OPIC Board Approves $40 Million for Investment Fund to Support SMEs in Russia's Outer Provinces
December 18, 2012
WASHINGTON, D.C. – The Board of Directors of the Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance institution, approved up to $40 million in financing for a private equity investment fund that will support small and medium-sized enterprises (SMEs) in Russia’s outer provinces, where private equity has been largely unavailable.
Fast-growing SMEs with strong market positions will stimulate sustainable development predominantly in regions outside Moscow and St. Petersburg, where most economic power is concentrated. Those businesses will benefit from the support of the fund’s capital, state-of-the-art management techniques, and adherence to rigorous environmental, social and governance standards.
OPIC selected CapMan Russia II GP Limited as fund manager. Negotiations on more detailed terms and conditions of the financing will be conducted with the fund manager.
The CapMan Russia II Fund will invest in sectors such as consumer goods and services, health care, manufacturing and agriculture, IT and telecoms, as well as construction – industries expected to show strong growth in the future, supported by increasing consumer consumption and rising standards of living in Russia. The fund will provide hands-on support, transferring best-in class management practices and technology, helping targeted SMEs expand into new, complementary areas. The fund has a target capitalization of €175 million, or approximately $227 million.
“Small businesses in Russian regions outside of Moscow and St. Petersburg have terrific untapped potential, but have not had access to the capital they need to grow. This fund will help to fill that gap in high-growth sectors that stand to have the most significant development impact,” said OPIC President and CEO Elizabeth Littlefield.
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 more than $200 billion of investment in over 4,000 projects, generated an estimated $75 billion in U.S. exports and supported more than 277,000 American jobs.