OPIC - Overseas Private Investment Corporation

About Organization...

OPIC is a financial corporation of the US government that provides assistance to the American investments abroad by means of rendering insurance, financial and other services to the enterprises with the significant American investments.
OPIC has been functioning since 1971 and is now providing financing to the joint investment projects in 140 countries of the world.
The corporation has experience of financing the projects in Russia.

Developing countries and countries with transitional economy

Various
Some branches can be denied consideration for legislative or political reasons. Information about the list of these branches can be obtained directly in OPIC.

- The project must have a significant American share (financial or administrative). Usually the share of the American participant of the investment project amounts to no less than 25% of its value.
- As a rule, not less than 50 % of the voting shares of the joint venture should be privately owned, though exceptions can be made for the projects with the state owned controlling blocks of shares, if it is stipulated on paper, that the decisions of administrative character will be made by the private owners, and there is a significant American interest in this project's realization. Totally state owned projects are not accepted for consideration.
- Priority in receiving financing belongs to the joint ventures with American small-scale enterprises and cooperatives as participants. A small-scale enterprise for the OPIC purposes is a company which annual turnover does not exceed 250 million USD, or private individuals and other unincorporated entities with the net cost of less than 67 million USD.
- Economic, technical, marketing and financial competence of the investment project
- Availability of working experience of the project's executives in an analogous or similar sphere of activity
- The project should exert positive effect on the socio-economic state of the country, in which it is being realized, and perform one or several of the following functions:
Increase of availability of the goods and services of better quality or at lower prices,
Development of skills of the workers due to training,
Communication of technological and administrative skills,
Gaining of income or saving up in the domestic currency,
Job creation,
Supplement to the budget of the country of the project's realization due to tax payment,
Stimulation of activity of other local enterprises.
The Fund cannot assist in monopolization of any sector, therefore projects with considerable competitive advantages may be subjected to additional study on the part of OPIC.
- The project cannot have a negative influence on the state of the environment, health of the residents or safety of the country in which the project is being realized, and should conform to the requirements of the World Bank or the country of the project's realization in these areas.
- Financing is granted only to those investment projects, which cannot attract credits similar to the ones of OPIC, from other commercial financial establishments in the country of the project's realization.
- The projects which can result in reduction of work places in the USA, have a pernicious influence on the US economy, development of the country of the project or its ecology or entail violation of the internationally-recognized rights of the working people are not financed.

Credit
Guarantees

Minimum investment: 100 000
Maximum investment: 200 000 000
Period of investment: 5-15 years

Financing can be granted for creating new joint ventures, as well as for privatization, expansion or modernization of the existing enterprises. The projects of purchasing enterprises can also be accepted for consideration, if they presuppose subsequent modernization or expansion of the latter.
In financing new joint ventures the OPIC share cannot exceed 50% of the total value of the investment project, while in financing the projects that imply the expansion of the successfully operating enterprises - 75 %.
Usually no governmental guaranties of the credits granted are required. However OPIC demands from the initiators of the project to furnish a security of the credit obligations being assumed. As the collateral, the property situated both in the USA, and in the country of the project's realization can be accepted.
The direct OPIC credits are granted to the joint ventures with the American small-scale enterprises and cooperatives as participants. Guarantees with other credit organizations, as a rule, are provided for larger projects. OPIC can also assist in the search for an external source of financing the project, for which a guarantee is provided. Guarantees are issued only in order to secure the commitments of the borrowers to the American financial organizations.
When granting the direct credits, fixed interest rates are used, which depend on the financial and political risks of the investment project.
Pursuant to the commercial bank principles, the payment for bank services of document processing and recruiting outside consultants can be collected.

1. Standard application for competition for financing (the application form is found on the OPIC Internet page at the following address http://www.opic.gov/subdocs/pdf/FinApp-103101.pdf)
2. Business-plan
The business-plan content requirements:
- Project description
- Description, working experience and auditor certified financial reports of the enterprises - initiators of the project
- Planned suppliers, prospective volumes of production and markets, distribution system, competitiveness and forecast of the share of the market
- Cost of the project and prospective suppliers of the capital resources and services
- Financial plan, including the sum of OPIC's prospective share
- Forecasts of the project's financial reports and their calculation base
- Characteristic of the contribution, which the project can presumably make in the socio-economic development of the region of its realization
3. Legal documentation (list of the documents depends on each individual project and will be determined after the consideration of the first two documents)

The submitted documents undergo careful analysis. If necessary, outside advisers are recruited for the project evaluation
Given the preliminary approval of the project by OPIC, the initiator of the project may be requested to provide additional information
The time of consideration of the application and granting of financing depends on the completeness of the initially furnished information and on the complexity of the project, and it usually lasts 3 to 6 months.

Address: Overseas Private Investment Corporation
Vice President - Finance Department
1100 New York Avenue, N.W., Washington, D.C., 20527, USA
Phone: (202) 336-8799
Fax: (202) 408-9859
E-mail: info@opic.gov
Internet: http://www.opic.gov/

Additional payments at the loan granting (not for the site):
OPIC has a statutorily-imposed mandate to be self-sustaining and charges fees for its services. Costs and expenses may vary for each transaction, and will be dependent upon the type of financing, the location of the borrower, the type of collateral offered, and the extent of the complete security package.
Many of these costs may be capitalized through inclusion in the total financing amount, and thus amortized over the loan period. The interest rate on a transaction will be based upon OPIC's cost of funds (borrowed from the U.S. Treasury) plus a spread for undertaking the risk associated with the transaction.
In addition, there are several other fees required by OPIC. A retainer fee is a fee payable to OPIC to undertake a review of the project for financing. A commitment fee is required after loan approval and at the time of the signing of a commitment letter. This is a flat percentage, based on the loan amount, that continues for the life of the loan until the commitment amount has been drawn or cancelled. A facility fee is a one-time fee that is typically one percent of the loan amount. The retainer fee can be applied as a credit to the facility fee. In order to administer the loan, a maintenance fee may be charged annually. A cancellation fee of typically one percent of the amount of the commitment is charged for any portions thereof that are cancelled or expired.

Attention of investors: If your organization is interested in investing to Voronezh region enterprises, please contact us for placing your information in this section.