OPIC is an independent U.S. government agency whose mission is to mobilize and facilitate the participation of U. S. private capital and skills in the economic and social development of less developed countries and areas, and countries in transition from nonmarket to market economies.
OPIC assists U.S. companies by providing financing (from large structured finance to small business loans), political risk insurance, and investment funds. OPIC complements the private sector in managing risks associated with foreign direct investment and supports U.S. foreign policy.
OPIC was established as an agency of the U.S. government in 1971 and currently does business in over 150 countries.
OPIC Eligibility Checklist
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.
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 OPIC’s Country List. From time to time, statutory and policy constraints may limit the availability of OPIC programs in certain countries, or countries where programs were previous unavailable may become eligible.
Is the investor seeking a direct loan/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.
Does the project have significant U.S. ownership involvement?
OPIC requires significant U.S. involvement in the projects it supports. In order to be eligible for a direct loan, the project must be sponsored by or significantly involve a U.S. small business or cooperative. Generally, this test is satisfied if a U.S. small business owns at least 25 percent of the equity in the project, although other significant involvement in the project by U.S. small businesses will be considered for purposes of eligibility determination. Exceptions to the amount of equity requirement may be made in cases where involving U.S. brand name franchisors, hotel operators, or U.S. small businesses with long-term contracts which are significant to the project.
The OPIC guaranty is simply an alternative funding mechanism, and only legal entities created under the laws of the U.S., any state or territory, or D.C., such as corporations, partnerships, or other associations including nonprofit associations more than 50 percent beneficially owned by U.S. citizens may be recipients of OPIC’s guaranty. Foreign corporations that are more than 95 percent U.S. owned are also eligible. OPIC-guaranteed loans are classified as eligible U.S. government securities for insurance companies and many other institutional investors.
Does the U.S. sponsor qualify as a small or mid-market business under OPIC’s definition?
For a project to be eligible for Small & Medium Enterprise Finance, OPIC requires that annual revenues in the last fiscal year are not more than $250 million. If the U.S. sponsor does not have revenues, is other than a corporation, the net worth of the entity may not have exceeded $67 million.
Qualified U.S. companies with annual revenues less than $35 million are eligible for specialized financing through the OPIC.
Does the requested loan size fall within OPIC’s range of support?
OPIC offers financing from $100,000 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 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 positively contribute to the economic and social development of the host country?
OPIC’s mandate is to support U.S. private sector investments that are responsive to the development needs of the host country, foster private initiative and competition, and will not result in the loss of U.S. jobs, adversely affect the U.S. economy or the host country’s development or environment, or contribute to violations of internationally recognized workers rights. More specifically, OPIC reviews all projects to ensure the following:
- The project does not fall within one of our categorically prohibited sectors;
- The project will not result in the closing of a U.S. operation or a decline in U.S. employment;
- The project does not fall within a sector that has experienced significant job loss in the U.S. and/or erosion of global market share during the past decade; and
- The project will uphold International Labor Organization worker rights and human rights standards.
If you have answered, “yes” to the questions above, your project may be eligible for OPIC financing.
OPIC Application Requirements
The Application for Financing lists all required attachments including a detailed business plan and financial projections. A complete application package should establish the project’s and investor group’s general eligibility, and give OPIC the basis on which it can respond to the amount and basic terms of the requested financing. It should include:
- a description of the project;
- the identity, background and audited financial statements of the project’s proposed principal owners and management;
- financial statements of each investor (audited corporate financial statements or certified personal net worth statements of individuals, using the SBA Personal Financial Statement Form
- planned sources of supply, anticipated output and markets, distribution channels, competition, and the basis for projecting market share;
- a summary of project costs and anticipated suppliers of capital goods and services;
- a financial plan, including the sources and uses of funds for the project;
- pro forma financial statements of the proposed project or corporate borrower and accompanying assumptions; and
- a description of the contribution the business is expected to make to local economic and social development
The data prepared and submitted by sponsors to substantiate sources of raw material, technical feasibility and market demand are carefully analyzed together with the financial forecasts