Terms

The amount of OPIC’s participation in an eligible project may vary, taking into consideration the project’s contribution to the host country’s development, the project’s financial requirements, and the extent to which the financial risks and benefits are shared among the investors and the lenders. OPIC will not generally support more than 75 percent of the total investment.

OPIC recognizes that possible cost overruns and early operating problems may occur, despite careful planning and an allowance for contingencies in the financial plan. Therefore, OPIC, like other limited recourse lenders, normally requires that the principal sponsors enter into an agreement that guaranties the OPIC loan, the completion of the project, the company’s debt service, and cost overruns prior to project completion. Project completion is defined to include certain financial, legal and operating tests, as well as physical completion. The sponsors must have the financial capability to perform their obligations under this agreement.

The repayment schedule of a direct or guarantied loan will be designed taking into consideration the purpose of the loan and the projected level of cash flows to be generated in the transaction. The cash flows must be sufficient to meet interest and principal payments, and to provide for an adequate return to equity investors. The terms of such loans will typically provide for a final maturity of three to 15 years, including a suitable grace period during which only interest is payable.