opic lifecycle of an ict project - online.ptc.org · political risk insurance ― protection...

The U.S. Government’s Development Finance Institution

OPIC Lifecycle of an

ICT ProjectPTC ’16, Honolulu, HI


Our Organization

As the U.S. Government’s development finance institution, OPIC mobilizes U.S.

private capital to help address critical development challenges and in doing so,

advances U.S. foreign policy and national security priorities.

OPIC currently manages

a $20 billion portfolio of

projects in more than 100

countries and operates

on a self-sustaining basis

at no net cost to the

American taxpayer.

“We’re changing how we define development…we need to harness all the tools at our

disposal—from our diplomacy to our trade and investment policies.”— President Obama, 9/22/10


Our Solutions

OPIC offers innovative financial solutions to support private investors including

debt financing, insurance, and support for private equity investment funds.

Products Current* Portfolio

Investment Finance

― Limited recourse, long-term finance for private sector,

commercial projects

― Loan amounts up to $250M per project

― Specific programs for providing finance to small-and-

medium-sized enterprises

Political Risk Insurance

― Protection against currency inconvertibility,

expropriation and political violence, including terrorism,

as well as other specialized coverage

― Policy coverage up to $250M per project, up to 20 year

term

― Fixed premium, cancellable only by insured

Investment Funds

― Senior debt for private equity funds selected by

competitive process

― Investment decisions made independently by selected

fund managers

― Provide up to $250M with bullet repayment, zero

coupon structure

$15

$2.1

$2.8

$-

$2

$4

$6

$8

$10

$12

$14

$16

$18

Total Exposure

Political Risk

Insurance

Investment

Funds

Investment

Finance

$19.9 BILLION

*As of September 30, 2015


Our Current ICT Work

OPIC’s current ICT exposure is over $850 million across 38 projects. Since its founding,

OPIC has financed over $5 billion in ICT investments.

What• Data centers

• DTH satellite TV

• E-commerce

• Software development

• Submarine cables

• Towers

• IT and business services

• Telemedicine

• Mobile voice and data networks

• TV and radio broadcasting

• Wireline broadband and triple play networks

Where• Albania

• Bangladesh

• Bolivia

• Bulgaria

• Croatia

• Czech Republic

• Colombia

• DRC

• East Africa

Project Highlights

Colombia: $140 million loan

to Avantel SAS for

installation and deployment

of a 4G LTE wireless and

fiber-optic broadband

network. Over 300,000 LTE

subscribers were added to

the network in the first year.

Papua New Guinea: $10.3M

investment guaranty to

finance the expansion of the

country’s largest mobile

network, Digicel (PNG) Ltd.

• Ghana

• Guinea

• India

• Jordan

• Kenya

• Liberia

• Morocco

• Myanmar

• Nigeria

Myanmar: $250 million loan to Apollo Towers

Myanmar Ltd. for the development and operations

of a greenfield telecommunications network of

2,500 towers.

• Panama

• Palestine

• PNG

• Russia

• Sierra Leone

• South Africa

• Tanzania

• Ukraine


OPIC Policy Standards

Investors and project proposals must satisfy certain policy criteria.

OPIC’s Unique Position Eligibility Criteria for Investors

Foreign

Policy

International

Development

US Business

To be eligible for OPIC financing and insurance,

applicants must:

� Have a commercially viable business plan and

successful track record

� Involve the U.S. private sector in a meaningful

way

� Maintain private sector control

(<50% government ownership)

� Commercially viable private sector financing

or insurance is not already available for the

project

� Comply with OPIC policy standards, including ~160 eligible countries, environmental, human rights and worker rights


OPIC Project Lifecycle

SOURCING

PRESCREENING

APPLICATION

DUE DILIGENCE &

POLICY REVIEW

APPROVAL

PROJECT CLOSE

PORTFOLIO MANAGEMENT

Clients and Partners; Interagency; Business Development

Statutory and Policy Eligibility; Additionality; Development

Impact; Financial Viability

Business plan; Eligibility of investor/project; Creditworthiness;

Developmental Return; Investor/Management Experience/Track Record

Credit and Risk Underwriting; Policy Review; Legal Review;

Character Risk Due Diligence (CRDD)

Vice President; Credit Committee/Evaluation Committee; Investment

Committee and President & CEO; Board of Directors

Finish CRDD, Legal and Policy Review; Negotiation and Execution

of Commitment and Insurance/Financing Agreements; First

Closing on Equity Raising (Funds); First Disbursement

Ongoing Monitoring; Policy Approvals of Each Investment

(Funds); Loan Repayment; Restructuring or Write-Off;

Insurance Modifications and Claims;


Timeline: OPIC Project Lifecycle

Sourcing

Prescreening

Application

Credit and Risk Due Diligence

Policy Review

Legal Review

CRDD Review

Policy Monitoring

Portfolio Management

Credit

Committee

Investment

Committee

Board

Approval

Project

Close


OPIC Pipeline Analysis: FY2000-2012

C DB

3,175

F

Approximately 44% of applications reviewed in FY2000-2012 reached commitment and 37%

of applications reviewed reached first disbursement

2,399 1,841 1,188

E

1,408

A: Pre-screening B: Sourcing/

Application

C: Due Diligence

/ Policy Review

D: Policy

Clearances

E: Commitment F: First

Disbursement

Project teams pre-

screen possible

projects for

threshold policy,

credit and eligibility

issues

Potential projects

sourced from

clients, partners,

interagency, &

business

development.

Applications are

submitted

Projects filtered by

Credit and Risk

Underwriting

processes, Policy

and Legal Review,

and CRDD

Projects filtered by

Policy Clearance

process, which

evaluates policy

compliance and

consultation and

development

impact

Approved by

executive staff,

investment

committee, and/or

OPIC Board of

Directors.

Insurance contracts

made effective

Project

documentation

completed,

financial close, and

disbursements.

Insurance contracts

made effective.

A

~20,000


Main Drivers of Project Attrition: 2000-2012 PipelineProjects*

1

Source: Internal Vice President interviews

2

Most potential projects fall out of pipeline

between application and commitment due

to lack of equity/grant financing or due to

lack of a feasible business plan

1 37% of the applications screened between

FY2000-2012, reached first disbursement as of

end of FY2012

2

-300

200

700

1,200

1,700

2,200

2,700

3,200

Application Lack Equity Grant Needed Biz Plan NotFeasible

StructuringIssues

Legal/PolicyIssues

Credit Issues FirstDisbursement /

EffectiveInsuranceContract


I have a project. Where do I start?

Is my project

commercially viable?Is my project capable

of debt service?

Is my project supporting

sustainable development?

3

How do I apply for

an OPIC loan?

7Where can I get

help with my

business plan?

8Please visitwww.opic.gov

See Investor Screener

Is my country of

interest eligible?Is this type of

project eligible?

5How do I register

for insurance?

64

1 2


Resources & Contacts

Resources

Alexander Hadden

Director, Structured Finance

Overseas Private Investment Corporation (OPIC)

1100 New York Avenue, N.W.

Washington, D.C. 20527 USA

[email protected]

+1 (202) 336-8503

OPIC Contact

• Review the website: www.opic.gov

• Review The Investor Screener

• Consult Small Business Guide:

http://www.opic.gov/small-business

• Discuss your project with OPIC:

[email protected] or +1 (202) 336-8400

• Insurance: Complete Form 50

• Finance: Complete Section 1a of Form 115

• Need assistance? Loan Originators:

www.ednaccess.com


Overseas Private Investment Corporation

opic lifecycle of an ict project - online.ptc.org · political risk insurance ― protection...

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