OPIC to Provide up to $2 Billion for Investment in Middle East and North Africa
March 17, 2011
WASHINGTON, D.C. – The Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance institution, will provide up to $2 billion in financial support to catalyze private sector investment in the Middle East and North Africa, U.S. Secretary of State Hillary Clinton announced during the final day of her trip to Egypt.
Intended to encourage partnerships between U.S. and Arab businesses in order to generate economic growth and job creation in the region, the OPIC initiative will prioritize support for small- and medium-sized enterprises (SMEs) and grant projects fast-track approval to mobilize capital quickly. The OPIC financing is available for private sector investment in Egypt, Tunisia, Morocco, Iraq, Jordan, Lebanon, the Palestinian Territories, and potentially Algeria, Oman, and Yemen.
“One of the best ways to create jobs is to support small and medium-sized enterprises, which represent 99 percent of the firms in Egypt,” Secretary Clinton said during her meeting with Egyptian Foreign Minister Nabil Al-Araby. The United States aims to “encourage foreign direct investment that will help these businesses grow.”
OPIC President and CEO Elizabeth Littlefield, who joined Secretary Clinton on the trip, said “private capital investment is essential for security, stability, growth and job creation in the Middle East and North Africa. Partnership between US and Arab businesses is a powerful means to promote development and shared prosperity. By catalyzing investments in small and medium enterprises, infrastructure, and other key sectors, OPIC hopes to bolster the private sector’s role in helping to transform the region.”
OPIC will identify and encourage private businesses, especially U.S. businesses, to invest in the region by providing direct loans, guarantees and political risk insurance. OPIC’s financial support will include:
- direct loans, guarantees and political risk insurance for investors, as well as financing support for private equity investment funds;
- prioritization of investment in SMEs, infrastructure (especially the promotion of renewable resources) and other key sectors;
- expansion of OPIC’s existing risk insurance product, which protects investors from losses sustained due to currency inconvertibility, expropriation, breach of contract, as well as political violence including terrorism, to specifically protect US limited partner investments in private equity funds investing throughout the MENA region;
- ‘fast-track’ approval for OPIC-supported projects to ensure rapid deployment of capital, while maintaining OPIC investment policy standards concerning the environment and worker and human rights;
- development of OPIC partnerships with banks, investment funds, diaspora entrepreneurs, and others interested in investing in projects which promote regional stability.
OPIC is currently providing nearly $2.6 billion in support to projects in Middle Eastern and North African countries.