1. Screen your project with OPIC at an early stage.
While we cannot guarantee coverage availability for your proposed investment until the application process is complete, we can tell you whether we see any likely obstacles to obtaining the coverage you seek based on the information you provide us. So please contact OPIC early to discuss investor eligibility, project eligibility with respect to its U.S. effects (e.g., is it in a sensitive sector?), environmental impact and coverage availability in the proposed host country.
2. Register with OPIC before making an irrevocable commitment to invest.
This involves filling out OPIC Form 50, a simple cost-free one-page form that opens a file at OPIC. You will receive a registration confirmation letter once you have registered your project. Registering with OPIC does not commit you to purchase OPIC insurance, nor does it commit OPIC to provide it. If, however, you fail to register your project before you become irrevocably committed to invest, you may jeopardize your eligibility for coverage.
3. Begin the Foreign Government Approval (FGA) process early.
OPIC programs operate under agreements with host governments, all of which require host-government approval of OPIC insurance for each project. While in some countries this approval is virtually automatic and requires no special effort by the investor, in some countries a special formal process is involved. In the latter case, prompt action on your part can avoid delay in obtaining effective OPIC insurance coverage. When you submit Form 50 to OPIC, you will receive instructions on how to obtain the FGA along with the OPIC registration confirmation letter.
4. Keep OPIC in mind as you negotiate project agreements.
OPIC insurance policies require that the insured assign to OPIC free and clear its insured interest in a foreign enterprise (e.g., shares of stock in the case of an equity investment) in order to receive compensation for an expropriation claim. Thus, as you negotiate project loans and other agreements, you should take care to avoid having project lenders, joint venture partners or the host government impose restrictions on your ability to assign your insured interests in the foreign enterprise in circumstances where you might need to transfer them to OPIC.
5. Remember that OPIC cannot improve the terms of the deal you negotiate.
In particular, if your project involves an agreement with a government entity, OPIC cannot insure that the agreed dispute resolution forum will be fair, nor contest an outcome to which you are legally bound. Many investors will try to stipulate an internationally recognized dispute settlement forum (e.g., the American Arbitration Association, International Chamber of Commerce) rather than a local forum. The availability and terms of OPIC insurance may be affected by the dispute settlement clause in your project agreements and the country’s record regarding the enforcement of arbitral awards.
6. Submit a complete formal application along with all relevant project agreements to OPIC in a timely manner.
It is OPIC’s practice to insure an investment prior to or concurrent with the investment being made. We will process your application as quickly as possible, with the time required dependent upon various factors including the size of the investment, its sensitivity with regard to U.S., host country, and environmental effects, and OPIC’s ability to obtain timely information from you. Relevant project agreements are acceptable if still in draft form.
7. Think about coverage and cost.
Consider how you are exposed to risk in your project, and which risks are of most concern to you. OPIC’s base rates are a good guide; they are available in the OPIC Handbook and on our web site. In addition, investors can request non-binding indicative rates after registering a project. We will be pleased to discuss with you ways to limit the cost of coverage.
8. Consider private insurers.
For projects which require insurance coverage of more than $5 million, OPIC only offers insurance to investors who, having investigated the possibility of obtaining insurance from private political risk insurers, decide to pursue OPIC insurance because private insurance is not available on terms sufficient to make the investment viable for the investor, or because of specific benefits OPIC participation will bring to the investment. You may contact OPIC for a list of U.S. private insurers.
9. OPIC requires developmental information.
The developmental impact of a given project is important to OPIC’s ability to support investments in developing countries. OPIC uses objective measurements to demonstrate the developmental impact of its programs and to assist in developing OPIC’s annual report to Congress on developmental impact without unduly overburdening OPIC clients. For this reason, it is important to completely fill out information in the Application for Insurance on job creation in the host country, training of workers, local procurement, social responsibility, and equal employment policy.
10. Having a business plan, investment structure diagram, marketing plan and/or feasibility study helps.
If you have a business plan, marketing plan and/or feasibility study, be sure to submit them with your application. If not, we request a detailed description of the business process(es) and/or product to be produced. Having this information from investors facilitates the process of obtaining clearances for U.S. effects, developmental impact, worker rights and environment. It is also helpful for OPIC to receive information on the investment structure in the form of a diagram or description so that we understand precisely how the cross-border investment will take place.