OPIC has developed the following questions to help you determine whether or not your project may be eligible for financing from OPIC:
Are you proposing an investment in a foreign country?
OPIC programs support long-term direct investments in developing countries and emerging markets. OPIC support is available for new investments, expansions and modernizations of existing plants, and privatizations. Acquisitions of existing operations are also eligible for financing if the investor contributes additional capital for modernization and/or expansion.
OPIC does not offer financing of export sales unrelated to long-term investment. If you are seeking export financing, we recommend that you contact the Export-Import Bank of the United States (www.exim.gov) or the Small Business Administration’s (SBA) Office of International Trade (www.sba.gov/oit).
Will the project be located in a country where OPIC programs are available?
OPIC programs are available in over 150 developing countries and emerging markets. To review the list of countries and areas in which OPIC programs are generally available, please visit Where We Work at http://www.opic.gov/opic-action/interactive-map-overview. From time to time, statutory and policy constraints may limit the availability of OPIC programs in certain countries, or countries where programs were previously unavailable may become eligible. Thus, investors are urged to contact OPIC directly for up-to-date information regarding the availability of OPIC services in specific countries.
Is the investor seeking a direct loan or loan guarantee for the medium- to long-term?
The financing that OPIC offers is debt-financing in the form of direct loans and loan guaranties to support medium- to long-term investment projects overseas. OPIC loan terms typically range from three to fifteen years, with market rates of interest, and customary financing costs and fees borne by the borrower.
OPIC does not make direct equity investments in projects. If you are seeking equity for your project, please visit OPIC’s Investment Funds section at http://www.opic.gov/what-we-offer/investment-funds to read more about OPIC-supported private equity funds.
OPIC also does not provide grants or feasibility study assistance. For more information on this type of assistance, please contact the U.S. Trade Development Agency (www.ustda.gov).
Does the project have meaningful U.S. private sector involvement?
OPIC supports projects that enjoy a meaningful connection to the U.S. private sector. OPIC generally requires U.S. involvement in the project company in an amount that is equivalent to 25 percent of the project company’s equity The 25 percent equity benchmark may be met with equity investment, long-term debt investment in the project or other U.S. contracts (such as construction contracts), or by combining these types of involvement in a project.
Does the U.S. private sector participant in the project meet OPIC’s definition of U.S.?
A U.S.-organized entity generally must be at least 25 percent U.S.-owned. A foreign-organized entity generally must be at least majority U.S.-owned. U.S. citizens, lawful permanent residents (for example, Green Card holders) and U.S.-organized non-profit organizations meet the OPIC definition.
Will U.S. involvement be maintained for the duration of the project?
For an ongoing project, U.S. entities need to retain a 25 percent interest in the project through final disbursement of the OPIC loan. In the case of a start-up or ‘greenfield’ project, the U.S. entities need to retain a 25 percent interest through physical completion of the project. OPIC must approve any proposed transferee of the interest.
Does the U.S. participant qualify as a small business under OPIC’s definition?
For OPIC to finance a project with a direct loan, the U.S. involvement must come from U.S. small business. A “small” business includes:
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A business with annual revenues during the last fiscal year of less than $400 million.
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For entities/individuals without revenues, net worth of less than $100 million.
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Consistent with a test applied by the U.S. Small Business Administration, OPIC also considers a business with 500 or fewer employees as “small.”
Businesses which do not meet this definition may contact OPIC’s Structured Finance division at info@opic.gov.
Does the requested loan size fall within OPIC’s range of support?
OPIC offers financing from $350,000 up to $250 million per project.
Are the investors contributing an adequate level of equity to the project?
Investors must be willing to establish sound debt-to-equity relationships that will not jeopardize the success of the project through insufficient equity or excessive leverage. Although the financial structure may vary with the nature of a specific business, OPIC generally requires that the project company maintain a debt to equity ratio in the range of 60 percent debt to 40 percent equity.
OPIC can participate in (lend) up to 60 percent of the total costs of a new venture, while a somewhat higher participation may be considered in the case of an expansion of a successful existing business. OPIC will not generally support more than 75 percent of the total investment.
Do the sponsors have a successful track record in the industry?
All projects must be within the demonstrated competence of the proposed management, which can be demonstrated by a recent, proven record of success in the same or a closely related business as evidenced by three years of historical financial statements that show a record of successful business operations.
Will the proposed investment meet OPIC’s investment policy criteria?
OPIC implements policies that promote sustainable economic development across all OPIC-supported projects. These policies reflect Congressionally-mandated statutory requirements and general OPIC policy requirements. Specifically, OPIC works to ensure that supported projects:
• Are environmentally and socially sustainable;
• Respect human rights, including workers rights;
• Have no negative impact on the U.S. economy; and
• Encourage positive host country development effects.
If you have answered, “yes” to the questions above, your project may be eligible for OPIC financing. For more information on the finance program, including requirements for support and how to apply, please review the Small & Medium Enterprise Finance section at http://www.opic.gov/what-we-offer/financial-products/financing-guarantees.
OPIC strongly recommends that investors contact an OPIC representative to discuss their project proposal prior to submitting an application package. For more information, please contact 202-336-8799 or email info@opic.gov.
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