Report of the

OVERSEAS PRIVATE INVESTMENT CORPORATION

ANNUAL POLICY REPORT

FISCAL YEAR 2012

Submitted Pursuant to

Section 240A of the

Foreign Assistance Act of 1961,

As Amended

August, 2013
OPIC ANNUAL POLICY REPORT – Fiscal Year 2012

OPIC Annual Policy Report 2012 i

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OPIC ANNUAL POLICY REPORT – Fiscal Year 2012

OPIC Annual Policy Report 2012 ii

TABLE OF CONTENTS

TABLE OF CONTENTS..........................................................................................................II

EXECUTIVE SUMMARY........................................................................................................III

I. OPIC IN FISCAL YEAR 2012........................................................................................... 1

Fiscal Year Overview................................................................................................. 1

US Economic Effects ................................................................................................. 3

OPIC Impact in Fiscal Year 2012............................................................................... 5

II. HOST COUNTRY DEVELOPMENT IMPACTS ..................................................................... 10

Host Country Development Impacts ........................................................................ 10

III. ENVIRONMENTAL, HEALTH, SAFETY & SOCIAL IMPACTS ............................................... 13

Fiscal Year 2012 New Initiatives.............................................................................. 13

Project Screening and Assessment ......................................................................... 13

Mitigating Climate Change....................................................................................... 16

Fiscal Year 2012 Reporting ..................................................................................... 17

IV. LABOR AND HUMAN RIGHTS....................................................................................... 18

Project Screening and Assessment ......................................................................... 18

Human Rights .......................................................................................................... 19

V. MONITORING OF ACTIVE PROJECTS ............................................................................. 20

Overview.................................................................................................................. 20

Compliance with OPIC Conditions and Covenants.................................................. 21

Site Monitoring......................................................................................................... 22

Self-Monitoring......................................................................................................... 26

VI. EXHIBITS................................................................................................................... 29

Exhibit 1:* US Employment and Associated Effects of OPIC-Supported Projects ... 30

Exhibit 2:* Destination of Sales to Third Party Markets of OPIC Supported Projects 

Fiscal Year 2012 (Projections)................................................................................. 31

Exhibit 3:* US Employment Effects and Host Country Location of OPIC................. 33

Exhibit 4: Methodology for Calculating US Employment Effects ............................. 34

Exhibit 5: OPIC’s Revised Development Matrix Explained ..................................... 35

Exhibit 6: OPIC’s Greenhouse Gas Policy and Current Inventory........................... 36

Exhibit 7: OPIC Site Monitoring Methodology ......................................................... 40
OPIC ANNUAL POLICY REPORT – Fiscal Year 2012

OPIC Annual Policy Report 2012 iii

EXECUTIVE SUMMARY

The Overseas Private Investment Corporation (OPIC) is the U.S. Government’s development finance 

institution. The agency’s core mission is to mobilize private capital to help solve critical development 

challenges and in doing so, advances U.S. foreign policy.

OPIC has long been a leader among international financial institutions in creating and applying high 

standards that advance long-term sustainable development, thoroughly reviewing and regularly 

monitoring the projects it supports. This report offers a summary of the impact of OPIC’s work in Fiscal 

Year 2012, both in the United States and in developing and emerging markets around the world.

OPIC’s activities in Fiscal Year 2012

In FY12, OPIC committed new financing and/or political risk insurance for 120 new projects located in 42 

countries and seven regions around the world. These included 79 finance projects, 23 investment fund 

subprojects, and 18 insurance projects for a total investment value (OPIC and other investors) of $5.4 

billion.

Regions

OPIC works throughout the developing world and 

emerging markets. In FY12, 27% of new projects were in 

Latin America, 22% in Sub-Saharan Africa, 20% in Asia, 

and 19% in the Middle East and North Africa (MENA) 

region.

Key Sectors

OPIC continues its strong focus on investment in 

renewable resources. OPIC supported 19 new projects in the renewable resources sector, including 

renewable energy, clean water, and sustainable agriculture. Together, the projects OPIC supported in 

FY12 will help avoid the emission of 349,000 tons of CO2eq per year, and contribute to the generation of 

200 megawatts of renewable energy each year.

The financial services sector – which includes microfinance and lending to micro, small and medium-sized 

enterprises (MSMEs) – accounted for 51% of new projects in FY12. These projects encourage bank 

lending to MSMEs, increasing access to credit in developing countries, which encourages personal 

savings, entrepreneurial activity, and use of technology to foster greater innovation and improved 

productivity. Supporting MSMEs also helps to create jobs and a critical path out of poverty.

Impact on US business

As in past years, none of the projects supported in FY12 are expected to result in the loss of any US jobs. 

In fact, these projects are expected to support 650 US jobs and procurement of an estimated $224 million 

in US goods and services over the next five years. 

OPIC also supports US small businesses directly and indirectly. Eighty-eight of the 120 projects (73%) 

OPIC supported in FY12 were in direct partnership with US small businesses. In addition, the 120 new 

project OPIC supported in FY12 are expected to procure $37 million in goods and services from US small 

businesses located in 14 states and the District of Columbia. 

Investing in Sub-Saharan Africa can 

have a positive impact in the United 

States. A little more than half of the 

US job creation that is projected from 

the new projects that OPIC supported 

in FY12 comes from investments in 

Sub-Saharan Africa. 
OPIC ANNUAL POLICY REPORT – Fiscal Year 2012

OPIC Annual Policy Report 2012 iv

Host country impact 

Job creation is the biggest developmental impact OPIC-supported projects have in the countries in which 

OPIC operates. New projects supported by OPIC in FY12 are expected to directly generate 11,000 host 

country jobs over five years, about two-thirds of which are expected to be skilled or managerial positions.

By region, that includes:

 4,800 new jobs in Asia1 in addition to the 71,000 local jobs that OPIC’s current portfolio supports;

 3,200 new jobs in Sub-Saharan Africa in addition to the 26,000 local jobs already supported;

 1,300 new jobs in Latin America in addition to the 36,000 local jobs already supported; and 

 800 new jobs in MENA in addition to the 21,000 local jobs supported by OPIC’s existing portfolio.

OPIC-supported projects also have important indirect job creation impacts. Seventy-six percent of 

OPIC’s financial services clients in FY12 reported that they support MSMEs in their portfolios, providing 

an important driver for job creation and economic growth in developing and emerging economies. Over 

90% of OPIC-supported financial services projects reach underserved populations including women and 

the poor, and over half lend in rural areas.

OPIC also measures its impact through increased local purchasing by the projects it supports; 68%

percent of OPIC clients in FY12 reported that they procured locally, injecting an estimated $3 billion in 

additional spending into local economies. 

Environmental and social impact

To support OPIC’s strong and growing portfolio in renewable energy, and to help OPIC clients meet 

international best practices in this key sector, in FY12 OPIC created Renewable Energy Guidelines for 

solar, wind, biofuel, and geothermal projects. These guidelines will also help expedite project review by 

highlighting significant environmental and social issues that are generally associated with each type of 

renewable project, and help clients build stronger and more sustainable projects.

OPIC has committed to reducing the direct green house gas (GHG) emissions associated with projects in 

its active portfolio as of June 30, 2008 by 30% over a ten-year period and by 50% over a 15-year period. 

Since 2008, GHG emissions generated by OPIC-supported projects have been cut by 34%, putting OPIC 

on track to meet its 15-year target.

Labor and human rights

OPIC works to ensure that the projects it supports respect human rights, including workers rights. All of 

the 120 new projects OPIC supported in FY12 were screened and determined to be able to meet 

international best practices in worker rights protection.

Project Monitoring 

OPIC monitors the policy compliance and development impact of every active project from inception to 

conclusion with detailed annual self-monitoring questionnaires (SMQ) and selective on-site monitoring. In 

FY12, OPIC reviewed almost 320 SMQs and conducted on-site monitoring of 32 active projects. OPIC 

also introduced a new more user-friendly, web-based SMQ form, in order to reduce client reporting 

burden and improve reporting data quality. 

 

1 Asia includes East and Southeast Asia, South Asia, and West and Central Asia.
OPIC Annual Policy Report 2012 1

Latin America

27%

Middle East 

and North 

Africa

Multi-country 19%

Commitments

5%

South Asia

8%

Southeast 

Europe

7%

Sub-Saharan 

Africa

22%

West & 

Central Asia

9%

East & South 

East Asia

3%

Figure 2

Regional Distribution of FY2012 Projects

I. OPIC IN FISCAL YEAR 2012

Fiscal Year Overview

In FY12, OPIC supported 120 new projects in 42 countries and seven regions for a total 

investment value of $5.4 billion.

In FY12, OPIC committed new market-based 

financing and political risk insurance for 120

new projects2 located in 42 countries and 

seven regions for a total investment value 

(OPIC and other investors) of $5.4 billion. In 

addition to OPIC’s and other US private 

funding, 17% of this $5.4 billion total project 

funding will come from within the host 

countries, 7% from third countries,3 and 2%

from multilateral development institutions (See

Figure 1). 

OPIC offers its clients project financing and

guarantees, political risk insurance, and loan

guarantees to private equity investment funds. 

In FY12, the 120 new projects included:

 79 finance projects

 23 investment fund subprojects; and

 18 insurance projects.

OPIC-supported projects target emerging markets around the globe

In FY12, new OPIC projects were 

regionally balanced throughout the 

developing world and emerging 

markets. Latin America received the 

highest share of the number of new 

projects (27%), followed by SubSaharan Africa (22%), Asia (20%) and 

Middle East & North Africa (19%) (See 

Figure 2).

 

2The project count includes new finance and insurance projects that have not been previously reported to Congress, as well as

downstream investments made by OPIC-supported investment funds and framework agreements. 

3 “Third countries” refers to countries that are neither the U.S. nor the country where the project is located.

United States 

(including 

OPIC)

74%

Host Country

17%

Multilateral 

Institutions

2%

Third 

Country

7%

Figure 1

Source of FY12 Project Investment
OPIC Annual Policy Report 2012 2

Agriculture

4%

Communication

5%

Construction

16%

Energy*

8%

Financial 

Services

51%

Manufacturing 

& 

Mining

5%

Transportation

2%

Other Services

9%

Figure 3

Sectoral Distribution of FY12 Projects

In FY12, OPIC supported projects across a broad range of sectors.

Figure 3 shows the sector breakdown of new projects OPIC supported in FY12. Projects in the financial 

services sector, which includes, for example, microfinance support, small and medium enterprise 

financing as well as leasing, accounted for 51% of all new OPIC-supported projects in FY12, followed by 

construction (16%), other services (9%), energy4 (8%), manufacturing & mining (5%), communication 

(5%), agriculture (4%), and transportation (2%). 

Financial services can be broken down into support for Small and Medium Enterprises (SMEs) (38%);

microfinance (25%); those that combine support for micro, small, and medium-sized enterprises (MSMEs) 

(11%); mortgage financing/real estate rental (11%); and others (15%) such as projects with multiple 

financing uses, leasing, and health care financing. About three-quarters of the projects in financial 

services were committed to supporting MSMEs. Providing MSMEs access to credit will enable these 

companies to grow, creating jobs and raising standards of living.

 

4 Ninety percent of the energy projects OPIC committed to in FY12 were renewable energy projects.

Mortgage 

Financing/Real 

Estate Rental

11%

MSME

11%

Microfinance

25%

SME on-lending

38%

Others

15%
OPIC Annual Policy Report 2012 3

US Economic Effects

None of the FY12 projects are expected to result in the loss of any US jobs. In fact, FY12 

projects are expected to support 650 US jobs over the next five years.

OPIC-supported projects are carefully screened for their effect on employment in the United States. 

OPIC does not invest in projects that would harm the U.S. economy or result in the loss of U.S. jobs.

OPIC collects and analyzes the projected U.S. employment and associated economic effects of the 

projects that it supports, based on the projects’ projected procurement from the United States. Consistent 

with previous years, none of the FY12 projects are expected to result in the loss of U.S. jobs. In fact, 

OPIC-supported projects in FY12 are expected to support 650 US jobs over the next five years.5

FY12 OPIC-supported projects will provide other important economic benefits to the United States.

 OPIC-supported projects are

projected to result in an estimated 

$211 million in US exports of 

capital goods and services through 

initial procurement. 

 The value of US materials and 

equipment required for the 

continued operations of OPICsupported projects is estimated at 

an additional $224 million over the 

next five years. 

 As a result of this level of initial 

and operational procurement from 

the United States, FY12 projects 

are expected to support an 

estimated 3,250 person-years of 

direct and indirect employment for 

U.S. workers. This is equivalent to 

an estimated 650 US jobs over a 

five-year period. 

 The impact of FY12 projects on 

the US trade balance over the first 

five years of operations is 

expected to be a positive $361

million.

Exhibits 1-3 to this report provide detailed information on OPIC-supported projects and their impact on the 

US economy through procurement and support of US employment. Exhibit 1 provides details of the 

OPIC-supported projects in FY12 by sector, including agribusiness, energy, manufacturing & mining, and 

services. Using these four sector classifications, the chart provides data on the project markets – host 

country, U.S., and third country6 – in which revenue will be generated for new OPIC-supported projects in 

 

5 The US employment impact is generated using projected procurement data provided by investors. For a detailed description of

 the methodology used to calculate the US employment effects of OPIC-supported projects from initial and operational

 procurement, please refer to Exhibit 4.

6 “Third country” refers to any country that is neither the U.S. nor the country where the project is located.

Table 1

Estimated US Economic Benefits of

FY12 Projects Supported by OPIC

Total project investment $5.4 billion

 US investment in projects $4.0 billion

 US percent of total 74%

Total direct US exports $435 million

 Initial procurement from U.S. $211 million

 Operational procurement

 (5 years) $224 million

Estimated US employment supported

(5 years, direct and indirect) 3,250 person-years

 650 U.S. jobs
OPIC Annual Policy Report 2012 4

FY12, and what the projected US procurement amount – both initial and operational – is by sector, as 

well as the effect on US employment and trade balance. 

Exhibit 2 details the revenues generated by third-country sales from all OPIC-supported projects in FY12, 

classified by sector. Projects are grouped according to their impact on US employment – projects having 

a positive US employment impact, and projects with a neutral US impact. Exhibit 3 describes projected 

US employment effects by sector and by host country location of OPIC-supported projects.

OPIC directly and indirectly supports US small businesses

Seventy-three percent of OPIC’s new projects in FY12 had significant involvement by US 

small businesses.

OPIC recognizes the importance of small businesses as a key driver of US economic growth, and actively 

seeks to partner with these firms to enable their expansion into developing markets. OPIC supports US 

small businesses directly, through direct loans, investment guarantees, and political risk insurance. Over 

the last five years, OPIC committed $5.5 billion in finance and insurance to more than 370 US small 

businesses to support new projects in developing countries around the globe.

OPIC’s efforts to reach out to US small businesses continued to yield positive results in FY12. OPIC 

supported 88 new projects that involved US small businesses, representing 73% of all new projects 

supported in FY12: 

 43 small businesses received OPIC investment guarantees directly or through investment funds or 

financial intermediaries;

 28 small businesses received direct loans from OPIC; 

 17 small businesses received OPIC political risk insurance coverage;

 4 of the new OPIC insurance and finance projects in FY12 supported women-and/or minority-owned 

businesses. 

In addition, new FY12 projects are expected to procure $37 million from US small businesses located in 

14 states and the District of Columbia.

According to the data collected for the fiscal years 1994 through 2012, OPIC has identified specific US 

suppliers for $16.9 billion in expected procurement from OPIC-supported projects. Approximately 55% of 

the identified US suppliers (by number) were US small businesses.
OPIC Annual Policy Report 2012 5

OPIC Impact in Fiscal Year 2012

OPIC supported projects in FY12 had a significant impact in: i) renewable resources; ii) increasing access 

to finance for MSMEs in developing and emerging markets;(iii) investment in the Middle East and North 

Africa; iv) investment in Sub-Sahara Africa; and v) investment in Latin America. 

Renewable Resources

With a commitment volume of $1.6 billion, OPIC 

continues to be a leader in financing renewable 

energy projects in the developing world, where the 

size and complexity of such projects often exceed 

local banks’ capacity to provide financing.

In FY12, 19 of the 120 new OPIC-supported projects 

were in the renewable resources sector, which 

includes energy, water, and agriculture. OPIC’s 

renewable energy projects are expected to help 

avoid the emission of 349,000 tons of CO2eq per year

and generate 200 Megawatts of renewable energy.

OPIC’s intensive focus on renewable resources 

resulted in clean energy projects in markets as 

diverse as Peru, Pakistan, Bulgaria, and South 

Africa. 

Access to Capital

In order to increase access to capital in developing 

and emerging markets, OPIC also supports lending 

through financial intermediaries (FI). The projects 

OPIC finances aim to: 

 Increase credit available to Small- and 

Medium-sized enterprises:

Improved access to capital enables SMEs to 

grow and invest, which stimulates economic 

activity and job creation, resulting in an overall

increase in the standard of living in the 

countries where OPIC operates. 

 Support Microfinance Institutions (MFIs): 

MFIs can be an effective tool for poverty 

reduction as they make financing available to 

underserved segments of the population 

including women and micro-entrepreneurs. 

Support for MFIs helps increase the available 

capital for lending to micro-entrepreneurs and 

can improve terms and lengthen loan tenor. 

SSJD Energy, Pakistan

Pakistan suffers from severe energy 

shortage with energy black-outs from 8-20 

hours a day in most of the country.

SSJD, a Delaware-based U.S. sponsor 

received an OPIC loan commitment for 

$16.7 million to finance the first renewable 

energy biomass plant to supply power to 

the national electric grid in Pakistan. The 

12-MW plant will be built to run mainly on 

bagasse, a waste product from the 

processing of sugar cane, and other 

agricultural waste such as rice husk, cotton 

stalk and cane trash. 

The project will support the local economy 

by providing critical power, generating jobs 

through local procurement, and investing in 

education and healthcare in rural areas. All 

of the biomass will be procured locally,

helping the overall local agricultural sector.

PT Bank Andara, Indonesia 

OPIC is providing a $21.5-million loan via 

Citibank Indonesia to Bank Andara. The 

US sponsors include Washington-based 

Mercy Corps and Connecticut-based 

Developing World Markets. Bank Andara 

will use the funds, which Citibank will lend 

in local currency, to on-lend to local 

microfinance institutions, many of which 

focus specifically on lending to the very 

poor. In addition, through innovative 

technology, Bank Andara is also providing 

basic financial services such as bill 

payments, money transfers, and savings 

accounts to micro entrepreneurs and small 

businesses.
OPIC Annual Policy Report 2012 6

OPIC Impact in MENA

In FY12, OPIC supported 23 new projects in MENA: 

 766 new jobs to be created, 58% of which are 

managerial or technical 

 $360 million in additional local procurement

This is in addition to OPIC's current portfolio in MENA:

 supporting 21,000 local jobs 

 86% of women employed are in a managerial / 

technical position 

 Develop the local financial sector:

The demand for OPIC support for 

financial intermediaries reflects the 

relatively underdeveloped nature of 

capital and credit markets in many of 

the countries in which OPIC operates. 

By supporting FIs, OPIC seeks to 

enhance the local financial sector by 

increasing the capital available to lend 

and the types of financial services

available in the market. In addition to 

increased economic activity, increasing 

credit available to businesses 

encourages entrepreneurial activity and 

technology adoption, which in turn 

fosters greater innovation and improved 

productivity.

 Create indirect employment:

According to the International Finance 

Corporation’s 2013 Jobs Study, access 

to finance has both direct and indirect 

employment effects. Directly, increased 

access to finance helps create new 

firms and also allows business to 

expand, leading to increased 

employment. Indirectly, increased 

lending allows businesses to grow and 

increase demand throughout the supply 

chain of its borrowers. 

Middle East and North Africa (MENA)

OPIC continues its work to stimulate private investment in the Middle East and North Africa (MENA), 

helping to promote job creation and economic stability in a region of critical foreign policy priority. OPIC 

finances projects that generate high quality jobs in the MENA region with an emphasis on supporting 

entrepreneurs and SMEs. In FY12, OPIC committed 23 new projects in MENA including support to

improve housing and energy infrastructure, and support to strengthen the local financial sector and 

increase lending to SMEs in the region.

Global Commercial Microfinance Consortium II

In FY12, OPIC demonstrated its commitment to 

the Smart Campaign Client Protection Principles 

and its efforts to promote client-focused microlending, through a $20 million, seven-year OPIC 

investment in the Global Commercial Microfinance 

Consortium II, a global microfinance and impact 

investment facility.

The $100 million facility will provide capital to 

highly customer-focused MFIs that are committed 

to serving the needs of clients by offering products 

appropriate for microenterprises. For example, the

facility will provide technical assistance to portfolio 

MFIs to become certified under the Smart 

Campaign’s Client Protection Principles as well as 

to develop new products.

While OPIC’s loan proceeds will be lent to 

microfinance institutions (MFIs), up to 15% of the 

total capital of the facility may be invested in social 

enterprises providing non-financial services, 

including healthcare, energy, agriculture, 

education and housing to low income populations.
OPIC Annual Policy Report 2012 7

The Atlantic-Erbil, Iraq 

OPIC often operates in post-conflict countries such 

as Iraq and Afghanistan, where economic growth is 

critical to achieving political stability. For example, 

OPIC is helping to address a decades-long housing 

shortage in Iraq with a $26-million loan to support the 

construction of 900 middle-market housing units in 

the Kurdistan region of northern Iraq. The OPIC loan 

to Claremont Erbil, which was formed by three 

principals of the New York real estate developer, the 

Claremont Group, will cover the construction costs 

and provide a 10-year facility to finance the buyers 

under lease purchase agreements. The new housing 

complex will also include both community and 

commercial space and will create local jobs in Iraq.

Sub-Saharan Africa (SSA)

OPIC has greatly increased its activity in Sub-Saharan African (SSA) over the last several years, 

supporting the dramatic business growth on the continent. OPIC finances projects in the region that 

broaden the economic base, further improving macroeconomic conditions of these economies. In FY12, 

OPIC supported projects in various sectors including agriculture, health, and telecommunications. Of the 

11,000 local jobs that will be created by the new projects OPIC supported globally in FY12, nearly onethird will be created in Sub-Saharan Africa. Forty-three percent of these new jobs are projected to be at 

the managerial and technical skill level, underscoring the priority OPIC places on creating high-quality 

jobs. 

And, significantly, investing in Sub-Saharan Africa can have a positive impact in the United States. A little 

more than half of the US job creation that is projected from the new projects that OPIC supported globally 

in FY12 comes from US procurement from investments in Sub-Saharan Africa. 

Riyada Enterprise Development 

Growth Capital Fund 

In FY12 OPIC signed a commitment 

of up to $150 million with the private 

equity group Abraaj Capital to 

support lending to entrepreneurs 

and SMEs in the Middle East and 

North Africa region through the 

Riyada Enterprise Development 

Growth Capital Fund. The Fund will 

provide financing in amounts as 

small as $500,000 to businesses in 

various sectors including 

healthcare, education, financial 

services, and technology. 

Impact in Sub-Saharan Africa

In FY12, OPIC supported 26 new projects in Sub-Saharan Africa: 

 3,200 new jobs to be created in Sub-Saharan Africa

 $943 million in additional local procurement

 $61 million in taxes and other local government transfers

This is in addition to OPIC's current portfolio in Sub-Saharan Africa: 

 supporting 26,000 local jobs

 $563 million in taxes and other local government transfers

 $149 million in support to micro-entrepreneurs

 $813 million in support for SMEs 
OPIC Annual Policy Report 2012 8

Belstar Capital, Ghana

Ghana’s agricultural sector is hampered by low productivity and massive postharvest losses that 

leave nearly two million people struggling to maintain consistent access to safe and nutritious food.

OPIC has committed to provide political risk insurance in support of a $119.5 million capital 

markets financing for a project to modernize the agricultural sector and boost food production in 

Ghana. The project involves the installation of modern silos, grain mills, cold storage and livestock 

breeding facilities and other technical equipment to assist in statistical research and agricultural

monitoring throughout Ghana. The commitment was issued to Belstar Capital Limited, which is 

arranging the project’s financing.

Agriculture comprises more than half of Ghana’s labor force, and this project will create jobs and 

income particularly for the country’s small-scale farmers.

Medical Credit Fund

Sub-Saharan Africa carries a disproportionate amount of the world’s disease burden, yet accounts 

for less than one percent of global health expenditures. A $5.4 million OPIC loan to the Medical 

Credit Fund is focused on enabling small and mid-size health care providers to receive the capital 

they need to improve the quality of medical care they provide. In addition to this loan, OPIC is 

coordinating with USAID on a grant for up to $1 million for the project.

Medical Credit Fund partners with local banks to provide loans to small private healthcare 

providers in Tanzania, Ghana, Kenya and Nigeria, with plans to expand to additional countries in 

Sub-Saharan Africa. Medical Credit Fund also provides technical assistance and financing to 

healthcare providers serving low income populations. The technical assistance focuses on 

improving business planning, financial competence, and patient quality of care under SafeCare, a 

multi-step certification program designed to establish a uniform, measurable standard of care for 

private health facilities in Sub-Saharan Africa.
OPIC Annual Policy Report 2012 9

OPIC Impact in Latin America

In FY12, OPIC supported 33 new projects in Latin America: 

 1,263 new jobs to be created, 56% of which are managerial or 

technical 

 $714 million in additional local procurement

This is in addition to OPIC's current portfolio in Latin America:

 supporting 36,000 local jobs 

 $433 million in taxes and other local government transfers

 $1.5 billion in support to micro-entrepreneurs

 $1.0 billion in support for SMEs

Latin America

In FY12, OPIC committed 33 new projects in Latin America in a number of important sectors including

renewable energy, financial services, education, and housing construction. Fifty-eight percent of these 33 

new projects supported financial intermediaries, which will increase access to capital for small and 

medium-sized businesses in the region. 

Higher Education Finance Fund 

This project seeks to address the 

lack of funding for higher education 

throughout Latin America. OPIC is 

providing a $10-million loan to the 

Higher Education Finance Fund 

and the Calvert Social Investment 

Foundation, Inc. to provide loans 

to microfinance institutions and 

other financial intermediaries, 

which will in turn provide loans for 

higher education to 

underprivileged youth in 

Guatemala, Honduras, Dominican 

Republic, Peru, Bolivia and 

Paraguay.

InterEnergy, Dominican Republic

In the Caribbean, OPIC is supporting the first 

medium-scale, grid-connected wind generation 

project in the Dominican Republic. The OPIC 

supported AIC Caribbean Fund invested in 

InterEnergy for the construction of a 25.2 MW wind 

farm in the south-western province of the island. 

The project will have a strong developmental impact 

on the Dominican Republic by building infrastructure, 

creating local jobs and providing community 

development impacts. The local community of 

Juancho-Los Cocos will also benefit as the company 

will provide free energy to a very poor village in its 

concession area as well as to municipal offices and 

the local law enforcement and fire services. 

TACNA SOLAR S.A.C. AND PANAMERICANA SOLAR, Peru

In 2011, OPIC financed the construction of Peru’s first large-scale solar photovoltaic power project, 

which was named the 2011 “Latin America Renewables Deal of the Year” by Project Finance 

magazine. In announcing the award, the magazine noted that OPIC’s 19-year loan was critical in a 

country that had no track record of utility-scale solar power plants. In 2012, OPIC followed this 

investment by providing a loan for $180 million to finance the construction of two additional 20-

megawatt solar photovoltaic power plants in Peru’s rural south. These power plants help Peru meet 

its growing energy needs with lower carbon alternatives while also supporting the local economy 

through local job creation and procurement from Peruvian businesses.
OPIC Annual Policy Report 2012 10

II. HOST COUNTRY DEVELOPMENT IMPACTS

Host Country Development Impacts

OPIC’s core mission is to mobilize private capital to help solve critical development challenges. OPIC 

selects projects that will serve as foundations for long-term economic growth and provide new products 

and services to developing and 

emerging economies.

The projects supported by 

OPIC in FY12 are expected to

provide significant local 

economic and social benefits. 

The projects are expected to 

directly generate nearly 11,000

jobs in developing countries 

over five years. About 67% of 

these jobs are projected to be 

in skilled - management and 

professional - positions. This 

demonstrates OPIC’s efforts to 

support projects that generate 

high quality jobs in the local 

economies.

The total initial local 

expenditures for FY12 projects 

are projected to be $3.7 billion. 

This procurement of local 

goods and services will further 

support economic activity and 

employment. 

OPIC-supported enterprises 

are expected to generate $117

million annually in taxes and 

duties for the host countries. 

Once in operation, the projects 

are expected to generate an 

estimated $244 million in 

annual export earnings for the 

host countries. 

Table 2

Estimated Developmental Impacts of

Fiscal Year 2012 Projects

Host Country Effects Amount or Number

A. Foreign exchange benefits 1

 Exports generated $244 million

 Imports replaced $29 million

 Total A $273 million

B. Foreign exchange costs 1

 Capital outflows $486 million

 Project imports $210 million

 Total B $696 million

Net foreign exchange impact (A less B) 1 ($423) million

Net annual taxes, revenues and

duties paid to the host country 1 $117 million

Initial local expenditures $3,757 million

Local employment generated in fifth year of operation (# of workers)

 Technical and management 7,289

 Unskilled labor 3,522

 Total 10,811

1 Average annual amount over a 5-year forecast period.

Supporting Host Country Job Creation

Key job facts about the projects OPIC supported in FY12

 11,000 new jobs in 42 countries and 7 regions

 67% of new jobs created are managerial or professional / technical

 4,200 of new jobs created are in healthcare services
OPIC Annual Policy Report 2012 11

HealthPoint Services Global, India

Many villages in India have no source of safe 

drinking water and residents generally cannot afford 

bottled water. In FY12, OPIC committed a $3.5 

million loan to Healthpoint Services Global India Ltd., 

an affiliate of the U.S. company Healthpoint Global 

Services Inc. of New York, to support the 

construction of small water treatment facilities to 

some 500 communities in India’s Punjab and other 

states with limited access to safe drinking water.

As a result of this project, villagers will have a steady 

source of clean drinking water, which they pick up 

from a central distribution point. The project earned

the highest score on OPIC’s development matrix 

among all the projects the agency committed to in 

FY12. 

In addition to providing clear health benefits through 

this critical infrastructure investment in as many as 

500 communities, the project is expected to create 

about 600 permanent jobs with extensive benefits 

such as health care and stock ownership. In addition, 

the purchase of water purification equipment will 

generate additional local economic activity. 

Healthpoint Global Services was also recognized by 

Bloomberg Businessweek as one of America’s Most 

Promising Social Entrepreneurs.

OPIC systematically evaluates the developmental impacts of the projects it supports. 

To measure the benefits of OPIC-supported projects, OPIC uses two developmental assessment models:

one designed to measure the impacts of a physical investment, and one designed to measure the 

impacts of providing support through a financial intermediary.

Since its inception in 1971, OPIC has collected direct and indirect developmental impact data for each of 

its projects. In 2004, OPIC implemented a development impact assessment tool and in 2007 a second 

model was developed that was specifically tailored to assess the development impacts of financial 

services projects. 

In FY11, OPIC conducted an extensive review of these models, including a review of similar matrices in 

use at other development finance institutions and similar efforts under way in the private sector. This 

review resulted in the streamlining and updating of OPIC’s development impact measurement over the 

course of FY12, with full implementation in FY13. 

The new matrices are comprised of the following five broad categories that measure a project’s 

developmental impact, regardless of the project’s industry sector or the host country level of 

development:

 Job Creation and Human Capacity 

Building:, the number of new jobs 

projected as well as training and 

employee benefits that go beyond 

local law. 

 Demonstration Effects: technology 

and knowledge transfer; technical 

assistance to suppliers or 

borrowers; the introduction of new 

products (including financial 

products); the project’s impact on 

regulatory and legal reform; and 

the adoption of internationallyrecognized quality or performance 

standards.

 Host Country Impact: local 

procurement and fiscal and foreign 

exchange impacts. 

 Environmental and Community 

Benefits: improvements to the 

environment and community 

benefits.

 Development Reach: impacts on 

basic infrastructure and/or 

potential benefits to the poor and 

underserved populations. 
OPIC Annual Policy Report 2012 12

IHS Plc, Nigeria, Cameroon, and Cote d'Ivoire

The telecommunications industry in Nigeria, 

Cameroon, and Cote d'Ivoire is booming and the 

demand for upgraded networks and voice lines is 

growing rapidly. To expand the 

telecommunications infrastructure in these 

countries, OPIC is supporting a new investment by 

the ECP Africa Fund III into IHS Holding Limited 

("IHS"), the largest telecommunications 

infrastructure provider in Africa. With the new 

investment, IHS has expanded from 715 towers in 

Nigeria where ECP Africa Fund III initially invested, 

to over 5,000 owned or managed towers in 

Nigeria, Cameroon and Cote d'Ivoire. .

IHS is a leader in the African co-location business, 

owning a shared infrastructure of mobile towers 

and leasing them to mobile network operators.

Tower co-location reduces the incremental cost of 

expanding service for all mobile carriers thereby 

allowing them to service remote and less 

developed areas. The investment will reduce the 

operating costs for mobile operators and allow 

them to increase their coverage across the 

country. This will subsequently reduce the cost of 

mobile usage for subscribers and increase the 

availability of mobile banking services. The project 

was rated highly developmental due to the strong 

job creation impact and training; significant local 

procurement; its strong corporate social 

responsibility efforts; and important physical 

infrastructure upgrades. in low-income countries.

Every proposed project is evaluated and 

scored, with a minimum score required in 

order to be considered developmental and 

clearly eligible for OPIC support. There is a 

higher threshold for a project to be considered 

highly developmental.

Exhibit 5 provides a detailed description of the 

methodologies used for both standard and 

financial intermediary projects.

HealthPoint Services Global and IHS, both 

highlighted here, are two examples of projects 

that were rated highly developmental in FY12, 

or those projects that scored among the 

highest on OPIC’s development impact 

measure. 
OPIC Annual Policy Report 2012 13

III. ENVIRONMENTAL, HEALTH, SAFETY & SOCIAL IMPACTS 

This section reports information related to environmental, health, safety, and social screening and 

assessment, annual greenhouse gas reporting, and active project monitoring. It also summarizes other 

initiatives related to environment and social policy undertaken by OPIC during the previous fiscal year. 

Fiscal Year 2012 New Initiatives 

During FY12, OPIC created Renewable Energy 

Guidelines for solar, wind, biofuel and geothermal 

projects. These guidelines are meant to expedite project 

reviews by highlighting significant environmental and 

social issues that are generally associated with each 

type of renewable project. The guidelines identify 

applicable guidelines and standards, recommended 

measures to mitigate impacts, information required to 

complete the environmental and social review of a 

project, and include monitoring recommendations. 

Additionally, OPIC hired a dedicated Social Impact 

Analyst to assist in the evaluation and monitoring of 

socially sensitive projects and to further develop 

procedures for assessment and monitoring of 

community engagement throughout the project lifecycle.

Project Screening and Assessment

OPIC screens all potential projects to identify the risk of 

adverse environmental and social impacts of a project,

and to identify project impacts that could preclude OPIC 

support. If a project is determined to be categorically 

ineligible,

7 OPIC immediately informs the applicant so 

as to avoid unnecessary effort or expense. If the project 

category is eligible, OPIC classifies the project to 

determine the requirements for documentation, 

disclosure, consultation, reporting and post-commitment

monitoring. Projects may be categorized as A, B, C, or 

D depending on potential risks and impacts of a 

particular project. Category A represents the greatest 

potential for adverse environmental and/or social 

impacts, whereas C represents the least potential for 

adverse impact. Category D is reserved for certain 

projects involving financial intermediaries. 

 

7 Certain types of projects have potential adverse environmental or social impacts that preclude the project from receiving OPIC 

 support. These categorically prohibited projects are listed in Appendix B of the OPIC Environmental and Social Policy Statement.

Santa Catarina Wind Farm, Mexico

OPIC provided an Investment Guaranty to 

Latin Power III for its investment in a 22 MW 

wind farm located just outside of the city of 

Monterrey, Mexico near the town of Santa 

Catarina. The project, which will use GE wind 

turbines, is being developed on a 33.45 

hectare parcel located adjacent to the 

Cumbres de Monterrey National Park. The 

project was developed in consultation with the 

Park authorities to assure minimal impacts. 

Additionally, the project was required to 

develop a Flora Relocation Plan for nationally 

protected species of cacti and to ensure that 

turbine siting avoided the removal and 

relocation of protected pine trees. An onsite 

nursery has been established to protect the 

smaller cacti until they can be replanted 

throughout the site after construction activities 

are completed. 

OPIC also requires a comprehensive bird, 

bat, and butterfly monitoring program to 

ensure the turbines, once operational, will not 

adversely impact migrating or resident birds, 

bats, or butterflies. 

The project will improve the supply of power 

to several nearby municipalities and is 

expected to result in positive environmental 

and social benefits including a reduction in 

Mexico’s reliance on expensive and polluting 

fossil fuels and rainfall-dependent hydro 

projects for power production.
OPIC Annual Policy Report 2012 14

A

1%

B

52%

C

45%

D

2%

Figure 4

Environmental Category of FY2012

OPIC uses a rigorous methodology for assessing and calculating potential 

environmental and social impacts.

OPIC uses environmental and social assessment to evaluate the potential environmental and social 

impacts of an applicant’s project and to identify means to improve the project by preventing, minimizing, 

remediating or compensating for potential adverse impacts as a condition of OPIC support. The process 

includes the following:

 Identification of potential adverse environmental and social impacts;

 Disclosure of the project’s environmental and social impact assessment (ESIAs) for public review 

and comment (if the project has been screened as Category A);

 Comparison of the project’s performance in relation to internationally-accepted standards and 

alternative approaches;

 Evaluation or design of mitigation measures; and

 Evaluation or design of associated management and monitoring measures.

Only one of the 120 projects that OPIC provided a commitment to in FY12 was screened as Category A, 

or a project with the potential to have significant adverse environmental and/or social impacts that are 

sensitive, diverse or unprecedented in the absence of adequate mitigation measures. The Category A 

project is a power plant in Jordan. As a Category A project, OPIC required the preparation of a full 

environmental and social impact assessment (ESIA), which was subsequently disclosed to the public for 

comment. 

Sixty-three of the 120 FY12

OPIC-supported projects 

were screened as Category 

B. Category B projects are 

likely to have environmental 

and/or social impacts that 

are few in number, generally 

site-specific, largely 

reversible and readily 

addressed through effective 

management systems.

Fifty-four FY12 projects were 

screened as Category C 

projects. Category C 

projects are likely to have 

minimal adverse 

environmental and/or social 

impacts.

Two of the 120 projects were 

screened as Category D

projects. As mentioned 

above, Category D is 

reserved for certain projects 

involving financial 

intermediaries.
OPIC Annual Policy Report 2012 15

OPIC’s environmental experts conduct pre-approval site visits for Category A projects 

and potential projects with possible environmental and social sensitivities.

As part of OPIC’s environmental and social assessment, OPIC environmental officers conduct on-site due 

diligence prior to commitment of OPIC support to any project screened as Category A. In addition, 

environmental officers periodically visit projects at the screening stage to determine categorical eligibility. 

In FY12, OPIC conducted pre-approval site visits to five Category A projects in four countries including:

 Two housing projects in South Africa

 A municipal solid waste-coal co-fired power plant in Haiti

 A natural gas-fueled power plant in Jordan

 A hydroelectric power generation project in Chile

Strengthening OPIC Investments

In addition to screening and assessment, OPIC also provides advice and assistance to projects in areas 

such as improving environmental and social management systems, assistance in identifying and 

strengthening mitigation measures, amplifying stakeholder engagement activities, implementing technical 

tools for impact assessment, and incorporating best environmental and social management practices.

In FY 2012 OPIC approved a number of on-lending facilities and investment funds. As part of the review 

for these financial intermediaries, OPIC assessed the existing environmental and social management 

systems of the institutions and provided in-depth reviews for strengthening their capacity building and 

training to better identify and manage issues with the potential to impact the environmental and social 

performance of their portfolio.

Project disclosure

OPIC publishes information on all Category A projects for public comment.

In FY12, consistent with OPIC policy, six Category A projects under consideration for OPIC support were 

disclosed on OPIC’s website for 60 days prior to action by the OPIC Board and announced via email to

OPIC stakeholders, giving interested persons and organizations the opportunity to review the ESIAs, and 

to comment on the projects’ potential environmental and social impacts. Full text versions of ESIAs were 

available for download directly from the OPIC website. One of the six projects was committed in FY12 

and the other five are still under consideration.

No public comments were received in response to the ESIAs posted in FY12.

Transactions rejected on environmental and/or social grounds

OPIC works diligently to ensure that its policies regarding environmental and social impact are well 

understood. OPIC counsels away projects that are potentially problematic from an environmental or 

social impact perspective before formal applications are submitted. As a result, OPIC did not reject any 

applications for finance or insurance in FY12 on environmental or social grounds. 
OPIC Annual Policy Report 2012 16

Mitigating Climate Change

OPIC is reducing direct GHG emissions. Since 2008, emissions have been cut by 34%.

OPIC has committed to: (a) reducing the direct GHG emissions associated with projects in OPIC’s active 

portfolio as of June 30, 2008 (i) by 30% over a ten-year period; and (ii) by 50% over a 15-year period; and 

(b) increase investment support to renewable and energy efficiency projects. 

For the purpose of tracking progress in achieving its GHG reduction goals, OPIC procured the services of 

an outside environmental auditor, Pace Global Energy Services LLC (“Pace”), to develop a baseline GHG 

inventory of existing OPIC supported projects. The organizational boundary for the inventory was defined 

as 100% of on-site emissions from the calendar year 2007 for all projects within OPIC’s active portfolio as 

of June 30, 2008 (“baseline emissions”). This organizational boundary is consistent with the voluntary 

Scope 38emissions reporting methodology that OPIC adopted in 2004. Accounting for 100% of project 

emissions is more conservative than the equity or operational control approach that assumes partial 

ownership of a project’s greenhouse gas emissions. OPIC accounts for direct emissions because these 

emissions are verifiable and directly attributable to the project activity that is benefiting from OPIC’s 

support.

OPIC estimates greenhouse gas emissions from all projects that have significant direct emissions. OPIC

reports estimates for projects emitting greater than 25,000 tons CO2eq per year. The 25,000 tons CO2eq

threshold was selected to be consistent with the U.S. Environmental Protection Agency’s threshold 

criteria for significant GHG emissions.9 

Baseline emissions, which were calculated for calendar year 2007 for projects active as of June 30, 2008, 

were estimated to be 51,949,179 tons of CO2eq.

10 Based on independent audit findings, the estimated 

calendar year 2011 inventory of GHG emissions from all projects with significant emissions that were 

active as of September 30, 2012

11 was 32,599,137 tons of CO2eq. Annual estimates are based on 

investor-provided data indicative of actual operating conditions and internationally recognized algorithms. 

A buffer of 4.7 percent was then added to the total to account for GHG emissions from active projects in 

OPIC’s portfolio that have less than 25,000 tons of CO2eq. Thus, the total inventory of GHG emissions for 

calendar year 2011 for projects active as of September 30, 2012 was 34,130,763 tons of CO2eq. This 

represents a 34% reduction in portfolio emissions from the 2007 baseline. 

Figure 5 shows the development of OPIC’s portfolio GHG emissions profile as compared to the 2008 

portfolio emissions baseline and the 30% and 50% reduction targets.

For a more complete explanation of OPIC’s GHG policy and current inventory please refer to Exhibit 7.

 

8 Under the World Resource Institute’s Greenhouse Gas Protocol, corporations choose to report emissions based on either an

equity share or a financial or operational control basis. In other words, a corporation chooses to report either a share of a facility’s 

emissions consistent with its equity ownership or it chooses to report all emissions from a facility (regardless of share ownership) 

based on its having operational or financial control of the facility. The corporation then assesses two types of emissions (Scope 1 

and Scope 2) and may assess a third type of emissions (Scope 3). Scope 1 emissions are direct emissions; Scope 2 emissions 

are indirect emissions associated with purchased electricity; and Scope 3 emissions are other indirect emissions, which can 

involve any indirect emissions associated with the lifecycle of products or services associated with the company’s activities (other 

than those associated with purchased electricity, i.e., Scope 2 emissions). Reporting of Scope 1 and Scope 2 emissions is 

mandatory while reporting of Scope 3 emissions is voluntary. 

9 The U.S. Environmental Protection Agency’s threshold criterion for significant GHG emissions is 25,000 metric tons. To maintain 

consistency with units, OPIC uses 25,000 short tons, which is conservative since 25,000 metric tons converted to short tons 

equals approximately 27,500 short tons.

10 OPIC revised baseline emissions based on new information reported by one of OPIC’s project sponsors which had previously 

reported emissions based on their equity share (50%) rather than accounting for emissions for the entire project. Because OPIC 

accounts for 100% of emissions from projects regardless of equity share, the 2007 and 2008 estimates were revised to reflect 

100% of emissions.

11 OPIC aligns GHG accounting with the fiscal year by estimating emissions for those projects active as of September 30, 2011.
OPIC Annual Policy Report 2012 17

Fiscal Year 2012 Reporting

As illustrated in the table below, OPIC reports no direct (Scope 1) emissions associated with its activities 

because OPIC has no direct CO2eq emissions. OPIC reports indirect (Scope 2) emissions totaling 1,263

short tons of CO2eq associated with its purchase of electricity. The Scope 3 emissions that OPIC reports 

for FY12 are those direct GHG emissions associated with projects that have emissions that exceed 

25,000 tons of CO2eq per year, were operational in calendar year 2011, and were in OPIC’s active 

portfolio as of September 30, 2012. 

OPIC Fiscal Year 2011 CO2eq Emissions (tons)

SCOPE 1 EMISSIONS SCOPE 2 EMISSIONS SCOPE 3 EMISSIONS

OPIC 0 1,263 34,130,763

On a transactional basis, OPIC considers reduction and control alternatives for all projects, including 

opportunities to enhance energy and operational efficiency; protect and enhance sinks and reservoirs of 

greenhouse gases, such as natural forests; and the application of emerging technologies for capture, 

storage, and recovery of greenhouse gases. 

0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

2008 2009 2010 2011 2012

Annual CO2 Emissions

(millions of tons per year)

Year

Figure 5

OPIC's Portfolio GHG Emissions Profile

2008 Baseline

30% Reduction 

(required by 2018)

50% Reduction 

(required by 2023)

Actual 

Emissions
OPIC Annual Policy Report 2012 18

IV. LABOR AND HUMAN RIGHTS

In FY12, OPIC developed its Environment Social Labor & Human Rights Procedures Manual to support 

the implementation of the 2010 Environmental and Social Policy Statement, which articulates OPIC’s 

robust labor and human rights policies on project screening and categorization, reviews, conditions and 

compliance, and country eligibility. 

Project Screening and Assessment

OPIC screens all potential projects to identify labor-related risks and to identify project activities that are 

categorically prohibited. If a project is not categorically prohibited, the project undergoes a full labor 

review. None of the projects reviewed in FY12 were determined to be categorically prohibited on laborrelated grounds12 or classified as “Special Consideration,” a designation that requires additional oversight 

in the form of an independent audit and annual reporting for projects with a heightened potential for labor 

rights violations. 

OPIC uses a rigorous methodology to assess potential labor-related risks.

OPIC uses its labor assessment to evaluate the potential risks to workers at the applicant’s project and to 

identify the means to improve the project by preventing and minimizing such risks as a condition of OPIC 

support. The process includes the following:

 Identification of potential risks to workers, including the project’s potential to infringe upon 

internationally recognized worker rights;

 Comparison of the project’s expected performance in relation to internationally-accepted 

standards and practices;

 Evaluation or design of project requirements necessary to enable OPIC support;

 Evaluation or design of associated management and monitoring measures.

All 120 of the FY12 OPIC projects were subjected to a full review of worker rights, and OPIC support was 

conditioned upon contractual adherence to OPIC’s worker rights requirements. Supplemental contract 

conditions addressing one or more internationally recognized worker rights were included in all of the 

project contracts and agreements.

Country eligibility on worker rights grounds

OPIC tracks countries’ eligibility as part of its worker rights statutory obligations.

OPIC’s Environmental and Social Policy Statement outlines OPIC’s policies on country eligibility based on 

labor-related statutory obligations. To maintain consistency across the U.S. Government, OPIC follows 

the worker rights determinations made by the President of the United States for the purpose of the 

Generalized System of Preferences (GSP) program, a trade benefits program overseen by the Office of 

the U.S. Trade Representative (USTR). During FY12, no countries regained their GSP benefits on 

worker rights grounds, and no countries became ineligible for GSP benefits, resulting in no change for 

OPIC programs on worker rights grounds.

For its FY12 GSP Annual Review, USTR continued to formally review the GSP eligibility of the following 

countries on worker rights grounds: Georgia, Bangladesh, Niger, Uzbekistan, the Philippines, and added 

Iraq and Fiji. The review of Sri Lanka’s country eligibility was closed with no change in status. Sri Lanka 

 

12 Certain types of projects have potential adverse environmental or social impacts that preclude the project from receiving OPIC

 support. These categorically prohibited projects are listed in Appendix B of the OPIC Environmental and Social Policy

 Statement.
OPIC Annual Policy Report 2012 19

remains eligible for GSP benefits. OPIC will adjust country eligibility status on the basis of USTR’s final 

determination in these countries. 

Human Rights 

OPIC recognizes that respecting human rights is essential to the success of its projects and through its 

project evaluation process systematically requires all projects to adhere to the highest human rights 

standards. The OPIC project review process is designed to ensure that OPIC-supported projects meet 

the statutory requirements of the Foreign Assistance Act. For all potential projects, OPIC works in close 

consultation with the U.S. Department of State’s Bureau for Democracy, Human Rights and Labor (DRL),

prior to making a final commitment. 

In FY12, OPIC subjected every project considered for OPIC financing, insurance, or for investment by an 

OPIC-supported investment fund to a human rights review process. Through a mutually-agreed process, 

OPIC consults with DRL on this human rights review on a regular basis to ensure consistency between 

OPIC and DRL regarding relevant human rights matters in OPIC eligible countries. OPIC did not decline 

support for any projects in FY12 as a result of the consultative human rights review process.
OPIC Annual Policy Report 2012 20

V. MONITORING OF ACTIVE PROJECTS

OPIC actively monitors the projects it supports in order to: 1) evaluate the methodology OPIC uses to 

calculate both development and U.S. impacts; 2) validate client-reported data; and 3) ensure compliance 

with policy covenants. This section provides an overview of OPIC’s policy monitoring and evaluation 

program, and outlines monitoring activities in FY12. The section is divided in three parts: compliance; site 

monitoring; and self-monitoring. 

Overview

OPIC considers project monitoring a vital part of the 

project oversight process and employs two types of 

project monitoring: self-monitoring and site 

monitoring. 

All OPIC-supported projects are required to report 

annually on the impacts of projects in implementation, 

by completing an on-line Self-Monitoring 

Questionnaire (SMQ). The SMQ gathers annual 

operational information13 on active projects, including 

such critical data points as the number of employees 

and U.S. and local procurement. OPIC uses the SMQ 

to gather data that enable the agency to track and 

monitor developmental performance over time. 

Site monitoring helps ensure the integrity of 

information gathered through self-monitoring. Site 

monitoring involves field visits to OPIC-supported 

projects to ensure compliance with relevant covenants in OPIC agreements. The projects that are sitemonitored are a combination of: 1) projects randomly selected from OPIC’s active portfolio; and 2) 

projects designated as sensitive for at least one of OPIC’s statutory disciplines (U.S. economic impact, 

labor, human rights, environment, and social impact). Projects with particular sensitivities may be subject 

to audits conducted by a third party.

The value of site monitoring extends beyond ensuring compliance and understanding why a project 

succeeded or struggled. The process of gathering, analyzing, and verifying information about projects 

helps OPIC continually improve its investment strategy, which means better outcomes for U.S. investors 

and host country development. Site monitoring also allows OPIC the opportunity to learn from its clients, 

and share this learning across countries and sectors.

In late 2007, OPIC initiated an integrated site monitoring approach, using one policy monitoring visit to 

comprehensively assess projects’ compliance with each of the statutory disciplines as well as its actual 

developmental impacts. FY12 was the fifth complete fiscal year of integrated site monitoring, resulting in

a more efficient and effective use of staff and budget resources. 

In FY12, approximately 320 projects were self-monitored and 32 projects were site-monitored. 

 

13 The SMQ collects data and information used to support the monitoring of OPIC’s investment policy requirements and project 

 development impacts. The financial performance of loans and guaranties is monitored separately within OPIC.

New On-Line Reporting Launched

A new, more user-friendly, web-based 

self-monitoring questionnaire was 

launched in 2012, in order to:

 Reduce client reporting burden

 Provide parity with initial application 

questions to better measure actual 

project results

 Improve reporting data quality 

through more clear questions
OPIC Annual Policy Report 2012 21

Compliance with OPIC Conditions and Covenants

Each discipline within the Office of Investment Policy monitors projects to ensure compliance with OPIC 

conditions and covenants. The results of project site monitoring this year are:

 U.S. economic effects: In FY12 U.S. economic and host country developmental impact site 

monitoring found that no projects were out of compliance with OPIC conditions and covenants 

related to ensuring no harm to the U.S. economy or jobs.

 Environment and social impact: In FY12, environmental and social impact monitoring focused 

on those projects with the potential for greatest environmental and social risk. In FY12, 95% of 

the site visits involved Category A and B projects. One project was a Category C.

o During site monitoring, 11 of 17 projects were found to be fully in compliance with all 

OPIC covenants and conditions pertaining to environmental and social considerations. 

o Of the six site-monitored projects that were not fully in compliance with OPIC covenants 

related to environmental and social impacts: 

 Five projects had issues related to reporting, site housekeeping, or less than 

satisfactory wastewater management. In each of these cases, OPIC’s 

environmental and social impact group informed the project investor of the 

deficiency and required implementation of corrective actions.

 In one case, the investor did not have sufficient resources to implement the 

necessary corrective actions, thus OPIC support to the project was terminated. 

 Labor and human rights: In FY12, the site-monitored projects generally demonstrated a strong 

commitment to the OPIC worker rights requirements, and often extended their commitments to 

support workers and their local communities above and beyond OPIC requirements. 

However, during a scheduled third-party labor audit, an issue of labor non-compliance was 

identified. The deficiencies were readily rectifiable, including the need for improvements to time 

management and wage-tracking systems to avoid unwarranted overtime work, and to ensure the 

timely and appropriate payment of wages. The project sponsor demonstrated strong cooperation 

and support for the remediation efforts. The third-party auditor oversaw the successful 

remediation process and continues to monitor the project through its construction phase. 

OPIC also requires self-reporting of policy compliance by clients (see Self-Monitoring section below). In 

FY12, 99% of OPIC clients reported that they were in compliance with conditions imposed by OPIC

related to environment, health and workers’ safety. Initially, three projects reported that they were not 

compliant with OPIC conditions; two of these projects were short-term relief projects that closed when 

relief efforts ended. The third project has since submitted the required documents.

 99% of OPIC clients reported compliance with local or host country environmental, health and 

safety laws. The one project that was not in compliance quickly remedied their compliance by 

submitting documents and obtaining a necessary permit from the local environmental agency. 

 100% of projects report compliance with the submission of OPIC-required environment, health 

and safety reporting.

The following sections provide additional detail on the results of OPIC’s FY12 monitoring. 
OPIC Annual Policy Report 2012 22

Site Monitoring

In FY12, OPIC site-monitored 32 projects in various sectors around the globe. The figures in this section 

provide a breakdown of the sectors, products, and locations of these projects.

The sector breakdown of OPIC’s FY12 

monitored projects reflects the diverse 

array of OPIC’s portfolio. A quarter of 

investments monitored were in the 

services sector, including educational, 

transportation, and retail services. 

Power projects, including renewable 

energy projects, comprised nearly a 

quarter of the projects monitored in 

FY12. 

The sector breakdown of OPIC’s site 

monitoring also reflects active policy 

risk management. For example, the 

share of agribusiness projects

monitored is greater than the share of 

agribusiness projects in OPIC’s portfolio overall. This reflects the monitoring of economically-,

environmentally-, or labor-sensitive projects to ensure compliance with OPIC policies and standards. 

Reflecting the share of OPIC’s portfolio, investment 

guarantees make up the majority of OPIC’s products 

for the projects monitored, including both investment 

guarantees for Investment Funds as well as Finance. 

Geographically, over half of the projects 

monitored in FY12 were located in SubSaharan Africa. As one of OPIC’s priority 

regions, investments in Sub-Saharan Africa 

include financial services, energy, and services 

such as education and retail. 

Agribusiness

19%

Construction

9%

Energy

22%

Financial 

Services

19%

Manufacturing

6%

Services

25%

Figure 6

FY12 Site Monitoring by Sector 

Latin 

America

23%

South Asia

6%

Southeast 

Europe

19%

Subsahara

n Africa

52%

Figure 8

FY12 Site Monitoring By Region

Direct Loan

19%

Insurance

Investment 22%

Guaranty 

(Finance)

22%

Investment 

Guaranty 

(Funds)

37%

Figure 7

FY12 Site Monitoring by Product
OPIC Annual Policy Report 2012 23

International Community School in Kumasi, Ghana

Challenge: Significant demand for high-quality education from an internationally-certified 

institution that will prepare students for college.

Solution: Direct OPIC loan to leverage an expansion of the International Community School in 

Kumasi, the only school in central Ghana offering an international curriculum.

Impact: Construction of advanced secondary school facilities, a student center, and 

administrative center has allowed the school to increase enrollment from 460 to 1,010 

students. Several recent graduates have gone on to attend college in the United States.

The quality of public schools in Ghana is mixed. As an alternative to the public school system, 

many Ghanaian families turn to internationally-certified schools to provide their children with a 

quality education. While there are a number of international schools in the capital city of 

Accra, only one such school exists in the Ashanti region of central Ghana: The International 

Community School (ICS) in Kumasi. ICS is an independent, co-educational institution that 

operates under a University of Cambridge program, as well as the International Primary 

Curriculum, which is gaining popularity around the world. ICS is partially owned by Three E 

Kumasi Investment Company LLC, a U.S.-based investment firm that seeks to invest in

projects with potential for significant social impact.

Unlike other International Schools in Ghana that serve a largely expatriate population, ICS 

focuses on educating local Ghanaians, who comprise 91% of the student body and 94% of the 

staff. Although ICS is a private institution, its tuition is significantly lower than comparable 

international schools in Ghana, allowing the school to accommodate more local Ghanaians. 

ICS also has a scholarship program, covering the tuition costs of at least four students in every 

class, as well as the tuition of all faculty children.

In 2011, OPIC approved a second loan to the International Community School to leverage an 

expansion of three new dormitories. Expanded residential facilities will allow the school to 

serve a wider population, including students from neighboring countries who currently lack 

access to quality education. ICS constructed the first and second dormitories in 2011 and 

2012, and the third will be completed by August 2013. The three new dormitories will 

accommodate an additional 150 students.

Fiscal Year 2012 Monitoring Observations

The following is a sampling of findings from the projects that were monitored by the Office of Investment 

Policy in FY12. These examples show some of the ways in which OPIC-supported projects have had 

substantial developmental impact. For more detail on OPIC’s site monitoring methodology, see Exhibit 7. 
OPIC Annual Policy Report 2012 24

Kenya Microfinance Lending - Smart Campaign 

An interdepartmental OPIC team traveled to Kenya in 2012 to monitor 

the performance of three financial institutions whose microfinance 

lending is supported by the agency: Musoni, the Kenya Women’s 

Finance Trust DTM (KWFT), and Equity Bank. Over the course of three 

days, members of OPIC’s Office of Investment Policy, Portfolio 

Management Department, Small and Medium-sized Enterprise Finance 

Department, and Office of External Affairs met with staff from each 

institution, microloan groups organized by each, and with individual loan 

recipients. The goal was to assess the financial performance and 

developmental impact of the institutions’ microfinance lending, and more 

broadly, their efforts to implement the principles of the Smart Campaign, 

a global effort to integrate client protection into MFIs’ due diligence, 

investee selection, and loan covenants.

The OPIC Monitoring group first visited Musoni, a Kenyan MFI which has 

received $250,000 in OPIC financing through the Access Africa Fund to 

expand its mobile phone payment service. It was in fact the first MFI to 

provide microfinance services exclusively through mobile banking and to 

develop a technology that interfaces directly between its own IT system 

and that of the mobile provider.

Mobile, cash-free banking, is a true benefit. Customers are able to spend more time focused on their business. Most of 

their payments are made after working hours – a fact that is very much appreciated by account holders. The OPIC team 

visited one of Musoni’s many microloan groups, the Bright View Self Help Group in Kawangware. Working together, the 

group – including hardware store owners, green grocers, scrap metal vendors and second-hand clothing saleswomen –

confirmed loan payments on their cell phones, recording them in ledgers and filling out loan applications.

The next stop brought the team to KWFT. Through OPIC’s microfinance partnership with Citibank, Citibank Kenya 

provided loans totaling $8 million to KWFT where OPIC provided a $6.5 million investment guaranty. Managing Director 

Mwangi Githaiga and his senior team outlined KWFT’s impressive infrastructure: 2,000 staff members in 222 offices 

nationwide, serving 580,000 clients, managing a loan book of $144 million and a deposit book of $93 million. What had 

begun in 1981 as an MFI designed to “provide access to financial services to women entrepreneurs to enable them to 

improve their economic status and livelihoods” had grown into a mature powerhouse serving predominantly rural 

customers (about 80 percent of KWFT’s clientele) through a state-of-the-art Risk Management Reporting System (T24). 

Having signed onto the Smart Campaign in 2011, KWFT also offers a 24-hour call center for clients and closely monitors 

over-indebtedness by ensuring that KWFT loan groups limit members’ exposure and conduct rigorous assessments 

before approving loans. Perhaps most impressive was the host of KWFT products tailored for sectors and groups critical 

to the country’s future: water and sanitation loans to enable access to clean water; agricultural loans for crop farming, 

livestock purchase and aquaculture; clean energy loans to enable purchase of solar panels and lanterns, LPG cylinders 

and biogas systems. Additionally, they created children’s savings accounts, called Tausi Junior (complete with rubber 

ducks for young account holders), to promote saving for education.

The last monitoring visit led the team to Equity Bank. Founded in 1984, it was initially a small rural bank for older women 

and subsistence farmers. Though Equity’s first decade ended poorly, Equity reemerged thereafter with a new business 

model working from the bottom of the pyramid up, with a conservative emphasis on savings. Equity has since become 

the largest bank on the Nairobi stock exchange, managing 50 percent of all account holders in the country, and the 

largest African majority-owned company in East and Central Africa, with branches in Uganda, South Sudan, Rwanda 

and Tanzania. Equity Bank CEO and Managing Director James Mwangi, was named World Entrepreneur of the Year 

2012 by Ernst & Young.

The financial institutions monitored during the trip emphasize the range of businesses OPIC can serve in the financial 

services industry in emerging markets. From mobile banking, to a women-focused MFI, to a bank growing from an MFI 

to a commercial bank, OPIC provides support at each stage of growth. 

Smart Campaign

A Global effort to unite microfinance 

leaders around a common goal: to 

keep clients as the driving force of 

the industry.

Client Protection Principles

 Appropriate product design 

and delivery 

 Prevention of overindebtedness 

 Transparency 

 Responsible pricing

 Fair and respectful treatment 

of clients

 Privacy of client data

 Mechanism for complaint 

resolution
OPIC Annual Policy Report 2012 25

Round 8 Site Monitoring: 2010-2012

In order to evaluate the actual impacts of OPIC-supported projects against the impacts that were 

projected at their outset, every three years OPIC evaluates the combined US economic and host 

country development impact of projects site monitored over the previous three years (known as a 

“round”). FY12 marks the end of the 8th round of site monitoring, consisting of projects site monitored 

in FY10, FY11, and FY12.

Round 8 site monitored projects supported over 1,400 US jobs, which is over four 

times the number of US jobs originally projected. 

Results of Round 8 reveal that the actual effects of site monitored OPIC-assisted Insurance and 

Finance projects on US job creation were more positive than originally expected, with over 1,400 US 

jobs supported compared to the 336 jobs projected during pre-commitment review. These results are 

summarized in Table 3. The local job impact was roughly equal to projections. Also, the actual 

amount invested was slightly higher than had been projected: $3.8 billion compared to $3.7 billion. 

This positive increase means an additional $100 million of capital was leveraged than originally 

projected for the set of projects that were monitored in this three-year period. 

Table 3 

Results of Site Monitoring Round Eight

Projects Monitored in Fiscal Years 2010 – 2012 

Projected Actual

Total Investment $3.7 billion $3.8 billion

US Effects

U.S. Jobs Supported 336 1,405

Development Effects 

Management Jobs Created 528 1,145

Professional Jobs Created 3,722 5,145

Labor Jobs Created 4,964 2,949

Total Host Country Employment 9,214 9,239

OPIC site monitored a total of 111 projects from FY10 to FY12. In addition to the 82 monitoring site 

visits made to projects, OPIC staff monitored 29 microfinance projects during the monitoring round. 

Analysis of these projects was conducted separately because data projections are done at the 

framework rather than individual MFI level. MFIs can be an effective tool for poverty reduction, as 

they make credit available to underserved segments of the population including women and minorityowned businesses, as well as entrepreneurs. For example, one microloan recipient in Kenya used the 

funds to build a school for children living in a slum area. Another $350 loan helped a woman-owned 

hair salon buy new dryers and other machines that have helped her business grow after theft almost 

ruined her. Many MFIs also provide technical assistance to strengthen their client’s business. In 

Paraguay, for example, a shoemaker explained how a loan officer helped him prepare his financial 

statements and structure his accounting books to help increase his understanding of the business’ 

sales and costs. 
OPIC Annual Policy Report 2012 26

Self-Monitoring

Since 1993, OPIC has required all active OPIC-supported investments to report to OPIC through an 

annual Self-Monitoring Questionnaire (SMQ). The integrated SMQ incorporates data and information 

relevant to each of the policy areas that OPIC monitors, including developmental impact, US effects, labor 

and human rights, and environment and social impact, enabling OPIC to more effectively exercise 

oversight of a broad portfolio. The SMQ is divided into two sections, one, for project finance and/or 

insurance projects and one for projects involving financial intermediaries such as general lending banks, 

specialized lending institutions, mortgage facilities, microfinance institutions, and other capital market 

transactions.

In FY11, OPIC conducted an in-depth review of the data collected through the SMQ both to take a closer 

look at the development outcomes of OPIC-supported projects and also to test the quality of this selfreported data. One of the key findings was that some questions were difficult for investors to understand 

and drew inconsistent responses. As a result of this analysis, the SMQ was revised in order to simplify 

language wherever possible and include clearer definitions of terms. These improvements were intended 

to make it more client-friendly and improve the quality of the reported data. The revised form was used in 

FY12 to collect data.

The analysis in this section is based on data obtained from 319 self-monitored questionnaires. 

Jobs and Human Capacity Building

OPIC’s clients reported in 2012 that their projects have supported almost 184,000 local jobs: 

• 70,000 jobs for women, 86% which were managerial or technical

• 26,000 jobs in Sub-Saharan Africa

• 21,000 jobs in MENA

And, OPIC projects support good quality jobs, helping to increase the overall skill level and labor 

productivity with training and benefit packages that go beyond local requirements. 

 

BENEFITS

86% 

women employed at the 

managerial or 

professional level

17,800 

local employees received 

training

91%

provide benefits beyond 

the local law
OPIC Annual Policy Report 2012 27

57% Local 

Ownership

34% 

SMEs

14% 

Womanowned

Demonstration Effects

Project companies supported by OPIC increase economic development by helping local enterprises 

acquire knowledge and technology, both of which increase productivity. 

Fifty-seven percent of OPIC-supported projects have local 

ownership. 

Local business partners benefit by learning how to become entrepreneurs, 

and by acquiring world-class managerial skills from more experienced 

project managers. And, foreign direct investment can be more successful 

when it includes a strong local partner. Fifty-seven percent of OPIC 

projects have local ownership. Of these locally owned businesses, 34% are 

SMEs and 14% are owned by women. 

Fifty-six percent of projects provide technology or knowledge transfer.

Foreign investment often introduces new products, services, technologies, business practices, and/or

production processes into a developing economy. The technology and knowledge transfer directly 

enhances host country productivity by bolstering the productivity of the workers and other factors of 

production. It also indirectly enhances host country productivity by exposing local companies to both 

increased competition and to the competitive advantages gained from adopting innovations introduced by 

the foreign company. Fifty-six percent of OPIC-supported projects in FY12 provided technology or 

knowledge transfer which includes: 

 Management Practices

 Marketing Technology

 Production Technology

 New/Uncommon Products

 Technical Assistance

Host Country Impact

By procuring goods and services locally from host country businesses, foreign investors can strengthen 

existing local businesses, help launch new local businesses, and increase the diffusion of technology 

transfer. Sixty-eight percent of projects have procured locally, injecting roughly $3 billion into local 

economies. 

Support for Host Country Entrepreneurs 

A key to economic growth is the 

development of a robust, dynamic, and 

competitive local private sector. 

Projects that contribute to the 

development of local entrepreneurship 

and homeownership therefore 

contribute to economic development. 

OPIC-supported projects help stimulate entrepreneurship by supporting the entry of 

new businesses into the local private sector. OPIC-supported financial intermediaries reported in FY12 

that they have provided approximately $6.0 billion to host country SMEs and $3.6 billion to 

microenterprises. 

 $9.6 billion in lending to MSMEs

 Over 2 million loans to MSMEs

 $63 million in loans to start-ups
OPIC Annual Policy Report 2012 28

Community Benefits

Community benefits, such as 

Corporate Social Responsibility 

(CSR) activities, demonstrate 

how companies can be good 

corporate citizens. In FY12, 57% 

of the SMQ respondents were 

involved in these types of 

community outreach programs. 

Partnership

Working together, development 

finance institutions can 

collaborate and coordinate to 

increase impact. Of the FY12 

SMQs received by OPIC, 

approximately 31% reported the use of non-OPIC investment sources such as USAID, IFC, ADB, and 

EBRD, or a local development bank. 

Thirty-one percent of OPIC-supported projects involved other Development Finance 

Institutions (DFIs).

OPIC’s support for development also includes projects that involve local institutions such as civil society 

and non-governmental organizations. In FY12, 16% of OPIC-supported projects involved such 

institutions.

Lending to Underserved Populations

Finally, when support for a financial intermediary increases lending in low income or rural areas, it can 

increase access to finance for previously underserved populations. OPIC supports financial services 

projects that have a significant development reach to poor, underdeveloped, and/or rural areas of the host 

country. For example, OPIC-supported financial intermediaries reported that more than half of their nonmortgage lending last year was in rural areas.

Medical Clinics 

22%

Schools 42% Charitable Donation 

58%

Recreational 

Facility 26%

Scholarship 

Programs 33%

Other 38%
OPIC Annual Policy Report 2012 29

VI. EXHIBITS

Exhibit 1:* US Employment and Associated Effects of OPIC-Supported Projects ... 30

Exhibit 2:* Destination of Sales to Third Party Markets of OPIC Supported Projects 

Fiscal Year 2012 (Projections)................................................................................. 31

Exhibit 2 (cont.): Destination of Sales to Third Party Markets of OPIC Supported 

Projects Fiscal Year 2012 (Projections)................................................................... 32

Exhibit 3:* US Employment Effects and Host Country Location of OPIC................. 33

Exhibit 4: Methodology for Calculating US Employment Effects ............................. 34

Exhibit 5: OPIC’s Revised Development Matrix Explained ..................................... 35

Exhibit 6: OPIC’s Greenhouse Gas Policy and Current Inventory........................... 36

Exhibit 7: OPIC Site Monitoring Methodology ......................................................... 40
OPIC Annual Policy Report 2012 30

Exhibit 1:* US Employment and Associated Effects of OPIC-Supported Projects

Fiscal Year 2012 (Projections)

(All Dollar Figures are in Thousands)

Number

of

Projects

US

Current 

Account

Inflows 1/

Effect on

US Trade

Balance 1/

Industry

Sector

Final Destination of Project Output 2/

US

Procurement 1/

Effect on US Employment 1/ 3/

Host Country U.S. 3rd Country Initial Operating Total

A. Projects with Positive Effects on Employment 4/

Agribusiness 5/ 4 $103,112 $26,020 $0 $93,430 $103,112 44 125 169 $103,112

Energy 6/ 2 $22,836 $173,200 $0 $0 $22,836 16 25 41 $22,836

Services 10 $305,416 $224,069 $0 $89,970 $305,416 252 184 436 $305,416

Positive Total 16 $431,364 7/ $423,288 $0 $183,400 $431,364 312 333 645 $431,364

B. Projects with Neutral Effects on Employment 8/

Agribusiness 2 $0 $17,988 $3,800 $3,445 $0 0 0 0 ($19,000)

 

Manufacturing&

 Mining 5 $620 $20,347 $11,000 $38,568 $620 1 0 1 (54,380)

Energy 6/ 8 $962 $175,070 $0 $0 $962 1 1 2 $962

Services 89 $2,095 $567,655 $0 $3,491 $2,095 2 1 3 $2,095

Neutral Total 104 $3,667 $781,060 $14,800 $45,504 $3,667 4 2 5 ($70,323)

C. Projects with Negative Effects on Employment 9/

Negative Total 0 $0 $0 $0 $0 $0 0 0 0 $0 

Net FY Total 120 $435,041 $1,204,349 $14,800 $228,904 $435,041 315 335 650 $361,041

1/

* Foreign Assistance Act of 1961 (P.L. 87-195), Sec. 240A (2) (b)

Total effect during first 5 years of project operation.

2/ Average annual effect during first 5 years of project operation.

3/ Person years of employment.

4/ Projects with a US employment effect of more than two jobs (10 person years or more of employment during the first 5 years of project operation).

5/

There is one project within the Manufacturing & Mining sector in Section A (positive effects). To protect business confidentiality, the data for this project is included in the 

Agribusiness sector

6/ 90% percent of the energy projects OPIC committed to in FY12 were renewable energy projects

7/ Totals may differ slightly from the sum of individual sectors due to rounding.

8/ Projects with a US employment effect of 2 or fewer jobs (10 person years or less of employment during the first 5 years of project operation).

9/ There were no projects supported in FY12 that projected the loss of any US employment.
OPIC Annual Policy Report 2012 31

Exhibit 2:* Destination of Sales to Third Party1/ Markets of OPIC 

Supported Projects Fiscal Year 2012 (Projections)

PROJECTS WITH POSITIVE EFFECTS ON US EMPLOYMENT2/ Annual Revenue ($)

Agribusiness

All OPIC Countries $90,700,000

Sector Total $90,700,000

Manufacturing & Mining

Africa Regional $294,559

Algeria $253,948

Europe Regional $56,828

India $954,118

Middle East Regional $620,372

South Africa $131,602

Turkey $194,311

World Wide $224,322

Sector Total $2,730,060

Services

Sub-Saharan Africa Region $34,960,000

Tanzania $39,740,000

Uganda $15,270,000

Sector Total $89,970,000

TOTAL REVENUE FOR PROJECTS WITH POSITIVE US EFFECTS $183,400,060

 1/

* Foreign Assistance Act of 1961 (P.L. 87-195), Sec. 240A (2) (A)

“Third party” refers to countries that are neither the U.S. nor the host country.

 2/ Sixteen of the 120 OPIC-supported projects in FY12 had positive effect on US employment: Projects with a US employment effect

of more than two jobs (10 person years or more of employment during the first 5 years of project operation). There were no projects 

supported in FY12 that resulted in the lost of any US jobs.

 
OPIC Annual Policy Report 2012 32

Exhibit 2 (cont.): Destination of Sales to Third Party Markets of 

OPIC Supported Projects Fiscal Year 2012 (Projections)

PROJECTS WITH NEUTRAL EFFECTS ON US EMPLOYMENT3/ Annual Revenue ($)

Agribusiness

Middle East and North Africa $3,445,000

Sector Total $3,445,000

Manufacturing& Mining

Europe Regional $1,656,953

Germany $19,169,000

Italy $1,682,000

Middle East and North Africa $3,739,032

People Republic of China $12,000,000

Russia $321,015

Sector Total $38,568,000

Services

Africa Regional $349,056

Malawi $581,760

Mozambique $232,704

Zambia $2,327,040

Sector Total $3,490,560

TOTAL REVENUE FOR PROJECTS WITH NEUTRAL US EFFECTS $45,503,560

Fiscal Year TOTAL $228,903,620

3/ One hundred and four of the 120 OPIC-supported projects in FY12 had neutral effect on US employment: Projects with a US 

employment effect of 2 or fewer jobs (10 person years or less of employment during the first 5 years of project operation).

There were no projects supported in FY12 that resulted in the loss of any US jobs
OPIC Annual Policy Report 2012 33

Exhibit 3:* US Employment Effects and Host Country Location of 

OPIC

Supported Projects Fiscal Year 2012 (Projections)

In FY12, OPIC supported 120 projects in 42 countries and seven regions around the world.

Of those 120 projects, 16 had a positive impact on US jobs:

1/

 3 in the agricultural sector: Rwanda, Ukraine and Mexico

 1 in the energy sector: Afghanistan

 1 in manufacturing & mining: Egypt 

 11 in the services sector: Africa region, Ghana, Kenya, Portugal, Mexico, India, 

Pakistan, Egypt, Iraq, and Global 

Of those 120 projects, 104 had a neutral impact on US jobs:

2/

 3 in the agricultural sector: Egypt, Ukraine and Latin America Regional 

 6 in the energy sector: South Africa, India, Bulgaria, Jordan, Dominican Republic 

and Peru 

 6 in manufacturing & mining: India, Egypt, Brazil, and Georgia 

 89 in the service sector: Africa Region, Ghana, Liberia, Nigeria, South Africa,

South Sudan, Tanzania, Uganda, Indonesia, Cambodia, Papua new Guinea, India,

Pakistan, Kosovo, Moldova, Ukraine, Egypt, Jordan, Lebanon, West Bank, Global,

Argentina, Colombia, Costa Rica, Ecuador, Guatemala, Haiti, Honduras, Latin America

Regional, Mexico, Panama, Peru, Armenia, Azerbaijan, Georgia, Kazakhstan, and Turkey.

o Of these 89 projects, 58 were financial services, 5 pertained to commerce, 

17 dealt with retail, 5 with transportation, and 4 with other services.

Regional breakdown:

 26 in Sub-Saharan Africa (5 with positive US job impacts and 21 with neutral US 

job impacts )

 8 in Southeast Europe (2 with positive US job impacts and 6 with neutral US job impacts)

 33 in Latin America (2 with positive US job impacts and 31 with neutral US job impacts)

 3 in South Asia (all with positive US job impacts)

 10 in East & South Asia (all with neutral US job impacts)

 23 in Middle East and North Africa (3 with positive US job impacts and 20 with neutral US

job impacts)

 11 in West and Central Asia (all with neutral US job impacts) 

 6 located Globally (one with positive effect and 5 with neutral US job impacts) 

5 years of operation). The majority of projects were in the services sector. No projects that OPIC supported in FY12

 resulted in the loss of any U.S. jobs.

1/

* Foreign Assistance Act of 1961 (P.L. 87-195), Sec. 240A (3) (C)

Projects with a US employment effect of more than 2 jobs (10 person years or more of employment during the first 5

years of operations).

2/ Projects with a US employment effect of two or fewer jobs (10 person years or less of employment during the first
OPIC Annual Policy Report 2012 34

Exhibit 4: Methodology for Calculating US Employment Effects

Each project seeking OPIC support is individually reviewed to estimate the potential impact on 

employment in the United States. OPIC uses procurement estimates provided by the investor to 

calculate expected initial and operational procurement from the United States by value and 

specific type of good or service. The US employment generated by a project’s initial and five-year 

operational procurement of goods and services is then estimated by considering the direct and 

indirect employment necessary to produce those goods and services. That is, the employment 

effects incorporate the direct employment necessary to produce the procured goods and services, 

as well as the indirect employment required for the production of the associated intermediate 

inputs.

OPIC details each type of US good or service procured for each project and, using industryspecific data from the U.S. Department of Commerce Bureau of Economic Analysis (BEA) and the 

U.S. Bureau of Labor Statistics (BLS), OPIC calculates the employment effect in that industrial 

sector as well as in the sectors that supply necessary components or inputs. By using this 

standard employment effect methodology, OPIC is able to ascertain employment generation with 

greater precision than if it used an average for all US exports. By including indirect effects, OPIC's 

employment figures present a more accurate picture of the benefits accruing to US workers from 

the procurement of goods and services by OPIC-supported projects. Finally, to confirm 

employment effect estimates, OPIC monitors actual economic effects after project start-up and 

throughout the life of the OPIC’s involvement with the project. OPIC’s monitoring is described in 

further detail in the Monitoring section of this report. 
OPIC Annual Policy Report 2012 35

Exhibit 5: OPIC’s Revised Development Matrix Explained

OPIC supports projects that are expected to serve as foundations for long-term economic growth, 

especially those that improve upon the host country’s physical and financial infrastructure and 

provide the basic human necessities of shelter, food, water and health care. Since its inception in 

1971, OPIC has collected direct and indirect developmental impact data for each of its projects. In 

2004, OPIC implemented a development impact assessment tool – the Developmental Impact 

Matrix – enabling OPIC to compare projects across the portfolio and over time. A new model was 

developed in 2007 that was specifically tailored to assess the development impacts of financial 

services projects. These matrices incorporated between 27 and 34 developmental indicators that 

were used to evaluate and score every proposed project.

In October 2012, OPIC revised its Development Impact Matrices with the goal of simplifying the 

indicators for more accurate and relevant data collection. The new matrices are also more 

harmonized with the developmental impact assessment tools used by other development finance 

institutions. As before, OPIC has two matrices -- one pertaining to physical investments and one 

tailored for financial services projects. Both matrices are comprised of the following five broad 

categories that measure a project’s developmental impact, regardless of the project’s industry 

sector or the host country’s level of development:

 Job Creation and Human Capacity Building, which includes the number of new jobs to be 

created as well as training and employee benefits that go beyond local law. 

 Demonstration Effects, which includes technology and knowledge transfer, technical 

assistance to suppliers or borrowers, the introduction of new projects (including financial 

products), the project’s impact on regulatory and legal reform, and the adoption of 

internationally-recognized quality or performance standards.

 Host Country Impact, which measures local procurement and fiscal and foreign exchange 

impacts. For projects involving financial services, this factor measures the amount of 

funds to be disbursed, as well as the impact on micro, small, and medium-sized 

enterprises, entrepreneurship, and home ownership.

 Environmental and Community Benefits. This category assesses a project’s improvement 

of the environment and benefits to the local community.

 Development Reach, which measures a project’s impact on basic infrastructure and/or its 

potential benefits to the poor and other underserved populations. For projects involving 

financial services, this factor measures the extent to which underdeveloped areas or 

underserved, poor populations will be targeted by the financial institution.

Every proposed project is evaluated and scored based on a scale of 1 to 100. A project must 

score at least 25 to 60 points on the matrix to be considered developmental and clearly eligible for 

OPIC support. A score of over 60 to 100 qualifies a project as highly developmental.
OPIC Annual Policy Report 2012 36

Exhibit 6: OPIC’s Greenhouse Gas Policy and Current Inventory

In Fiscal Year 2012, OPIC’s outside environmental auditor, Pace Global Energy Services LLC 

(Pace) identified one new project commitment that had the potential to emit carbon dioxide 

equivalent emissions of 25,000 tons per year or greater but less than 100,000 tons per year (“Tier 

C”).

In order to account for GHG emissions from active projects in OPIC’s portfolio that emit less than 

25,000 tons of CO2eq, OPIC adds an extra four percent1/emissions to the aggregate emissions 

number. The addition of four percent to account for such sources is consistent with the GHG 

accounting methodology of The Climate Registry.2/ Pace’s Report on GHG emissions from 

projects that are expected to emit more than 25,000 tons of CO2eq is available at www.opic.gov.

OPIC calculates GHG emissions from projects in its active portfolio using methodologies and 

algorithms that rely on activity data such as fuel consumption or gas/oil throughput. In most 

cases, OPIC uses methodologies approved by The Climate Registry. For emissions from sources 

without Registry-approved methodologies, OPIC uses emission estimate methodologies provided 

by the U.S. Environmental Protection Agency.

Following the completion of the independent audit by Pace, OPIC provided investors the 

opportunity to comment on the Independent Auditor’s estimate, activity data, and methodology. 

The following table contains the final auditor estimates after consideration of investor input.

 

1/

Prior to FY10, OPIC added an extra 5% emissions to the aggregate emissions number to account for GHG emissions 

from active projects in OPIC’s portfolio that were estimated to have generated less than 100,000 short tons of CO2eq. 

However, OPIC now estimates emissions for projects emitting less than 100,000 short tons CO2eq but greater than 

25,000 tons CO2eq. As a result, in FY11 and FY12, OPIC added approximately 4% to estimate the total emissions from 

those projects that individually emit less than 25,000 tons CO2eq.

2/

The Climate Registry is a nonprofit collaboration among North American states, provinces, territories and Native 

Sovereign Nations that sets consistent and transparent standards to calculate, verify and publicly report greenhouse gas 

emissions into a single registry. The Registry supports both voluntary and mandatory reporting programs and provides 

comprehensive, accurate data to reduce greenhouse gas emissions. The 5% value is from The Climate Registry’s 

General Reporting Protocol, Version 1.1, May 2008, p. 58. Available online at: 

http://www.theclimateregistry.org/downloads/GRP.pdf.
OPIC Annual Policy Report 2012 37

OPIC GHG Emissions Inventory Estimate by Project
OPIC Annual Policy Report 2012 38
OPIC Annual Policy Report 2012 39

Project Name Location Description

FINAL 2009 

Emissions 

(short tons CO2)

FINAL 2010 

Emissions 

(short tons CO2)

FINAL 2011 

Emissions 

(short tons CO2)

Citadel Glass Works Egypt Manufacturing Not Active Not Active Not Active

Dominca Dominican Republic Oil 50,084 50,084 50,084

Jose Lindley Peru Manufacturing 25,000 25,000 Not Active

Joshi Technologies / Parko 

Services Colombia Oil 30,398 57,826 43,564

Tier C Projects
OPIC Annual Policy Report 2011 40

Exhibit 7: OPIC Site Monitoring Methodology

(Statutory Disciplines: Environment, US Economic Impact, Labor, and Host 

Country Developmental Impact)

OPIC performs comprehensive and integrated monitoring to evaluate the US and host-country economic 

effects as well as the environmental, social, health and safety, and general working conditions of the 

projects it supports. OPIC’s integrated project monitoring is designed to ensure that each project 

complies with statutory and contractual requirements in these areas. Project monitoring consists of site

visits to projects, in addition to the analysis of information submitted annually by investors in the form of 

an online “Self Monitoring Questionnaire.” As of 1993, Self Monitoring Questionnaires are required of all 

investors per the OPIC finance agreement or insurance contract.

Using a statistical sampling methodology combined with risk-based monitoring, OPIC identifies 

investment projects that OIP staff across all disciplines will site monitor, drawing active projects that 

exhibit specific characteristics within the portfolio. The sample of projects selected for site monitoring 

includes: (1) a random sample of projects supported by the agency during a three-year period or 

“monitoring round”; (2) projects supported during this period that are sensitive with respect to U.S. 

economic effects, labor or environment, social, health and safety issues; and (3) projects from other years 

that have either not been site-monitored in the past or that fit in logistically with randomly sampled project 

in similar regions or countries. This “sensitive project” sample ultimately provides more policy compliance 

comfort to the monitored results.

Labor

OPIC monitors projects for compliance with contractual worker rights requirements through a combination 

of annual reporting by companies as well as site visits to both random and selected samples of projects. 

OPIC targets its worker rights monitoring efforts toward countries and sectors with a higher potential for 

possible worker rights violations.

Because certain areas of worker rights violations may be difficult to identify from a typical project site 

monitoring visit, in instances when OPIC determines further investigation is warranted for a project, OPIC 

may employ trained and certified labor rights auditors, usually recruited from the NGO community with 

reputations for impartiality and credibility among both the labor and business communities, to perform a 

full project audit. The auditors spend as much time as necessary to investigate thoroughly potential 

violations. At a minimum, an audit would include independent and confidential interviews with employees

and management. Interviews may also include relevant entities such as government officials and 

knowledgeable local NGOs and organized labor groups. 

Environment, Social, Health, and Safety (E&S) 

With respect to E&S issues, projects selected for site monitoring in a given year are prioritized based on 

an environmental and social risk rating. Environmental and social risk ratings are based on several 

factors including project sensitivity, host country context, project-level environmental and social 

management system, and investor experience in implementing projects of similar complexity. OPIC 

assesses the E&S performance of a project against applicable benchmarks including contract conditions, 

international standards and guidelines, and industry best practices. Factors included in the performance 

assessment include an evaluation of the project’s environmental and social management systems, the 

effectiveness of mitigation, including pollution controls in risk reduction, and the efficiency of the 

operations, including energy efficiency.
OPIC Annual Policy Report 2011 41

US Economic Impact

All projects visited are evaluated for their actual impact on the US economy, including the US

employment generation effects of the investments. OPIC ensures that projects do not negatively impact 

the US economy. This analysis includes verifying export levels to the U.S. (if any) or to other countries, 

calculating the US balance of payments impact, and verifying compliance with any restrictions put forward 

in the OPIC loan agreement or insurance contract (e.g. restrictions on exporting to the U.S. or significant 

US export markets). 

Developmental Impact

Regarding host country economic impact, projects are reviewed using the same criteria as at the time of 

project approval. Thus, an “apples-to-apples” comparison can be made between original estimates and 

actual operations. For example, if a project originally expected to hire 100 local workers, actual 

employment numbers are verified and compared to this forecast. Additionally, if a project is expected, for 

example, to build a school for the children of its employees, this will be verified. Other developmental 

impacts not identified or anticipated at the time of application are also evaluated and quantified during site 

monitoring. Finally, the project is scored using actual findings against the initial developmental impact 

evaluation using the same criteria projected in the project’s original OPIC review.