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1 1 (May 24, 2017)

handle is hein.crs/govcfxq0001 and id is 1 raw text is: FF. ' ,iE S .r, i , May 24, 2017 Overseas Private Investment Corporation (OPIC) OPIC, a wholly-owned U.S. government corporation and development finance institution (DFI), operates under the Foreign Assistance Act of 1961 (FAA), as amended (22 U.S.C. §2191 et seq.). Spun out of the U.S. Agency for International Development (USAID) in 1971 to focus on market-oriented investment, OPIC aims to promote economic growth in developing and emerging economies by financing overseas investments and insuring against political risks of investing abroad, such as currency inconvertibility, expropriation, and political violence, for qualifying U.S. private investors. OPIC presents reauthorization, organizational structure, funding and other issues for Congress. Table I. OPIC Financial Products Overview OPIC Financial Product Political risk insurance: Protects against political risks of investing overseas, up to $250 million per transaction. Financing: Up to $250 million and up to 20 years through either fixed-rate direct loans for projects significantly involving U.S. small business, or investment guarantees of OPIC repayment of loan if the borrower defaults. Can include limited-recourse project finance (structured so that loan repayment comes from project). Investment fund support: Provides senior debt financing to supplement equity raised by funds (privately owned and managed capital sources). Examples of OPIC Commitments Since 2004, has committed over $300 million in political risk insurance to Apache Corp. for oil and gas development in Egypt. Approved a $750,000 loan in 2009 for a Utah-based small business to expand heavy equipment rental business in Nigeria, and $95 million in financing in 2013 for a wind power plant in Pakistan with General Electric wind turbines. In 2013, completed a $245 million, 20-year project finance loan for a hydroelectric power plant in Chile, sponsored in part by a Virginia-based subsidiary of a Chilean firm. Approved $125 million in financing in 2009 for a micro- finance fund in Latin America, and $80 million in financing in 2014 for an affordable housing fund in sub-Saharan Africa. Source: CRS, based on OPIC publications, various years. Authorization status. Since reauthorizing OPIC in December 2003 for nearly four years through FY2007 (P.L. 108-158), Congress generally has extended its authority through appropriations legislation. The FY2017 omnibus appropriations act (P.L. 115-31) extended OPIC's authority until September 30, 2017. Certain bills introduced in the 114th Congress to expand electricity access in sub-Saharan Africa would have renewed OPIC on a multi-year basis, but these provisions were not included in the final legislation (P.L. 114-121). OPIC may face more scrutiny in the 115th Congress, resulting in part from President Trump's FY2018 budget request to eliminate OPIC funding, the ongoing debate over the Export-Import Bank (Ex-Im Bank), and debate over the U.S. government's size and scope. Leadership. OPIC, by statute, has a Board of Directors with 15 members appointed by the President with the advice and consent of the Senate. The Board has eight private sector Directors (with requirements for small business, labor, and other representation), appointed to three-year terms, and seven federal government Directors (including the OPIC President, the USAID Administrator, the U.S. Trade Representative, and a Labor Department officer), who serve at the pleasure of the President. A quorum for the Board to transact business requires eight Directors. The Board provides policy guidance, and major OPIC commitments require its approval. The Board meets four times a year. OPIC participates in the interagency Trade Promotion Coordinating Committee (TPCC), and collaborates periodically on projects with USAID, Ex-Im Bank, and the Trade and Development Agency (TDA). Requirements. OPIC operates under the Secretary of State's policy guidance. OPIC must take into consideration economic and social development impacts when determining whether to support a project. Other criteria include investor eligibility based on sufficient connection to the United States, U.S. economic impact, environmental impact, worker rights, and development effects on the country receiving the investment. U.S. small businesses and sub-Saharan Africa are focus areas. Military production and sales are among categorically prohibited sectors. Funding. The FY2017 appropriations act provided $70 million for OPIC's administrative expenses to carry out its credit and insurance programs and a transfer of $20 million from its noncredit account for credit program costs. OPIC had an estimated 281 full-time equivalent employees in FY2017. The President's FY2018 budget requests $60.8 million to manage OPIC's existing portfolio and start orderly wind-down activities. The FAA directs OPIC to operate on a self-sustaining basis, taking into account... the economic and financial soundness of projects. OPIC charges interest, premia, and other fees for its services to cover operations. OPIC returns more funds to the U.S. Treasury than it receives in appropriations. On a cash basis, OPIC reported remitting $239 million in FY2016. On a budgetary basis, it finances loans by borrowing from the U.S. Treasury, and investment guarantees by issuing certificates of participation in U.S. debt capital markets. It repays the Treasury through collection of loan fees, repayments, and default recoveries. .O 'T gognpo goo , q 'S a X

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