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Press Release

Friday, March 30, 2007

U.S. Small Business Uses OPIC Loan to Support Low-income Housing Construction in Mexico

WASHINGTON, D.C. – A U.S. small business will use a loan from the Overseas Private Investment Corporation (OPIC) to expand its land development and urbanization activities Mexico, helping that nation meet a growing demand for low income housing, OPIC President and CEO Robert Mosbacher, Jr. announced today.

Salvatierra Desarollos of Arizona will use the proceeds of a $3 million OPIC loan to purchase raw land and finance expenses connected to the urbanization of land for resale to builders of low-income housing in the Laguna region of Mexico, and to support other working capital needs.

The project was processed through a small business fast-track system established by a framework agreement concluded in 2004 between OPIC and Interlink Capital Strategies, a Washington, D.C.-based financial consultant.

“By providing a way for small homebuilders to finance the purchase of land and land development for affordable housing construction, this project will have a strong developmental impact on the Mexican housing sector” Mosbacher said. “It will complement the Mexican Government’s support for the construction and purchase of entry-level homes and will specifically help alleviate the acute shortage of affordable housing the in the Laguna region. ”

“OPIC and Salvatierra have joined to serve a Mexican market demanding well over 1,000,000 housing units per year with enormous growth potential and opportunities for U.S. and Mexican companies. Builders can not meet the demand without access to development capital and this alliance fulfills a critical component to meeting Mexico’s demand for affordable housing” said Tim Bridgewater, Chairman of Interlink Capital Strategies.

Salvatierra Desarollos was founded by Arizona businessman Fife Symington to address Mexico’s acute housing shortage. Since 2004, Salvatierra has purchased, provided permits for, and urbanized raw land for resale to builders of low-income housing in Mexico. Currently, Salvatierra has the capacity to urbanize up to 1200 lots per year. The combination of the OPIC financing and the reinvestment of operational proceed will enable the company to increase its output capacity to 2400 lots by 2011.

“OPIC’s involvement in this project is welcome, and I am confident that is the Mexican people themselves will truly benefit from this alliance,” Symington said.

Interlink Capital Strategies specializes in financing transactions and projects in emerging markets using government programs. Because financial markets are typically unable to support sales and direct foreign investment in emerging markets without government involvement, Interlink Capital Strategies provides critical financial advisory services to mobilize financing in regions outside Western Europe and North America. The type of financial support includes: business development seed money, export working capital, vendor financing, direct foreign investment support, insurance, bonding and guarantees.

 

 


OPIC is the U.S. Government’s development finance institution.  It mobilizes private capital to help solve critical development challenges and in doing so, advances U.S. foreign policy.  Because OPIC works with the U.S. private sector, it helps U.S. businesses gain footholds in emerging markets catalyzing revenues, jobs and growth opportunities both at home and abroad.  OPIC achieves its mission by providing investors with financing, guarantees, political risk insurance, and support for private equity investment funds.

 

Established as an agency of the U.S. Government in 1971, OPIC operates on a self-sustaining basis at no net cost to American taxpayers. OPIC services are available for new and expanding business enterprises in more than 150 countries worldwide. To date, OPIC has supported nearly $200 billion of investment in over 4,000 projects, generated $74 billion in U.S. exports and supported more than 275,000 American jobs.