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OPIC Board Approves $550 Million for Citibank Lending in Emerging Markets

June 2, 2011

WASHINGTON, D.C. – The Board of Directors of the Overseas Private Investment Corporation (OPIC) today approved $550 million in financing to expand OPIC’s successful lending partnership with Citibank, providing businesses in emerging markets with access to the international bank market, many of them for the first time.

By extending long-term funding to both small and large businesses in developing countries, the project will expand an OPIC-Citibank collaboration that has already resulted in more than $1 billion worth of loans in more than 50 countries – not one of which has been written off.

The new framework agreement will result in Citibank-originated loans in OPIC-eligible countries, each of which will be screened and subject to the full scope of OPIC’s environmental and social assessment policies. OPIC will share credit risk with Citibank by guaranteeing a portion of each loan.

“OPIC’s long and successful partnership with Citibank grows even stronger today, enabling more companies in emerging markets to benefit from long-term U.S. capital,” said OPIC President and CEO Elizabeth Littlefield. “This new lending facility will help channel funds to high-impact emerging market companies and joint ventures while at the same time making the structuring and execution process more efficient.”

Historically, OPIC’s lending facilities with Citibank have performed extremely well, providing financing to approximately 60 borrowers in more than 50 countries. OPIC estimates that it has guaranteed more than $1 billion of loans over the course of 15 framework agreements with Citibank. All of this has been accomplished while earning OPIC approximately $46.7 million in revenue over the past decade.

Initially, OPIC’s risk-sharing with Citibank focused on areas of foreign policy significance, such as Haiti in the mid-1990s and Pakistan in the aftermath of September 11. The partnership has since grown to encompass other areas of OPIC’s focus, including home loans, small business loans, and loans to microfinance institutions.

Some examples of the types of transactions supported by the OPIC-Citibank partnership:

  • construction of a new international high school in Lagos, Nigeria;
  • expansion of telecommunications networks in Bangladesh and Pakistan;
  • construction of cement plants and equipment leasing in Pakistan;
  • housing finance in countries such as Honduras, Guatemala and Paraguay, and
  • financing for 19 microfinance institutions.