Innovative OPIC Political Risk Insurance Product Facilitates Ukraine’s First Access to U.S. Capital Markets

(OPIC) WASHINGTON – Today, the Overseas Private Investment Corporation (OPIC) joined the signing ceremony to mark the closing of a $250 million political risk insurance contract for the Central Spent Nuclear Fuel Storage Facility Project that will bolster energy independence in Ukraine.

OPIC, the U.S. Government’s development finance institution, is providing insurance to support the Central Storage Safety Project Trust’s $250 million fixed-rate bond securities issuance in the U.S. capital markets. The proceeds will fund a 20-year loan to State Enterprise National Nuclear Energy Generating Company (Energoatom). With OPIC’s political risk insurance credit enhancement, Moody’s rated the notes Aa2, a significant uplift from the Government of Ukraine’s Caa2 rating.

The loan will help to finance the construction of a long-term fuel storage facility in the Chernobyl Exclusion Zone, and provide Ukraine an alternative to its current practice of shipping spent fuel to Russia. In addition to advancing a major energy security project in a region critical to American foreign policy, this project marks a milestone in an innovative use of political risk insurance to help developing countries access the capital markets to finance major infrastructure projects.

“This project will help transform the energy landscape in Ukraine, and reflects OPIC’s ongoing commitment to innovating its products to address the needs of our clients,” said Ray W. Washburne, OPIC President and CEO. “By helping Ukraine raise money in the capital markets, OPIC is addressing one of the major hurdles that often prevents developing countries from raising sufficient financing for critical infrastructure projects.”

In addition to bolstering energy infrastructure in Ukraine, the project will generate approximately $225 million of procurement of American-made goods and services. Holtec International of Camden, New Jersey, will supply storage casks, along with other equipment and training to the project over a five year period.

Ukraine is supporting the OPIC-insured loan with an irrevocable and unconditional guarantee of Energoatom’s payment obligations. The OPIC policy cover for non-payment of arbitral award provides for payment if Energoatom defaults in making a timely loan payment to the Issuer and Ukraine defaults under the Guarantee, following the obtainment of a final arbitral award. Bank of America/Merrill Lynch, as the lead underwriter, was instrumental in the success of this financing.