[ 2 ]

President’s Letter

[ 7 ]

Regional Priorities

[ 10 ]

Small Business

[ 15 ]

Housing

[ 19 ]

Access to Capital

[ 22 ]

Leveraging Resources

[ 26 ]

2007 Investment Activities

[ 32 ]

OPIC Countries and Areas

[ 34 ]

Financial Statements

[ 48 ]

OPIC Board of Directors

[ 49 ]

OPIC Executive Staff

[ 49 ]

Photography Credits

Table of Contents
[ 2 ]

OPIC 2007 Annual Report

Congress created OPIC in 1971 to enable U.S. businesses to invest and 

compete in emerging market countries around the world. As the pioneer of 

government-backed political risk insurance, direct loans, guaranties and equity 

funds, OPIC has helped mobilize and facilitate more than $177 billion in U.S. 

private capital investment. It has done so at no net expense to the American 

taxpayer, and without the loss of U.S. jobs.

Not content to rest on its laurels in 2007, OPIC continued to refine, 

improve, and expand its programs and services. Based upon the premise 

that regardless of the culture or political system, there is a common desire 

to provide for one’s family, OPIC constantly looks for creative new ways 

to channel U.S. private investment into places where economic hope and 

opportunity are essential to establishing political stability and peace. 

Groundbreaking projects that promise to expand economic opportunity in 

Africa and Palestine are just two of many examples. 

In Africa, four new OPIC-supported investment funds totaling over $1 billion 

will create access to capital markets for African businesses with the potential to 

grow, but limited ability to raise funds. In the West Bank, OPIC is a critical part 

of a $228 million public/private partnership involving the Aspen Institute, the 

Palestinian Investment Fund, and local banks that will enable Palestinian small 

businesses to obtain affordable term loans.

Applying this same level of creativity here in the Americas, OPIC launched a 

new initiative with the U.S. Department of the Treasury and the InterAmerican 

Development Bank to encourage more Latin American commercial banks and 

other financial institutions to increase their lending to small and medium-sized 

businesses (SMEs). These are the businesses that create the vast majority of 

new jobs. 

President’s Letter 

promise

[ 4 ]

OPIC 2007 Annual Report

In recognition of the progress that has been made in Central America toward 

opening markets, expanding trade, and leveling the playing field for foreign 

direct investment, OPIC hosted its annual conference in El Salvador. The 

conference was well attended and included representatives of the investment 

promotion agencies in Guatemala, Honduras, El Salvador, and Nicaragua. 

Over the past two years, OPIC has signed cooperative agreements with each of 

those agencies and has trained their staffs in OPIC programs and services. This 

training has resulted in a number of project referrals to OPIC and is the type of 

creative outreach that increases both access to OPIC services and deal flow.

Another example of OPIC’s outreach is the Enterprise Development Network 

(EDN), which was launched in 2007. EDN is a strategic alliance with qualified 

financial institutions, business consultants, associations, law firms, and regional 

investment promotion agencies, all of whom have been trained in how to 

originate more projects for OPIC’s consideration.

Among those who will benefit from increased access to OPIC services are 

women and minority-owned businesses. To that end, OPIC continued a series of 

very successful outreach workshops that provide women and minority business 

owners with information and contacts that can help them enter the global 

marketplace. More than 500 attendees in Miami, Newark, Houston and San 

Francisco learned about OPIC and other government support programs, and 

the experiences of U.S. small businesses that are already investing overseas. 

Like the 2006 series, these workshops were held in cooperation with the U.S. 

Department of Commerce’s Minority Business Development Agency and the 

National Women’s Business Council.

As President and CEO of OPIC, 

I have come to understand 

that this agency has multiple 

mandates: to mobilize and 

facilitate U.S. investment in 

emerging markets; to be 

financially self-sustaining; 

to encourage economic and 

social development around 

the world; and to support 

and enhance American 

foreign policy.
[ 5 ]

www.opic.gov

commitment

While OPIC remains deeply committed to its development mission, it is also 

cognizant of its duty to operate in an environmentally responsible manner. 

Given the growing awareness of climate change issues, OPIC launched an 

initiative to significantly reduce greenhouse gas emissions in OPIC-supported 

projects. Under the Greenhouse Gas Initiative, the agency is committed to 

reduce by 20 percent over the next 10 years the aggregate CO2eq emissions 

from OPIC-supported projects. It will do so by establishing an annual 

emissions cap for all new projects, developing market-based incentives 

to encourage U.S. investment in renewable energy and energy efficient 

technology projects, and switching to project-based, rather than aggregate, 

annual emissions reporting and projections.

As President and CEO of OPIC, I have come to understand that this agency 

has multiple mandates: to mobilize and facilitate U.S. investment in emerging 

markets; to be financially self-sustaining; to encourage economic and social 

development around the world; and to support and enhance American 

foreign policy. We aspire to meet all those mandates in a manner which is as 

comparable to the way private sector businesses operate as possible. Whether it 

is improving technology systems, standardizing and documenting processes and 

controls, or marketing our products and services better, we are committed to 

operating as efficiently and productively as possible. In the past year, significant 

strides have been made in that regard, but more work remains to be done. With 

the talent and dedication of the team at this agency, I am confident that OPIC 

will not only fulfill its mandates, but contribute to market-driven economic 

growth and prosperity around the world.

Robert Mosbacher, Jr.

President and CEO

[ 7 ]

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confi dence

Regional Priorities

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 where OPIC support can make a real difference.

OPIC’s regional priorities are the broader Middle East (including Afghanistan 

and Pakistan), certain 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 

engage further with the global economy in order to overcome poverty and lack 

of economic progress.
[ 8 ]

OPIC 2007 Annual Report

To energize economic activity in countries that seek to overcome the legacy 

of conflict, OPIC has developed the Rapid Economic Development Initiative 

(REDI), aimed at countries torn by current conflict or seeking to recover from 

recent conflict. In these countries, OPIC seeks out and works with investors 

and partner organizations to launch projects that together will help the country 

to jumpstart economic growth.

The REDI program is best illustrated in Liberia, where OPIC developed 

a comprehensive strategy for attracting private investment. To identify the 

strategic challenges and opportunities in that country, OPIC sent a multidisciplinary team to Liberia to evaluate potential investments and the obstacles 

to their success. OPIC then organized a meeting with representatives of 

more than 40 government agencies, private foundations, non-governmental 

organizations, private corporations and academics involved in Liberia, 

and helped to organize a private sector investment forum for Liberia in 

collaboration with the World Bank’s International Finance Corporation and the 

Corporate Council on Africa. 

The tangible results included a joint initiative involving OPIC, CHF 

International and RLJ Companies LLC to establish the Liberia Enterprise 

Development Finance Company, which will provide financing for small and 

medium-sized enterprises. OPIC also provided political risk insurance to the 

International Rescue Committee for humanitarian assistance and to Maryland-

[ 10 ]

OPIC 2007 Annual Report

Small Business

innovation

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. The U.S. Small 

Business Administraion 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 can all undermine their 

investment options. 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.

[ 12 ]

OPIC 2007 Annual Report

An example of this is an OPIC-supported agricultural project in the country 

of Georgia, where a loan to a U.S. small business will enable the expansion 

of manufacturing operations at the nation’s largest dairy and juice products 

producer. Construction of milk collection centers will enable Sante GMT 

Products to convert from use of powdered milk to less expensive natural milk 

and milk by-products, thus expanding its production of butter and cheese and 

reviving production of yogurt and mayonnaise.

Two U.S. small businesses in the energy industry will use OPIC insurance 

to mitigate the risks of constructing new wind turbines in India and 

hydroelectric power plants in Serbia. Besides generating power, employment 

and tax revenues in their host countries, these projects support OPIC’s new 

Greenhouse Gas Initiative, which encourages U.S. investment in renewable 

energy products.

In FY 2006, OPIC supported 61 projects involving small 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 agency’s139 projects.


[ 15 ]

www.opic.gov

growth

Housing

Housing satisfies 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. In 2007, 

OPIC continued to expand its support for low- and medium-income housing in 

Africa, Central America and the Middle East.

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 few years, 

including a very successful investor housing conference in South Africa, OPIC 

has now generated a significant 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.
[ 16 ]

OPIC 2007 Annual Report

International Housing Solutions manages the new Emerging Markets Housing 

Fund, a $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 a third 

of the total capital of the fund.

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

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

El Salvador is generating additional new housing opportunities in Guatemala, 

El Salvador, Honduras, Nicaragua, and elsewhere in the region. 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 lowincome homebuyers throughout Central America, enabling, for example, 

workers in Honduras to lease-purchase $10,000 homes. 


[ 19 ]

www.opic.gov

opportunity

Access to Capital

Many developing countries lack financial institutions that are prepared 

to take the risk of lending to small and medium-sized enterprises without 

excessive collateral. Since SMEs are the principal creators of jobs in 

these countries, filling this gap is important. As part of its overall strategy 

to support grassroots capitalism, OPIC has taken on a pioneering role in 

expanding access to capital by developing a number of different approaches 

for supporting SME lending in developing countries.

OPIC has partnered with the Treasury Department and the Multilateral 

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

lending to SMEs in Latin America. 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. And OPIC 

will make $150 million available to support SME lending in Latin America 

through loan guarantees to U.S. banks which will lend to local financial 

institution in the host countries for the purpose of funding SME loans.
[ 20 ]

OPIC 2007 Annual Report

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 who do not have 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, who typically must overcome many barriers to participate 

in the formal economy, represent the majority of MFI clients.

As of the end of 2007, OPIC had 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 $8.5 million microfinance investment vehicle 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. 

[ 22 ]

OPIC 2007 Annual Report

Leveraging 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. Policy reforms and social investments supported by grant-funded 

technical assistance provided by the Millennium Challenge Corporation, the 

U.S. Agency for International Development, the Department of Treasury, the 

Department of State, and the Trade and Development Agency complement 

OPIC-backed private investments. 

OPIC has also leveraged resources by making extensive use of framework 

agreements with banks, other financial intermediaries, and non-profit 

organizations. 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 primary goals has been to channel 

capital 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. In this way, OPIC continues to strengthen the developmental quality 

of these projects by ensuring that a portion of funds are targeting the more 

developmental segments of the specific markets.
[ 23 ]

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potential
[ 24 ]

OPIC 2007 Annual Report

In 2007, OPIC formally launched the Enterprise Development Network 

(EDN), an alliance between OPIC and the private sector that will greatly 

expand the number of U.S. small businesses receiving OPIC support. By 

tapping their extensive grassroots networks and knowledge of individual 

markets across the country, EDN empowers American banks and small 

business consultants to increase SMEs’ access to OPIC financing and insurance 

— thereby resulting in more efficient, cost-effective delivery of services to 

American and host-country companies.

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

agreed to serve as EDN Loan/Insurance Originators largely throughout the 

U.S. with some additional representation in Africa and Asia. OPIC launched 

EDN with a two-day conference, 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. Wells Fargo HSBC Trade Bank became the first EDN 

designated lender through its agreement with OPIC to establish a $100 million 

lending facility expected to generate over its life up to 50 loans ranging from 

$2 million to $15 million for micro-, small- and medium-sized enterprises.

Leveraging resources is a key objective of OPIC’s Investment Funds program. 

That’s why OPIC launched eight new private equity funds for Africa which will 

mobilize over $1.6 billion of additional investment. 

[ 26 ]

OPIC 2007 Annual Report

2007 Investment Activities

Africa and the Middle East

CAMEROON

Transnational Automotive Group, Inc. Transnational Automotive GroupCameroon S.A.Urban and intercity passenger bus operation $10,000,000 Finance

CONGO, DEMOCRATIC REPUBLIC OF

Seaboard Overseas Limited Minoterie de Matadi, S.A.R.L. Flour mill and associated facilities expansion $24,500,000 Insurance

EGYPT

Apache Corporation N/A Oil and gas exploration, development and 

production

$200,000,000 Insurance

Michael Brodowski American Manufacturing Company Electrostatic coating powder production facility $600,000 Finance

GHANA

GHL USA Investment Partners, LLC Ghana Home Loans (Fund I) Limited Residential mortgage loans $675,360 Insurance

Three E Kumasi Investment Co., LLC International Community School, 

Limited

Private school $319,500 Insurance

IRAQ

Baltimore Dredges Enterprises, LLC Ellicott Dredges Iraq, LLC Dredge construction and shipment to Iraq $5,500,000 Finance

Baltimore Dredges, LLC Ministry of Water Resources Dredging equipment $488,457 Insurance

Hemin Dizayee Sigma International Construction LLC Financing 396 middle-class housing units in 

Erbil, Iraq

$10,000,000 Finance

International Homes, LLC International Development Trust Iraq Construction of approximately 800 houses $9,285,000 Finance

JORDAN

AES Corporation AES Jordan PSC 370 MW gas/oil-fi red electric power plant $70,000,000 Finance

Central Gas Technologies, Inc. Advanced Central Gas Company 

Limited 

Liquid propane gas distribution $1,750,000 Finance

Eligible U.S. Investors Foursan Capital Partners I Private equity investment fund targeting SME’s $50,000,000 Investment Funds

International Rescue Committee, Inc. International Rescue Committee Humanitarian services $22,500 Insurance

Markets and Banking, Citi Middle East Complex for Engineering* Household appliance business equipment $15,000,000 Finance

Markets and Banking, Citi Tamweelcom* Microfi nance institution $1,244,320 Finance

LEBANON

American University of Beirut American University of Beirut University $19,000,000 Insurance

Cooperative Housing Foundation Cooperative Housing Foundation 

Lebanon 

Local bank loans supporting microfi nance, 

SME and housing

$23,000,000 Finance

Development Innovations Group NHCAPSTONE Holding Group Limited Microfi nance service company equity 

contribution

$975,000 Finance

International College N/A School $5,000,000 Insurance

Lebanese American University N/A University $20,000,000 Insurance

Markets and Banking, Citi Banque Libano-Francaise S.A.L.* Fund SME lending\low-income home 

mortgages\consumer fi nance

$18,000,000 Finance

Markets and Banking, Citi Byblos Bank S.A.L.* Fund SME lending\low-income home 

mortgages\consumer fi nance

$45,000,000 Finance

LIBERIA

Cellcom USA LLC Cellcom Telecommunications Inc. GSM cellular network expansion $20,000,000 Finance

Cooperative Housing Foundation Liberia Enterprise Development 

Finance Co.

Lending to Liberian SMEs $20,000,000 Finance

International Rescue Committee, Inc. International Rescue Committee Humanitarian services $1,442,942 Insurance

LACHAMCO, Inc. Nationwide Group of Companies, Inc. Construction equipment rental $90,000 Insurance

US SPONSOR/INSURED INVESTOR PROJECT NAME PROJECT DESCRIPTION

[ 28 ]

OPIC 2007 Annual Report

BANGLADESH

The Asia Foundation The Asia Foundation Economic development $458,393 Insurance

Relief International Relief International Branch Offi ce Economic development activities, emergency 

response and humanitarian programs

$78,545 Insurance

CAMBODIA

The Asia Foundation The Asia Foundation Economic development $155,053 Insurance

EAST TIMOR

The Asia Foundation The Asia Foundation Economic development $168,542 Insurance

FIJI

The Asia Foundation The Asia Foundation Economic development $8,100 Insurance

INDIA

Mr Kesani Chandrasekhar Transindia Airlines Private Ltd. (India) Regional passenger airline start-up in southern 

India

$7,500,000 Finance

Southern Energy Partners LLC SEP Energy India Pvt. Ltd. Wind energy - Tamil Nadu $1,150,000 Insurance

Southern Energy Partners LLC SEP Energy India Pvt. Ltd. Wind energy - Maharashtra $721,035 Insurance

INDONESIA

The Asia Foundation The Asia Foundation Economic development $764,390 Insurance

Relief International Relief International Branch Offi ce Economic development activities, emergency 

response and humanitarian programs

$78,545 Insurance

MONGOLIA

The Asia Foundation The Asia Foundation Economic development $61,596 Insurance

NEPAL

The Asia Foundation The Asia Foundation Economic development $159,612 Insurance

PAKISTAN

American International School System, 

Inc.

American International School System 

Private Limited

School $3,500,000 Insurance

The Asia Foundation The Asia Foundation Economic development $144,947 Insurance

CHF International Tameer Mirco Finance Bank Limited Liquidity facility to support expansion of loan 

portfolio

$10,000,000 Finance

GE International Pakistan Water and Power 

Development Authority

Mobile power generation $29,820,000 Insurance

Dr. Munr Kazmir American International School System, 

Inc.

Pre-K through 3rd grade elementary school $2,500,000 Finance

Markets and Banking, Citi Kashf Foundation* Micro fi nance loans portfolio expansion $4,999,500 Finance

Markets and Banking, Citi Engro Vopak Terminal Ltd.* Ethylene storage facility $16,500,000 Finance

Relief International Relief International Branch Offi ce Economic development activities, emergency 

response and humanitarian programs

$139,014 Insurance

PHILIPPINES

The Asia Foundation The Asia Foundation Economic development $214,916 Insurance

Markets and Banking, Citi Center for Agriculture and Rural 

Development*

Microfi nance institution $1,555,400 Finance

SOUTH KOREA

The Asia Foundation The Asia Foundation Economic development $378,516 Insurance

SRI LANKA

The Asia Foundation The Asia Foundation Economic development $272,136 Insurance
[ 29 ]

www.opic.gov

South Asia Energy Management 

Systems, Inc

Math Hydro Power (PVT) Ltd. 5 MW hydro-power plant construction and 

operation

$4,306,000 Finance

THAILAND

The Asia Foundation The Asia Foundation Economic development $281,441 Insurance

VIETNAM

The Asia Foundation The Asia Foundation Economic development $118,561 Insurance

Europe and Eurasia

ARMENIA

Nishan Atinizian First Mortgage Company UCO, LLC Low and middle-income mortgage loan 

origination expansion

$5,000,000 Finance

AZERBAIJAN

Relief International Relief International Branch Offi ce Economic development activities, emergency 

response and humanitarian programs

$115,210 Insurance

BULGARIA

Financial Intermediary United Healthcare Bulgaria Integrated healthcare company Investment Funds

GEORGIA

Firebird Management LLC Georgian Leasing Company, LLC 

(WBC)

Equipment leasing\portfolio\loan refi nance 

expansion

$7,312,500 Finance

Edward & Kay Sturdivant/Jerome T. 

Jerome/Jerome Baruffi 

Sante GMT Products Ltd. Dairy manufacturing facility expansion $4,000,000 Finance

KAZAKHSTAN

Markets and Banking, Citi Kazmicrofi nance LLC* Microfi nance institution $3,888,500 Finance

National City Bank Alliance Bank JSC* Consumer loan portfolio expansion $30,000,000 Finance

KYRGYZSTAN

Microvest I, L.P. Kompanion Financial Group Microfi nance loans $1,280,076 Insurance

POLAND

David B. Kaiser & Associates LLC Onkomed Klinika Oncologii SP.ZO.O Oncology-related diagnostic and therapeutic 

treatment center

$16,800,000 Finance

Robert M. Purgert & Brian A. Purgert PALCO SP.ZO.O. Multi-pak aluminum recycling facility $4,500,000 Finance

RUSSIA

ACD Research Inc Ministry of Health of Samara Oblast Medical equipment $47,700,000 Insurance

Steven Brown, Amelia Oliver, Jeremy 

Huck & James Arneson

ZAO SOLNTSE Mexico Tex-Mex food manufacturing facility expansion $3,000,000 Finance

Financial Intermediary Strakhovaya Kompaniya SOK Regional insurance company Investment Funds

Financial Intermediary Iskra Telecom Broadband internet access provider Investment Funds

Financial Intermediary WestCall Telecommunications Independent local exchange carrier Investment Funds

Financial Intermediary Russian Logistic Service Freight forwarding, transportation and 

warehousing services

Investment Funds

Financial Intermediary STS Logistics Multi-modal freight forwarding, project 

logistics and customs and warehouse services

Investment Funds

Firebird Management LLC NBD Bank (WBC) SME loan portfolio expansion $6,825,000 Finance

Greenwich Financial Services, L.L.C. Russian Asset MBS, S.A. Russian residential mortgage-backed 

securities fi nancing

$200,000,000 Finance

Intercomp Technologies LLC Intercomp CJSC Payroll processing business expansion $4,250,000 Finance

National City Bank Center-Invest Bank JSC* Retail and mortgage loan portfolio expansion $16,000,000 Finance
[ 30 ]

OPIC 2007 Annual Report

National City Bank Locko Bank* SME lending portfolio expansion $15,000,000 Finance

Aleksander Smukler Agroterminal Ltd. Warehouse and cold storage facility $30,000,000 Finance

The U.S.- Russia Investment Fund 

“TUSRIF” & DL Holding Ltd

Closed Joint Stock Company 

Deltaleasing

Equipment leasing operation expansion $20,000,000 Finance

Wachovia Bank National Association Probusinessbank* Retail lending and SME loan portfolio 

expansion

$15,000,000 Finance

SERBIA

DV Technologies DV Technologies d.o.o. Belgrade Hydroelectric power plant - SHPP Vrutci $153,000 Insurance

DV Technologies DV Technologies d.o.o. Belgrade Hydroelectric power plant - SHPP Bovan $153,000 Insurance

Financial Intermediary Serbia Broadband d.o.o Cable television and broadband internet 

services provider

Investment Funds

TAJIKISTAN

Relief International Relief International Branch Offi ce Economic development activities, emergency 

response and humanitarian programs

$78,545 Insurance

TURKEY

Kenan Demirer Delta Plastik Endustrisi A.S. (WBC) Rigid and semi-rigid PVC fi lm manufacture $8,190,000 Finance

Financial Intermediary Balnak Logistics Group Freight forwarding, transportation and 

warehousing services

Investment Funds

Financial Intermediary Hedef Arac Kiralama ve Servis Automotive fl eet leasing company Investment Funds

National City Bank Asya Katilim Bankasi A.S.* SME loan portfolio expansion $12,069,000 Finance

National City Bank Asya Katilim Bankasi A.S. SME loan portfolio expansion $2,831,000 Insurance

Wachovia Bank National Association Turkiye Garanti Bankasi A.S.* Residential mortgages to low-income 

households

$21,000,000 Finance

N/A Interfarma Tibbi Malzemeler Sanayi 

ve TI (WBC)

Medical and surgical products distribution 

expansion 

$8,092,500 Finance

UKRAINE

UZBEKISTAN

O & S Consulting, LLC Khiva Malikasi, LLC Construction and expansion of 2 hotels $533,202 Insurance

Latin America and the Caribbean

BRAZIL

Wachovia Bank National Association Banco Pine, S.A.* SME loan portfolio expansion $15,000,000 Finance

Wells Fargo HSBC Trade Bank, N.A. Wisenbaker Building Services, Ltd.* Finance building of equipment for granite 

fi nishing plant

$5,250,000 Finance

COLOMBIA

International Rescue Committee, Inc. International Rescue Committee Humanitarian services $8,597 Insurance

COSTA RICA

Markets and Banking, Citi Banco Improsa, S.A.* SME and low to middle-income mortgage loans $15,000,000 Finance

ECUADOR

American Home Assurance Company Corporacion Quiport S.A. Airport $9,100,000 Insurance

EL SALVADOR

Markets and Banking, Citi Apoyo Integral, S.A. de C.V.* Microfi nance institution $2,100,000 Finance

*

*Information has temporarily been redacted, including to protect the safety of implementing partners.
[ 31 ]

www.opic.gov

GUATEMALA

Markets and Banking, Citi Banrural S.A.* Low-middle income residential mortgage loans $30,000,000 Finance

Wachovia Bank National Association Banco Reformador, S.A.* Low-income residential mortgage portfolio 

expansion

$15,000,000 Finance

HAITI

Markets and Banking, Citi Unigestion Holding S.A. (Digicel Haiti)* Greenfi eld telecommunications operation 

expansion 

$6,300,000 Finance

HONDURAS

Markets and Banking, Citi Banco Financiera Commercial 

Hondurena*

Low-middle income residential mortgage 

portfolio funding

$22,500,000 Finance

Markets and Banking, Citi Financiera Solidaria (FINSOL)* Microfi nance institution $2,333,100 Finance

Wachovia Bank National Association Banco del Pais, S.A.* SME and consumer lending portfolio expansion $15,000,000 Finance

Roberto J. Zamora Banco Lafi se Honduras, S.A. Refi nance fi xed rate, long-term USD residential 

mortgages

$15,000,000 Finance

N/A Comercial Laeisz, S.A. de C.V.(WBC) Equipment rental operation expansion $9,750,000 Finance

MEXICO

Colegio Mexico-Americano 

Association

Vallarta Vision y Mision A.C.(WBC) Non-profi t school expansion $5,167,500 Finance

Delgado Consultants International LLC Energia Escalona S. de R.L. de C.V. 

(WBC)

8.5 MW hydroelectric power generation facility $12,675,000 Finance

Financial Intermediary Grupo Baja Cero Packaged ice producer Investment Funds

Mr. Kent Hamilton Southern Valley Fruit and Vegetable, 

Inc. (WBC)

Vegetable farm $6,825,000 Finance

Markets and Banking, Citi Financiera Compartamos, S.A. II* Administrative systems\microfi nance loan 

portfolio expansion

$7,913,973 Finance

Markets and Banking, Citi Fundacion Integral Comunitaria 

(FINCA)*

Microfi nance institution $2,333,100 Finance

Mexican Enhanced Residential Bridge 

Loan CDO Holding Corp.

Reforma Bln-Backed I Construction and land development fi nancing $250,000,000 Finance

National City Bank Umbralcapital, S.A.P.I. de C.V. Housing-land development company fi nancing $10,000,000 Finance

NICARAGUA

Roberto Conrado Instituto Culinario Santa Lucia,S.A. Culinary school and restaurant $170,000 Finance

Markets and Banking, Citi Banco de la Produccion S.A.* Low-middle income residential mortgage 

portfolio funding 

$22,500,000 Finance

Roberto J. Zamora Banco de Credito Centroamericano, S.A. Refi nance fi xed rate, long-term USD residential 

mortgages

$10,000,000 Finance

The Zamora Family Banco de Credito Centroamericano, S.A. Bank $45,000,000 Insurance

PANAMA

Wachovia Bank National Association Credicorp Bank, S.A.* SME and retail lending portfolio expansion $7,500,000 Finance

LATIN AMERICA AND THE CARIBBEAN REGIONAL

AIC International Investments Limited ACF Investments, Ltd. Private equity investment fund $42,500,000 Investment Funds

AIC International Investments Limited ACF Investments, Ltd. Private equity investment fund $12,500,000 Investment Funds

AIC International Investments Limited ACF Investments B, Ltd. Private equity investment fund $25,000,000 Investment Funds

Global Partnerships Global Partnerships Microfi nance 

Fund 2006 LLC

Loans to MFI’s to expand existing lending 

portfolios

$4,650,000 Finance

All OPIC Countries

Calvert Social Investment Foundation Calvert Social Investment Foundation Lending program to microfi nance institutions $10,000,000 Finance

*Downstream transactions committed under framework agreements entered into during prior fi scal years.
[ 32 ]

OPIC 2007 Annual Report

OPIC Countries and Areas

Africa and the Middle East

Algeria

Angola

Bahrain

Benin

Botswana

Burkina Faso

Burundi

Cameroon

Cape Verde

Central African Republic

Chad

Congo

Congo, Democratic Republic of

Côte d’Ivoire

Djibouti

Egypt

Equatorial Guinea

Eritrea

Ethiopia

Gabon

Gambia

Ghana

Guinea

Guinea-Bissau

Iraq

Israel

Jordan

Kenya

Kuwait

Lebanon

Lesotho

Liberia

Madagascar

Malawi

Mali

Mauritania

Mauritius

Morocco

Mozambique

Namibia

Niger

Nigeria

Oman

Rwanda

OPIC services encourage U.S. private 

investment in some 150 countries and 

areas around the world, contributing to 

economic growth at home and abroad.

OPIC services are generally available in the countries and areas listed 

on the following pages. From time to 

time, statutory and policy constraints 

may limit the availability of OPIC 

services in certain countries, or countries where services were previously 

unavailable may become eligible. 

Investors are urged to contact OPIC 

directly or check the website: www.

opic.gov/doingbusiness/ourwork/

index.asp for up-to-date information 

regarding the availability of OPIC 

services in specifi c countries, as well 

as information on the availability of 

OPIC services in countries not listed.

(As of September 30, 2007)
[ 33 ]

www.opic.gov

São Tomé and Príncipe

Senegal

Sierra Leone

Somalia

South Africa

Swaziland

Tanzania

Togo

Tunisia

Uganda

West Bank and Gaza

Yemen

Zambia

Zimbabwe

Asia and the Pacifi c

Afghanistan 

Bangladesh

Cambodia

Cook Islands

East Timor

Fiji

India

Indonesia

Kiribati

Laos

Malaysia

Marshall Islands

Micronesia, Federated States of

Mongolia

Nepal

Pakistan

Palau

Papua New Guinea

Philippines

Samoa

Singapore

South Korea

Sri Lanka

Taiwan

Thailand

Tonga

Vietnam

Europe and Eurasia

Albania

Armenia

Azerbaijan

Bosnia and Herzegovina

Bulgaria

Croatia

Cyprus

Czech Republic

Estonia

Georgia

Greece

Hungary

Ireland

Kazakhstan

Kosovo

Kyrgyzstan 

Latvia

Lithuania

Macedonia

Malta

Moldova

Montenegro

Northern Ireland

Poland

Portugal

Romania

Russia

Serbia

Slovakia

Slovenia

Tajikistan

Turkey

Turkmenistan

Ukraine

Uzbekistan

Latin America and the Caribbean

Anguilla

Antigua and Barbuda

Argentina

Aruba

Bahamas

Barbados

Belize

Bolivia

Brazil

Chile

Colombia

Costa Rica

Dominica

Dominican Republic

Ecuador

El Salvador

French Guiana

Grenada

Guatemala

Guyana

Haiti

Honduras

Jamaica

Mexico

Netherlands Antilles

Nicaragua

Panama

Paraguay

Peru

St. Kitts and Nevis

St. Lucia

St. Vincent and the Grenadines

Suriname

Trinidad and Tobago

Turks and Caicos

Uruguay
[ 34 ]

OPIC 2007 Annual Report

Independent Auditors’ Report on Financial Statements

KPMG LLP 

2001 M Street, NW 

Washington, DC 20036 

KPMG LLP, a U.S. limited liability partnership, is the U.S. 

member firm of KPMG International, a Swiss cooperative. 

Independent Auditors’ Report on Financial Statements 

To the Board of Directors 

Overseas Private Investment Corporation: 

We have audited the accompanying balance sheets of the Overseas Private Investment Corporation (OPIC) 

as of September 30, 2007 and 2006, and the related statements of income, capital and retained earnings, 

and cash flows for the years then ended. These financial statements are the responsibility of OPIC’s 

management. Our responsibility is to express an opinion on these financial statements based on our audits. 

We conducted our audits in accordance with auditing standards generally accepted in the United States of 

America; the standards applicable to financial audits contained in Government Auditing Standards, issued 

by the Comptroller General of the United States; and Office of Management and Budget (OMB) Bulletin 

No. 07-04, Audit Requirements for Federal Financial Statements. Those standards and OMB Bulletin No. 

07-04 require that we plan and perform the audits to obtain reasonable assurance about whether the 

financial statements are free of material misstatement. An audit includes consideration of internal control 

over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, 

but not for the purpose of expressing an opinion on the effectiveness of the OPIC’s internal control over 

financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test 

basis, evidence supporting the amounts and disclosures in the financial statements, assessing the 

accounting principles used and significant estimates made by management, as well as evaluating the 

overall financial statement presentation. We believe that our audits provide a reasonable basis for our 

opinion. 

In our opinion, the financial statements referred to above present fairly, in all material respects, the 

financial position of the Overseas Private Investment Corporation as of September 30, 2007 and 2006, and 

the results of its operations and its cash flows for the years then ended in conformity with U.S. generally 

accepted accounting principles. 

In accordance with Government Auditing Standards, we have also issued our reports dated November 14, 

2007, on our consideration of the OPIC’s internal control over financial reporting and our tests of its 

compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. 

The purpose of those reports is to describe the scope of our testing of internal control over financial 

reporting and compliance and the results of that testing, and not to provide an opinion on the internal 

control over financial reporting or on compliance. Those reports are an integral part of an audit performed 

in accordance with Government Auditing Standards and should be read in conjunction with this report in 

assessing the results of our audits.

November 14, 2007 
[ 35 ]

www.opic.gov

Overseas Private Investment Corporation—September 30, 2007 and 2006 ($ in thousands)

Assets 2007 2006

Fund Balance with U.S. Treasury (notes 2 and 4) $ 838,364 $ 874,609

U.S. Treasury securities, at amortized cost plus related receivables

(notes 2 and 7) 4,543,310 4,337,225

Direct loans outstanding, net (notes 2 and 10) 641,123 595,500

Accounts receivable resulting from investment guaranties, net

(notes 2 and 11) 66,698 123,512

Assets acquired in insurance claims settlements, net (notes 2 and 11) 89,063 121,550

Guaranty Receivable (notes 2 and 18) 168,482 167,334

Accrued interest and fees and other 29,162 29,023

Furniture, equipment and leasehold improvements at cost less

accumulated depreciation and amortization of $13,899 in FY2007

and $13,363 in FY2006 (note 2) 2,031 6,939

Total assets $ 6,378,233 $ 6,255,692

Liabilities, Capital, and Retained Earnings

Liabilities:

Reserve for political risk insurance (note 9) $ 315,000 $ 315,000

Reserve for investment guaranties (notes 10) 486,304 620,000

Accounts payable and accrued expenses 5,524 5,365

Guaranty liability (notes 2 and 18) 168,482 167,334

Customer deposits and deferred income 42,535 48,806

Borrowings from U.S. Treasury, and related interest (note 6) 793,544 788,255

Unearned premiums 13,327 11,966

Deferred rent & rent incentives from lessor of $3,827 and

$4,014 net of accumulated amortization of $1,004 and

$655 in FY2007 and FY2006 (note 14) 2,822 3,359

Total liabilities 1,827,538 1,960,085

Contingent liabilities (notes 2 and 17)

Capital and retained earnings:

Contributed capital 50,000 50,000

Credit funding (note 5) 109,641 123,257

Interagency transfers (note 2) 11,472 5,810

Retained earnings and reserves:

Insurance (notes 9 and 12) 1,321,128 1,337,167

Guaranty (notes 10 and 12) 3,058,454 2,779,373

4,550,695 4,295,607

Total liabilities, capital, and retained earnings $ 6,378,233 $ 6,255,692

See accompanying notes to financial statements.

Balance Sheets
[ 36 ]

OPIC 2007 Annual Report

Revenues 2007 2006

Political risk insurance premiums and fees (note 9) $ 25,274 $ 24,671

Investment financing interest and fees 183,925 140,212

Interest on finance program deposits 44,608 42,584

Other operating income 4 2

Interest on U.S. Treasury securities 212,225 195,971

Total revenues 466,036 403,440

Expenses

Provisions for reserves:

Political risk insurance (notes 2 and 9) 4,060 (23,709)

Investment financing (notes 2, 10 and 11) (106,589) 7,023

Salaries and benefits (note 15) 26,858 26,552

Rent, communications and utilities (note 14) 6,882 6,811

Contractual services 18,907 10,246

Travel 2,580 2,672

Interest on borrowings from U.S. Treasury (note 6) 45,940 41,274

Depreciation and amortization (note 2) 537 553

Write-down of internally developed software (note 19) 4,462 —

Other general and administrative expenses 1,568 1,549

Total expenses 5,205 72,971

Net income $ 460,831 $ 330,469

See accompanying notes to financial statements.

Statements of Income

Overseas Private Investment Corporation—Years ended September 30, 2007 and 2006 ($ in thousands)
[ 37 ]

www.opic.gov

See accompanying notes to financial statements.

Statements of Capital and Retained Earnings

Overseas Private Investment Corporation—Years ended September 30, 2007 and 2006 ($ in thousands)

Equity reserves

Contributed

capital

Credit

funding

Interagency

transfers

Insurance

(notes 9

and 12)

Guaranty

(notes 10

and 12)

Retained

earnings Total

Balance, September 30, 2005 $ 50,000 $ 171,432 $ 5,811 $ 1,347,890 $ 2,514,178 $ — $ 4,089,311

Net income — — — 13,350 317,119 — 330,469

Return credit funding to U.S. Treasury — (45,605) — — (213,171) — (258,776)

Credit funding received from:

Accumulated earnings — 45,438 — (20,074) — (25,364) —

Credit appropriations — 134,603 — — — — 134,603

Credit funding used — (181,611) — — 156,247 25,364 —

Interagency transfers — (1,000) (1) (3,999) 5,000 — —

Balance, September 30, 2006 $ 50,000 $ 123,257 $ 5,810 $ 1,337,167 $ 2,779,373 $ — $ 4,295,607

Net income — — — (5,675) 466,506 — 460,831

Return credit funding to U.S. Treasury — (14,671) — — (321,787) — (336,458)

Credit funding received from:

Accumulated earnings — 45,330 — (20,073) — (25,257) —

Credit appropriations — 115,344 — — — — 115,344

Credit funding used — (159,619) — — 134,362 25,257 —

Interagency transfers — — 5,662 9,709 — — 15,371

Balance, September 30, 2007 $ 50,000 $ 109,641 $ 11,472 $ 1,321,128 $ 3,058,454 $ — $ 4,550,695
[ 38 ]

OPIC 2007 Annual Report

2007 2006

Cash flows from operating activities:

Net income $ 460,831 $ 330,469

Adjustments to reconcile net income to net cash provided by 

operating activities

Provisions for:

Political risk insurance 4,060 (23,709)

Investment financing (106,589) 7,023

Amortization of premiums on U.S. securities 9,437 11,710 

Accretion of discounts on U.S. securities (13,546) (9,949)

Amortization of deferred rent and rental incentives (579) (864)

Increase in rent incentives 42 455

Depreciation and amortization 537 553

Write-down of internally developed software 4,462 —

(Increase) decrease in operating assets:

Accrued interest and fees (5,433) (493)

Accounts receivable 1 1

Guaranty receivable (1,148) (14,593)

Assets acquired in insurance claims settlements — (2,650)

Recoveries on assets acquired in insurance claims settlements 28,503 75,559

Assets acquired in finance claims settlements (172,045) (118,196)

Recoveries on assets aquired in finance claims settlements 224,249 68,096

Increase (decrease) in operating liabilities:

Accounts payable and accrued expenses 159 1,529

Customer deposits and deferred income (6,271) (3,721)

Guaranty liability 1,148 14,593

Unearned premiums 1,361 (1,005)

Insurance claim payments (75) (167)

Cash provided by operating activities 429,104 334,641

Cash flows from investing activities: 

Sale and maturity of U.S. Treasury securities 741,603 661,450

Purchase of U.S. Treasury securities (938,286) (879,000)

Repayment of direct loans 58,675 35,570

Disbursement of direct loans (126,796) (159,580)

Acquisition of furniture and equipment (90) (1,979) 

Cash used in investing activities (264,894) (343,539)

Cash flows from financing activities:

Return credit funding to U.S. Treasury (336,458) (258,776)

Interagency transfers 15,371 —

Credit appropriations 115,344 134,603

Credit reform borrowings from U.S. Treasury 5,288 114,857

Cash provided by (used in) financing activities (200,455) (9,316)

Net decrease in cash (36,245) (18,214)

Fund banance with U.S. Treasury at beginning of year 874,609 892,823

Fund banance with U.S. Treasury at end of year $ 838,364 $ 874,609

See accompanying notes to financial statements.

Statements of Cash Flows

Overseas Private Investment Corporation—Years ended September 30, 2007 and 2006

($ in thousands)
[ 39 ]

www.opic.gov

Notes to Financial Statements

Overseas Private Investment Corporation—September 30, 2007 and 2006

(1) Statement of Corporate Purpose

The Overseas Private Investment Corporation (OPIC) is a 

self-sustaining 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 Significant Accounting Policies

Basis of Presentation: These financial statements have 

been prepared to report the financial position, results of 

operations, and cash flows of OPIC. OPIC’s accounting 

policies conform to accounting principles generally 

accepted in the United States of America. OPIC’s 

financial statements are presented on the accrual basis 

of accounting. Under the accrual basis, revenues are 

recognized when earned, and expenses are recognized 

when a liability is incurred, without regard to receipt or 

payment of cash.

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 flows.

Depreciation and Amortization: OPIC capitalizes 

property and equipment at historical cost for acquisitions 

exceeding $5,000. Depreciation and amortization of 

fixed assets, leasehold improvements, and lease incentives 

are computed using the straight-line method over the 

estimated useful life of the asset or lease term, whichever is 

shorter, with periods ranging from 5 to 15 years. 

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-specific risk factors. Also, in the 

political risk insurance reserve evaluation, OPIC takes 

into consideration losses incurred but not yet reported.

FASB Interpretation No. 45: In November 2002 the 

Financial Accounting Standards Board (FASB) issued 

Interpretation No. 45, Guarantor’s Accounting and 

Disclosure Requirements for Guaranties, Including 

Indirect Guaranties of Indebtedness of Others (FIN 

45). FIN 45 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 FIN 45 applies only to guaranties issued 

or modified after December 31, 2002. OPIC’s initial 
[ 40 ]

OPIC 2007 Annual Report

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. Revenue from both loan interest 

payments and guaranty fees that is more than 90 days past 

due is recognized only when cash is received. Revenue 

from political risk insurance premiums is recognized 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.

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 financial statements 

requires management to make estimates and assumptions 

that affect the reported amounts of assets and liabilities, 

the disclosure of contingent assets and liabilities at the 

date of the financial statements, and the reported amounts 

of revenue and expenses during the reporting period. 

Actual results could differ from these estimates.

Commitments and Contingencies: Liabilities from the 

loss contingencies, other than those related to political 

risk insurance and investment guaranties, arising from 

the claims, assessments, litigation, fines 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 

financial decisions and management controls of the Office 

of Management and Budget. As a result of this relationship, 

OPIC’s operations may not be conducted, nor its financial 

position reported, as they would be if OPIC were not a 

government corporation. Furthermore, in accordance 

with international agreements relating to its programs, as 

well as internal U.S. Government operating procedures, 

foreign currency acquired by OPIC can be used for 

U.S. Government expenses. This facility constitutes an 

additional means, which would otherwise be unavailable, 

by which OPIC can recover U.S. dollars with respect to its 

insurance and investment financing programs.

(4) Fund Balance with U.S. Treasury

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

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

September 30, 2007 and 2006 consists of the following 

(dollars in thousands):

2007 2006

Restricted:

Pre-Credit reform $ 349 $ 311

Credit reform 806,522 852,408

Interagency fund transfers 1 1

Unrestricted 31,492 21,889

TOTAL $ 838,364 $ 874,609

The Federal Credit Reform Act of 1990 established 

separate accounts for cash flows associated with investment 

financing activity approved prior to implementation of the 

Act and investment financing activity subject to the Act. 

With the advent of Credit Reform, OPIC is not permitted 

to invest its pre-Credit Reform cash balances. These 

balances grow over time, and when they are determined to 

be no longer needed for the liquidation of the remaining 

pre-Credit Reform direct loans and investment guaranties, 

they are transferred to OPIC’s unrestricted noncredit 

insurance account. In 2007 and 2006, OPIC transferred 

$13.6 million and $1.2 million, respectively, to the 

noncredit insurance account. Credit Reform balances 

are also maintained in the form of uninvested funds. The 

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

except for undisbursed credit funding. 

(5) Credit Funding 

OPIC’s finance activities are subject to the Federal 

Credit Reform Act of 1990, which was implemented as 

of October 1, 1991. Credit Reform requires agencies 

to estimate the long-term cost to the government of 

each fiscal year’s new credit transactions and to obtain 

funding through the appropriations process equal to the 

net present value of such costs at the beginning of the 

year. OPIC’s credit funding is available for two years. In 

addition, the Act requires the administrative costs related 

to its credit program to be displayed.
[ 41 ]

www.opic.gov

In fiscal year 2007, OPIC’s appropriations legislation 

authorized the corporation to use $20.1 million of its 

accumulated earnings to cover the future costs of credit 

transactions committed in fiscal years 2007 and 2008. In 

fiscal year 2006, OPIC was also authorized to use $20.1 

million to cover commitments in fiscal years 2006 and 

2007. In addition to the credit funding allocated directly 

to OPIC through the appropriations process, OPIC has 

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

agencies to be used exclusively to finance projects in the 

New Independent States (NIS). 

The following table shows the status of funding for credit 

activities (dollars in thousands):

2007 2006

Balance carried forward $ 123,257 $ 171,432

Upward reestimates 115,344 134,603

Transferred from earnings 45,330 45,438

Expired credit funding (14,671) (45,605)

Interagency transfers (net) — (1,000)

Credit funding used (159,619) (181,611)

Credit funding remaining $ 109,641 $ 123,257

Changes in financial 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 fiscal 

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 $115.3 million and 

$134.6 million and decreases in subsidy costs of $283.5 

million and $258.8 million in fiscal years 2007 and 

2006, respectively. 

(6) Borrowings From the U.S. Treasury

In accordance with the Federal Credit Reform Act of 

1990, the portion of investment financing activities not 

funded through the appropriations process must be 

funded by borrowings from the U.S. Treasury. Borrowings 

for Credit Reform financings totaled $242.7 million in 

2007 and $210.1 million in 2006, all of which have 

been disbursed. OPIC paid a total of $45.9 million and 

$41.3 million in interest to the U.S. Treasury during 

fiscal years 2007 and 2006, respectively. Repayments of 

borrowings from the U.S. Treasury totaled $237.7 million 

in 2007 and $93.4 million in 2006. Future payments, 

excluding interest of $385 thousand, for borrowing 

outstanding at September 30, 2007 are as follows (dollars 

in thousands):

Payment due in:

Fiscal year 2008 $ 10,552

Fiscal year 2009 38,306

Fiscal year 2010 39,095

Fiscal year 2011 70,636

Fiscal year 2012 60,576

Thereafter 573,994

TOTAL $ 793,159

(7) Investment in U.S. Treasury Securities

The composition of investments and related receivables 

at September 30, 2007 and 2006 is as follows (dollars in 

thousands):

2007 2006

Investments, amortized cost $ 4,490,983 $ 4,290,192

Interest receivable 52,327 47,033

TOTAL $ 4,543,310 $ 4,337,225

The amortized cost and estimated fair value of investments 

in U.S. Treasury securities are as follows (dollars in 

thousands):

Gross 

amortized 

cost

Gross 

unrealized 

gains

Gross 

unrealized 

losses

Estimated 

fair value

At September 30, 

2007 $ 4,490,983 176,573 (5,968) 4,661,588

At September 30, 

2006 $ 4,290,192 161,207 (34,041) 4,417,358

At September 30, 2007, the securities held had an 

interest range of 2.6% to 12.5% and a maturity period 

from one month to almost 21 years.

OPIC holds its securities to maturity. The amortized cost 

and estimated fair value of U.S. Treasury securities at 

September 30, 2007, by contractual maturity, are shown 

below (dollars in thousands):

Amortized 

cost

Estimated 

fair value

Due in one year or less $ 866,824 $ 866,087

Due after one year through five years 2,498,241 2,533,000

Due after five years through 10 years 701,724 755,921

Due after 10 years 424,194 506,580

TOTAL $ 4,490,983 $ 4,661,588 
[ 42 ]

OPIC 2007 Annual Report

(8) Statutory Limitations on the Issuance of 

Insurance and Finance

OPIC issues insurance and financing under a single limit 

for both programs, currently $29 billion, fixed by statute in 

the FAA. At September 30, 2007, OPIC’s insurance and 

finance programs have collectively utilized $11.2 billion.

(9) Political Risk Insurance 

Insurance revenues include the following components for 

the years ended September 30 (dollars in thousands):

2007 2006

Political risk insurance premiums $ 21,853 $ 22,341

Miscellaneous insurance income 3,421 2,330

Total insurance revenue $ 25,274 $ 24,671 

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

available for insurance at both September 30, 2007 

and 2006 totaled $1.7 billion. Charges against retained 

earnings could arise from (A) outstanding political risk 

insurance contracts, (B) pending claims under insurance 

contracts, and (C) guaranties issued in settlement of claims 

arising under insurance contracts. 

(a) Political Risk 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 confiscation, nationalization, or other 

governmental actions that deprive investors of their 

fundamental rights in the investment.

Insurance against political violence insures investors 

against losses caused by politically motivated acts of 

violence (war, revolution, insurrection, or civil strife, 

including terrorism and sabotage).

Under most OPIC insurance contracts, investors may 

obtain all three coverages, but claim payments may 

not exceed the single highest coverage amount. Claim 

payments are limited by the value of the investment 

and the amount of current coverage in force at the 

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

recoveries from other sources. In addition, in certain 

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

highest coverage amount is further reduced by stoploss 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, 2007 and 2006 was $3.4 billion 

and $3.7 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, 2007 and 2006 was $2.4 billion and 

$2.5 billion, respectively.

(b) Pending Claims

At September 30, 2007 OPIC had no material 

pending insurance claims. At September 30, 2006, 

the total amount of compensation formally requested 

in insurance claims for which no determination 

of specific liability had yet been made was 

approximately $3 million. In addition to requiring 

formal applications for claimed compensation, 

OPIC’s contracts generally require investors to notify 

OPIC promptly of host government action that the 

investor has reason to believe is or may become 

a claim. Compliance with this notice provision 

sometimes results in the filing of notices of events that 

do not mature into claims.

OPIC does not record a specific liability related to 

such notices in its financial 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.
[ 43 ]

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(c) Claims Settlement Guaranties and Indemnities

At September 30, 2006 OPIC also had off-balancesheet risk in connection with one claim settlement. 

OPIC settled a claim in 1991 through a guaranty of 

$30 million of host government obligations. Payments 

by the host government reduced OPIC’s exposure to 

$1.4 million at September 30, 2006. The claim was 

repaid in full in fiscal year 2007. Any claims that might 

have arisen from this settlement were factored into the 

nonspecific reserve for political risk insurance for 2006. 

Changes in the reserve for political risk insurance 

during fiscal years 2007 and 2006 were as follows 

(dollars in thousands):

2007 2006

Beginning balance $ 315,000 $ 315,000

Amounts charged off (75) (166)

Increase (decrease) in provisions 4,060 (23,709)

Transfers from other reserves (3,985) 23,875 

Ending balance $ 315,000 $ 315,000

(10) Investment Financing

OPIC is authorized to provide investment financing to 

projects through direct loans and investment guaranties. 

Project financing provides medium- to long-term funding 

through direct loans and investment guaranties to 

ventures involving significant equity and/or management 

participation by U.S. businesses. Project financing looks 

for repayment from the cash flows generated by projects, 

and as such, sponsors need not pledge their own general 

credit beyond the required project completion period.

Investment funds use direct loans and investment 

guaranties to support the creation and capitalization of 

investment funds that make direct equity and equityrelated 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 OPICbacked 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 

both fiscal years 2007 and 2006, $20.1 million 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 financing at September 30, 2007 and 2006 

totaled $3.7 billion and $3.6 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, 2007 totaled $1.3 billion, of which 

$794 million was outstanding. Direct loan exposure at 

September 30, 2006 totaled $1.2 billion, of which $729 

million was outstanding. Interest income is not accrued 

on direct loans that have payments that are more than 90 

days past due. Loans with payments more than 90 days 

past due totaled $179.1 million at September 30, 2007 

and $138.5 million at September 30, 2006. If interest 

income had been accrued on those loans, it would have 

approximated $4.7 million during fiscal year 2007 and 

$3.6 million during fiscal year 2006. Interest collected on 

delinquent loans and recorded as income when received 

amounted to $7.1 million and $3.5 million for fiscal years 

2007 and 2006, respectively.

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

2007 2006

Direct loans outstanding $ 794,274 $ 728,827

Allowance for uncollectible loans (153,151) (133,327)

Direct loans outstanding, net $ 641,123 $ 595,500

Changes in the allowance for uncollectible loans during fiscal 

years 2007 and 2006 were as follows (dollars in thousands):

2007 2006

Beginning balance $ 133,327 $ 127,655

Amounts charged off (3,085) (14,416)

Recoveries 46 8

Increase in provisions 22,498 20,080

Provision for capitalized interest 365 —

Ending balance $ 153,151 $ 133,327
[ 44 ]

OPIC 2007 Annual Report

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 fixed or 

floating rates of interest and are payable in U.S. dollars. 

OPIC’s losses on payment of a guaranty are reduced by 

the amount of any recovery from the borrower, the host 

government, or through disposition of assets acquired upon 

payment of a claim. Guaranties extend from 5 to 17 years for 

project finance and from 10 to 12 years for investment funds.

Credit risk represents the maximum potential loss due 

to possible nonperformance by borrowers under terms 

of the contracts. OPIC’s exposure to credit risk under 

investment guaranties, including claim-related assets, 

was $6.5 billion at September 30, 2007, of which $4.2 

billion was outstanding. Of the $6.5 billion of exposure, 

$5 billion was related to project finance and $1.5 billion 

was related to investment fund guarantees. Of the $4.2 

billion outstanding, $3.7 billion related to project finance 

and $500 million related to investment fund guaranties. 

Included in the $1.5 billion of investment fund exposure 

is $202 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, 2007, $56 million of 

the $202 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, 2006, OPIC’s exposure to credit risk 

under investment guaranties, including claim-related assets, 

was $5.5 billion, of which $3.4 billion was outstanding. 

Of the $5.5 billion of exposure, $3.5 billion was related 

to project finance and $2 billion was related to investment 

fund guarantees. Of the $3.4 billion outstanding, $2.8 

billion related to project finance and $686 million related 

to investment fund guaranties. Included in the $2 billion 

of investment fund exposure is $353 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, 2006, $186.5 million of the $353 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 

fiscal years 2007 and 2006 were as follows (dollars in 

thousands):

2007 2006

Beginning balance $ 620,000 $ 625,000

Amounts charged off (20,833) —

Recoveries 4,754 9

(Decrease) increase in provisions (117,617) (5,009)

Ending balance $ 486,304 $ 620,000

(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 financing program or the 

insurance program. Under the investment financing 

program, when OPIC pays a guaranteed party, a 

receivable is created. Under the insurance program, 

similar receivables reflect the value of assets, generally 

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

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

receivables are generally collected over a period of 5 to 15 

years. 

Accounts receivable resulting from investment guaranties 

were as follows (dollars in thousands):

2007 2006

Accounts receivable resulting 

from investment guaranties $ 83,175 $ 148,725

Allowance for doubtful recoveries (16,477) (25,213)

Accounts receivable, net $ 66,698 $ 123,512

Changes in the allowance for doubtful recoveries for assets 

resulting from investment guaranties during fiscal years 

2007 and 2006 were as follows (dollars in thousands):

2007 2006

Beginning balance $ 25,213 $ 36,480

Amounts charged off — (3,950)

Decrease in provisions (11,469) (8,049)

Recoveries 2,733 732

Ending balance $ 16,477 $ 25,213
[ 45 ]

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Assets acquired in insurance claims settlements were as 

follows (dollars in thousands):

2007 2006

Assets acquired in insurance 

claims settlements $ 93,255 $ 142,685

Allowance for doubtful recoveries (4,192) (21,135)

Accounts receivable, net $ 89,063 $ 121,550

Changes in the allowance for doubtful recoveries for assets 

acquired in insurance claims settlements during fiscal years 

2007 and 2006 were as follows (dollars in thousands):

2007 2006

Beginning balance $ 21,135 $ 50,898

Amounts charged off (20,928) (5,888)

Transfers to other reserves 3,985 (23,875)

Ending balance $ 4,192 $ 21,135

(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 FY2007 and FY2006, OPIC’s 

retained earnings were allocated to these reserves on the 

basis of maximum exposure outstanding for insurance and 

guaranties respectively, thereby reflecting 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 both September 30, 2007 and 

2006, the Insurance Reserve totaled $1.3 billion, and 

the Guaranty Reserve totaled $3.1 billion at September 

2007 and $2.8 billion at September 30, 2006. Should 

funds in OPIC’s reserves not be sufficient 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 fulfill the pledge of full faith and credit to 

which such obligations are entitled. Standing authority for 

such appropriations is contained in Section 235(f) of the 

FAA. The Federal Credit Reform Act of 1990 authorizes 

permanent, indefinite appropriations and borrowings from 

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

resulting from the investment financing program.

(13) Disclosures About Fair Value of Financial 

Instruments

The estimated values of each class of financial instrument 

for which it is practicable to estimate a fair value at 

September 30, 2007 are as follows (dollars in thousands):

Carrying

Amount

Fair

Value

Financial assets:

Cash $ 838,364 $ 838,364

U.S. Treasury securities 4,490,983 4,661,588

Interest receivable on securities 52,327 52,327

Direct loans 641,123 641,123

Accounts receivable from 

investment guaranties 66,698 66,698

Assets acquired in insurance 

claims settlements 89,063 89,063

Financial liabilities:

Borrowings from the U.S.

Treasury and related interest 793,544 822,233

The methods and assumptions used to estimate the fair value 

of each class of financial instrument are described below:

Cash: The carrying amount approximates fair value because 

of the liquid nature of the cash, including restricted cash.

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

Treasury securities are estimated based on quoted prices 

for Treasury securities of the same maturity available to 

the public. (OPIC is not authorized, however, to sell its 

securities to the public, but is instead restricted to direct 

transactions with the U.S. Treasury.) Interest receivable on 

the securities is due within 6 months and is considered to 

be stated at its fair value.

Direct Loans, Accounts Receivable Resulting from 

Investment Guaranties, and Assets Acquired in 

Insurance Claims Settlements: These assets are 

stated on the balance sheet at the present value of the 

amount expected to be realized. This value is based 

on management’s quarterly review of the portfolio and 

considers specific factors related to each individual 

receivable and its collateral. The stated value on the 

balance sheet is also management’s best estimate of fair 

value for these instruments.
[ 46 ]

OPIC 2007 Annual Report

Borrowings from the U.S. Treasury: The fair value of 

borrowings from the U.S. Treasury is estimated based on 

the face value of borrowings discounted over their term 

at year-end rates. These borrowings were required by the 

Federal Credit Reform Act, and repayment terms are fixed 

by the U.S. Treasury in accordance with that Act.

Investment Guaranties Committed and Outstanding:

OPIC’s investment guaranties are intended to provide 

a means of mobilizing private capital in markets where 

private lenders would be unwilling to lend without the 

full faith and credit of the U.S. Government. Given the 

absence of a market for comparable instruments, 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 fiscal year 

2004. Under the lease terms, OPIC received interestbearing 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. 

Rental expense for 2007 and 2006 was approximately 

$4.5 million and $5.1 million, respectively. Minimum 

future rental payments under the 15-year lease at 1100 

New York Avenue, N.W. are approximately $4.1 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 

7.0% of employees’ gross 2007 earnings and contributed 

7.0% of employees’ 2007 gross earnings. The sums were 

transferred to the Civil Service Retirement Fund from which 

this employee group will receive retirement benefits. 

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 

benefits. 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 benefits. 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.

FERS and CSRS employees may elect to participate 

in the Thrift Savings Plan (TSP). In January 2006 the 

TSP contributions limits were eliminated and now both 

CSRS and FERS employees may elect to contribute up to 

$15,500, 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%.

Although OPIC funds a portion of employee pension 

benefits under the CSRS, the FERS, and the TSP, and 

makes necessary payroll withholdings, it has no liability 

for future payments to employees under these programs. 

Furthermore, separate information related to OPIC’s 

participation in these plans is not available for disclosure 

in the financial statements. Paying retirement benefits 

and reporting plan assets and actuarial information 

is the responsibility of the U.S. Office of Personnel 

Management and the Federal Retirement Thrift 

Investment Board, which administer these plans. Data 

regarding the CSRS and FERS actuarial present value of 

accumulated benefits, assets available for benefits, and 

unfunded pension liability are not allocated to individual 

departments and agencies.

(16) Concentration of Risk

OPIC is subject to certain risks associated with financial 

instruments not reflected in its balance sheet. These 

financial instruments include political risk insurance, loan 

guaranties, and committed-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 financing through direct loans and investment 

guaranties.

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

in the assets of the projects or transactions it 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 
[ 47 ]

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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, 2007 and 2006 (dollars in thousands):

2007

Total Outstanding

Unused 

commitments

Guaranties $ 6,439,356 4,075,153 2,364,203

Undisbursed direct loans 532,736 — 532,736

Insurance 3,390,720 2,410,166 980,554

2006

Total Outstanding

Unused 

commitments

Guaranties $ 6,259,122 4,114,295 2,144,827

Undisbursed direct loans 513,613 — 513,613

Insurance 3,679,952 2,490,365 1,189,587

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

involves coverage outside of the United States. The 

following is a breakdown of such total commitments at 

September 30, 2007 by major geographical area (dollars 

in thousands): 

Loan 

guaranties

Undisbursed 

portion on 

direct loans Insurance

Africa $ 803,421 162,983 545,089

Asia 389,396 128,129 564,575

Europe 853,936 11,000 120,908

Latin America 1,996,808 73,524 1,188,413

Middle East 1,069,724 45,594 624,364

NIS (New Independent States) 1,058,936 80,622 362,313

Worldwide 267,135 30,884 —

Insurance stop-loss adjustment — — (14,942)

$ 6,439,356 532,736 3,390,720

OPIC has several client-specific contracts with stop-loss 

limits that are less than the aggregate coverage amounts. 

The insurance stop-loss adjustment represents the 

difference between the aggregate coverage amount and 

OPIC’s actual exposure under these contracts.

At September 30, 2007, OPIC’s largest finance and 

insurance exposure was in the following countries and 

sectors (dollars in thousands):

Country Sector

Russia $ 983,602 Financial services $ 4,416,755

Columbia 643,262 Power generation 2,040,594

Turkey 612,504 Oil and gas services 1,651,696

Nigeria 601,366 Manufacturing 772,879

Philippines 444,037 Construction 678,691

(17) Other Contingencies

OPIC is currently involved in certain legal claims and has 

received notifications 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) Accounting and Disclosure Requirements 

for Guaranties

In FY 2007 and FY 2006 pursuant to the requirement 

of FIN 45, OPIC recognized a guaranty liability and a 

guaranty fee receivable of $168.5 million and $167.3 

million, respectively. OPIC collected $39.2 million and 

$28.4 million of guaranty fees in FY 2007 and FY 2006, 

respectively, on the investment guaranties issued since 

December 31, 2002.

(19) Writedown of Internally Developed Software

In fiscal year 2007, management analyzed previously 

capitalized costs associated with internally developed 

software and determined that it would no longer be of 

future benefit and should be written down by $4.5 million. 

The writedown was calculated as the difference between 

the carrying amount less costs identified by management 

as having future economic benefit, in accordance with FAS 

144, “Accounting for Impairment or Disposal of Longlived Assets.” 

(20) Statutory Covenants

OPIC’s enabling statute stipulates both operating and 

financial requirements with which OPIC must comply. In 

management’s opinion, OPIC is in compliance with all 

such requirements. 
[ 48 ]

OPIC 2007 Annual Report

OPIC Board of Directors

Samuel E. Ebbesen

Small Business

(General, USA, Ret.) 

Chief Executive Officer

Omni Systems Inc.

Vienna, Virginia 

VACANT

Small Business 

Christopher J. Hanley

Organized Labor

General Secretary-Treasurer

International Union of Operating Engineers

Washington, DC 

C. William Swank

Cooperatives 

Retired Executive Vice President

Ohio Farm Bureau Federation

Westerville, Ohio 

Diane M. Ruebling

Member

President

The Ruebling Group

Scottsdale, Arizona / Longville, Minnesota 

Sanford L. Gottesman

Member 

President 

The Gottesman Company

Austin, Texas 

VACANT

Member 

Dianne Ingels Moss

Member

President & Owner 

Cartera Investment Corporation 

Dallas, Texas

Henrietta Holsman Fore

Administrator

U.S. Agency for International Development 

and Director of United States Foreign Assistance 

Ambassador John K. Veroneau 

Deputy U.S. Trade Representative

Office of the U.S. Trade Representative 

Robert Mosbacher, Jr.

President & Chief Executive Officer

Overseas Private Investment Corporation 

John J. Sullivan

Deputy Secretary

U.S. Department of Commerce 

Howard M. Radzely

Deputy Secretary

U.S. Department of Labor 

Reuben Jeffery III 

Under Secretary for Economic, 

Energy & Agricultural Affairs 

U.S. Department of State 

David H. McCormick 

Under Secretary for International Affairs 

U.S. Department of the Treasury
OPIC Executive Staff

Office of the President

Robert Mosbacher, Jr.

President and Chief Executive Officer 

John A. Simon

Executive Vice President 

Dulce A. Zahniser

Chief of Staff 

Vice Presidents

James C. Polan

Vice President

Small and Medium Enterprise Finance

Robert Drumheller

Vice President

Structured Finance

Rod Morris

Vice President

Insurance

Page 3

Martin Simon

Page 9

Lynn Tabernacki, OPIC

The Aspen Institute

Dr. Munr Kazmir, American International 

School System, Inc.

Page 13

Joseph Wozniak, OPIC

Timothy Harwood, OPIC

Joseph Wozniak, OPIC

Page 17

Joseph Wozniak, OPIC

Lynn Tabernacki, OPIC

Dr. Christine Emery, OPIC

Page 21

OPIC

Dr. Christine Emery, OPIC

OPIC

Page 25

OPIC

U.S. Department of State

Joseph Wozniak, OPIC

Cynthia Hostetler

Vice President

Investment Funds

Howard L. Burris

Vice President and Chief Financial Officer

Office of the Chief Financial Officer

Daniel A. Nichols

Vice President

Economic Development 

Christopher Coughlin

Vice President

External Affairs 

Dr. Christine V. Emery

Vice President

Investment Policy

Mark Garfinkel

Vice President and General Counsel

Legal Affairs

Photography Credits

[ 49 ]

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