues insurance and fi nancing under a single limit for both 

programs, currently $29 billion, fi xed by statute in the FAA. At 

September 30, 2012, OPIC’s insurance and fi nance programs 

have collectively utilized $16.7 billion.

(9) Political Risk Insurance 

Insurance revenues include the following components for the 

years ended September 30 (dollars in thousands):

 2012 2011

Political risk insurance premiums $15,452 14,281

Miscellaneous insurance income — —

 Total insurance revenue $15,452 14,281 

OPIC’s capital, allowance, retained earnings, and reserves available for insurance totaled $1.1 billion at both September 30, 

2012 and 2011. Charges against retained earnings could arise 

from (A) outstanding political risk insurance contracts, (B) pending claims under insurance contracts, and guaranties issued in 

settlement of claims arising under insurance contracts. 

(a) Political Risk Insurance 

OPIC insures investments for up to 20 years against three 

different risks: inconvertibility of currency, expropriation, and 

political violence. Insurance coverage against inconvertibility 

protects the investor from increased restrictions on the investor’s ability to convert local currency into U.S. dollars. Inconvertibility insurance does not protect against devaluation of a 

country’s currency.

Expropriation coverage provides compensation for losses due to 

confi scation, nationalization, or other governmental actions that 

deprive investors of their fundamental rights in the investment.

Insurance against political violence insures investors against 

losses caused by politically motivated acts of violence (war, 

revolution, insurrection, or civil strife, including terrorism 

and sabotage).

Under most OPIC insurance contracts, investors may obtain 

all three coverages, but claim payments may not exceed the 
VERSEAS PRIVATE INVESTMENT CORPORATION

single highest coverage amount. Claim payments are limited 

by the value of the investment and the amount of current 

coverage in force at the time of the loss and may be reduced 

by the insured’s recoveries from other sources. In addition, in 

certain contracts, OPIC’s requirement to pay up to the single 

highest coverage amount is further reduced by stop-loss and 

risk-sharing agreements. Finally, losses on insurance claims may 

be reduced by recoveries by OPIC as subrogee of the insured’s 

claim against the host government. Payments made under insurance contracts that result in recoverable assets are reported 

as assets acquired in insurance settlements.

OPIC’s Maximum Contingent Liability at September 30, 2012 

and 2011 was $3.1 billion and $2.6 billion, respectively. This 

amount is OPIC’s estimate of maximum exposure to insurance 

claims, which includes standby coverage for which OPIC is 

committed but not currently at risk. A more realistic measure of 

OPIC’s actual exposure to insurance claims is the sum of each 

single highest “current” coverage for all contracts in force, or 

Current Exposure to Claims (CEC). OPIC’s CEC at September 

30, 2012 and 2011 was $2.4 billion and $1.7 billion, respectively.

(b) Pending Claims

At both September 30, 2012 and 2011 OPIC had no material 

pending insurance claims. In addition to requiring formal 

applications for claimed compensation, OPIC’s contracts 

generally require investors to notify OPIC promptly of host 

government action that the investor has reason to believe is 

or may become a claim. Compliance with this notice provision 

sometimes results in the fi ling of notices of events that do not 

mature into claims.

OPIC does not record a specifi c liability related to such 

notices in its fi nancial statements, due to the highly speculative nature of such notices, both as to the likelihood that the 

events referred to will ripen into any claims, and the amounts 

of compensation, if any, that may become due. Any claims 

that might arise from these situations are factored into the 

reserves for political risk insurance.

Changes in the reserve for political risk insurance during fi scal 

years 2012 and 2011 were as follows (dollars in thousands):

2012 2011

 Beginning balance $275,000 275,000 

 Amounts charged off — — 

 Increase/(Decrease) in provisions 3,000 29 

 Transfers (to)/from other reserves — (29) 

 Ending balance $278,000 275,000 

(10) Investment Financing

OPIC is authorized to provide investment fi nancing to projects 

through direct loans and investment guaranties. Project fi nancing provides medium- to long-term funding through direct loans 

and investment guaranties to ventures involving signifi cant equity and/or management participation by U.S. businesses. Project fi nancing looks for repayment from the cash fl ows generated 

by projects, and as such, sponsors need not pledge their own 

general credit beyond the required project completion period.

Investment funds use direct loans and investment guaranties 

to support the creation and capitalization of investment funds 

that make direct equity and equity-related investments in new, 

expanding, or privatizing companies in emerging market economies. The fund managers, selected by OPIC, are experienced, 

private investment professionals. OPIC’s participation in a fund 

takes the form of long-term, secured loans and loan guaranties that supplement the fund’s privately raised equity. OPIC’s 

guaranty may be applied only to the debt portion of the fund’s 

capital and, for certain funds, to accrued interest on that debt. 

OPIC does not guaranty any of the fund’s equity, and all equity 

investments in OPIC-backed funds are fully at risk.

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

respectively. Direct loans and investment guaranties are committed in accordance with the Federal Credit Reform Act of 1990, 

pursuant to which loan disbursements and any claim payments 

for these commitments have been funded through appropriations actions, borrowings from the U.S. Treasury, and the accumulation of earnings or collection of fees. In fi scal years 2012 

and 2011, $25 million and $18.1 million, respectively, was made 

available for credit funding costs. OPIC is in compliance with all 

relevant limitations and credit funding appropriations guidance. 

OPIC’s capital, allowances, retained earnings, and reserves 

available for claims on its investment fi nancing at September 30, 

2012 and 2011 totaled $4.6 billion and $4.5 billion, respectively.

Direct Loans: Direct loans are made for projects in developing and other eligible countries involving U.S. small business 

or cooperatives, on terms and conditions established by OPIC. 

Direct loan exposure at September 30, 2012 totaled $3.4 billion, 

of which approximately $1.6 billion was outstanding. Direct loan 

exposure at September 30, 2011 totaled $3.6 billion, of which 

approximately $1.5 billion was outstanding. Loans with payments 

more than 90 days past due totaled $182 million at September 

30, 2012 and $192.5 million at September 30, 2011. Interest accrued on these non-performing loans was $8.1 million and $25.2 

million during fi scal years 2012 and 2011, respectively; interest 

and fee receivables from these projects as of each fi scal year 

end are reserved in full.
OPIC 2012 ANNUAL REPO

Direct loans outstanding were as follows (dollars in thousands):

 2012 2011

Direct loans outstanding $1,586,602 1,488,487

Allowance for uncollectible loans (223,386) (162,195)

Direct loans outstanding, net $1,363,216 1,326,292

Changes in the allowance for uncollectible loans during fi scal 

years 2012 and 2011 were as follows (dollars in thousands):

2012 2011 

Beginning balance $162,195 139,686 

Amounts charged off (4,288) (8,987) 

Recoveries — 12 

Increase in provisions 65,479 31,484 

Ending balance $223,386 162,195 

Investment Guaranties: OPIC’s investment guaranty covers the 

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

guaranty, OPIC makes payments of principal and interest to the 

lender. These payments are recorded as accounts receivable 

resulting from investment guaranties. The loans that are guaranteed can bear either fi xed or fl oating rates of interest and are 

payable in U.S. dollars. OPIC’s losses on payment of a guaranty 

are reduced by the amount of any recovery from the borrower, 

the host government, or through disposition of assets acquired 

upon payment of a claim. Guaranties extend from 5 to 21 years 

for project fi nance and from 10 to 18 years for investment funds.

Credit risk represents the maximum potential loss due to possible nonperformance by borrowers under terms of the contracts. 

OPIC’s exposure to credit risk under investment guaranties, 

including claim-related assets, was $10.2 billion at September 

30, 2012, of which $5.6 billion was outstanding. Of the $10.2 

billion of exposure, $7.7 billion was related to project fi nance and 

$2.5 billion was related to investment fund guarantees. Of the 

$5.6 billion outstanding, $4.7 billion related to project fi nance 

and $.9 billion related to investment fund guaranties. Included in 

the $2.5 billion of investment fund exposure is $216.5 million of 

estimated interest that could accrue to the guaranty lender. This 

interest generally accrues over a 10-year period, payable upon 

maturity. Upon complete nonperformance by the borrower, 

OPIC would be liable for principal outstanding and interest accrued on disbursed investment funds. At September 30, 2012, 

$128.8 million of the $216.5 million had actually accrued to the 

guaranteed lender on disbursed investment funds; the remainder represents an estimate of interest that could accrue to the 

guaranteed lender over the remaining investment fund term.

At September 30, 2011, OPIC’s exposure to credit risk under 

investment guaranties, including claim- related assets, was $8.3 

billion, of which $5 billion was outstanding. Of the $8.3 billion of 

exposure, $5.7 billion was related to project fi nance and $2.6 billion was related to investment fund guarantees. Of the $5 billion 

outstanding, $4.1 billion related to project fi nance and $.9 billion 

related to investment fund guaranties. Included in the $2.6 billion of investment fund exposure is $241.8 million of estimated 

interest that could accrue to the guaranty lender. This interest 

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

Upon complete nonperformance by the borrower, OPIC would 

be liable for principal outstanding and interest accrued on 

disbursed investment funds. At September 30, 2011, $112.9 million of the $241.8 million had actually accrued to the guaranteed 

lender on disbursed investment funds; the remainder represents 

an estimate of interest that could accrue to the guaranteed 

lender over the remaining investment fund term.

Changes in the reserve for investment guaranties during fi scal 

years 2012 and 2011 were as follows (dollars in thousands):

2012 2011

Beginning balance $573,331 650,229

Decrease in provisions (84,011) (76,898)

Ending balance $489,320 573,331

Accrued Interest, Fees and Other, net of Allowance: Prior to 

fi scal year 2011, Interest, Fee and other income was not accrued 

on direct loans and guarantees that had payments more than 90 

days past due. Revenue collected was recorded as income when 

received. During fi scal year 2011, OPIC implemented a loans accounting system that provided transactional support for recording the revenues associated with these non-performing projects, 

and any related receivables outstanding at the end of each fi scal 

year are reserved in full. 

 2012 2011 

Accrued Interest, Fees and Other, Gross $64,474 56,921 

Less Allowance (31,631) (27,440) 

Net $32,843 29,481 

(11) Accounts Receivable from Investment 

Guaranties and Assets Acquired in Insurance 

Claims Settlements (Claim-Related Assets)

Claim-related assets may result from payments on claims under 

either the investment fi nancing program or the insurance program. Under the investment fi nancing program, when OPIC pays 

a guaranteed party, a receivable is created. Under the insurance 

program, similar receivables refl ect the value of assets, generally 

shares of stock, local currency, or host country notes, that may 

be acquired as a result of a claim settlement. These receivables 

are generally collected over a period of 1 to 15 years.

Accounts receivable resulting from investment guaranties were 

as follows (dollars in thousands):

2012 2011

Accounts receivable resulting from 

 investment guaranties $150,391 162,590 

Allowance for doubtful recoveries (107,997) (102,988) 

Accounts receivable, net $ 42,394 59,602
VERSEAS PRIVATE INVESTMENT CORPORATION

Changes in the allowance for doubtful recoveries for assets 

resulting from investment guaranties during fi scal years 2012 and 

2011 were as follows (dollars in thousands):

2012 2011

Beginning balance $102,988 64,264 

Amounts charged off (14,179) (8,801)

Increase in provisions 19,188 47,525 

Recoveries — — 

Ending balance $107,997 102,988 

Assets acquired in insurance claims settlements were as follows 

(dollars in thousands): 

2012 2011

Assets acquired in insurance

 claims settlements $3,014 3,014 

Allowance for doubtful recoveries (1,507) (1,507)

Accounts receivable, net $1,507 1,507 

Changes in the allowance for doubtful recoveries for assets 

acquired in insurance claims settlements during fi scal years 2012 

and 2011 were as follows (dollars in thousands): 

2012 2011

Beginning balance $1,507 1,478 

Amounts charged off — — 

Transfers (to)/from other reserves — 29 

Ending balance $1,507 1,507 

(12) Reserves and Full Faith and Credit 

Section 235(c) of the FAA established a fund which shall be available for discharge of liabilities under insurance or reinsurance or 

under similar predecessor guaranty authority. This fund consists 

of the Insurance Reserve and the Guaranty Reserve for the respective discharge of potential future liabilities arising from insurance or from guaranties issued under Section 234(b) of the FAA. 

These amounts may be increased by transfers from retained earnings or by appropriations. In fi scal years 2012 and 2011, OPIC’s 

retained earnings were allocated to these reserves on the basis 

of maximum exposure outstanding for insurance and guaranties 

respectively, thereby refl ecting OPIC’s increased ability to absorb 

potential losses without having to seek appropriated funds.

All valid claims arising from insurance and guaranties issued by 

OPIC constitute obligations on which the full faith and credit 

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

September 30, 2012 and 2011, the Insurance Reserve totaled 

$858 million and $791 million, and the Guaranty Reserve totaled 

$3.7 billion and $3.6 billion, respectively. Should funds in OPIC’s 

reserves not be suffi cient to discharge obligations arising 

under insurance, and if OPIC exceeds its $100 million borrowing authority authorized by statute for its insurance program, 

funds would have to be appropriated to fulfi ll the pledge of full 

faith and credit to which such obligations are entitled. Standing 

authority for such appropriations is contained in Section 235(f) 

of the FAA. The Federal Credit Reform Act of 1990 authorizes 

permanent, indefi nite appropriations and borrowings from the 

U.S. Treasury, as appropriate, to carry out all obligations resulting from the investment fi nancing program. 

(13) Disclosures About Fair Value of Financial 

Instruments

The estimated values of each class of fi nancial instrument for 

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

2012 are as follows (dollars in thousands):

Carrying Fair

 Amount Value

Financial assets:

 Cash $1,076,559 1,076,557

 U.S. Treasury securities 5,276,250 5,732,092

 Interest receivable on securities 44,075 44,075

 Direct loans 1,363,216 1,363,216

 Accounts receivable from 

 investment guaranties 42,394 42,394

 Assets acquired in insurance 

 claims settlements 1,507 1,507

Financial liabilities:

 Borrowings from the U.S. Treasury 2,241,224 2,170,691

The methods and assumptions used to estimate the fair value of 

each class of fi nancial instrument are described below: 

Cash: The carrying amount approximates fair value because of 

the liquid nature of the cash, including restricted cash.

U.S. Treasury Securities: The fair values of the U.S. Treasury 

securities are estimated based on quoted prices for Treasury 

securities of the same maturity available to the public. OPIC is 

not authorized, however, to sell its securities to the public, but 

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

Interest receivable on the securities is due within 6 months and 

is considered to be stated at its fair value.

Direct Loans, Accounts Receivable Resulting from Investment 

Guaranties, and Assets Acquired in Insurance Claims Settlements: These assets are stated on the balance sheet at the 

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

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

considers specifi c factors related to each individual receivable 

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

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

Borrowings from the U.S. Treasury: The fair value of borrowings from the U.S. Treasury is estimated based on the face value 

of borrowings discounted over their term at year-end rates. 

These borrowings were required by the Federal Credit Reform 

Act, and repayment terms are fi xed by the U.S. Treasury in accordance with that Act.
OPIC 2012 ANNUAL REPO

Investment Guaranties Committed and Outstanding: OPIC’s 

investment guaranties are intended to provide a means of 

mobilizing private capital in markets where private lenders would 

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

Government. Given the absence of a market for comparable 

instruments, OPIC determined that the fair value is the present 

value of future fees expected to be collected.

(14) Operating Lease 

OPIC negotiated a new building lease during fi scal year 2004. 

Under the lease terms, OPIC received interest-bearing tenant improvement allowances for space refurbishment. Total incentives 

offered by the lessor to cover these costs were $3.4 million. The 

value of these incentives is deferred in the balance sheet and is 

amortized to reduce rent expense on a straight-line basis over 

the 15-year life of the lease.

OPIC executed a lease amendment in November, 2011 to consolidate the leased space onto contiguous fl oors. An additional 

non-interest bearing tenant improvement allowance of $300,000 

was received as incentive offered by the lessor to cover space 

refurbishment. The value of this additional incentive is treated 

as stated above for the original incentives. There was no material change in leased square footage or future minimum rental 

expense as a result of the lease amendment.

Rental expense for fi scal years 2012 and 2011 was approximately 

$4.4 million and $4.2 million, respectively. Minimum future rental 

payments under the remaining term of the 15-year lease at 1100 

New York Avenue, N.W. are approximately $4.8 million annually, 

with additional adjustments tied to the consumer price index.

(15) Pensions

OPIC’s permanent employees are covered by the Civil Service 

Retirement System (CSRS) or the Federal Employee Retirement 

System (FERS). For CSRS, OPIC withheld 7% of employees’ gross 

2012 earnings and contributed 7% of employees’ 2012 gross 

earnings. The sums were transferred to the Civil Service Retirement Fund from which this employee group will receive retirement 

benefi ts.

For FERS, OPIC withheld 0.80% of employees’ gross earnings. 

OPIC transferred this sum to the FERS fund from which the employee group will receive retirement benefi ts. An additional 6.2% 

of the FERS employees’ gross earnings is withheld, and that, plus 

matching contributions by OPIC, are sent to the Social Security 

System from which the FERS employee group will receive social 

security benefi ts. OPIC occasionally hires employees on temporary appointments, and those employees are covered by the social security system under which 6.2% of earnings is withheld and 

matched by OPIC. For calendar year 2012, a special reduction of 

2% is being applied to the Social Security withholding rate, pursuant to the “Tax Relief, Unemployment Insurance Reauthorization, 

and Job Creation Act of 2010.”

FERS and CSRS employees may elect to participate in the Thrift 

Savings Plan (TSP). In 2012 both CSRS and FERS employees could 

elect to contribute up to $17,000, the IRS elective deferral limit for 

the tax year. FERS employees receive an automatic 1% contribution from OPIC. Amounts withheld for FERS employees are 

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

The amount of employer contributions to these plans for the year 

ended September 30, 2012 was $3.9 million.

Although OPIC funds a portion of employee pension benefi ts under the CSRS, the FERS, and the TSP, and makes necessary payroll 

withholdings, it has no liability for future payments to employees 

under these programs. Furthermore, separate information related 

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

in the fi nancial statements. Paying retirement benefi ts and reporting plan assets and actuarial information is the responsibility of 

the U.S. Offi ce of Personnel Management and the Federal Retirement Thrift Investment Board, which administer these plans. Data 

regarding the CSRS and FERS actuarial present value of accumulated benefi ts, assets available for benefi ts, and unfunded pension 

liability are not allocated to individual departments and agencies.

(16) Concentration of Risk

OPIC is subject to certain risks associated with fi nancial 

instruments not refl ected in its balance sheet. These fi nancial 

instruments include political risk insurance, loan guaranties, and 

committed-but- undisbursed direct loans.

With respect to political risk insurance, OPIC insures against 

currency inconvertibility, expropriation of assets, and political violence. Additionally, OPIC provides investment fi nancing 

through direct loans and investment guaranties.

OPIC’s credit policy is to take a senior security position in the assets of the projects or transactions it guaranties. The nature and 

recoverable value of the collateral pledged to OPIC varies from 

transaction to transaction and may include tangible assets, cash 

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

company as well as personal and corporate guaranties. OPIC 

takes all necessary steps to protect its position in such collateral 

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

such action becomes necessary.

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

September 30, 2012 and 2011 (dollars in thousands):

2012 

 Unused

 Total Outstanding Commitments

Guaranties $10,022,667 5,437,500 4,585,167

Undisbursed 

 direct loans 1,806,812 — 1,806,812

Insurance 3,134,483 2,353,720 780,763
VERSEAS PRIVATE INVESTMENT CORPORATION

2011

 Unused

 Total Outstanding Commitments

Guaranties $8,096,076 4,867,358 3,228,718

Undisbursed 

 direct loans 2,119,809 — 2,119,809

Insurance 2,595,376 1,662,057 933,319

OPIC’s off-balance-sheet fi nance and insurance exposure involves coverage outside of the United States. The following is a 

breakdown of such total commitments at September 30, 2012 by 

major geographical area (dollars in thousands):

Undisbursed 

 Loan Portion on 

 Guaranties Direct Loans Insurance

Africa $ 1,969,363 275,813 1,301,259

Asia 1,222,502 291,327 627,815

Europe 1,443,842 37,699 4,027

Latin America 2,533,029 220,099 329,518

Middle East 1,806,158 518,527 868,136

NIS (New Independent

 States) 625,549 143,397 366,746

Worldwide 422,224 319,950 —

Insurance stop 

 loss adjustment — — (363,018) 

 $10,022,667 1,806,812 3,134,483 

OPIC has several client-specifi c contracts with stop-loss limits 

that are less than the aggregate coverage amounts. The insurance stop-loss adjustment represents the difference between 

the aggregate coverage amount and OPIC’s actual exposure 

under these contracts.

At September 30, 2012, OPIC’s largest fi nance and insurance 

exposure was in the following countries and sectors (dollars in 

thousands):

Country 

Turkey $1,119,229

Jordan 1,077,717

Ghana 834,668

India 728,946

South Africa 628,967 

Sector

Financial services $8,143,930

Energy - Power 3,368,243

Services 1,335,353

Energy - Oil and Gas 909,591

Manufacturing 722,594

(17) Other Contingencies

OPIC is currently involved in certain legal claims and has 

received notifi cations of potential claims in the normal course 

of business. There are substantial factual and legal issues that 

might bar any recovery in these matters. It is not possible to 

evaluate the likelihood of any unfavorable outcome, nor is it 

possible to estimate the amount of compensation, if any, that 

may be determined to be owed in the context of a settlement. 

Management believes that the resolution of these claims will not 

have a material adverse impact on OPIC.

(18) Subsequent Events

Management evaluated subsequent events through November 

14, 2012, the date the fi nancial statements were available to be 

issued. Events or transactions occurring after September 30, 

2012, but prior to November 14, 2012, that provided additional 

evidence about conditions that existed at September 30, 2012, 

have been recognized in the fi nancial statements for the period 

ended September 30, 2012. Events or transactions that provided evidence about conditions that did not exist at September 30, 2012, but arose before the fi nancial statements were 

available to be issued, have not been recognized in the fi nancial 

statements for the period ended September 30, 2012.

As of November 9, 2012, OPIC expected prepayments on several direct loans in the amount of $53 million.

(19) Accounting and Disclosure Requirements 

for Guaranties 

In FY 2012 and FY 2011 pursuant to the requirement of FASB 

ASC 460, OPIC recognized a guaranty liability and a guaranty 

fee receivable of $692 million and $456.1 million, respectively. 

OPIC collected $92.3 million and $89.8 million of guaranty fees 

in FY 2012 and FY 2011, respectively, on the investment guaranties issued since December 31, 2002. The FY 2011 guaranty fees 

collections refl ect an updated amount from that disclosed in the 

prior year fi nancial statements, to correct for an immaterial error 

in the prior year’s calculation.

(20) Statutory Covenants

OPIC’s enabling statute stipulates both operating and fi nancial 

requirements with which OPIC must comply. In management’s 

opinion, OPIC is in compliance with all such requirements.
OPIC 2012 ANNUAL REPO

executive STAFF

board of DIRECTORS

Elizabeth L. Littlefi eld, Chair

President and Chief Executive Offi cer

Overseas Private Investment Corporation

Dr. Rajiv Shah

Administrator

U.S. Agency for International Development

Ambassador Demetrios J. Marantis

Deputy U.S. Trade Representative

Offi ce of the U.S. Trade Representative

Francisco J. Sánchez

Under Secretary for International Trade

U.S. Department of Commerce

Seth D. Harris

Deputy Secretary

U.S. Department of Labor

Lael Brainard

Under Secretary for International Affairs

U.S. Department of the Treasury

Robert D. Hormats

Under Secretary for Economic, Energy & 

Agricultural Affairs

U.S. Department of State

Elizabeth Littlefi eld

President and Chief Executive Offi cer

Mimi Alemayehou

Executive Vice President

John E. Morton

Chief of Staff

Paula Tufro

Deputy Chief of Staff

Don S. De Amicis

Vice President and General Counsel

Allan Villabroza

Vice President and Chief Financial Offi cer

Margaret L. Kuhlow

Acting Vice President, Offi ce of Investment Policy

Matthew Maxwell Taylor Kennedy

Small Business

Director, Kennedy Enterprises

Katherine M. Gehl

Small Business

President and CEO, Gehl Foods, Inc.

Terry Lewis

Cooperatives

Principal, LIA Advisors, LLC

Michael J. Warren

Member

Principal, Albright Stonebridge Group

Kevin G. Nealer

Member

Principal & Partner, The Scowcroft Group

James A. Torrey

Member

General Partner, BioPharma Growth Fund, LLC

Roberto R. Herencia

Member

President & CEO, BXM Holdings, Inc

Vacant

Organized Labor 

Judith D. Pryor

Vice President, Offi ce of External Affairs

Jay L. Koh

Head of Investment Funds and Chief Investment 

Strategist

John F. Moran

Vice President, Insurance

Robert B. Drumheller

Vice President, Structured Finance

James C. Polan

Vice President, Small and Medium Enterprise Finance

Dennis Lauer

Vice President, Offi ce of Administrative Services and 

Chief Information Offi cer

These lists refl ect positions held at the end of the fi scal year, on September 30, 2012
OVERSEAS PRIVATE INVESTMENT CORPORATION

E