{ "id": "98-567", "type": "CRS Report", "typeId": "REPORTS", "number": "98-567", "active": true, "source": "EveryCRSReport.com, University of North Texas Libraries Government Documents Department", "versions": [ { "source": "EveryCRSReport.com", "id": 587597, "date": "2016-12-22", "retrieved": "2020-01-02T14:59:16.861376", "title": "The Overseas Private Investment Corporation: Background and Legislative Issues", "summary": "The Overseas Private Investment Corporation (OPIC), a wholly owned U.S. government corporation, is referred to as the U.S. development finance institution (DFI). It provides political risk insurance, project and investment funds financing, and other services to promote U.S. direct investment in developing countries and emerging economies that will have a development impact. It operates under the foreign policy guidance of the Secretary of State. OPIC\u2019s governing legislation is the Foreign Assistance Act of 1961, as amended (22 U.S.C. \u00a72191 et seq.). \nCongress periodically has extended OPIC\u2019s authority to conduct its programs. Over the past several years, Congress has extended OPIC\u2019s authority through appropriations law, most recently through April 28, 2017 (FY2017 further continuing resolution, P.L. 114-254). The last multi-year, stand-alone reauthorization took place in 2003 with legislation extending OPIC\u2019s authority until September 30, 2007 (P.L. 108-158). Congress also has appropriations, oversight, and other legislative responsibilities related to OPIC. \nOPIC\u2019s programs are intended to promote U.S. private investment in developing countries by mitigating risks, such as political risks (including currency inconvertibility, expropriation, and political violence). Its financing and insurance are backed by the full faith and credit of the U.S. government. Congress places statutory requirements on OPIC\u2019s activities, such as those related to the economic and environmental impacts of projects. OPIC support is available in over 160 countries around the world and across a range of economic sectors. According to OPIC, it extended $4.4 billion in financing and insurance commitments in FY2015. OPIC also reported a record high total exposure of nearly $20 billion at the end of that year. OPIC estimates that since its inception in 1974, it has contributed to about $80 billion in U.S. exports and supported over 280,000 U.S. jobs. \nThe international context in which OPIC operates has evolved. Foreign direct investment (FDI) flows have overtaken official development assistance (ODA) flows as a primary source of external financing to developing countries. DFIs are playing a more active role in supporting private sector capital flows to developing countries. The composition of DFI players, historically dominated by developed countries, also has evolved, with emerging markets such as China becoming more prominent. \nOPIC states that it operates on a \u201cself-sustaining basis,\u201d using its own revenues, which include user fees and interest from U.S. Treasury securities. Congress annually sets in legislation OPIC\u2019s maximum spending levels for its administrative and program expenses. The FY2016 appropriations act provided $62.8 million for OPIC\u2019s administrative expenses to carry out its credit and insurance programs and a transfer of $20 million from its noncredit account for credit program costs. In FY2016, OPIC had a staff of 289 full-time equivalents (estimate).\nOPIC presents a number of possible issues for Congress, a key one being whether to renew OPIC\u2019s authority and, if so, under what terms. Supporters highlight OPIC\u2019s role in filling gaps in private sector investment financing and political risk insurance and helping to level the playing field for U.S. businesses vis-\u00e0-vis foreign competitors, while critics argue that OPIC is a form of \u201ccorporate welfare,\u201d with the private sector better suited to conduct such services, and question OPIC\u2019s development benefits. Other issues include OPIC\u2019s financial product offerings, policies, activity composition, and organizational structure.", "type": "CRS Report", "typeId": "REPORTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "https://www.crs.gov/Reports/98-567", "sha1": "e4977c2625b313fcfc925f0ea62cb1f94fc8a196", "filename": "files/20161222_98-567_e4977c2625b313fcfc925f0ea62cb1f94fc8a196.html", "images": { "/products/Getimages/?directory=RS/html/98-567_files&id=/2.png": "files/20161222_98-567_images_9caf9f3f338ed139cf96830f0b777ee1e512445d.png", "/products/Getimages/?directory=RS/html/98-567_files&id=/1.png": "files/20161222_98-567_images_7d9fcec16b45ec18fa2537bbc1f765efece16ef8.png", "/products/Getimages/?directory=RS/html/98-567_files&id=/3.png": "files/20161222_98-567_images_0960bf66549b9351298b724326030625db6e8018.png", "/products/Getimages/?directory=RS/html/98-567_files&id=/0.png": "files/20161222_98-567_images_d51cf5da449027d9b5a952726a9f93aaa6a30ef6.png" } }, { "format": "PDF", "encoding": null, "url": "https://www.crs.gov/Reports/pdf/98-567", "sha1": "78af9eeaee5b6c277b28567eb9a0bcbd78c78628", "filename": "files/20161222_98-567_78af9eeaee5b6c277b28567eb9a0bcbd78c78628.pdf", "images": {} } ], "topics": [ { "source": "IBCList", "id": 4763, "name": "Export Policy" } ] }, { "source": "EveryCRSReport.com", "id": 444521, "date": "2015-08-20", "retrieved": "2016-04-06T18:33:49.064711", "title": "The Overseas Private Investment Corporation: Background and Legislative Issues", "summary": "Congressional Research Service\n7-5700\nwww.crs.gov\n98-567\nSummary\nThe Overseas Private Investment Corporation (OPIC), a wholly-owned U.S. government corporation, is referred to as the U.S. development finance institution (DFI). It provides political risk insurance, project and investment funds financing, and other services to promote U.S. direct investment in developing countries and emerging economies that will have a development impact. It operates under the foreign policy guidance of the Secretary of State. OPIC\u2019s governing legislation is the Foreign Assistance Act of 1961, as amended (22 U.S.C. \u00a72191 et seq.). \nCongress periodically has extended OPIC\u2019s authority to conduct its programs. The most recent multi-year, stand-alone reauthorization took place in 2003 with legislation extending its authority until September 30, 2007 (P.L. 108-158). Over the past several years, Congress has extended OPIC\u2019s authority through the appropriations process. The FY2015 appropriations act (\u00a77073(b) of P.L. 113-235) extends OPIC\u2019s authority to conduct its credit and insurance programs until September 30, 2015. In addition to authorization responsibilities, Congress has appropriations, oversight, and other legislative responsibilities related to OPIC. \nOPIC\u2019s programs are intended to promote U.S. private investment in developing countries by mitigating risks, such as political risks (including currency inconvertibility, expropriation, and political violence). Its financing and insurance are backed by the full faith and credit of the U.S. government. Congress places statutory requirements on OPIC\u2019s activities, such as those related to the economic and environmental impacts of projects. In FY2014, OPIC support was available in over 160 countries around the world and across a range of economic sectors. According to OPIC, since it began operations, it has supported more than 4,300 investment projects of more than $225 billion in investment value.\nThe international context in which OPIC operates has evolved. Foreign direct investment (FDI) flows have overtaken official development assistance (ODA) flows as a primary source of external financing to developing countries. DFIs also are playing a more active role in supporting private sector capital flows to developing countries. The composition of DFI players, historically dominated by developed countries, also has evolved, with emerging markets such as China becoming more prominent. Presently, OPIC has many counterparts at the bilateral, regional, and multilateral levels. \nOPIC states that it operates on a \u201cself-sustaining basis,\u201d using its own revenues, which include user fees and interest from U.S. Treasury securities. However, Congress annually sets in legislation OPIC\u2019s maximum spending levels for its administrative and program expenses. For FY2015, Congress provided $62.8 million for OPIC\u2019s administrative expenses to carry out its credit and insurance programs and authorized a transfer of $25.0 million from OPIC\u2019s noncredit account for credit program costs. \nThe 114th Congress may take up a number of issues related to OPIC. A key issue is whether or not to renew OPIC\u2019s authority and, if so, under what terms. Perspectives on OPIC differ. Supporters highlight OPIC\u2019s role in filling gaps in private sector investment financing and political risk insurance and helping to level the playing field for U.S. businesses vis-\u00e0-vis foreign competitors. Critics argue that OPIC is a form of \u201ccorporate welfare,\u201d with the private sector better suited to conduct such services, and they question OPIC\u2019s development benefits. Congress also may examine OPIC\u2019s financial product offerings, policies, activity composition, and organizational structure.\nContents\nBackground\t2\nOrigins\t2\nPrograms\t2\nPolitical Risk Insurance\t3\nInvestment Financing\t4\nInvestment Funds\t4\nOther Activities\t5\nStatutory and Policy Conditions for OPIC-Supported Projects\t5\nPortfolio Exposure\t8\nAuthorizations of Finance and Insurance Support\t9\nBudget\t12\nRisk Management\t14\nInternational Context for Development Finance\t14\nIssues for Congress\t20\nReauthorization\t20\nProduct Offerings\t21\nEquity Authority\t21\nTechnical Assistance\t22\nPolicies\t22\nActivity Areas\t23\nOrganizational Structure\t24\n\nFigures\nFigure 1. OPIC Portfolio Exposure: Statutory Limit and Actual Level, FY2000-2014\t8\nFigure 2. Composition of OPIC New Commitments, FY2014\t11\nFigure 3. Net Official Development Assistance (ODA) and Foreign Direct Investment (FDI) Flows to Developing Countries, 1970-2013\t16\n\nTables\nTable 1. Overview of Selected Statutory and Policy Requirements for OPIC\t6\nTable 2. Composition of OPIC Portfolio Exposure, FY2014\t9\nTable 3. OPIC Appropriations, FY2011-FY2016\t13\nTable 4. Selected Development Finance Institutions (DFIs)\t17\n\nContacts\nAuthor Contact Information\t25\n\nThe Overseas Private Investment Corporation (OPIC) is a wholly-owned U.S. government corporation that seeks to promote economic growth in less developed economies through the mobilization of private capital, in support of U.S. foreign policy goals. It is often referred to as the U.S. government\u2019s development finance institution (DFI). \nOPIC\u2019s enabling legislation is the Foreign Assistance Act of 1961 (P.L. 87-195), as amended. The Foreign Assistance Act provides OPIC with authority to conduct its activities for a renewable period of time. The latest multi-year, standalone reauthorization of OPIC was in legislation passed in 2003 (P.L. 108-158) that extended OPIC\u2019s authority until September 30, 2007. Over the past several years, Congress has renewed OPIC\u2019s authority through the appropriations process (i.e., essentially through a \u201creauthorization waiver\u201d). Most recently, the FY2015 appropriations act (\u00a77073(b) of P.L. 113-235) extends OPIC\u2019s authority to conduct its credit and insurance programs until September 30, 2015. \nThe Foreign Assistance Act directs OPIC to, \u201cmobilize and facilitate the participation of United States 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 ... under the policy guidance of the Secretary of State.\u201d OPIC works to fulfill its mandate by providing political risk insurance, project and investment funds financing, and other services to promote U.S. direct investment oveseas. Its services are intended to mitigate the risks affecting U.S. international investment, such as political risks (including currency inconvertibility, expropriation, and political violence), for U.S. firms making qualified investments overseas. OPIC characterizes itself as \u201cdemand-driven,\u201d providing services based on user interest. OPIC\u2019s activities may support U.S. exports, and it is involved in U.S. trade promotion interagency processes and initiatives. \nCongress does not approve individual OPIC projects, but has authorization, appropriations, oversight, and other legislative responsibilities related to the agency and its activities. Congress authorizes OPIC\u2019s ability to conduct its credit and insurance programs for a period of time that it chooses; can amend or change its governing legislation as it deems appropriate; and approves an annual appropriation for OPIC that sets an upper limit on the agency\u2019s administrative and program expenses, which are covered by OPIC\u2019s own funds. The Senate confirms presidential appointments to OPIC\u2019s Board of Directors and to the OPIC positions of president and executive vice president. The 114th Congress may take up a number of issues related to OPIC, chief of which could be whether to renew OPIC\u2019s authority and, if so, under what terms. Congress also may examine OPIC\u2019s financial product offerings, policies, activity composition, and organizational structure.\nThis report is structured into three parts: (1) OPIC background; (2) international context for development finance; and (3) key issues for Congress related to OPIC. \nBackground\nOrigins\nCreated under the Foreign Assistance Act of 1961 (P.L. 87-195) as amended, OPIC was established in 1969 and began operations in 1971 as a development finance institution amid an atmosphere of congressional disillusionment overall with U.S. aid programs, especially large infrastructure projects. In his first message to Congress on aid, President Nixon recommended the creation of OPIC to assume the investment guaranty and promotion functions that were being conducted by the U.S. Agency for International Development (USAID). President Nixon also directed that OPIC would provide \u201cbusinesslike management of investment incentives\u201d to contribute to the economic and social progress of developing nations.\nIn creating OPIC, the Nixon Administration indicated that it was not attempting to end official U.S. foreign assistance, because \u201cprivate capital and technical assistance cannot substitute for government assistance programs,\u201d a combination that can provide \u201cofficial aid on the one hand, and private investment and technical assistance on the other.\u201d Private investment activities, however, were meant to complement the official assistance programs and, thereby, multiply the benefits of both. In addition, market-oriented private investment was viewed as an antidote to the government-oriented aid projects that were considered by some to be costly and inefficient. OPIC was created as a first step in the eventual overhaul of the entire U.S. aid program. In 1973, this overhaul was completed as the United States largely abandoned infrastructure building and other large capital projects in favor of humanitarian aid to meet basic human needs.\nPrograms\nOPIC categorizes its operations into three main programs\u2014insurance, finance, and investment funds\u2014that are intended to promote U.S. private investment in less developed countries by mitigating risks, such as political risks, for U.S. firms making qualified investment overseas. OPIC\u2019s authority to guarantee and insure U.S. investments abroad is backed by the full faith and credit of the U.S. government and OPIC\u2019s own financial resources. OPIC provides financing and insurance coverage of up to $250 million per project. \nWhile private sector markets exist for financing and insuring U.S. direct investment overseas, there may be gaps in them due to \u201cmarket failures\u201d such as imperfect information, barriers to entry, risk levels, and financial crises. OPIC\u2019s primary objective in operating its programs is to promote economic development in low-income countries by supporting investment in projects, economic sectors, regions, and countries that are underserved by private markets; and mobilizing private investment in countries with viable project environments, but low credit ratings. For example, individual firms may attach more risk to investing in developing economies due to imperfect information and, thus, be unwilling to commit resources to investments in the least developed countries without risk mitigation by OPIC through its financing and insurance support. \nPolitical Risk Insurance\nOPIC provides political risk insurance to safeguard investments against certain political risks involved in investing in developing countries in three broad areas:\nCurrency inconvertibility coverage compensates investors if new currency restrictions are imposed which prevent the conversion and transfer of remittances from insured investments, but does not protect against currency devaluation.\nExpropriation coverage protects U.S. firms against the nationalization, confiscation, or expropriation of an enterprise, including actions by foreign governments that deprive an investor of fundamental rights or financial interests in a project for a period of at least six months. This coverage excludes losses that may arise from lawful regulatory or revenue actions by a foreign government and actions instigated or provoked by the investor or foreign firm.\nPolitical violence coverage compensates U.S. citizens and firms for property and income losses directly caused by various kinds of violence, including declared or undeclared wars, hostile actions by national or international forces, civil war, revolution, insurrection, and civil strife (including politically motivated terrorism and sabotage). Income loss insurance protects the investor\u2019s share of income from losses that result from damage to the insured property caused by political violence. Assets coverage compensates U.S. citizens and firms for losses of or damage to tangible property caused by political violence. OPIC also has a number of special programs that protect U.S. banks from political violence. This type of insurance reduces risks for banks and other institutional investors, which allows them to play a more active role in financing projects in developing countries. Specialized types of insurance coverage also are available for U.S. investors involved with certain contracting, exporting, licensing, or leasing transactions that are undertaken in a developing country.\nOPIC\u2019s political risk insurance is available to U.S. citizens, U.S. firms, or to the foreign subsidiaries of U.S. firms as long as the foreign subsidiary is at least 95% owned by a U.S. citizen. According to OPIC, such insurance is available for investments in new ventures or in expansions of existing enterprises, and can cover equity investments, parent company and third party loans and loan guarantees, technical assistance agreements, cross-border leases, assigned inventory or equipment, and other forms of investment.\nInvestment Financing\nOPIC\u2019s investment financing program operates like an investment bank, customizing and structuring a complete package for individual projects in countries where conventional financing institutions often are unwilling or unable to lend on a basis that is competitively advantageous for investors. Most OPIC financing for a \u201cnon-financial\u201d industry project (e.g., energy, manufacturing, transportation) is used to cover capital costs, such as facility construction or leasehold improvements, equipment, and design and engineering services associated with establishing or expanding a project. For a financial industry project, OPIC financing is used to fund lending capacity expansion, such as for microfinance, small- and medium-sized enterprise (SME) lending, or mortgage lending, by a financial services provider.\nTo obtain OPIC financing, the venture must be commercially and financially sound and have some portion of U.S. ownership. Projects may be wholly owned by U.S. companies, foreign subsidiaries of U.S. companies, or joint ventures involving local companies and U.S. sponsored firms. In the case of a joint venture involving existing firms, the U.S. investor generally is expected to own at least 25% of the equity of the project. For new ventures, financing may be equal to 50% of the total project cost; a larger share is possible for certain projects. \nThe amount of OPIC\u2019s participation may vary taking into consideration financial risks and benefits. In general, OPIC will not support more than 75% of the total investment. OPIC provides financing to investors through two major programs: direct loans and loan guarantees. \nDirect loans generally range between $350,000 and $50 million, but can be more in certain cases. Direct loans are available only for ventures sponsored by, or significantly involving, U.S. SMEs or cooperatives (e.g., joint ventures).\nLoan guarantees typically are used for larger projects, ranging in size up to $250 million, but in certain cases can be higher. OPIC\u2019s guarantees are issued to financial institutions that are more than 50% owned by U.S. citizens, corporations, or partnerships. Rates and conditions on loans and guarantees depend on financial market conditions at the time and on OPIC\u2019s assessment of the financial and political risks involved. Consistent with commercial lending practices, OPIC charges up-front, commitment, and cancellation fees, and reimbursement is required for project-related expenses. \nAs part of its emphasis on U.S. small business investors, OPIC established the Enterprise Development Network (EDN) in June 2007. Under the EDN, OPIC collaborates with participating financial intermediaries to expand access of small businesses to OPIC-supported products and services. \nInvestment Funds\nInvestment funds are privately owned and managed sources of capital that make direct equity investments in portfolio companies in new, expanding or privatizing companies in developing or emerging markets. OPIC supports these funds through financing to supplement the equity that the funds privately raise. In most instances, OPIC provides up to one-third of the fund\u2019s total capital, and receives debt returns on its investment. OPIC takes a senior creditor position.\nOPIC supports these funds in situations where U.S. firms either cannot allocate or cannot raise sufficient capital to start or expand their businesses overseas. OPIC solicits these funds through a competitive \u201cCall for Proposals\u201d process that seeks investment funds focusing on the agency\u2019s development priorities, particularly in areas where investments have been difficult to obtain. OPIC uses the \u201cCall for Proposals\u201d process to select fund managers with private equity investment capability and experience. OPIC-supported investment funds cover a range of economic sectors, including financial services, insurance, housing, renewable energy, and information technology. \nOPIC approved its first investment fund in 1987. The investment funds program has been restructured periodically, such as in 2002, leading to the incorporation of the competitive selection process through the \u201cCall for Proposals\u201d (discussed above). \nOther Activities\nOPIC conducts outreach to raise awareness of its programs and services for U.S. investors. For instance, OPIC offers workshops and seminars as part of its Expanding Horizons program to address concerns over political risks in emerging markets and share information about its programs and resources to support overseas investment. Expanding Horizons includes a focus on supporting U.S. small businesses in expanding to overseas markets. \nStatutory and Policy Conditions for OPIC-Supported Projects\nCongress does not approve individual OPIC projects, but sets forth specific statutory requirements for OPIC in the Foreign Assistance Act of 1961 (22 U.S.C. \u00a72191 et seq.), as amended. OPIC also has various policy requirements for its support (see Table 1).\nOPIC investment support falls outside of the international rules of the OECD Arrangement on Officially Supported Export Credits (the Arrangement)\u2014which establishes guidelines for member countries\u2019 export credit agencies (ECAs), such as the Export-Import Bank of the United States (Ex-Im Bank). The Arrangement establishes limitations on terms and conditions of ECAs, including on minimum interest rates, maximum repayment terms, notification procedures, and reporting requirements for government-supported export credit activity that is directly tied to exports. Among other things, the Arrangement does not apply to investment support not directly linked or tied to procurement from the United States. As such, OPIC\u2019s activities are considered to fall outside of the OECD Arrangement (though they nevertheless may contribute to U.S. exports). \nTable 1. Overview of Selected Statutory and Policy Requirements for OPIC\nRequirement\nDescription\nStatutory Basis\n\nOVERALL\n\n\n\nMandate \nOPIC\u2019s mandate is \u201c[t]o mobilize and facilitate the participation of United States 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, thereby complementing the development assistance objectives of the United States... under the foreign policy guidance of the Secretary of State.\u201d\n22 U.S.C. \u00a72191\n\nRepayment\nOPIC is directed to operate \u201con a self-sustaining basis, taking into account in its financing operations the economic and financial soundness of projects[.]\u201d \n22 U.S.C. \u00a72191(a)\n\nTRANSACTION-SPECIFIC\n\n\nU.S. Connection\nAccording to OPIC, projects that it supports must have \u201cmeaningful involvement\u201d by a U.S. citizen or business. OPIC\u2019s enabling legislation defines the term \u201celigible investor,\u201d and its policies provide further specifications. \n22 U.S.C. \u00a72198(c)\n\nEconomic Impact\nIn determining whether to provide support, OPIC shall \u201cbe guided by the economic and social impact and benefits\u201d of the project, and seek to support \u201cthose developmental projects having positive trade benefits for the United States[.]\u201d OPIC must decline support if it determines that overseas investment may reduce employment in United States, either because the U.S. firm shifts part of its production abroad, or because output from overseas investment will be shipped to United States and \u201creduce substantially the positive trade benefits\u201d of the investment. \n22 U.S.C. \u00a72191(1); \n22 U.S.C. \u00a72191(i),\n(k)-(m)\n\nEnvironmental Impact\nOPIC generally is barred from participating in projects that pose an \u201cunreasonable or major environmental health, or safety, hazard....\u201d The Board of Directors cannot vote in favor of any project likely to have \"significant adverse environmental impacts that are sensitive, diverse, or unprecedented\" unless at least 60 days before the date of the vote, an environmental impact assessment of the project is conducted and made publicly available. \n22 U.S.C. \u00a72191(n); \n22 U.S. \u00a72191a(b)\n\nWorker Rights\nProjects can be implemented only in countries that currently have, or are taking steps to adopt and implement, laws that uphold internationally recognized worker rights. A national economic interest determination waiver is possible by the President of the United States. \n22 U.S.C. \u00a72191a(a)\n\nHuman Rights\nOPIC is required to take into account in conducting its programs in a country, in consultation with the Secretary of State, \u201call available information about observance of and respect for human rights and fundamental freedoms in such country and the effect the operation of such programs will have on human rights and fundamental freedoms in such country.\u201d \n22 U.S.C. \u00a72199(i)\n\nSmall Business\nTo the \u201cmaximum degree possible consistent with its purposes,\u201d OPIC must give preferential consideration to projects involving U.S. small business and to increase the proportion of projects significantly involving U.S. small business to at least 30% of certain of its activity.\n22 U.S.C. \u00a72191(e)\n\nAdditionality\nIt is OPIC policy that its activities should complement, rather than compete with, the private sector, i.e., transactions that would otherwise be impossible or unlikely without its support. \n\n\n\nFOCUS AREAS AND LIMITATIONS\n\n\nRenewable Energy\nFY2010 appropriations language directed OPIC to \u201cissue a report, not later than 180 days after December 16, 2009, highlighting its substantial commitment to invest in renewable and other clean energy technologies and plans to significantly reduce greenhouse gas emissions from its portfolio,\u201d with the proviso that \u201csuch commitment shall include implementing a revised climate change mitigation plan to reduce greenhouse gas emissions associated with projects and sub-projects in the agency\u2019s portfolio as of June 30, 2008 by at least 30 percent over a 10-year period and by at least 50 percent over a 15-year period.\u201d\nP.L. 111-117, 7079(b); 22 U.S.C. \u00a72191b\nCoal-fired Power PlantsUnder FY2015 appropriations legislation, the use of OPIC funds is prohibited, through September 30, 2015, under certain conditions, for the enforcement of any rule, regulation, policy, or guidelines implemented pursuant to: \nOPIC's greenhouse gas emissions reductions policy, based on FY2010 appropriations language (see above); and \nOPIC's proposed modification to its Environmental and Social Policy Statement (ESPS) related to coal. \nP.L. 113-235, 7086(4)(A)-(B))\nSub-Saharan AfricaThe Board of Directors is directed to take \u201cprompt measures\u201d to increase OPIC programs and financial commitments in sub-Saharan Africa.22 U.S.C. \u00a72193(e)\n\nCountry Restrictions\n\u201cFrom 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.\u201d \n\n\nSectoral and Product Restrictions\nOPIC has \u201ccategorically prohibited sectors\u201d based on economic, environmental, and other policy, e.g., projects established as a result of reducing or terminating U.S.-based operations.\n\n\nSource: CRS analysis of OPIC\u2019s enabling legislation (22 U.S.C. \u00a72191 et seq.), as well as OPIC website and publications.\nNotes: Descriptions provide summaries of the requirements and may not be comprehensive. \nPortfolio Exposure\nThe statutory limit on the total contingent liability (\u201cportfolio exposure\u201d) for OPIC\u2019s financing and insurance is $29 billion. In FY2014, OPIC\u2019s portfolio had a total exposure of $18 billion distributed across financial products and regions (see Figure 1 and Table 2). \nThe composition of OPIC\u2019s portfolio by financial product type has evolved; in earlier years, political risk insurance constituted the larger share of the portfolio, while in more recent years, investment financing constitutes the larger share. For example, in FY2000, OPIC\u2019s total portfolio of $16.8 billion was composed of 59% in political risk insurance and 41% in investment financing. In contrast, in FY2014, OPIC\u2019s total portfolio of $18 billion was composed of 17% in political risk insurance and 83% in investment financing. \nFigure 1. OPIC Portfolio Exposure: Statutory Limit and Actual Level, FY2000-2014\n\nSource: CRS, based on data from OPIC annual reports, various years. \nNotes: OPIC\u2019s statutory limit on its exposure is provided in 22 U.S.C. \u00a72195(a).\n\n\n\nTable 2. Composition of OPIC Portfolio Exposure, FY2014\nExposure Category\nAmount ($bn)\nPercent of Total Exposure\n\nTotal Exposure\n$18.0\n100%\n\nProgram\n\n\n\nFinancing (Loan, Loan Guarantee, Funds Support)\n$15.0\n83%\n\nPolitical Risk Insurance\n$3.1\n17%\n\nGeographic Region\n\n\n\nLatin American & the Caribbean\n$5.5\n30%\n\nSub-Saharan Africa \n$3.7\n20%\n\nNorth Africa/Middle East\n$3.3\n18%\n\nEastern Europe & Newly Industrializing States\n$3.0\n17%\n\nAsia\n$2.6\n14%\n\nWorldwide Funds\n$0.7\n4%\n\nStop Loss Adjustmentsa\n-$0.6\n-4%\n\nSource: CRS, based on data from Annual Management Report of the Overseas Private Investment Corporation for Fiscal Year 2014, p. 9.\nNotes: The OPIC publication did not provide exposure composition by economic sector. \nAccording to OPIC\u2019s FY2013 annual management report, the insurance stop-loss adjustment \u201crepresents the difference between the aggregate coverage amount and OPIC\u2019s actual exposure under these contracts.\u201d\nAuthorizations of Finance and Insurance Support \nIn FY2014, OPIC provided $2.96 billion in new commitments for investment projects (see Figure 2), which it estimates will support $316 million in U.S. exports over the next five years. It also estimates that its FY2014 new commitments are associated with 409 jobs in the United States and 9,000 jobs in the host countries. OPIC prioritizes its works based on U.S. foreign policy and development objectives, but is also demand-driven. Activities include the following.\nCountries/regions: In FY2014, OPIC support was available in 162 developing and emerging economies across Africa, Latin America, the Middle East, Asia, and Eastern Europe. OPIC had active projects in 101 countries that year. According to OPIC, 31% of the new projects to which it committed support in FY2014 were in poor countries. OPIC\u2019s support for projects in sub-Saharan Africa has grown from around 6% about a decade ago to around one-quarter of new commitments in FY2014.\nEconomics sectors: OPIC is active in a range of economic sectors, including agriculture, renewable energy, health care, financial services, housing, infrastructure, \u201cimpact investing,\u201d and technology. Between FY2010 and FY2014, its renewable energy commitments nearly doubled to $1.22 billion. OPIC considers all of its projects to be in \u201cimpact sectors,\u201d but specified that its FY2014 activity included $188 million for projects \u201cwith the explicit intention of promoting social and environmental returns in addition to financial returns.\u201d\nSMEs: OPIC seeks to expand U.S. SME involvement in overseas investment. According to OPIC, between FY2010 and FY2014, U.S. SMEs accounted for nearly 75% of projects receiving its support. OPIC also has focused on expanding financing available to SMEs in developing countries and emerging markets.\nFigure 2. Composition of OPIC New Commitments, FY2014\n/\nSource: CRS, based on OPIC 2014 Annual Report; and U.S. Congress, House Committee on Foreign Affairs, Subcommittee on Terrorism, Nonproliferation, and Trade, Testimony by Elizabeth Littlefield, President and CEO, OPIC, Hearing on \u201cTrade Promotion Agencies and U.S. Foreign Policy,\u201d 114th Cong., 1st sess., May 19, 2015.\nNotes: OPIC FY2014 new commitments totaled $2.96 billion. The economic sector values reflect CRS calculations using the worldwide commitment and percentages for each economic sector from the testimony. \nOPIC participates in broader foreign policy initiatives by the Administration, as illustrated below.\nIn response to political change in the MENA region, in March 2011, then-Secretary of State Clinton announced that OPIC would provide up to $2 billion in financial support \u201cto catalyze private sector development\u201d in MENA to spur economic growth and job creation. In May 2011, President Obama announced that OPIC would provide up to $1 billion in financing to support infrastructure and job creation specifically in Egypt. As part of these efforts, OPIC, for example, approved $500 million in lending to Egypt and Jordan ($250 million to each country) to support small businesses in those countries. \nThe U.S.-Africa Clean Energy Finance (ACEF) Initiative\u2014a joint mechanism by OPIC, along with the Department of State and the Trade and Development Agency (TDA)\u2014is a four-year, $20 million program launched in June 2012 to catalyze private sector investment in the African clean energy sector by identifying and providing financing for project development costs. In 2013, OPIC dedicated a staff member for South Africa to support the initiative. \nThe U.S.-Asia Pacific Comprehensive Partnership for a Sustainable Energy Future, announced during the 2012 East Asia Summit, is a policy initiative that includes up to $6 billion from federal trade and investment promotion agencies to finance exports and investments related to energy infrastructure in the region. OPIC stated that it will provide up to $1 billion in financing for sustainable power and infrastructure projects in the region, in support of the initiative.\nPower Africa, announced by the President in June 2013, is an initiative to double access to power in sub-Saharan Africa. The U.S. government plans to commit more than $7 billion in financial support over the next five years, including up to $1.5 billion in OPIC financing and insurance to energy projects in the region.\nLook South, announced in January 2014, is a Department of Commerce-led federal government initiative to help more companies do business with Mexico and the United States\u2019 other free trade agreement partners in Latin America. The initiative includes a focus on increasing availability and awareness of investment tools for the region through OPIC. \nBudget\nCongress directs OPIC to operate \u201con a self-sustaining basis, taking into account in its financing operations the economic and financial soundness of projects.\u201d OPIC\u2019s budget is funded from its offsetting collections, which are derived from the premiums, interest, and fees generated from its insurance and finance services and the accumulated interest generated from the agency\u2019s investment in U.S. Treasury securities. Its budget is composed of noncredit and credit accounts, in conformity with the standards set out in the Federal Credit Reform Act of 1990 (FCRA). The noncredit portion relates to OPIC\u2019s political risk insurance program, while the credit portion is comprised of OPIC\u2019s direct and guaranteed loans. OPIC uses premium income and the interest it accrues from the assets in its noncredit account to fund the direct and indirect expenses in its noncredit and credit accounts.\nWhile OPIC has the authority to spend from its own revenue to cover its operations, Congress and the President set OPIC\u2019s maximum spending levels for its administrative and program expenses through the annual appropriations process. 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Today, OPIC is a U.S. government agency that provides project financing, investment insurance, and other services for U.S. businesses in over 150 developing nations and emerging economies. To date, OPIC has funded, guaranteed, or insured over $180 billion in\r\ninvestments.", "type": "CRS Report", "typeId": "REPORT", "active": false, "formats": [ { "format": "PDF", "filename": "files/20091201_98-567_a8066fbc8b6bcc9a4e7052cd0e9d7207b4c5aaed.pdf" }, { "format": "HTML", "filename": "files/20091201_98-567_a8066fbc8b6bcc9a4e7052cd0e9d7207b4c5aaed.html" } ], "topics": [ { "source": "LIV", "id": "Finance", "name": "Finance" }, { "source": "LIV", "id": "Investments", "name": "Investments" }, { "source": "LIV", "id": "Finance - Developing countries", "name": "Finance - Developing countries" }, { "source": "LIV", "id": "International finance", "name": "International finance" }, { "source": "LIV", "id": "International affairs", "name": "International affairs" } ] }, { "source": "University of North Texas Libraries Government Documents Department", "sourceLink": "https://digital.library.unt.edu/ark:/67531/metacrs10540/", "id": "98-567_2008Oct20", "date": "2008-10-20", "retrieved": "2008-12-11T20:31:13", "title": "The Overseas Private Investment Corporation: Background and Legislative Issues", "summary": "The Overseas Private Investment Corporation (OPIC)1 was established in 1969 and began operations in 1971 to promote and assist U.S. business investment in developing nations. OPIC is a U.S. government agency that provides project financing, investment insurance, and other services for U.S. businesses in 154 developing nations and emerging economies. 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It discusses U.S. policy and assistance. Basic facts and biographical information are provided. This report may be updated. Related products include CRS Report RL33458, Central Asia: Regional Developments and Implications for U.S. Interests, updated regularly.", "type": "CRS Report", "typeId": "REPORT", "active": false, "formats": [ { "format": "PDF", "filename": "files/20080522_98-567_8c19823ee8d8d59b813b706248aebe081a8a1a7b.pdf" }, { "format": "HTML", "filename": "files/20080522_98-567_8c19823ee8d8d59b813b706248aebe081a8a1a7b.html" } ], "topics": [ { "source": "LIV", "id": "Finance", "name": "Finance" }, { "source": "LIV", "id": "Investments", "name": "Investments" }, { "source": "LIV", "id": "Finance - Developing countries", "name": "Finance - Developing countries" }, { "source": "LIV", "id": "International finance", "name": "International finance" }, { "source": "LIV", "id": "International affairs", "name": "International affairs" } ] }, { "source": "University of North Texas Libraries Government Documents Department", "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc807107/", "id": "98-567_2008Jan16", "date": "2008-01-16", "retrieved": "2016-03-19T13:57:26", "title": "The Overseas Private Investment Corporation: Background and Legislative Issues", "summary": null, "type": "CRS Report", "typeId": "REPORT", "active": false, "formats": [ { "format": "PDF", "filename": "files/20080116_98-567_cd9c84178292497a82742691cc378fd0c052c070.pdf" }, { "format": "HTML", "filename": "files/20080116_98-567_cd9c84178292497a82742691cc378fd0c052c070.html" } ], "topics": [] }, { "source": "University of North Texas Libraries Government Documents Department", "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc807280/", "id": "98-567_2003Dec04", "date": "2003-12-04", "retrieved": "2016-03-19T13:57:26", "title": "The Overseas Private Investment Corporation: Background and Legislative Issues", "summary": null, "type": "CRS Report", "typeId": "REPORT", "active": false, "formats": [ { "format": "PDF", "filename": "files/20031204_98-567_eac1734807e4c21d23ced21db692591ad84bd6c5.pdf" }, { "format": "HTML", "filename": "files/20031204_98-567_eac1734807e4c21d23ced21db692591ad84bd6c5.html" } ], "topics": [] } ], "topics": [ "Appropriations", "Domestic Social Policy", "Economic Policy", "Environmental Policy", "Foreign Affairs", "Industry and Trade", "Intelligence and National Security", "National Defense" ] }