OPIC announces $3.7 billion in new commitments for FY2016
November 30, 2016
(OPIC)
Reaches Record-Setting $21.5 Billion in Support
of Private Sector-Led Development
OPIC’s Growth Reflects Private Capital's
Increasing Role in Tackling Global Development
Challenges
Supports 39th Year of Operating at No Net Cost
to Taxpayers
Celebrates 10th Anniversary of Expanding
Horizons Small Business Workshops
WASHINGTON – The Overseas Private Investment
Corporation (OPIC), the U.S. Government’s
development finance institution, today
announced $3.7 billion in financing and
insurance commitments during Fiscal Year 2016
to support economic development in emerging
markets. OPIC’s portfolio reached a
record-setting $21.5 billion across 100
developing countries and the Agency marked the
39th year of achieving its mission at no net
cost to taxpayers.
“Our financing for development advanced U.S.
foreign policy and national security goals, all
while helping American businesses gain
footholds in Africa, Asia, Latin America and
the Middle East,” said Elizabeth L.
Littlefield, OPIC President and CEO.
“Partnering with businesses is a cost-effective
way to lift people out of poverty, build
markets, and create more stable and
self-sufficient economies. Whether they are
building power plants in Senegal where only
half of the population has access to
electricity, providing affordable mortgages in
El Salvador where six out of 10 families live
in inadequate housing, or introducing better
food production in Zambia where the chronic
malnutrition is among the highest in the world,
our clients are demonstrating how business can
be a powerful force for good.”
When OPIC was formed more than four decades
ago, private capital flowing into developing
countries was a very small fraction of aid
dollars. Today, that ratio of aid to investment
has reversed as private businesses, often with
initial financing or risk mitigation from
development finance institutions, enter these
new and growing markets. OPIC and its
development finance institution peers worldwide
are now investing an estimated $80 billion each
year, which catalyzes that much capital from
private investors and project developers.
OPIC financing and political risk insurance
supports private investors investing their own
capital in the most challenging frontier
markets – such as very low-income, fragile or
conflict-affected countries – where they are
unable to obtain commercial loans or insurance.
OPIC’s investments in FY2016, for example,
helped to provide employment and economic
stability in conflict-affected countries such
as Jordan, Egypt and Ukraine. Overall, about
one-third of OPIC’s current portfolio now
supports private sector projects in
conflict-affected countries.
Highlights from FY2016 include:
OPIC committed $1.4 billion to critical
infrastructure and energy transactions around
the world. This included $55 million for
off-grid energy projects to bring electricity
to some of the poorest and most remote
communities in the world, especially in
Africa.
Nearly forty percent (40%) of OPIC’s
commitments ($1.5 billion) will finance private
sector projects in the lowest income countries,
countries that are so poor, they rarely receive
the investment they need.
OPIC reached two important milestones in
2016. In the microfinance sector, providing
access to financial services to low income
entrepreneurs, OPIC’s portfolio reached $1
billion for the first time. In the information
and communications technology (ICT) sector,
which is so crucial to enabling low-income
countries to connect to the world economy and
become increasingly self-reliant, OPIC’s
portfolio also topped $1 billion.
Over three-quarters of OPIC’s 2016 projects
involve a U.S. small business. Also in 2016,
OPIC marked the 10th Anniversary of its
Expanding Horizons Small Business Workshops.
Since 2009, OPIC has doubled the number of
annual workshops held to support U.S. small
businesses and entrepreneurs.
“The 2016 results underscore OPIC’s role as a
highly efficient and effective development
agency,” added Ms. Littlefield. “The depth and
breadth of our financing requires that we
constantly balance strong portfolio growth on
the one hand, while prudently managing risk,
maintaining our tradition of extremely low
write-off rates, and solid financial returns on
the other. Our team prides itself on that.”
Over the past eight years, OPIC has focused
deeply on building and modernizing its
institutional infrastructure, developing modern
systems, policies, processes and reporting
mechanisms and replacing many outdated ones in
order to respond to both the needs of its
clients and the goals of U.S. foreign policy
alike. This included developing an enterprise
risk management system, all new management
information systems, as well as human
resources, security and knowledge management
systems. Said Littlefield, “These investments
have strengthened the Agency, making us more
capable and nimble while also increasing our
analytical rigor, transparency and
accountability.”
Other highlights include:
Since 2009, OPIC has introduced nearly a
dozen new finance and insurance tools and
processes to better serve the needs of the
market, especially small business partners,
with early-stage but high-potential projects,
including off-grid energy solutions.
Over the last six years, OPIC prioritized
development of crucial power generation in
countries with high levels of energy poverty.
In particular, the Agency committed more than
$8 billion to renewable energy projects, as
well as $580 million to natural gas projects,
mostly in Africa.
OPIC increased its work across all sectors
in Sub-Saharan Africa, a region which now
accounts for nearly a third of the Agency’s
global portfolio.
OPIC’s prudently managed risks and strong
financial performance have resulted in
consistent returns to the U.S. taxpayer for 39
years. This has enabled OPIC to generate over
$2.3 billion to reduce the U.S. budget deficit
over just the past six years.
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