WWW.OPIC.GOV 1

table of conte

3 Introductio

7 Opening the world to small busi

9 reaching out to partners and customers worldwi

11 leveraging resources to expand access to capit

13 bringing africa into the global eco

15 Encouraging Peace Through inves

in the middle ea

16 investment activ

21 OPIC Countries an

23 FINANCIAL s
2 OPIC 2008 ANNUAL
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Investing in a bett

OPIC, the Overseas Private Investment Corporation,

U.S. government agency created specifically to support U.S. private sec

investment in the developing world.

OPIC exists because most overseas development is in fact funded not 

international aid, but by American capital, foreign investment and trade. But fo

projects in some parts of the world, private capital can be difficult to obtain or is 

simply unavailable.

That is where OPIC comes in. OPIC promotes U.S. private overseas in

by making direct loans, issuing loan guaranties and underwriting political risk 

insurance for developmental projects, or by investing in private equity funds 

established to finance projects in specific regions, markets or sectors. Through

its innovative financial products and services, OPIC helps U.S. businesses of

sizes to compete overseas, fosters economic development in new and emerging 

markets, complements the private sector in managing risks associated with 

foreign direct investment and mobilizes the U.S. private sector to advance U

foreign policy and development initiatives.

More importantly, OPIC-supported projects make real and measurable differences

their host countries. They expand economic opportunity, which can be the foundation

for hope and peace. They encourage the development of democratic institutions

and free market reforms, which in turn promote political stability. And they improve

the quality of life for local populations, because of OPIC’s requirement that projec

adhere to international standards on the environment and worker rights.

OPIC projects make a difference here in the U.S. by increasing American exp

strengthening our economy and generating employment. Since its founding in

1971, OPIC has funded, guaranteed or insured more than $180 billion worth 

investments. And because OPIC charges market-based fees for its products, 

agency operates on a self-sustaining basis at no net expense to the American

taxpayer and with no loss of U.S. job

Building on this history of results both at home and abroad, OPIC reac

important milestones in 2008.

Fulfilling its mandate to direct investment to financially-underserved or strategicallyimportant regions and nations, OPIC announced over $200 million in supp

for socially- and environmentally-responsible investments across the African
4 OPIC 2008 ANNUAL

continent, and nearly $150 million in new financing or insurance for projects and 

initiatives throughout the greater Middle East

OPIC support for new lending facilities and private equity funds will levera

additional capital flows into Africa’s markets, meeting growing needs for health

care, housing, information technology, small business loans and consumer goods 

and services. In Liberia, in particular, OPIC has risen to support new President 

Johnson-Sirleaf’s strategy of achieving quick and visible progress that reaches

a significant number of the Liberian people and establishes the foundation for

sustained economic development. Governments in the Middle East, recognizi

that privately-funded growth is an engine of sustainable development, are reforming 

investment laws and undertaking privatization programs. Progress in that regard

enabled OPIC in 2008 to announce support for a new public-private facility th

will provide political risk insurance to Palestinian export-related businesses and

local and foreign investors. If coverage from the Palestinian Political Risk Insuran

Project helps insured exporters to grow by only ten percent annually, the program

could facilitate more than $400 million in exports from Palestinian businesses

Helping developing nations make the transition to free market economies is a

work in progress in a continually changing world. Responding to the dynamic

environment in which the agency operates — with services now available in more 

than 150 countries worldwide — OPIC continues to seek and develop innovati

ways to make investment capital more accessible to U.S. businesses and thei

overseas partners.

For example, an OPIC guaranty to the Calvert Social Investment Found

which was finalized in February 2008, is helping to change the way American

earn investment returns while making socially responsible investments. OPIC

guaranty will enable Calvert Foundation to sell up to $143 million of its Calve

Community Investment Notes on MicroPlace and through other Cal

Foundation sales channels. MicroPlace is an eBay subsidiary that provides

online microfinance investment marketplace where socially conscious investors 

can make an impact on global poverty. Calvert Foundation will use the proceed

of Calvert Community Investment Notes sold on MicroPlace to make loan

microfinance institutions, whose clients have typically lacked the same access to 

capital as those of larger and more established borrowers.
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As a repeatable investment model that takes advantage of online technology,

this project leverages OPIC’s financing to great effect — contributing to anoth

ongoing OPIC objective: maximizing outreach to new markets, partners, investo

and potential customers of the agency’s services.

OPIC understands that it is not enough that the agency provide innovative financi

products, services and support to increase U.S. private investment in developin

overseas markets. OPIC must also increase international trade opportunities f

small businesses and especially women- and minority-owned enterprises, and 

must actively reach out to these prospective clients, projects and partners.

Only through continual, aggressive outreach to the U.S. business communi

can OPIC increase awareness — and thereby utilization — of its diverse financi

products. International investment conferences, U.S. regional workshops, oneon-one meetings, an information-rich web site and promotional partnerships wit

organizations both here and abroad are just a few of the ways OPIC reached o

to the world in 2008 to increase access to opportunity.

OPIC also recognizes that sound development supports both economic grow

and environmental sustainability. In 2008, OPIC’s Small and Medium Fi

Department implemented an outreach program that resulted in the agency’s

consideration of more than 100 proposals for support of projects totaling $2 

billion in every conceivable sub-sector of renewable energy and sustainable 

development, including biomass, waste-to-energy, solar, hydro, geothermal, wind, 

reforestation, water purification, green housing, clean fuels and more. OPIC loo

forward to enlarging its portfolio of renewable energy projects and partnering with 

investors to support long term sustainable development in emerging markets.

OPIC’s mission grows more important every year, as every day, in every region 

the globe, we see new examples of the transformative role of private investment 

and economic development. To demonstrate the difference that OPIC contin

to make for U.S. businesses, their overseas partners and host countries, thi

year’s Annual Report not only describes new projects and funds that receive

OPIC support in 2008, but updates the progress, success and results of projec

initiated earlier in the decade.

As expressed through support for these projects and others, past and present,

too numerous to include, OPIC’s developmental mission represents the best 

what the American people — and American business — can bring to nation

striving to realize their full potential by expanding economic opportunity.

OPENING THE WORLD TO SMALL BUSINESS 

BEYOND ITS BROAD MANDATE to support the investment of U.S. private 

capital and skills in the economic and social development of less-developed 

countries, OPIC recognizes the importance of increasing the participation of U.S. 

small business in developing markets overseas. Not only does this help small 

businesses grow, it often provides the fastest transfer of new ideas, innovative 

technology and best practices to developing markets. 

Such is the case with one U.S. small business that received OPIC financing to 

help provide 25 year-lease purchase financing for low-income housing in Central 

America. The company will enter into agreements with builders in each country to 

develop houses costing homebuyers an average of $10,300, including land and 

services. The company will cooperate with major employers in each market to 

facilitate homebuyer education and affordable lease payment plans. 

OPIC political risk insurance supported a Galifomia small business, which 

supplied the Pakistan Ministry of Defense with 300 Gamow Mountain Bag portable 

hyperbaric chambers - medical devices used in treating altitude sickness. This 

will help support an investment in a country where visible economic progress is 

critical to maintaining political stability. 

In Turkey, a U.S. small business will use an OPIC loan to expand and equip an 

existing bottling plant, more than doubling its production capacity for home/office 

delivery of bottled water - from 1,500 bottles per hour to 4,000. 

WWW.OPIC.GOV 7 

* 

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

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

WWW.OPIC.GOV 9

Reaching out to partners and c

U.S. businesses that want to invest overseas can only avail themsel

of OPIC’s programs, products and services by first knowing they exist. That

why reaching out to bring the agency’s message to prospective customers and 

partners is an important part of OPIC’s missi

The agency’s outreach efforts in 2008 included

attracting more than 250 participants from 23 countries to Access to 

Opportunity in the Middle East, a three-day OPIC investment conference 

Jordan.

continuing the highly successful series of Expanding Horizons workshops 

designed specifically to inform women and minority business owners of 

overseas investment support available from OPIC and other governme

agencies, and to provide valuable contacts toward fulfilling their international 

aspirations.

welcoming Wambia Capital, as an originator of both loans and political ris

insurance, to the growing list of Enterprise Development Network partne

assisting OPIC in reaching out to U.S. small businesses

signing a new agreement with ProInversión Perú, the investment promotion 

agency of Peru, which will help increase awareness of OPIC support 

projects in that country.

WWW.OPIC.GOV 11

Leveraging resources to expan

OPIC remains committed to expanding access to capital in emer

markets, especially for small and medium-sized enterprises. Whether from difficulty

in attracting foreign direct investment or a lack of domestic lending capacity, 

economic growth in these nations is inhibited by gaps in access to investment 

capital.

OPIC works to close those gaps with innovative solutions to leverage investment 

areas where the private sector alone cannot fully meet demand. OPIC’s investme

funds program, in particular, is now a major catalyst for providing equity capital to 

emerging markets, supporting over 40 funds that have invested almost $4 billion 

in more than 400 private enterprises in 53 developing countries. Equally important,

OPIC investment funds have demonstrated that significant returns on investme

can be realized in emerging markets anywhere. This generates a multiplier effect

for OPIC’s support, as new capital attracts additional investment and financing 

the targeted markets, nations and regions.

This commitment continued with the announcement of several new investment

funds in 2008. Reflecting its commitment to support environmentally-friendly

investment, OPIC announced it will provide up to $505 million in financing 

the agency’s first funds designed to invest in renewable and sustainable energy 

projects. Three new Latin American funds will also receive up to $350 million 

OPIC guaranteed financing to help to leverage more investment by providing t

region’s businesses with forms of capital currently in short supply.

And in 2008, the OPIC-sponsored Southeast Europe Equity Fund II 

important investment in the health care system in Albania, with financial support

to American Hospital. The U.S. company operates the leading private hosp

in Albania, delivering the highest standard of care in cardiac surgery, diagnostic

imaging, hemodialysis, ophthalmology and organ transplants.

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Bringing Africa into t

One of OPIC’s top priorities is to increase the flow of foreign direct investme

to support economic development throughout Africa

To that end, OPIC in 2008 provided $294,000 in additional political risk insura

to help the International Rescue Committee (IRC) carry out its humanitarian 

programs in the Central African Republic to improve health care, provide cle

water and sanitation, and offer education for children and adolescents. The new

coverage in 2008 expanded a successful relationship that began in 2005 with 

OPIC’s offer of $5 million in insurance for IRC humanitarian efforts not onl

African nations, but in 21 countries worldwide

To generate even wider impact than what is achieved through the direct support for

individual projects such as these, OPIC announced up to $250 million in financi

to help South African banks expand their small business lending, and more tha

$635 million in support for new investment funds that could leverage nearly 

double that amount for investments in every region of the continent. These funds

will encourage the growth of sectors critical to Africa’s ongoing development,

including natural resources, energy, manufacturing, agriculture, transportation, 

telecommunications, education and consumer goods. Several of the funds will

also work to strengthen Africa’s capital markets, considered the final frontier of

the continent’s economic development.

In Liberia, a company named for a local term meaning “all of us” is using

OPIC political risk insurance to support the nation’s continuing reconstructi

following the 1989-2003 civil war. Nearly $1 million in OPIC coverage will ena

Kwaplah International Liberia, Inc., to rent vehicles and equipment to the Liberia

government, non-governmental organizations, and development institutions. The

project is a tangible down payment on the vision articulated by President Elle

Johnson-Sirleaf, who told the nation in her 2006 inaugural address that “we have

the potential to promote a healthy economy in which Liberians and international

investors can prosper.”

*

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

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

WWW.OPIC.GOV 17

Africa and the Middle 

Algeria

Financial Intermediary Générale Assurance Méditerranéenne Private insurance company Investment Funds

Central African Republi

International Rescue Committee, Inc. International Rescue Committee Humanitarian services and activities $294,387 Insurance

Cote d’Ivoi

Financial Intermediary Planor Capital International Ltd. Wireless telecommunications Investment Funds

East Afric

Financial Intermediary The East Africa Marine System (TEAMS) Deep sea fiber-optic cable Investment Funds 

Financial Intermediary Wananchi Group Integrated cable and ISP solutions Investment Funds

Ira

Baltimore Dredges, LLC Ministry of Water Resources Dredging equipment $190,881 Insurance 

Baltimore Dredges, LLC Ministry of Water Resources Dredging equipment $432,675 Insurance 

Iraq Middle Market Development Foundation Iraq Middle Market Development Foundation Support SME and agricultural loans $10,000,000 Finance

Liquid Waste Technology LLC Ministry of Water Resources Dredging equipment $84,576 Insurance

Jordan

Relief International Relief International Branch Office Economic development activities $78,545 Insurance

Kenya

Citi Institutional Clients Group Faulu Kenya* Expansion of microfinance loan portfolio $4,555,100 Finance

Citi Institutional Clients Group K-Rep Bank* Expansion of microfinance loan portfolio $7,221,500 Finance

Financial Intermediary Equity Bank Limited Commercial bank Investment Funds

Lebano

Citi Institutional Clients Group Bank Audi Sal-Audi Saradar Group* Expansion of SME and regional housing portfolios $30,000,000 Finance 

Relief International Relief International Branch Office Economic development activities $78,545 Insurance

Liberi

Kwaplah International Trading Co., Inc. Kwaplah International, Inc. Distribution center $1,656,000 Insurance

Tusk Capital Inc. Cellcom Telecommunications Inc. Loan to expand affiliate cellcom Guinea S.A. $10,000,000 Finance

Nigeri

Financial Intermediary First City Monument Bank plc Universal banking operation Investment Funds

Financial Intermediary Helios Towers Mauritius Holdings Limited Telecommunications towers Investment Funds

South Afric

AIG Capital Partners, Inc. Blue Financial Services Limited (WBC) Expansion of mortgage lending to $9,750,000 Finance 

low-income individuals 

Financial Intermediary Blue Financial Services Limited Micro-lending Investment Funds

Financial Intermediary Brandcorp Distributor of niche industrial and retail products Investment Funds

Financial Intermediary House of Busby Retailer and wholesaler of apparel, accessories Investment Funds 

and related products

2008 Investment Act

*Downstream transactions committed under framework agreements entered into during prior fiscal years.

US Sponsor / Insured Investor Project Name Project Description
18 OPIC 2008 ANNUAL

Financial Intermediary TiAuto Retailer and distributor of wheels and tires Investment Funds

International Housing Solutions South Africa Workforce Housing Fund Private equity fund $80,000,000 Investment Funds

Tunisi

Financial Intermediary Société d’Articles Hygiéniques Production of personal care products Investment Funds

Uganda

Citi Institutional Clients Group Uganda Finance Trust* Expansion of microfinance loan portfolio $1,166,550 Finance

West Africa

Financial Intermediary Cellcom Telecommunications Ltd. GSM mobile telecommunications services Investment Funds

Africa and the Middle East Regiona

Capital Trust Group EuroMENA Fund II, L.P. Private equity investment fund $100,000,000 Investment Funds

East Africa Capital Partners Management, LP Africa Telecommunications, Media Closed-end investment fund $50,000,000 Investment Funds 

and Technology Fund LLC 

Financial Intermediary Africatel B.V. Telecommunications company Investment Funds

Asia and the Paci

Afghanistan

Bangladesh

Citi Institutional Clients Group BRAC* Expansion of microfinance loan portfolio $16,665,000 Finance

Indi

Citi Institutional Clients Group SKS Microfinance Private Ltd.* Expansion of microfinance loan portfolio $16,665,000 Finance

Financial Intermediary Nilgiri’s Dairy Farm Chain of franchised convenience stores Investment Funds

Financial Intermediary Paras Pharmaceuticals Health and personal care products Investment Funds

Pakistan

CHF International Tameer Microfinance Bank Limited Microfinance lending and liquidity management $5,000,000 Finance

Hyperbaric Technologies, Inc. Directorate General Procurement Portable hyperbaric chambers $27,630 Insurance

South Kore

Genworth Mortgage Insurance Corp Genworth Mortgage Insurance Corp - Korea Mortgage insurance $5,000,000 Insurance

Sri Lan

Financial Intermediary Ceylon Oxygen Limited Industrial and medical gas manufacturing Investment Funds

Relief International Relief International Branch Office Economic development activities $78,545 Insurance

Steadfast Insurance Company MaTH Hydro Power (Pvt) Limited Hydroelectric power $1,402,922 Insurance

*Downstream transactions committed under framework agreements entered into during prior fiscal years.

US Sponsor / Insured Investor Project Name Project Description

*

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

(FAT AA) of 2016; including the health and security of implementing partners, as well as national interest of the United States. 
WWW.OPIC.GOV 19

Europe and

Albania

Financial Intermediary Abcom s.a.r.l. Cable television and broadband business Investment Funds

Financial Intermediary Univers-Alb s.a.r.l. (aka American Hospital) Health care businesses Investment Funds

Azerbaijan

Financial Services Volunteer Corps (“FSVC”) Rabitabank OJSC (WBC) Expansion of SME loan portfolio $4,875,000 Finance

Kazakhstan

Financial Intermediary Caspian Services Inc. Oil and gas exploration services Investment Funds

National City Bank ATF Bank JSC* Expansion of SME loan portfolio $30,000,000 Finance

National City Bank Bank Center Credit JSC* Expansion of consumer loan portfolio $30,000,000 Finance

Kosovo

Financial Intermediary Kujtesa Max s.a.r.l. Cable television and broadband business Investment Funds

Moldova

NCH Property Associates, LLC ICS Prime Capital SRL (WBC) Expansion of residential mortgage $9,750,000 Finance 

lending operations

Romani

Citi Institutional Clients Group Opportunity Microcredit Romania (“OMRO”)* Expansion of microfinance loan portfolio $2,721,950 Finance

Financial Intermediary Hiperdia S.A. Diagnostic health care services Investment Funds

Russi

Citi Institutional Clients Group CJSC Forus Bank* Expansion of microfinance loan portfolio $3,888,500 Finance

Financial Intermediary Far East Shipping Company (FESCO) Multimodal container transportation and logistics Investment Funds

Firebird Management, LLC Sotsyalniy Gorodskoy Bank (WBC) Expansion of SME loan portfolio $9,750,000 Finance 

National City Bank Roseurobank* Expansion of SME lending program $20,000,000 Finance 

National City Bank Transcapital Bank JSC* Expansion of SME lending and retail loan portfolios $15,000,000 Finance

Russia Partners Management LLC Independent Leasing, LLC (WBC) Expansion of equipment leasing operations $9,750,000 Finance

Arkady Starikovsky Zao Aires (WBC) Expansion of SME lending and retail loan portfolios $2,340,000 Finance

Turke

Taha Selcuk Disli Kaynak Sulari Ve Turizm A.S. (WBC) Expand bottled natural spring water $9,750,000 Finance 

production facility 

Wachovia Bank National Association Bankpozitif Kredit Ve Kalkinam Bankasi* Expansion of residential mortgage portfolio $7,000,000 Finance

Wachovia Bank National Association Sekerbank A.S.* Expansion of microfinance and SME portfolio $10,000,000 Finance

*Downstream transactions committed under framework agreements entered into during prior fiscal years.

US Sponsor / Insured Investor Project Name Project Description
20 OPIC 2008 ANNUAL

Latin America and the

Brazil 

National City Bank Banco Pine S.A.* Expansion of retail loan portfolio $15,880,000 Finance 

National City Bank Banco Pine Loan $4,120,000 Insurance 

Wachovia Bank National Association Banco Fibra, S.A.* Expansion of consumer loan portfolio $20,000,000 Finance

Costa Ric

Citi Institutional Clients Group Banca Promerica, S.A.* Expansion of SME and mortgage lending $14,000,000 Finance 

Citi Institutional Clients Group Grupo M Holding S.A.* Expansion of consumer financing portfolio $15,000,000 Finance 

of retail business 

Roberto Zamora Llanes Banco Lafise, S.A. (Tranche 3) Expand low income mortgage financing $15,000,000 Finance

Ecuado

Citi Institutional Clients Group Banco Procredit Ecuador* Expansion of portfolio of microfinance lending $15,000,000 Finance

Guatemala

Ace Hardware Corporation Nuevos Almacenes S.A. D/B/A/ Expansion of Ace Hardware retail operation $9,750,000 Finance 

CEMACO (WBC)

Hondura

Citi Institutional Clients Group Organizacion de Desarollo Expansion of microfinance loan portfolio $2,721,950 Finance 

Empresarial Femenino* 

Clark Realty Capital, LLC Inter-Mac International, Inc. Construction and sale/lease of $70,000,000 Finance 

low income housing units 

Colite Outdoor, LCC Colite Honduras, SA Outdoor advertising/billboard leasing $2,880,000 Insurance

Mexico 

MBIA Insurance Corporation Red Carreteras de Occidente, S. de RL DE CV Concession to operate and maintain $400,000,000 Finance 

four existing toll roads 

Wells Fargo HSBC Trade Bank, N.A. Andrew and Williamson Fresh Produce Expansion of agricultural operations $5,000,000 Finance

Nicaragua

Roberto J. Zamora Banco de Credito Centroamericano, S.A. Expand low-income mortgages for $7,000,000 Finance 

Hurricane Felix relief

Paraguay 

Citi Institutional Clients Group Banco Regional, S.A.* Expansion of loan portfolio to local SMEs $11,250,000 Finance 

Citi Institutional Clients Group BBVA Paraguay S.A.* Expansion of loan portfolio to local SMEs $30,000,000 Finance 

Citi Institutional Clients Group Interbanco S.A.* Expansion of loan portfolio to local SME’s $30,000,000 Finance

Peru

Wachovia Bank National Association Banco Financiero del Peru, S.A.* Expansion of SME loan portfolio $10,000,000 Finance 

Wachovia Bank National Association Banco Interamericano de Finanzas, S.A.* Expansion of residential mortgage portfolio $10,000,000 Finance

Latin America and the Caribbean Region

Alsis Funds, LLC Alsis Latin America Fund, L.P. Investment fund targeting affordable housing $100,000,000 Investment Funds 

and other assets 

Financial Intermediary Columbus Communications Inc. Telecommunication and broadband provider Investment Funds 

*Downstream transactions committed under framework agreements entered into during prior fiscal years.

US Sponsor / Insured Investor Project Name Project Description 
WWW.OPIC.GOV 21

OPIC services encourage U.S. private investment in some 150 countries and areas around the world, contributin

economic growth at home and abroad.

OPIC services are generally available in the countries and areas listed on the following pages. From time to ti

statutory and policy constraints may limit the availability of OPIC services in certain countries, or countries whe

services were previously unavailable may become eligible. Investors are urged to contact OPIC directly or check t

website: www.opic.gov/doingbusiness/ourwork/index.asp for up-to-date information regarding the availability of O

services in specific countries, as well as information on the availability of OPIC services in countries not list

(As of September 30, 2008)

OPIC Countries and

Africa and 

middle eas

Algeri

Angol

Bahrai

Beni

Botswan

Burkina Fa

Burund

Cameroo

Cape Ver

Central African Repub

Cha

Cong

Congo, Democrati

Republic o

Côte d’Ivoir

Djibout

Egyp

Equatorial Guin

Eritre

Ethiopi

Gabo

Gambi

Ghan

Guine

Guinea-Biss

Iraq

Israel

Jordan

Kenya

Kuwait

Lebano

Lesoth

Liberi

Madagasca

Malaw

Mal

Mauritani

Mauritiu

Morocc

Mozambiqu

Namibi

Nige

Nigeri

Oma

Rwand

São Tomé and Prínc

Senega

Sierra Leo

Somali

South Afri

Swazilan

Tanzani

Tog

Tunisi

Ugand

West Bank and G

Yeme

Zambia

Zimbabwe
22 OPIC 2008 ANNUAL

Asia and the 

Afghanistan

Banglades

Cambodi

Cook Island

Fij

India

Indonesia

Kiribati

Lao

Malaysi

Marshall Island

Micronesia, Federate

States o

Mongoli

Nepa

Pakista

Pala

Papua New Gui

Philippine

Samo

Singapor

South Kore

Sri Lan

Taiwa

Thailan

Timor-Les

Tong

Vietna

Europe

Eur

Albani

Armeni

Azerbaija

Bosnia and Herzegovi

Bulgari

Croati

Cypru

Czech Republ

Estoni

Georgi

Greec

Hungar

Ireland

Kazakhstan

Kosovo

Kyrgyzstan 

Latvi

Lithuani

Macedoni

Malt

Moldov

Montenegr

Northern Irelan

Polan

Portuga

Romani

Russi

Serbi

Slovaki

Sloveni

Tajikista

Turke

Turkmenista

Ukrain

Uzbekista

Latin Americ

the caribb

Anguill

Antigua and Barbu

Argentin

Arub

Bahama

Barbado

Beliz

Bolivi

Brazi

Chil

Colombi

Costa Ri

Dominic

Dominican Republ

Ecuado

El Salvad

French Guia

Grenad

Guatemal

Guyan

Hait

Hondura

Jamaica

Mexic

Netherlands Antill

Nicaragu

Panam

Paragua

Per

Saint Kitts and Nev

Saint Luc

Saint Vincent and th

Grenadine

Surinam

Trinidad and Toba

Turks and Caic

Urugua
WWW.OPIC.GOV 23

KPMG LLP 

2001 M S ree NW 

Washing on DC 20036 

KPMG LLP, a U S limited liability partnersh p, 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, 2008 and 2007, 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 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, 2008 and 2007, and 

the results of 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 13, 

2008, on our consideration of 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 13, 2008 
24 OPIC 2008 ANNUAL

Assets 2008 2007

Fund Balance with U.S. Treasury (notes 2 and 4) $ 554,818 $ 838,364

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

 (notes 2 and 7) 4,767,168 4,543,310

Direct loans outstanding, net (notes 2 and 10) 617,356 641,123

Accounts receivable resulting from investment guaranties, net

 (notes 2 and 11) 56,786 66,698

Assets acquired in insurance claims settlements, net (notes 2 and 11) 65,355 89,063

Guaranty Receivable (notes 2 and 18) 152,485 168,482

Accrued interest and fees and other 22,734 29,162

Furniture, equipment and leasehold improvements at cost less 

 accumulated depreciation and amortization of $14,263 in FY2008 

 and $13,899 in FY2007 (note 2) 2,399 2,031

Total assets 6,239,101 6,378,233

Liabilities, Capital, and Retained Earn

Liabilities:

 Reserve for political risk insurance (note 9) 300,000 315,000

 Reserve for investment guaranties (note 10) 625,291 486,304

 Accounts payable and accrued expenses 5,572 5,524

 Guaranty liability (notes 2 and 18) 152,485 168,482

 Customer deposits and deferred income 37,145 42,535

 Borrowings from U.S. Treasury, and related interest (note 6) 861,286 793,544

 Unearned premiums 12,600 13,327

 Deferred rent & rent incentives from lessor of $4,449 and

 $3,827 net of accumulated amortization of $1,357 and 

 $1,004 in FY2008 and FY2007 (note 14) 3,092 2,822

Total liabilities 1,997,471 1,827,538

Contingent liabilities (notes 2 and 17)

Capital and retained earnings:

 Contributed capital 50,000 50,000

 Credit funding (note 5) 115,765 109,641

 Interagency transfers (note 2) 19,499 11,472

 Retained earnings and reserves:

 Insurance (notes 9 and 12) 1,049,510 1,321,128

 Guaranty (notes 10 and 12) 3,006,856 3,058,454

4,241,630 4,550,695

Total liabilities, capital, and retained earnings $ 6,239,101 $ 6,378,233

BALA

Overseas Private Investment Corporation—September 30, 2008 and 2007 ($ in thousands)

See accompanying notes to financial statements.
WWW.OPIC.GOV 25

STAE

Overseas Private Investment Corporation—Years ended September 30, 2008 and 2007 ($ in thousands)

Revenues 2008 200

Political risk insurance premiums and fees (note 9) $ 18,770 $ 25,274 

Investment financing interest and fees 184,495 183,925 

Interest on finance program deposits 21,855 44,608 

Other operating income 1 4 

Interest on U.S. Treasury securities 220,231 212,225 

Total revenues 445,352 466,036 

Expense

Provisions for reserves:

 Political risk insurance (notes 2 and 9) (15,169) 4,060 

 Investment financing (notes 2, 10 and 11) 197,334 (106,589)

Salaries and benefits (note 15) 27,470 26,858 

Rent, communications and utilities (note 14) 7,361 6,882 

Contractual services 13,001 18,907 

Travel 3,202 2,580 

Interest on borrowings from U.S. Treasury (note 6) 43,669 45,940 

Depreciation and amortization (note 2) 364 537 

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

Other general and administrative expenses 1,619 1,568 

Total expenses 278,851 5,205 

Net income $ 166,501 $ 460,831

See accompanying notes to financial statements.
26 OPIC 2008 ANNUAL

STAEMENTS OF 

Overseas Private Investment Corporation—Years ended September 30, 2008 and 2007 ($ in thousands)

See accompanying notes to financial statements.

Equity reserve

Contributed

capital

Credit

funding

Interagency

transfers

Insurance

(notes 9 

and 12)

Guaranty 

(notes 10 

and 12)

Retained

earnings Tota

Balance, September 30, 2006 $ 50,000 $ 123,257 $ 5,810 $ 1,337,167 $ 2,779,373 $ — $ 4,295,60

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 $ — $ 4,550,69

Net income — — — (250,091) 416,592 — 166,501

Return credit funding to U.S. Treasury — (3,700) — — (552,259) — (555,959)

Credit funding received from:

 Accumulated earnings — 52,000 — (23,500) — (28,500) —

 Credit appropriations — 70,393 — — — — 70,393

Credit funding used — (112,569) — — 84,069 28,500 —

Interagency transfers — — 8,027 1,973 — — 10,000

Balance, September 30, 2008 $ 50,000 $ 115,765 $ 19,499 $ 1,049,510 $ 3,006,856 $ — $ 4,241,63
WWW.OPIC.GOV 27

STAEME

Overseas Private Investment Corporation—Years ended September 30, 2008 and 2007 ($ in thousands)

See accompanying notes to financial statements.

2008 2007

Cash flows from operating activities:

 Net income $ 166,501 $ 460,831

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

 Provisions for:

 Political risk insurance (15,169) 4,060

 Investment financing 197,334 (106,589)

 Amortization of premiums on U.S. securities 7,663 9,437

 Accretion of discounts on U.S. securities (14,460) (13,546)

 Amortization of deferred rent and rental incentives 248 (579)

 Increase in rent incentives 21 42

 Depreciation and amortization 364 537

 Write-down of internally developed software — 4,462

 (Increase) decrease in operating assets:

 Accrued interest and fees 10,573 (5,432)

 Guaranty receivable 15,995 (1,148)

 Assets acquired in insurance claims settlements (1,980) —

 Recoveries on assets acquired in insurance claims settlements 25,858 28,503

 Assets acquired in finance claims settlements (51,455) (172,045)

 Recoveries on assets acquired in finance claims settlements 12,364 224,249

 Increase (decrease) in operating liabilities:

 Accounts payable and accrued expenses 48 159

 Customer deposits and deferred income (5,390) (6,271)

 Guaranty liability (15,995) 1,148

 Unearned premiums (727) 1,361

 Insurance claim payments — (75)

Cash provided by operating activities 331,793 429,104

Cash flows from investing activities: 

 Sale and maturity of U.S. Treasury securities 1,013,194 741,603

 Purchase of U.S. Treasury securities (1,234,400) (938,286)

 Repayment of direct loans 92,051 58,675

 Disbursement of direct loans (77,628) (126,796)

 Acquisition of furniture and equipment (732) (90)

Cash used in investing activities (207,515) (264,894)

Cash flows from financing activities:

 Return credit funding to U.S. Treasury (555,959) (336,458)

 Interagency transfers 10,000 15,371

 Credit appropriations 70,393 115,344

 Credit reform borrowings from U.S. Treasury 67,742 5,288

Cash used in financing activities (407,824) (200,455)

Net decrease in cash (283,546) (36,245)

Fund balance with U.S. Treasury at beginning of year 838,364 874,609

Fund balance with U.S. Treasury at end of year $ 554,818 $ 838,364 
28 OPIC 2008 ANNUAL

(1) Statement of Corpo

The Overseas Private Investment Corporation (OPIC) is a self-sustaining U.S. Government corporation created under t

Assistance Act of 1961 (FAA), as amended. OPIC facilit

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 t

(2) Summary of Significa

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 St

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

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. Tr

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

of the Statement of Cash Flows, fund balance with U.S. Tre

is considered cash.

Investment in U.S. Treasury Securities: By statute, OPIC is authorized to invest funds derived from fees and other revenues rela

to its insurance and preinvestment programs in U.S. Treasury securities. Investments are carried at face value, net of unamortiz

discount or premium, and are held to maturity. OPIC has the ability and intent to hold its investments until maturity or until t

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 inconvertibili

claims when an insured foreign enterprise is unable to convert 

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

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

equivalent is recorded and revalued annually until the foreign currency is utilized by OPIC or other agencies of the United St

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

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 a

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. Th

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 incurr

but not yet reported.

FASB Interpretation No. 45: In November 2002 the Financial Accounting Standards Board (FASB ) issued Interpretatio

Guarantor’s Accounting and Disclosure Requirements for GuaranOverseas Private Investmen

Financial Statemen

September 30, 2008 and 200
WWW.OPIC.GOV 29

ties, Including Indirect Guaranties of Indebtedness of Others (F

45). FIN 45 requires that upon issuance of a guaranty, the guarantor must disclose and recognize a liability for the fair value of th

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, 200.  OPIC’s in

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 fr

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 fr

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

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 Finan

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

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 rep

as they would be if OPIC were not a government corporatio

Furthermore, in accordance with international agreements relating to its programs, as well as internal U.S. Government operat

procedures, foreign currency acquired by OPIC can be used f

U.S. Government expenses. This facility constitutes an additio

means, which would otherwise be unavailable, by which O

can recover U.S. dollars with respect to its insurance and investment financing program

(4) Fund Balance with U

OPIC is restricted in its uses of certain cash balances, as described below. The fund balance with U.S. Treasury as of September 30, 2008 and 2007 consists of the following (dol

thousands):

2008 2007

Restricted

Pre-Credit reform   7 3

Credit reform 544,549 806,52

Interagency fund transfers 1 1

Unrestricted 10,261 31,49

Total $554,818 838,36

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 inves

financing activity subject to the Act. With the advent of Cred

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

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 2008 and 2007, OPIC transferred $625,

$13.6 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 th

balances except for undisbursed credit funding. 
30 OPIC 2008 ANNUAL

(5) Credit Fu

OPIC’s finance activities are subject to the Federal Credit Reform Act of 1990, which was implemented as of October 1

Credit Reform requires agencies to estimate the long-term cos

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 for 2008 is available for three year.  Prior

2008, OPIC’s credit funding was available for two years. In addition, the Act requires the administrative costs related to its cre

program to be displayed.

In fiscal year 2008, OPIC’s appropriations legislation authoriz

the corporation to use $23.5 million of its accumulated earnings 

to cover the future costs of credit transactions committed in fiscal 

years 2008 through 2010. In fiscal year 2007, OPIC was authorized to use $20.1 million to cover commitments in fiscal yea

2007 and 2008. In addition to the credit funding allocated directly 

to OPIC through the appropriations process, OPIC has recei

total of $67 million in net transfers from other agencies to be used 

exclusively to finance projects in the New Independent State

(NIS)

The following table shows the status of funding for credit activities

(dollars in thousands):

2008 2007

Balance carried forward $109,641 123,25

Upward reestimates 70,393 115,34

Transferred from earnings 52,000 45,33

Expired credit funding (3,700) (14,671

Credit funding used (112,569) (159,619

Credit funding remaining $115,765 109,64

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 withOMB guidelin

OPIC reestimates subsidy costs for each group of loans and guaranties obligated in a given fiscal year to account for those changing factor.  Reestimates that result in increases to subsidy co

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. Treasur.  OPIC incurred increased subsidy costs of $70.4 million and $115.3 million and decreases in subsidy costs of $504.9 million and $

million in fiscal years 2008 and 2007, respectively. 

(6) Borrowings From 

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

Treasury. Borrowings for Credit Reform financings totaled $25

million in 2008 and $242.7 million in 2007, all of which have been 

disbursed. OPIC paid a total of $43.7 million and $45.9 million 

interest to the U.S. Treasury during fiscal years 2008 and 200

respectively. Repayments of borrowings from the U.S. Treas

totaled $190.7 million in 2008 and $237.7 million in 2007. Future

payments for borrowing outstanding at September 30, 2008 are

as follows (dollars in thousands):

Payment due in:

Fiscal year 2009 $ 15,18

Fiscal year 2010 13,66

Fiscal year 2011 75,14

Fiscal year 2012 50,94

Fiscal year 2013 37,84

Thereafter 668,50

Total $861,28

(7) Investment in U.S. Treasu

The composition of investments and related receivables at

September 30, 2008 and 2007 is as follows (dollars in thousands)

2008 2007

Investments, amortized cost $4,718,986 4,490,983

Interest receivable 48,182 52,327

Total $4,767,168 4,543,31

The amortized cost and estimated fair value of investments in

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

Gross Gross Gross 

amortized unrealized unrealized Estimat

cost gains losses fair value

At Septembe

30, 2008 $4,718,986 293,977 (207) 5,012,756

At Septembe

30, 2007 $4,490,983 176,573 (5,968) 4,661,588

At September 30, 2008, the securities held had an interest rang

of 2% to 10.6% and a maturity period from one month to almost 

20 years.
WWW.OPIC.GOV 31

OPIC holds its securities to maturity. The amortized cost and estimated fair value of U.S. Treasury securities at Septem

2008, by contractual maturity, are shown below (dollars in thousands):

 Amortized Estima

cost fair value

Due in one year or less $1,083,390 1,097,77

Due after one year through five years 2,590,506 2,689,64

Due after five years through 10 years 678,320 767,73

Due after 10 years 366,770 457,60

Total $4,718,986 5,012,75

(8)  Statutory Limitations on t

Insurance and F

OPIC issues insurance and financing under a single limit for bo

programs, currently $29 billion, fixed by statute in the FAA.

September 30, 2008, OPIC’s insurance and finance progr

have collectively utilized $11.3 billion.

(9) Political Risk In

Insurance revenues include the following components for the 

years ended September 30 (dollars in thousands)

2008 2007

Polital risk insurance premiums $19,633 21,85

Miscellaneous insurance income (863) 3,42

Total insurance revenue $18,770 25,27

OPIC’s capital, allowance, retained earnings, and reserves available for insurance at September 30, 2008 and 2007 totaled $

billion and $1.7 billion, respectively. Charges against retained

earnings could arise from (A) outstanding political risk insurance

contracts, (B) pending claims under insurance contracts, and

guaranties issued in settlement of claims arising under insurance 

contracts. 

(a) Political Risk Insuran

OPIC insures investments for up to 20 years against thr

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 paym

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 p

up to the single highest coverage amount is further reduced 

by stop-loss and risk-sharing agreements. Finally, losses on

insurance claims may be reduced by recoveries by O

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 Septemb

2008 and 2007 was $2.9 billion and $3.4 billion, respectively. 

This amount is OPIC’s estimate of maximum exposure to insurance claims, which includes standby coverage for wh

OPIC is committed but not currently at ris. A more realistic measure of OPIC’s actual exposure to insurance 

is the sum of each single highest “current” coverage for all 

contracts in force, or Current Exposure to Claims (

OPICs CEC at September 30, 2008 and 2007 was $2.2 billion and $2.4 billion, respec

(b) Pending Claim

At both September 30, 2008 and 2007 OPIC had no mate

pending insurance claims. In addition to requiring formal 

applications for claimed compensation, OPIC’s contrac

generally require investors to notify OPIC promptly of ho
32 OPIC 2008 ANNUAL

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 t

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

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

that might arise from these situations are factored into the 

reserves for political risk insurance.

Changes in the reserve for political risk insurance during fiscal

years 2008 and 2007 were as follows (dollars in thousands):

 2008 2007

Beginning Balance $315,000 315,0

Amounts charged off ____ (75

Increase (decrease) in provisions (15,169) 4,060

Transfers from other reserves 169 (3,985

Ending balance $300,000 315,00

(10) Investment Fin

OPIC is authorized to provide investment financing to projec

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 

projects, and as such, sponsors need not pledge their own general credit beyond the required project completion period.

Investment funds use direct loans and investment guaranties to 

support the creation and capitalization of investment funds that 

make direct equity and equity-related investments in new, expanding, or privatizing companies in emerging market economies. 

The fund managers, selected by OPIC, are experienced, priv

investment professionals. OPIC’s participation in a fund takes t

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

be applied only to the debt portion of the fund’s capital and, for 

certain funds, to accrued interest on that debt. OPIC does n

guaranty any of the fund’s equity, and all equity investments in 

OPIC-backed funds are fully at ri

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 Ac

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 accumulati

of earnings or collection of fees. In fiscal years 2008 and 2007, 

$23.5 million and $20.1 million was made available for credit 

funding costs. OPIC is in compliance with all relevant limitatio

and credit funding appropriations guidance. OPIC’s capital, allowances, retained earnings, and reserves available for claims 

its investment financing at September 30, 2008 and 2007 totaled

$3.8 billion and $3.7 billion, respectively.

Direct Loans: Direct loans are made for projects in developi

and other eligible countries involving U.S. small business or cooperatives, on terms and conditions established by OPIC. Direct loan exposure at September 30, 2008 totaled $1.2 bi

of which $766 million was outstanding. Direct loan exposure at

September 30, 2007 totaled $1.3 billion, of which $794 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 $147.7 million 

at September 30, 2008 and $179.1 million at September 30, 2007

If interest income had been accrued on those loans, it would have 

approximated $3.5 million during fiscal year 2008 and $4.7 million 

during fiscal year 2007. Interest collected on delinquent loans and 

recorded as income when received amounted to $6.9 million and 

$7.1 million for fiscal years 2008 and 2007, respectively.

Direct loans outstanding were as follows (dollars in thousands)

2008 2007

Direct loans outstanding $765,748 794,27

Allowance for uncollectible loans (148,392) (153,151

Direct loans outstanding, net $617,356 641,12

Changes in the allowance for uncollect ble loans during fiscal

years 2008 and 2007 were as follows (dollars in thousands):

2008 2007

Beginning Balance $153,151 133,3

Amounts charged off (13,077) (3,085

Recoveries 163 4

Increase in provisions 9,344 22,498

Provision for capitalized interest (1,189) 36

Ending balance $148,392 153,15
WWW.OPIC.GOV 33

Investment Guaranties: OPIC’s investment guaranty covers 

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

guaranty, OPIC makes payments of principal and interest to t

lender. These payments are recorded as accounts receivable resulting from investment guaranties. The loans that are guarantee

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 

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 poss ble nonperformance by borrowers under terms of the contracts.

OPIC’s exposure to credit risk under investment guaranties, including claim-related assets, was $7.2 billion at September 

2008, of which $4.8 billion was outstanding. Of the $7.2 billion

of exposure, $5.5 billion was related to project finance and $1.7 

billion was related to investment fund guarantees. Of the $4.8 billion outstanding, $4.2 billion related to project finance and $600

million related to investment fund guaranties. Included in the $1.7 

billion of investment fund exposure is $299 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

liable for principal outstanding and interest accrued on disbursed 

investment funds. At September 30, 2008, $43 million of the $29

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, 2007, OPIC’s exposure to credit risk under investment guaranties, including claim-related assets, was $6.5 billion, of which $4.2 billion was outstanding. Of the $6.5 billi

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

liable for principal outstanding and interest accrued on disbursed 

investment funds. At September 30, 2007, $56 million of the $20

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 2008 and 2007 were as follows (dollars in thousands):

2008 2007

Beginning Balance $486,304 620,0

Amounts charged off (51,455) (20,833

Recoveries ____ 4,75

Increase (decrease) in provisions 190,442 (117,617)

Ending balance $625,291 486,30

Mindful that uncertainty in the global economy and volatility in

world financial markets can affect loan repayments, it is O

policy to regularly review reserve adequacy. Accordingly, to provide for potential future impact to the portfolio OPIC set aside

additional prudential reserve in fiscal year 2008. This reserve is

reflected in the above $190 million “Increase in provisions”.

(11)  Accounts Receivable from Investment Guaranties and Assets Ac

Settlements (Claim-Related Asse

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 p

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):

2008 2007

Accounts receivable resulting from

investment guaranties $70,949 83,175

Allowance for doubtful recoveries (14,163) (16,477

Accounts receivable, net $56,786 66,69

Changes in the allowance for doubtful recoveries for assets resulting from investment guaranties during fiscal years 2008 and

2007 were as follows (dollars in thousands):
34 OPIC 2008 ANNUAL

2008 2007

Beginning Balance $16,477 25,2

Decrease in provisions (2,452) (11,469

Recoveries 138 2,73

Ending balance $14,163 16,47

Assets acquired in insurance claims settlements were as follows

(dollars in thousands):

2008 2007

Assets acquired in insurance

claims settlements $69,378 93,255

Allowance for doubtful recoveries (4,023) (4,192

Accounts receivable, net $65,355 89,06

Changes in the allowance for doubtful recoveries for assets acquired in insurance claims settlements during fiscal years 2008

and 2007 were as follows (dollars in thousands):

2008 2007

Beginning Balance $4,192 21,1

Amounts charged off ____ (20,928

Increase (decrease) in provisions (169) 3,985

Ending balance $4,023 4,19

(12) Reserves and Full Faith an

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

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 th

These amounts may be increased by transfers from retained earnings or by appropriations. In fiscal years 2008 and 2007, OPI

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 abso

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 t

United States of America is pledged for full payment. At September 30, 2008 and 2007, the Insurance Reserve totaled $1 bi

and $1.3 billion, and the Guaranty Reserve totaled $3 billion an

$3.1 billion, respectively. Should funds in OPIC’s reserves not

sufficient to discharge obligations arising under insurance, and if 

OPIC exceeds its $100 million borrowing authority authorized 

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

Act of 1990 authorizes permanent, indefinite appropriations and

borrowings from the U.S. Treasury, as appropriate, to carry out a

obligations resulting from the investment financing program. 

(13)  Disclosures About Fair

Instrumen

The estimated values of each class of financial instrument for

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

2008 are as follows (dollars in thousands):

Carrying Fai

 Amount Val

Financial assets

Cash $ 554,818 554,81

U.S. Treasury securities 4,718,986 5,012,

Interest receivable on securities 48,182 48,182

Direct loans 617,356 617,35

Accounts receivable from

investment guaranties 56,786 56,786

Assets acquired in insurance

claims settlements 65,355 65,355

Financial liabilities

Borrowings from the U.S. Treas    861,86  904

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 

restricted to direct transactions with the U.S. Treasur.  Intere

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 
WWW.OPIC.GOV 35

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.

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

from the U.S. Treasury is estimated based on the face value 

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

borrowings were required by the Federal Credit Reform Act, 

repayment terms are fixed by the U.S. Treasury in accordan

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 

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 va

future fees expected to be collected.

(14) Operating L

OPIC negotiated a new building lease during fiscal year 200

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

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 fiscal years 2008 and 2007 was approximately

$3.8 million and $4.5 million, respectively. Minimum future rental

payments under the 15-year lease at 1100 New York Avenu

N.W. are approximately $4.3 million annually, with additional adjustments tied to the consumer price index

(15) Pension

OPIC’s permanent employees are covered by the Civil Ser

Retirement System (CSRS) or the Federal Employee Re

System (FERS). For CSRS, OPIC withheld 7.0% o

gross 2008 earnings and contributed 7.0% of employees’ 2008 

gross earnings. The sums were transferred to the Civil Servi

Retirement Fund from which this employee group will receive retirement benefits

For FERS, OPIC withheld 0.80% of employees’ gross ea

OPIC transferred this sum to te FERS fund from which the employee group will receive retirement benefits. An addition

of the ERS employees’ gross earnings is withheld, and that, p

matching contributions by OPIC, are sent to the Social Secu

System from which theFERS employee group will receive so

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 a

matched by OP

FERS nd CSRS employees may elect to participate in th

Savings Plan (TSP). In January 2006the TSP contributions

were eliminated and now both SRS nd FERS employ

elect to contribute up to $15,500, the IRS elective deferral limi

for the tax year. ERS employees receive an automatic 1% contribution from OPIC. Amounts withhld for FERS em

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

Although OPIC funds a portion of employee pension benef

under the CSRS, the FERS, and the TSP, and makes

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 availa

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

the Federal Retirement Thrift Investment Board, which adminis

these plans. Data regarding theCSRSand FERS actuarial

value of accumulated benefits, assets available for benefits, and 

unfunded pension liability are not allocated to individual departments and agencies.

 (16) Concentration 

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 loa

With respect to political risk insurance, OPIC insures against currency inconvertibility, expropriation of assets, and political violence. Additionally, OPIC provides investment financing 

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 

recoverable value of the collateral pledged to OPIC varies fr

transaction to transaction and may include tangible assets, cash 
36 OPIC 2008 ANNUAL

collateral or equivalents, and/or a pledge of shares in the project company as well as personal and corporate guaranties. O

takes all necessary steps to protect its position in such collateral 

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

such action becomes necessary.

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

September 30, 2008 and 2007 (dollars in thousands)

2008

Unused 

 Total Outstanding commitmen

Guaranties $7,081,511 4,731,719 2,349,79

Undisbursed direct loans 453,076 — 453,07

Insurance 2,921,905 2,245,473 676,432

2007

Unused 

 Total Outstanding commitmen

Guaranties $6,439,356 4,075,153 2,364,20

Undisbursed direct loans 532,736 — 532,73

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

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

breakdown of such total commitments at September 30, 2008 by

major geographical area (dollars in thousands): 

Undisbursed 

 Loan portion 

guaranties direct loans Insurance

Africa $ 949,869 88,847 510,63

Asia 340,997 116,106 502,39

Europe 766,682 5,500 105,29

Latin America 2,521,836 128,420 855,6

Middle East 1,147,056 32,237 610,7

NIS (New Independent States) 1,094,819 51,382 352

Worldwide 260,252 30,584 

Insurance stop-loss adjustment — — (15,183)

$7,081,511 453,076 2,921,905

OPIC has several client-specific contracts with stop-loss limi

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 und

these contracts.

At September 30, 2008, OPIC’s largest finance and insurance exposure was in the following countries and sectors (dollars in thousa

Country  Sec

Russia $972,192 Financial services $4,786,

Mexico 732,892 Power generation 1,654,

Nigeria 581,303 Oil and gas services 1,573,

Turkey 523,628 Transportation 707,

Colombia 419,896 Manufacturing 650,

(17) Other Conting

OPIC is currently involved in certain legal claims and has receiv

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 OPI

(18)  Accounting and Disclos

Guarant

In Y 2008 an FY 2007 pursuant to the requirement of FI

OPIC recognized a guaranty liability and a guaranty fee receivab

of $152.5 million and $168.5 million, respectively. OPIC collect

$51 million and $39.2 million of guaranty fees in Y 2008 an

FY 2007, respectively, on the investment guaranties issued sinc

December 31, 2002

(19) Writedown of Internally Deve

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 AS 144, Accounting for Impairment or Disposal 

Long-lived Assets.

(20) Statutory Co

OPIC’s enabling statute stipulates both operating and financi

requirements with which OPIC must comply. In management

opinion, OPIC is in compliance with all such requiremen