Press Release
Monday, October 16, 2006
OPIC TO ANNOUNCE $212 MILLION IN NEW SUPPORT FOR FOUR CAFTA COUNTRIES
WASHINGTON, D.C. – Robert Mosbacher, Jr., president and CEO of the Overseas Private Investment Corporation (OPIC), will announce significant new OPIC support for countries in Central America during an October 16-19 trip to the region. OPIC financing will support a minimum of $212 million in new investment for El Salvador, Guatemala, Honduras and Nicaragua. Each of the nations is a signatory to the Central America and the Dominican Republic (CAFTA-DR) free trade agreement.
The trip follows up on Mosbacher’s May 2006 visit to the region, during which the OPIC president announced $120 million in OPIC-supported projects.
Mosbacher will also announce that OPIC will host an international investment conference in El Salvador in March 2007. The conference, to be held in San Salvador, will bring together U.S. and regional companies to identify investment opportunities in Central America and the Caribbean. The conference is modeled after successful OPIC regional conferences in Bucharest in 2004, Marrakesh in 2005, and Cape Town in May 2006.
The new financing includes $149 million designated for investment in Central America from three new OPIC-supported investment funds – two focused on the housing sector and one on power sector with a focus on renewable energy.
In addition, the OPIC package provides a combined $55 million in mortgage finance projects in Honduras and Nicaragua, a $7.5 million microfinance project in all four countries (also Peru and Mexico) and a $1 million regional salt distribution project.
“In a continuing demonstration of the power of free trade and the value of the CAFTA-DR agreement, I am pleased to announce this significant new OPIC support. Our efforts speak both to OPIC’s ongoing commitment to the region’s economic development and a growing realization that Central America is a profitable destination for U.S. investment dollars,” Mosbacher said.
“The projects that we announce during this trip will support the development of two critical pillars of Central America’s economic growth – the provision of housing finance and microfinance – as well as the region’s energy and agricultural infrastructure. We at OPIC are pleased to support projects that not only demonstrate tangible progress in the implementation of CAFTA-DR, but also deliver so many developmental benefits for the people of Central America,” Mosbacher said.
The OPIC trip will feature agreement signings for each of the following projects:
Latin Power III
An OPIC-supported private equity investment fund that will invest in mid-sized independent electrical generation projects in Latin America, with a focus on renewable energy. The fund is capitalized at $393 million, including $60 million in financing from OPIC, and expected to dedicate between 30 percent of 50 percent of its total capital to CAFTA-DR countries. The fund is managed by Conduit Capital Partners, LLC.
CAFTA-DR investment: minimum of $98 million.
Paladin Realty Latin America Mortgage Finance
An OPIC-supported private equity investment fund, managed by Paladin Realty Partners, LLC, that will invest in the provision of mortgage financing for affordable housing in Latin America. Supported by $35 million in financing from OPIC, the $105 million fund will dedicate one-third of its capital to investments in CAFTA-DR countries.
CAFTA-DR investment: minimum of $34.6 million.
Paladin Realty Latin America Investors II
An OPIC-supported private equity investment fund that will invest in the real estate sector in Latin America, with a focus on low- and middle-income housing development. Also managed by Paladin Realty Partners, LLC, the $200 million fund received $35 million in financing from OPIC. Eight percent of the fund’s investments will be earmarked for CAFTA-DR countries.
CAFTA-DR investment: minimum of $16 million.
Bancentro/Nicaragua
OPIC has approved a $10 million loan to Bancentro S.A. of Nicaragua for the financing of mortgage loans for low- and middle-income households in the country. The project is expected to result in approximately 500 mortgage loans for houses in the $10,000 to $30,000 range. OPIC is also providing $20 million in financing for Bancentro to originate mortgage loans for its traditional customer base.
CAFTA-DR investment: $30 million.
Banco Lafise/Honduras
OPIC this month approved a $15 million loan to Banco Lafise S.A. of Honduras to finance mortgage loans for low- and middle-income households in the country, a project that is expected to result in approximately 750 mortgage loans for houses in the $10,000 to $30,000 range. In addition, OPIC is providing $10 million in financing for the bank to originate mortgage loans for its traditional customer base.
CAFTA-DR investment: $25 million.
Global Partnerships
A $7.5 million microfinance fund, supported by a $4.7 million OPIC loan to Global Partnerships, a Seattle-based nonprofit organization. The fund will make loans to second-tier microfinance institutions (MFIs) primarily in El Salvador, Guatemala, Honduras, and Nicaragua, as well as in Peru and Mexico. The MFIs, in turn, would make loans averaging less than $1000 to individual entrepreneurs.
CAFTA-DR investment: $7.5 million.
Baja Salt
A $1 million project, supported by a $700,000 OPIC loan, involving acquisition of high- quality salt from Mexico for distribution into Central America, and the establishment of salt processing facilities and construction of warehouses in El Salvador and Guatemala. The project is expected to eventually create 39 permanent local jobs.
CAFTA-DR investment: $1 million.
In addition, Mosbacher will sign memoranda of understanding for the following projects, which are expected to be concluded in the near future:
Lafise Group El Salvador & Guatemala
OPIC and the Lafise Group, a Miami-based financial services company, are in discussions on two potential $15 million OPIC loans to a Lafise Group affiliate to support mortgage loans for low- and middle-income households in Guatemala and El Salvador. The program is expected to result in approximately 1000 mortgage loans for houses in the $10,000 to $30,000 range.
OPIC was established as an agency of the U.S. government in 1971. It helps U.S. businesses invest overseas, fosters economic development in new and emerging markets, complements the private sector in managing risks associated with foreign direct investment, and supports U.S. foreign policy. Because OPIC charges market-based fees for its products, it operates on a self-sustaining basis at no net cost to taxpayers.
OPIC’s political risk insurance and financing help U.S. businesses of all sizes invest in more than 150 emerging markets and developing nations worldwide. Over the agency’s 35-year history, OPIC has supported $164 billion worth of investments that have helped developing countries to generate more than 732,000 host-country jobs and $13 billion in host-government revenues. OPIC projects have also generated $69 billion in U.S. exports and supported more than 264,000 American jobs.