Secretary Clinton Announces OPIC-supported Investment Fund for Pakistan

ISLAMABAD, Pakistan – U.S. Secretary of State Hillary Clinton, at a meeting of the U.S.-Pakistan Strategic Dialogue, announced that the Overseas Private Investment Corporation (OPIC) would provide $50 million to support a private equity investment fund designed to invest in companies in Pakistan that could benefit from technological upgrades. The fund has a target capitalization of $150 million. 

“To expand access to credit for small and medium-sized enterprises so more good ideas have the chance to become successful businesses, through the Overseas Private Investment Corporation we will provide $50 million to support private equity investments in innovation and technology projects in Pakistan,” Secretary Clinton said.

OPIC President and CEO Elizabeth L. Littlefield said “OPIC is pleased to support both President Obama’s priority of spurring new investment in Muslim-majority countries and the goals of the U.S.-Pakistan Strategic Dialogue.

“As one of nine new OPIC-supported funds designed to facilitate investment in Muslim-majority countries in the Middle East, Africa and Asia, this investment fund in particular will enable Pakistani businesses to take advantage of recent technological advances in such sectors as health care, agriculture, education and telecom. In so doing, these investments will accelerate economic growth, opportunity and stability in the country,” Ms. Littlefield said.

At a speech in Cairo in June 2009, President Obama announced that the United States would launch an investment fund to support technological development in Muslim-majority countries. OPIC responded last October by issuing a call for proposals to manage Global Technology and Innovation Funds intended to catalyze private sector investments that promote technological growth in OPIC-eligible countries in Asia, the Middle East and Africa. The Pakistan fund was among 87 responses to the call. OPIC’s Board of Directors approved OPIC’s contribution to the fund at its June 24 meeting.

The JS Private Equity Fund II LLC will invest in companies which have untapped growth potential that could be realized through the application of new technologies. Specifically, the fund intends to invest in companies that either have technology at the core of their business, or can improve efficiency and profitability by upgrading existing technologies. In certain situations, it may invest in underperforming companies that could employ technology to return to growth, as well as start-up businesses that are applying proven technology from other countries. Sectors of interest to the fund include agribusiness, education, health care, financial services, transportation and logistics, media and telecommunications, chemicals, pharmaceuticals and manufacturing. For example, the fund is considering investing in a chain of retail stores that provides rural communities in Pakistan with services ranging from banking to farming supplies. The fund has a target capitalization of $150 million.

The fund will invest primarily in Pakistan, but may also invest up to a quarter of its capital in other countries in the Middle East and North Africa region, as well as south Asia.

OPIC selected as fund manager JSPE Management LLC, the private equity arm of JS Group, a leading financial services company in Pakistan. The fund is the successor to JS Private Equity Fund I, a $158 million fund, also focused on Pakistan. JSPE is headquartered in Karachi, with satellite offices in Islamabad, Lahore and Dubai.