Congressional

Budget

Justification

Fiscal Year

2013

Overseas Private Investment

Corporation
Table of Contents

Table of Contents ............................................................................................................................. i

President’s Letter ............................................................................................................................ ii

Overview ......................................................................................................................................... 1

OPIC Budget Request ..................................................................................................................... 2

OPIC Supports US Policy while Generating Resources ............................................................. 3

OPIC Impact Results for FY 2011 .............................................................................................. 5

Foreign Direct Investment Flows Outweigh ODA ..................................................................... 6

Key Challenges and Market Failures .......................................................................................... 7

OPIC Supports National Security and Foreign Policy ................................................................ 8

Afghanistan ............................................................................................................................. 8

Pakistan ................................................................................................................................... 9

Iraq ........................................................................................................................................ 10

OPIC Supports U.S. Policy ....................................................................................................... 11

Middle East and North Africa in the Wake of the Arab Spring ............................................ 12

Renewable Resources ........................................................................................................... 13

Economic Opportunities for this Transition ......................................................................... 15

The Partnership for Growth .................................................................................................. 17

Policy Directive on Development ......................................................................................... 18

OPIC Assists U.S. Businesses and Small and Medium Enterprises ......................................... 19

Investment Funds ...................................................................................................................... 20

Appendix ....................................................................................................................................... 22

Appendix A: Legislation ........................................................................................................... 22

Reauthorization Legislation .................................................................................................. 22

Reauthorization Waiver .................................................................................................... 22

Appropriations Language...................................................................................................... 22

Noncredit Account ............................................................................................................ 22

Program Account .............................................................................................................. 22

Transfer Authorities (General Provisions) ........................................................................ 23

Export Financing Transfer Authorities ............................................................................. 23

Appendix B: Development Matrix............................................................................................ 24

Appendix C: Sources Cited ....................................................................................................... 27
President’s Letter

January 2012 marked OPIC’s 41st anniversary, and while much has changed in the world, it is 

remarkable how prescient OPIC was in its design. When OPIC opened in 1971, official 

development assistance to developing countries 

outweighed foreign direct investment by 2 to 1. Today, 

those numbers are reversed – foreign direct investment 

outweighs assistance by 4 to 1. Private funds, not public, 

fuel developing economies. For four decades, OPIC has 

successfully worked hard to remain self-sustaining, 

efficient, and effective -- and in FY 2011 we have 

continued that success, generating net income of $269 

million. 

Private Investment Flows

Outweigh Development

Assistance by 4:1

2010 Foreign Direct Investment

to Developing Economies...573 B

2010 Official Development

Assistance (ODA)................128 B

Source: UNCTAD, OECD DAC

OPIC’s role in mobilizing the private sector not only opens 

markets for U.S. companies, and keeps America 

competitive, but also is an important way to influence 

policy and support economic growth consistent with U.S. 

foreign policy and development objectives. 

The United States needs to mobilize resources in new and more effective ways, not only with 

fewer tax dollars, but in market friendly ways. OPIC’s development finance enables the U.S. to 

do both: using its own resources, and moving with the grain of cultures and free markets by 

leveraging business as ambassadors and contributors to international development. As a nation, 

now more than ever, the United States must take a strategic approach to foreign investment. We 

must invest in regions and projects where we can make a difference, and we must continuously 

monitor to ensure projects are working as designed. 

We must recognize that transitions in post-conflict regions present economic opportunities, as 

well as practical and competitive challenges. In this environment when global engagement is 

more important than ever, programs that can be self-sufficient or partner with an outside investor 

will be an increasingly necessary tool for doing more with less new resources. This means 

leveraging all the tools of development beyond aid, especially investment and trade. As the 

President referenced in his address to the United Nations last September, “the United States will 

continue to support those nations that transition to democracy – with greater trade and 

investment, so that freedom is followed by opportunity.” Both Congress and the Administration 

recognize these challenges and are promoting changes in development assistance to focus on a 

full range of tools, as well as solutions that help permanently break the cycles of poverty, famine, 

and disease. 

OPIC has a unique and powerful role to play in accomplishing this mission. OPIC multiplies 

scarce federal resources first by mobilizing finance and insurance in multiples to its appropriated 

budget, and then again, by mobilizing private sector finance. One dollar (from OPIC’s own 

resources) drives an estimated $159 in total resources, of which $116 is non-federal. 
OPIC’s resources are not drawn from the General Fund of the Treasury – the costs of OPIC’s 

administration and its credit programs are funded from OPIC’s own earnings. Even as OPIC 

fully budgets for the risk of its transactions, OPIC’s reserves further insulate the General Fund. 

OPIC thus is self-sustaining – deploying its own resources to underwrite, evaluate, and monitor 

transactions as well as protecting the Treasury from the risks of OPIC’s transactions. 

Pricing and fees will support our net collections and our contributions to the budget. OPIC 

anticipates $3.20 in net collections for each $1 of appropriated resources. These resources will 

enable higher program capabilities within a total footprint essentially the same as FY 2011. 

FY 2011 FY 2012 FY 2013

Actual Enacted Request

Resources 

 Administration 52.31 54.99 60.78 

 Credit Program 18.1 25.0 31.0 

 Net Collections (262.8) (278.0) (284.9)

 Net Budget $ (192.4) $ (198.0) $ (193.1) 

Commitments 

 Finance $ 2,423 $ 3,100 $ 3,150 

 Insurance $ 381 $ 600 $ 800 

This use of OPIC’s own balances will enable OPIC to underwrite more transactions and generate 

self-sustaining collections. This level of resources is integral to OPIC’s ability to support foreign 

policy priorities such as in the Middle East and North Africa, a program of clean energy finance, 

and continued prudent management of OPIC’s portfolio. OPIC’s ability to mobilize private 

resources toward U.S. priorities will become ever more important as the budget environment 

reduces resources for other foreign policy and international development programs. 

We look forward to your guidance and support in advancing the work before us. 

Best, 

Elizabeth L. Littlefield 

President and CEO 
Overview  

Established as an agency of the U.S. Government in 1971, OPIC operates on a self-sustaining 

basis at no net cost to U.S. taxpayers. OPIC’s portfolio is currently $14.5 billion of projects in 

more than 100 countries. As the U.S. Government’s development finance institution, OPIC 

mobilizes private capital to help solve critical development challenges and in doing so, advances 

U.S. foreign policy. OPIC achieves its mission by providing investors with financing, guarantees, 

political risk insurance, and support for private equity investment funds. Because OPIC works 

with the U.S. private sector, it helps U.S. businesses gain footholds in emerging markets 

catalyzing revenues, jobs, and growth opportunities both at home and abroad. 

By leveraging economically sound projects and charging market-based fees, OPIC catalyzes but 

does not compete with the private sector. In order to ensure that it is supporting rather than 

supplanting private investment in these economies, OPIC systematically assesses whether it is 

needed in a particular project. OPIC’s approach incorporates both country-specific market 

information such as country risk, macroeconomic risk, and regulatory market risk, as well as 

project-specific financing needs such as size, tenor, and use of new technology. In this way, 

OPIC works to ensure that its funds are additional to a project’s financing.

1

The Budget requests an Administrative Budget for FY 2013 which would support a greater 

lending level and higher related revenue. In total these administrative expenses can be self 

supporting using revenues from the related program. The requested level reflects the resources 

required to maintain its portfolio and to meet policy and technical mandates for FY 2013. 

OPIC’s budget request should be considered in the following context: 

 OPIC Makes Money – OPIC generates more income than it uses, producing $3 for each 

$1 of appropriations, thus generating net revenue within the International Affairs budget. 

OPIC’s appropriations set OPIC’s spending from its own balances, rather than making 

available funds from the Treasury. 

 OPIC Supports National Security and Foreign Policy – OPIC efficiently mobilizes the 

private sector to support U.S. development and foreign policy objectives – even in 

challenging environments such as in Afghanistan, Pakistan, and Iraq. 

 OPIC Supports U.S. Policy – OPIC is a critical tool to fulfilling the policy goals such as 

supporting the Middle East and North Africa region, the Partnership for Growth, the 

National Export Initiative, and global efforts to promote renewable and clean energy. 

 OPIC Assists U.S. Businesses and Small and Medium Enterprises (SMEs) – OPIC 

helps U.S. businesses expand and export into emerging markets, and supports SMEs 

which have the most growth and employment potential but otherwise would not be able 

to access the market, thus OPIC supports U.S. jobs and exports. 

 

1 OPIC annually meets with the Private Market Advisory Group (“PMAG”), which consists of representatives from 

the investment community and the private sector insurance market. The PMAG is structured to provide feedback on 

OPIC’s products and performance as a political risk insurer and to enhance cooperation between OPIC and the 

private sector. 
OPIC Budget Request  

FY 2011 FY 2012 FY 2013 

Actual Enacted Request 

Resources 

 Administrative 52.31 54.99 60.78 

 Credit Program 18.1 25.0 31.0 

 Net Collections (262.8) (278.0) (284.0)

 Net Budget $ (192.4) $ (198.0) $ (192.2) 

Commitments 

 Finance $ 2,423 $ 3,100 $ 3,150 

 Insurance $ 381 $ 600 $ 800 

The budget request for FY 2013 proposes a net impact very close to the last two fiscal years 

while providing OPIC with administrative and subsidy resources to expand its program and 

responsibly maintain its portfolio. OPIC can do this through offsets from negative subsidy 

supported by transaction volume, and other income. 

These offsets are supported by the requested resources - to achieve the higher negative subsidy 

levels, OPIC needs the systems and staffing to support transaction levels and fees. To the extent 

that the resources are not appropriated, then these offsets are similarly affected. 

The appropriated resources will continue OPIC’s support of policy priorities such as MENA, 

clean and renewable energy initiatives, and business-critical portfolio and financial management 

standards necessary to keep pace with audit and financial reporting requirements. 

Active management and monitoring of OPIC’s portfolio is necessary as OPIC cannot diversify 

its exposures through methods available to the private sector such as asset sales, or purchases of 

options. OPIC must continually advance its institutional capability to underwrite, account for, 

and manage complex assets throughout their life cycle. This is necessary to remain selfsustaining over a multi-year period; and, to extend an unblemished record of clean audit 

opinions. In summary, OPIC is different: 

 OPIC earns more than it spends and is a net resource generator for the appropriations 

bill. 

 OPIC has a well established history of contributing to deficit reduction. Throughout 

OPIC’s 41 years, OPIC has been a steady contributor to reducing the federal deficit. 

By collecting more than it spends, OPIC demonstrates that it is self-sustaining, 

whether on an annual, or cumulative basis. 

 Administrative resources can generate more offsetting collections than they use. The 

FY 2013 budget request, for example, projects more than $3 of gross offsetting 

collections for each $1 of appropriations. 

 OPIC’s resources are not from the General Fund of the Treasury but are from OPIC’s 

own balances. 

2 
OPIC Supports US Policy while Generating Resources

OPIC has a unique value to the Budget as directly supporting foreign policy and development, 

while at the same time generating income for the, Approaches such as OPIC’s are a critical 

solution to supporting development goals in an efficient, effective, flexible, and cost-effective 

way. 

The budget request illustrates that OPIC’s request for additional resources can be justified in the 

current context in which all agencies are constrained. 

 All of OPIC’s funds are provided out of its own balances, not out of the general fund or 

taxpayer resources at the Treasury. 

 OPIC’s proposed budget can be offset with negative subsidy – generated by its 

transactions. 

 OPIC is efficient with its resources. 

o For FY 2011 OPIC committed almost $7 in program level for each $1 of 

appropriated administrative expenses and credit budget. 

o OPIC has over its history mobilized an average of $2.70 for each $1 of its 

insurance and finance commitments. 

o OPIC’s FY 2011 administrative expenses are 1.7 percent of insurance and finance 

program levels. OPIC’s FY 2013 request proposes $79 of insurance and finance 

program for each $1 of resources. 

o OPIC is a small agency at approximately 220 FTE supporting more than 500 

transactions and a portfolio of more than $14.5 billion. 

o In FY 2011, each OPIC employee generated an average of $17.4 million in new 

commitments and supported $1.2 million in revenue for the federal government.

By balancing risks, returns and resources, OPIC earns a nominal return for the budget, maintains 

itself as a fully self-sustaining Federal Corporation, and helps to reduce the federal deficit. 

OPIC had met its statutory requirement to operate on a self-sustaining basis even before 1982, 

when President Ronald Reagan hosted a White House event where he accepted a check from 

OPIC’s President, repaying the U.S. Treasury for OPIC’s original paid-in capital.2

 

In FY 2011, OPIC’s positive effect on the federal budget totaled $240 million – the 33rd 

consecutive year that OPIC has contributed to the budget. On a private-GAAP basis, OPIC had 

audited net income of $269 million in FY 2011. 

 

 

2 http://www.youtube.com/watch?v=oWA7xmWa1mE

3 

The annual appropriations process acts as a limit on the resources which OPIC can spend, 

creating budgetary income from the difference between what OPIC collects in a year and what it 

can spend. 

 This budget request projects that in FY 2013 OPIC will contribute $193.1 million to 

the federal budget. 

 OPIC has contributed toward reducing the federal deficit for 33 consecutive years. In 

FY 2011, for example, OPIC contributed $240 million (negative outlays) to deficit 

reduction. OPIC is one of the very few U.S. government agencies which generate 

deficit reduction for the U.S. taxpayer. 

 Separately, the annual external audit of OPIC’s financial statements confirm that 

OPIC generated $434 million in revenue and $269 million in net income in FY 2011. 

These figures compared favorably to FY 2010, when OPIC generated $397 million in 

revenue and $260 million in income. 

 OPIC’s reserves now total $5.2 billion invested in Treasury securities – enabling 

OPIC to insulate the Treasury from the risk that its portfolio might generate losses in 

excess of those already budgeted. 

OPIC Impact Results for FY 2011

Total Number of New Projects 92 

Projects in Low Income Countries (# of projects) 39% 

External Capital Mobilized $4.36 B 

Renewable Megawatts Generated 727.8 

Annual Tons CO2 Emissions Avoided 931,312 

Number of Projects with U.S. Small Business 72 

Share of Projects with U.S. Small Businesses 78% 

U.S. Exports Generated $1 B 

U.S. Jobs Supported 1,373 

These results are based on projections at the time of OPIC 

commitment. 

5 


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

(FATAA) of 2016; including the health and security of implementing partners, as well as national interest of the United States.
*

*

*

*

*

*

* Information has been Redacted in accordance with the two principled exceptions of the Foreign Aid Transparency and Accountability Act (FATAA) 

of 2016; including the health and security of implementing partners, as well as national interest of the United States.
Currently, OPIC’s portfolio in Pakistan totals $73.5 million across 14 projects including: 

 SME Credit – $6.5 million loan to help launch and finance a nation-wide microfinance 

institution, a $21.5 million liquidity facility for expansion of microfinance loan portfolio 

and a credit facility to help expand the microloan portfolio of a leading microfinance 

institution. 

 Infrastructure (manufacturing) – $1.2 million financing for manufacture of water 

treatment equipment. 

 Telecommunications – $1.4 million in financing for Pakistan’s largest cellular service 

provider, and $9.8 million financing for the construction of telecommunications towers. 

OPIC is currently completing due diligence on several priority projects in Pakistan, including: 

 Renewable Energy (biofuel) – Insurance for a company building and operating a 

biomass-fueled power plant that will utilize bagasse, a byproduct from sugarcane. 

 Renewable Resources – a direct loan for a desalinization project to be located in Karachi. 

 Oil and Gas – a direct loan for construction and development of a liquefied natural gas 

terminal and regassification facility. 

Iraq

OPIC supports investment in Iraq by providing the capital and risk mitigation tools that investors 

need to overcome the many barriers faced in the region including legal risks, operational risks, 

and regional conflict. OPIC’s current portfolio in Iraq totals $226 million across seven projects. 

Examples of current projects include: 

 Small and Medium Enterprise Finance – In 2005, 

OPIC leveraged grant resources and the U.S. 

private sector to create the Iraq Middle Market 

Development Foundation (IMMDF), which has 

made loans to businesses, especially SMEs, 

including agricultural, construction and 

manufacturing sectors. OPIC has provided almost 

$75 million in direct loans through three facilities. 

One example of the use of this facility was in Kurdistan the largest agriculture area in 

Iraq. The provision of a $5 million loan to a poultry and agricultural business in 

Kurdistan region helped the borrower purchase cooling equipment and refrigerated trucks 

for a new food processing and cold storage including a total of five halls with a capacity 

of up to 500 tons per unit. These refrigerated units are used to store chicken, vegetables, 

processed foodstuffs, and as space for rent to other producers. The need for food 

processing and cold storage is clear after taking into account that the Iraqi agriculture 

sector accounts for 26 percent of the country’s GDP, 64 percent of its employment and 18 

percent of its exports. A separate SME loan is being used to fund feed mill equipment, 

construction and raw materials to further enhance the capabilities of this SME in Iraq. 

Since 2004, OPIC has

invested $527 million in 26

projects in Iraq.    

10 
 Microfinance – OPIC is financing $90 million for the expansion of microfinance services 

in Iraq. The borrower will use the proceeds of the OPIC loan to expand the largest 

microfinance service provider in the country, currently serving almost 24,000 

clients. Most of the clients are micro-entrepreneurs working the trade and service 

sectors, including grocery stores, mobile phone shops, clothing and accessories, as well 

as electricians and mechanics. Since its creation in 2003, the microfinance provider has 

enabled its borrowers to create or sustain employment for over 39,000 Iraqis. 

OPIC is currently completing due diligence on several projects in Iraq, including: 

 Infrastructure (Equipment) – Insurance to support the sale of equipment used in 

infrastructure projects. 

 Affordable Housing – Financing for the construction and lease purchase financing for 

over 1,500 affordable housing units. 

OPIC Supports U.S. Policy

As a small agency, OPIC is flexible and nimble, so it can respond immediately to foreign policy 

and development needs. OPIC’s proposed budget maintains OPIC’s ability to be responsive to 

the Middle East and North Africa and key initiatives such as clean and renewable energy as well 

as the Partnership for Growth. OPIC has been a key contributor to these policy goals - and 

OPIC will continue to be key wherever the private sector can be mobilized in support of U.S. 

policy. 

 OPIC’s ability to deliver in the Middle East within three months of a policy 

announcement demonstrates OPIC’s effectiveness and value as a nimble foreign policy 

tool and a cost-effective means for development. In the Middle East/North Africa, OPIC 

is developing up to $3B in financing for the region. 

 Clean and Renewable Energy – OPIC is a significant component of the U.S. program to 

support clean and renewable energy. 

 The Partnership for Growth – OPIC supports sustainable economic development in 

priority countries. For example, in FY 2011 OPIC projects created over 19,000 host 

country jobs. 

 

11 
Middle East and North Africa in the Wake of the Arab Spring

$1.4

$1.8 $1.8

$2.9

$2.5 $2.6

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

2006 2007 2008 2009 2010 2011

MENA Portfolio Exposure OPIC has a long and successful history as a (2006-2011, $ billions) catalyst for private-sector investment in the 

Middle East and North Africa (MENA). 

For over 35 years, OPIC has supported 

investment in MENA by providing the 

capital and risk mitigation tools that 

investors need to overcome the many 

barriers faced in the region. To stimulate 

investment, OPIC offers financing, 

guarantees, political risk insurance, and 

support for private equity investment funds. 

Since 1974, OPIC has invested nearly $8 

billion in 463 projects in the Middle East 

and North Africa. Historically, OPIC’s 

support for the region has targeted four 

critical areas: 

 Credit for small and medium enterprises (SMEs) 

 Infrastructure development (housing, energy, telecommunications) 

 Agriculture and food security 

 Humanitarian Assistance 

Sweeping change in the MENA region, including revolutions in Egypt, Libya and Tunisia, have 

made OPIC’s work in the region even more critical. As a result, MENA is a top regional priority 

for OPIC. OPIC’s work in this region has been fueled by the recognition that private capital 

investment is essential for security, stability, growth and job creation, and that partnerships 

between U.S. and local businesses are a powerful means to promote development and shared 

prosperity. 

In March 2011, Secretary of State Hillary Clinton announced OPIC will provide up to $2 billion 

in financial support to catalyze private sector investment in the Middle East and North Africa 

region. This initiative will prioritize small- and medium-sized enterprises and provide projects 

with fast-track approval to mobilize capital quickly. 

Separately, in May 2011, President Obama announced that OPIC would provide up to $1 billion 

in new financing to support infrastructure and job creation in Egypt. OPIC financing will support 

public-private partnerships in key sectors such as energy, health and waste-water treatment as 

well as potential facilities for SME lending, housing, or consumer financing. 

Credit for SMEs: Less than three months after Secretary Clinton’s original announcement of 

support, OPIC’s Board of Directors approved two Loan Guarantee Facilities to support lending 

through local banks to small businesses in Egypt and Jordan. These facilities could leverage up 

to $1.4 billion in combined lending to SMEs, which are the drivers of growth and employment in 

both countries, and will enhance stability and contribute to sustainable economic development 

12 
across the region. OPIC anticipates first loans being made to SMEs under the structure by 

January 2012. OPIC is exploring providing financing to support SME expansion and franchising 

opportunities in Tunisia. 

Infrastructure Development: OPIC is continuing to pursue a number of other financing 

opportunities with U.S. companies and financial institutions, such as Coca-Cola, GE, Bechtel, 

FedEx, First Solar, JP Morgan, and Citibank, in the renewable energy, housing, health, 

infrastructure and agricultural sectors in the region. In addition, OPIC is working with Citadel 

Capital to provide a $125 million loan alongside Citibank to support the growth of ten existing 

portfolio companies in the transportation, financial services, infrastructure and agricultural 

sectors. This transaction is expected to be approved by the OPIC board in October 2011, and 

disbursed by January FY 2012. 

Support for Private Equity Funds: In addition, OPIC has approved debt financing for a 

number of private equity funds operating throughout the MENA region, particularly in Egypt, 

including $150 million for Abraaj Capital, $25 million for Accelerator Tech Capital Partners, 

and $100 million for Citadel. OPIC has been working closely with these funds to finalize legal 

documents. 

OPIC is supporting the Maghreb Private Equity III, LP Fund which will invest $210 million 

including an OPIC loan guarantee of up to $52.5 million. This fund will be managed by 

TunInvest, which is based in Tunis with offices in Casablanca and Algiers, and is their third fund 

for the region. The fund will invest primarily in Small and Medium enterprises in agriculture, 

transport and other industries in Tunisia and other countries in the Maghreb. Other partners in 

the Fund include IFC, DEG, FMO, SIFEM, Proparco, Africa Development Bank, CDC 

France. The Fund reached its first closing at $119 million in September of last year, and OPIC’s 

Board of Directors approved this loan guarantee in December. OPIC hopes to sign a 

commitment letter by the end of June. 

Renewable Resources  

The global transition to cleaner forms of energy is perhaps the most predictable economic 

transformation in modern history. While the environment, health, and considerations of social 

stability and energy independence drive this change, a clear driver should be both the economic 

opportunities for U.S. technology, as well as the opportunity to support a cleaner energy 

trajectory for emerging economies. 

OPIC is a key participant for the U.S. government, and has made significant progress in 

advancing the U.S. Government’s pledge to assist developing nations in combating climate 

change. OPIC has a strong track record of supporting renewable resources and clean technology 

projects in emerging markets. Since 2008, OPIC has committed more than $2 billion of 

investments in renewable resources, including financing and insurance to support projects in 

renewable energy, energy efficiency, agriculture, forestry, and water treatment. OPIC’s focus on 

renewable resources is supporting projects in wind, solar, hydropower, biomass, geothermal, 

and other sustainable sources of energy, which will reduce carbon emissions, improve access to 

electricity and support economic growth. OPIC’s current portfolio includes over 2,200 MW of 

13 

Government’s breach of contract risk and political violence. This is the first time that a political 

risk insurance contract has been written by OPIC for a REDD carbon project and it is believed to 

be the first REDD insurance contract executed globally. Other new OPIC products include a 

long-term subordinated debt offering for energy efficiency upgrades, and a renewable energy and 

clean technology equipment leasing product. 

These new asset classes present an opportunity and a risk for OPIC. OPIC has committed to an 

impressive number of clean and renewable energy transactions which are beginning to disburse. 

While transactions have been underwritten, signed, and announced, the work does not end there. 

OPIC must now document, disburse, monitor, and sometimes work out transactions. OPIC 

requires the staff and technical background to support these and other specialized transactions. 

Finally, OPIC has a very progressive and explicit commitment to lowering greenhouse gas 

emissions across its portfolio by 50 percent over a 15 year period ending in 2023.5 This policy, 

which some feared would hurt OPIC’s ability to generate new investments, has not had that 

effect. Instead, by establishing an annual carbon cap for its portfolio and shifting its sectoral 

emphasis to renewable resources, OPIC has emerged as a market leader in the space. OPIC is on 

target and plans to continue working toward reduced emissions and increased energy efficiency, 

which is in line both with U.S. foreign policy priorities and the increasingly rapid global 

transition to a lower carbon economy. 

Economic Opportunities for this Transition

The rapid depletion of the worlds 

resources coupled with incredible 

technological advances in just the past 

five years alone have combined to make 

this transition readily apparent to all 

those following the issue. What has been 

seen for 20 to 30 years as largely an 

environmental issue is being recognized 

by more and more countries and 

governments as an economic o

with projected growth in renewables 

expected to far outpace growth in m

traditional fuel types in the years to 

come. 

pportunity, 

ore 

 

At the same time, delayed action in this 

transition will result in real costs. The 

economic opportunities associated with 

this transition run easily into the 

hundreds of billions of dollars. First 

Source: International Energy Outlook 2010. Energy

Information Administration. May 2010

2010‐2035

Projectedgrowthin fueltypes

92%

70%

58%

38%

29%

Renewables

Coal

NaturalGas

Liquids

Nuclear

5

 “Department of State, Foreign Operations, and Related Programs Appropriations Act, 2010.” 

(Public Law 111-117 Section 7079(b)), 123 Stat 3396. 

15 
movers will lock in significant long-term advantages. The industry standard for battery storage, 

for example, or grid switching devices, confers long-term benefits to the economies and the firms 

which establish first. 

A recent study from Pew confirmed that the clean tech sector was among the fastest growing 

sectors over the past decade from a jobs perspective, yet the rate of growth in the U.S. has paled 

in comparison to the rate of growth in many other countries.6

 And a recent Brookings study, 

released in July 2011, shows that the clean economy in the U.S. now employs more people than 

the fossil fuel sector.7

Different countries have responded to the global economic downturn in different ways. China 

and South Korea in particular have used their economic stimulus packages to support sizable 

new investments in a low-carbon economy. The United States did that as well but to a lesser 

extent, as it is neither possible nor desirable to raise the amount of capital required from public 

coffers. Instead, smart policies and limited public money can catalyze private investment into 

low-carbon infrastructure in developing countries; and OPIC is the tool that makes this possible. 

As the global population grows, and with it, the demand for power, renewable energy is 

becoming an increasingly practical solution to the power shortages around the world. For 

example, one OPIC loan recipient, Assured Guaranty Municipal Corporation, is developing, 

constructing and operating two 20 MW solar power projects to help supply Peruvians with much 

needed power. Using solar technology developed by a U.S. company, the project will sell all the 

electricity it produces to the national grid and thereby supporting Peru’s effort to diversify its 

sources of electricity generation. 

In the same way that developing countries were able to leapfrog in the telecom space, and go 

from no phone service in many communities straight to widespread cell phone use even in 

relatively remote villages, the same will be true with respect to renewable energy in developing 

countries. 

 

6

 “The Clean Energy Economy” June 10, 

2009 http://www.pewcenteronthestates.org/uploadedFiles/Clean_Economy_Report_Web.pdf

7

 Sizing the Clean Economy: A National and Regional Green Jobs Assessment" July 13, 

2011 http://www.brookings.edu/reports/2011/0713 clean economy.aspx

16 
The Partnership for Growth

The Partnership for Growth (PFG) puts into practice 

the principles of the new Policy Directive to drive 

economic progress and achieve sustainable 

economic growth. The initiative focuses on four 

top-performing low-income countries: El Salvador, 

Tanzania, Ghana, and the Philippines. OPIC is 

central to the President’s development policy 

through the Partnership for Growth. The PFG 

process recognizes the critical role of the private 

sector as a driver of economic development, and 

because OPIC works with the private sector, we 

foster a business-to-business aspect of U.S. foreign 

and development policy. This is increasingly important, since private sector capital flows to 

emerging markets far outweigh official development assistance. In 2010, developing countries 

received $4.46 of Foreign Direct Investment for every $1 of Official Development Assistance. 

 OPIC made two $60M direct loans

to Ghana Home Loans to enable

expansion of its mortgage lending

activities to low‐ and middle‐

income borrowers.

 The loan reinvigorated the

affordable housing market and has

increased the availability of long

term financing in Ghana.

 OPIC’s loan catalyzed private and

multilateral investments.

The PFG process has targeted specific constraints to growth in each country and, once complete, 

should help remove some of the barriers to investment faced by private companies. OPIC’s 

financial and risk mitigation tools will be essential to supporting increased investment into these 

four priority countries and delivering on the Administration’s commitment to supporting broadbased economic growth. OPIC’s expertise in supporting investments in renewable energy and 

financial services will be especially valuable in addressing the access to power constraint which 

is being targeted in Ghana and Tanzania, as well as access to credit which is highlighted in 

Ghana. 

OPIC is open for business in all four PFG countries. In Ghana and Tanzania, OPIC enables 

agricultural productivity, helps expand small and medium enterprise lending, and furthers 

investments in critical infrastructure. Since 1975, OPIC has invested more than $572 million in 

39 projects in Ghana with a current portfolio of $109 million over 7 projects. Since 1984, OPIC 

has invested more than $147 million in 12 projects in Tanzania with a current portfolio of $41 

million across 9 projects. In the Philippines, OPIC furthers investments in critical infrastructure 

projects including those that promote clean technology and renewable resources. Since 1974, 

OPIC has invested more than $2.6 billion in 144 projects in the Philippines, with a current 

portfolio of $390 million across 8 projects. In El Salvador, OPIC has invested more than $357 

million in 34 projects. 

OPIC has a substantive pipeline of projects in PFG countries, and is contributing to the process. 

Most significantly, in June 2011, OPIC’s Board of Directors approved nearly $500 million in 

financing for five new investment funds that could ultimately invest more than $1.5 billion in the 

renewable resources sectors of South and Southeast Asia and Africa. This includes $62 million 

to a fund that will target renewable energy projects in India and the Philippines, and $250 million 

for two funds focused on the agricultural sector in Sub-Saharan Africa. These investment funds 

leverage private-sector dollars and will inject much-needed capital into critical sectors in these 

priority countries. 

17 
Policy Directive on Development

On September 22, 2010, the President signed a Policy Directive on Global Development.8 The 

directive provides guidance for federal agencies on the President’s strategic direction. The table 

below summarizes some of the key ways in which OPIC provides unique value in catalyzing the 

private sector in support of the Policy Directive’s three pillars. 

Pillars Key Approaches OPIC’s Role

A policy focused on sustainable 

development outcomes that places a 

premium on broad-based economic 

growth, democratic governance, 

game-changing innovations, and 

sustainable systems for meeting 

basic human needs; 

• Foster the next generation of 

emerging markets by enhancing 

our focus on broad-based 

economic growth and 

democratic governance. 

• Game-Changing Innovations 

• Private sector-led growth is most 

likely to be self sustaining because it 

focuses capital on efficient uses. 

• OPIC combines creative and flexible 

financial tools with the innovation of 

the U.S. private sector 

A new operational model that 

positions the United States to be a 

more effective partner and to 

leverage our leadership; 

• Be more selective about where 

and in which sectors it works. 

• Underscore the importance of 

country ownership and 

responsibility 

• Leverage the private sector, 

philanthropic and 

nongovernmental organizations, 

and diaspora communities. 

• Strengthen key multilateral 

capabilities 

• Drive our policy and practice 

with the disciplined application 

of analysis of impact 

• OPIC leverages the capital and skills 

of the private sector and U.S. business 

in support of private-sector-led 

initiatives. 

• By mobilizing and shaping Foreign 

Direct Investment and private 

resources – OPIC multiples federal 

dollars. 

• OPIC collaborates with DFI’s and 

bilateral aid agencies. 

• OPIC’s projects are aligned with 

private sector goals and thus are selftargeting to efficient uses of capital. 

A modern architecture that elevates 

development and harnesses 

development capabilities spread 

across government in support of 

common objectives. 

• Elevate development as a 

central pillar of our national 

security policy, equal to 

diplomacy and defense, and 

build and integrate the 

capabilities that can advance 

our interests. 

• Establish mechanisms for 

ensuring coherence in U.S. 

development policy across the 

United States Government. 

• Foster the integration of 

capabilities needed to address 

complex security environments. 

• OPIC’s three-pronged mission of 

development, foreign policy, and 

support for U.S. businesses supports 

this approach 

• The private sector provides the bulk 

of external resources to the 

developing world. A modern 

architecture requires a Federal 

capability to influence these flows. 

• The long run solution for complex 

humanitarian and security challenges 

inevitably requires broad based 

economic development. 

• OPIC has unique tools and skills 

within the federal government to 

support and mobilize private capital. 

 

8 http://www.whitehouse.gov/the-press-office/2010/09/22/fact-sheet-us-global-developmentpolicy 

18 

Investment Funds

OPIC’s investment funds program supports active, best practices-based U.S. private investment 

in emerging markets to complement development and U.S. foreign policy. By facilitating 

investment into growth equity and private equity funds, OPIC supports U.S. private sector 

involvement in the development of markets where capital – and in particular, active capital – is 

scarce. Through the investment funds program, OPIC has helped to generate sustainable, 

entrepreneurial private investment in emerging and frontier regions around the world. 

OPIC’s funds program has four direct impacts on development and support for U.S. foreign 

policy. 

 OPIC increases the capital available for active investment into growth companies in 

emerging and foreign policy priority countries. This capital can be critical to support the 

growth of small and medium enterprises in these countries as well as the targeted 

development of priority sectors, particularly in countries that are in transition or in 

substantial need of investment for development. 

 OPIC’s participation as matched financing helps to catalyze U.S. and other private 

investment into emerging markets growth and private equity. OPIC provides financing 

matched to U.S. and other private capital, helping to mobilize additional capital into these 

funds. 

 OPIC’s support for emerging and first time growth equity and private equity sponsors 

helps to develop and mature best practices-based investment groups in emerging and 

transitional countries. Over 36 percent of OPIC-supported funds have been first time 

funds, in many cases among the first active investment funds in particular countries. 

Many of these funds have matured and gone on to attract additional capital in subsequent 

funds and demonstrated development and financial success. OPIC supports fund 

managers who take an active role in their investments, helping to provide advice and 

guidance to portfolio companies and to enable those companies to grow. 

 OPIC’s participation in growth and private equity funds has helped to standardize and 

popularize international environment, social, and governance (ESG) standards in 

emerging markets investing. OPIC supported managers adhere to ESG standards in their 

due diligence, investment and asset management process, helping to bring those 

standards and business practices to emerging markets. Moreover, the success in OPICsupported funds helps to demonstrate the value of adhering to these standards. 

OPIC’s support for growth equity and private equity funds was important to provide capital to 

and demonstrate the success of privatization in Russia and Central and Eastern Europe in the 

1990s. Similarly, OPIC’s involvement in investment funds in the Middle East and North Africa 

will provide critically needed capital for small and medium enterprises in the region. 

OPIC is providing a $30 million guarantee to the Siraj Fund which focuses on growth 

investments in companies in the Palestinian territories. Investors are comprised of church 

20 
groups, individual Palestinian investors, an international economic development fund, high net 

worth US investors, other institutional investors—most are investing for both returns and for the 

social and economic impacts the fund is expected to have on the local economy. The Fund 

Manager believes that OPIC’s support was critical in helping him raise the full $50 million in 

equity capital and in achieving his target of $80 million to support investment in a wide range of 

companies, including a date producer, propane gas distribution, and an engineering architectural 

services business. 

OPIC is also credited with helping to catalyze the creation of private equity investing in Africa. 

OPIC invested in the first Helios and ECP funds, which have gone on to raise additional funds 

and successfully support companies and projects in South Africa and in Sub-Saharan Africa. 

Another example of OPIC’s support in Africa is ATMT. OPIC’s $50 million support to this 

Fund helped this group of US, Tanzanian and Kenyan investors expand a group of small 

disparate cable TV operations into a regional broadband, satellite TV business, Wananchi Group; 

the company has subsequently attracted over $75 million in capital from institutional investors 

such as Liberty and Kew. OPIC’s support at the early stages of the company’s development was 

key to proving out the concept and attracting additional capital. 

Another story is OPIC’s support of AIC Caribbean Fund, a $250 million fund, the largest in the 

region. Among other investments, the fund established Columbus International, Inc., a 

telecommunications company which has laid underwater fiber optic circling the entire 

Caribbean, providing information products and services to the region. 

In summary, the investment funds program at OPIC is focused on providing capital to private 

fund managers which engage in investing in emerging market countries globally. The fund 

managers which OPIC support, raise private capital from U.S. investors and investors elsewhere, 

and apply to OPIC to augment their private capital with government funding. Fund managers 

then use their capital pool and management expertise to give a lifeline to struggling companies, 

growth companies and start-up firms in markets that are capital-deficient. The important work 

that is done by private equity firms in emerging markets in not replicated by any other type of 

financial assistance – they pursue an active investment strategy, helping to bring international 

best practices of management and governance to maturing enterprises, attracting and developing 

senior management, and enforcing environment, social and governance standards. 

21 
Appendix

Appendix A: Legislation

Reauthorization Legislation

Introduced as HR 2762 on August 1, 2011 

Section 235(a)(2) of the Foreign Assistance Act of 1961 (22 U.S.C. 2195(a)(2)) is amended by 

striking `2007' and inserting `2015'. 

Reauthorization Waiver

Notwithstanding section 235(a)(2) of the Foreign Assistance Act of 1961 (22 U.S.C. 2195(a)(2)), 

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

through September 30, 2013. 

Appropriations Language

Department of State, Foreign Operations, and Related Programs Appropriations Act, 2012 

Noncredit Account

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

limitations, as provided by 31 U.S.C. 9104, such expenditures and commitments within the limits 

of funds available to it and in accordance with law as may be necessary: Provided, That the 

amount available for administrative expenses to carry out the credit and insurance programs 

(including an amount for official reception and representation expenses which shall not exceed 

$35,000) shall not exceed [$54,990,000] $60,784,500: Provided further, That project-specific 

transaction costs, including direct and indirect costs incurred in claims settlements, and other 

direct costs associated with services provided to specific investors or potential investors pursuant 

to section 234 of the Foreign Assistance Act of 1961, shall not be considered administrative 

expenses for the purposes of this heading. 

Program Account

For the cost of direct and guaranteed loans, [$25,000,000] $31,000,000, as authorized by section 

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

Investment Corporation Noncredit Account: Provided, That such costs, including the cost of 

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

1974: Provided further, That such sums shall be available for direct loan obligations and loan 

guaranty commitments incurred or made during fiscal years [2012, 2013, and 2014] 2013, 2014, 

and 2015: Provided further, That funds so obligated in fiscal year [2012] 2013 remain available 

for disbursement through [2020] 2021, funds obligated in fiscal year [2013] 2014 remain 

available for disbursement through [2021] 2022, and funds obligated in fiscal year [2014] 2015

remain available for disbursement through [2022] 2023: Provided further, That notwithstanding 

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

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

22 
23 

Provided further, That funds made available pursuant to the authority of the previous proviso 

shall be subject to the regular notification procedures of the Committees on Appropriations. In 

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

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

credit and insurance programs in the Overseas Private Investment Corporation Noncredit 

Account and merged with said account. 

Transfer Authorities (General Provisions)

Whenever the President determines that it is in furtherance of the purposes of the Foreign 

Assistance Act of 1961, up to a total of $20,000,000 of the funds appropriated under title III of 

this Act may be transferred to, and merged with, funds appropriated by this Act for the Overseas 

Private Investment Corporation Program Account, to be subject to the terms and conditions of 

that account: Provided, That such funds shall not be available for administrative expenses of the 

Overseas Private Investment Corporation: Provided further, That designated funding levels in 

this Act shall not be transferred pursuant to this section. 

Export Financing Transfer Authorities

Sec [7009] 7008(b) 

(b) EXPORT FINANCING TRANSFER AUTHORITIES. Not to exceed 5 percent of any 

appropriation other than for administrative expenses made available for fiscal year [2012] 2013, 

for programs under title VI of this Act may be transferred between such appropriations for use 

for any of the purposes, programs, and activities for which the funds in such receiving account 

may be used, but no such appropriation, except as otherwise specifically provided, shall be 

increased by more than 25 percent by any such transfer: Provided, That the exercise of such 

authority shall be subject to the regular notification procedures of the Committees on 

Appropriations. 
Appendix B: Development Matrix

EXPANDED DEVELOPMENT IMPACT MATRIX (XDIP) 

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

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

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

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

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

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

objectively quantify its expected contribution to host-country development. 

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

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

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

economic development within the host country. 

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

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

leveraging, social effects, infrastructure improvements, macroeconomic and 

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

projects demonstrate these additional developmental benefits depends significantly 

on the features of a given project. 

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

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

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

investments. 

A project must score at least 50 on the matrix to be considered developmental and clearly 

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

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

across all business lines. 

 

24 
FINANCIAL SERVICES DEVELOPMENT IMPACT MATRIX (finDIP) 

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

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

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

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

finDIP matrix consists of four Core Development Indicators, six Supplemental 

Development Indicators, and a GNP Per Capita Indicator: 

o The four Core Development Indicators are financial instrument 

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

governance. 

o The six Supplemental Development Indicators are sustainability, economic 

diversification, macroeconomic and institutional impacts, corporate social 

responsibility, human capital improvements, and transfer of technology and 

knowledge. 

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

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

countries. 

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

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

to 49 is Minimally Developmental, 50 to 99 is Developmental, and 100 to 160 is Highly 

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

supporting projects in which the development score falls below 50, unless the project 

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

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

financial services development matrix is presented in the annual Policy Reports. 

 

25 
FY 2012 CHANGES TO THE XDIP AND finDIP 

In FY 2012, OPIC will implement revisions to both the XDIP and finDIP matrices in order 

to: 

o Harmonize XDIP and finDIP indicators with other development finance 

institutions’ development impact measures. 

o Integrate lessons learned from the application of the development matrix over the 

last decade. 

o Improve customer service by decreasing application completion times and 

streamline internal processes. 

Continuing current practices, the XDIP and finDIP matrices will be utilized to assess, 

monitor, and evaluate every proposed and operational OPIC project. Incorporating data 

patterns gathered over the past decade of implementing OPIC’s current development 

impact scoring methodology, the revised matrices will eliminate highly correlated 

indicators and emphasize data driven indicators with statistically-sound scoring 

breakpoints that best reflect the agency’s mission as a development finance institution. 

Spread across five broad categories (Jobs/Human Capacity Building; Demonstration 

Effect; Host Country Impact; Environmental and Social Impact; Development Reach), 

these 12 indicators represent more than a 50 percent decrease in the number of indicators 

utilized in previous XDIP and finDIP versions. This matrix revision process and 

consequential decrease in indicators has catalyzed a simultaneous agency-wide revision of 

its forms, which once submitted and approved by OMB, will significantly decrease the 

amount of time prospective and current OPIC clients spend on paperwork. 

As a part of the FY2012 XDIP and finDIP revision, the maximum achievable score will 

change from 160 to 100 and OPIC internal performance targets will be adjusted to reflect 

these changes. Established breakpoints in the current XDIP and finDIP that differentiate 

between a developmental and a highly developmental rating will be applied to the FY 2012 

XDIP and finDIP to reflect the revised scoring system. 

 

26 
27 

Appendix C: Sources Cited  

1. "Fact Sheet: U.S. Global Development Policy." 

The White House. 22 Sept. 2010. Web. 30 Aug. 2011. <http://www.whitehouse.gov/the-pressoffice/2010/09/22/fact-sheet-us-global-development-policy>.Organization for Economic Co-operation and 

Development. OECD. Web. 30 Aug. 2011. <http://stats.oecd.org/Index.aspx?DatasetCode=TABLE>. 

<http://unctadstat.unctad.org/TableViewer/tableView.aspx?ReportId=88>. 

2. Organization of Economic Co-operation and Development. OECD. The Role of the Private Sector in the 

Context of Aid Effectiveness. OECD. Web. 30 Aug. 2011. 

<http://www.oecd.org/document/38/0,3746,en_2649_3236398_45675430_1_1_1_1,00.html, 

http://www.oecd.org/dataoecd/39/35/48156055.pdf>. 

3. United Nations. Conference on Trade and Development. Department of Stats. Web. 30 Aug. 2011. 

<http://unctadstat.unctad.org/TableViewer/tableView.aspx?ReportId=88>. 

4. United Nations. United Nations Conference on Trade and Development. World Investment Report 2011. 26 

July 2011. Web. 

5. United States. Pew Center. The Clean Energy Economy. The Pew Center, 10 June 2009. Web. 

<http://www.pewcenteronthestates.org/uploadedFiles/Clean_Economy_Report_Web.pdf>. 

6. United States. The Brookings Institution. Sizing the Clean Economy: A National and Regional Green Jobs 

Assessment. Brookings, 13 July 2011. Web. 30 Aug. 2011. 

<http://www.brookings.edu/reports/2011/0713_clean_economy.aspx>.