OPIC Board of Directors Approves Over $1 billion in Financing for U.S.-led Development Projects Worldwide
September 17, 2015
New projects will support private sector development in energy and inclusive access to finance
WASHINGTON – The Board of Directors of the Overseas Private Investment Corporation (OPIC), the U.S. Government’s Development Finance Institution, today approved new financing and insurance support to private sector-led development projects in Africa and Asia. Projects approved for planned commitment include large-scale renewable power generation, increased lending to underserved populations to spur inclusive economic growth, and partnerships to modernize and construct stabilizing energy infrastructure in fast-emerging economies that currently lack reliable electricity.
“The projects approved by OPIC today are significant in both vision and volume,” said Elizabeth Littlefield, OPIC’s President and CEO. “Both YES Bank and Standard Bank are lenders with a broad reach in developing markets, extending the impact OPIC can make through local partnerships. And the new clean power generation led by SolarReserve as well as sweeping efficiency modernizations from K-Electric exemplify the exciting realities of energy production and delivery in the 21st century. These projects show the transformative impact that the U.S. private sector can have in the developing world, and we look forward to their successes in supporting clean power and inclusive growth in Asia and Africa.”
The approved projects include the following:
SolarReserve, Inc. in South Africa – Up to $400 million in financing
Santa Monica, Calif.-based SolarReserve, alongside co-sponsor and lead developer ACWA Power, will use an OPIC investment guaranty to help construct and operate the 100 megawatt Redstone concentrating solar power plant in Northern Cape, South Africa. OPIC financing supports the agency’s key role in President Obama’s Power Africa initiative, which aims to address critical power access needs across sub-Saharan Africa. SolarReserve’s development of the project also helps fulfill the South African government’s renewable energy goals.
Standard Bank of South Africa – Up to $250 million in financing
Standard Bank will use an OPIC-supported facility to finance power generation and infrastructure projects in OPIC-eligible countries in Sub-Saharan Africa. The demand for electricity across Africa is critical, and OPIC’s support to Standard Bank helps fulfill an agency commitment to President Obama’s Power Africa Initiative, in which OPIC financing and insurance to private sector developers play a key role.
YES Bank, Ltd. in India – Up to $245 million in financing
YES Bank will use an OPIC investment guaranty to increase lending to micro, small and medium enterprises in underserved markets across India, including women and rural borrowers. The collaboration between YES Bank and OPIC was first explored during OPIC President and CEO Elizabeth Littlefield’s visit to India with U.S. President Barack Obama earlier this year. The lending strategy of this partnership will help YES Bank fulfill goals to reach underbanked areas in the north and east of India as well as provide credit access to a growing entrepreneur class that currently lacks financial tools.
K-Electric, Ltd. in Pakistan – Up to $250 million in financing
K-Electric will use an OPIC investment guaranty to undertake a comprehensive and transformative power grid upgrade program in Karachi, Pakistan. Electricity outages and shortfalls are recognized as a constraint to economic growth and stability in Pakistan, and the K-Electric grid improvement project will significantly improve reliability and efficiency of the power network in KE’s licensed area, which extends to parts of Baluchistan and Sindh in addition to Karachi. OPIC’s support in conjunction with a direct loan from Citibank, Pakistan to K-Electric’s project will support new transmission capacity, loss-reduction measures, and an innovative smart grid initiative to more accurately distribute and utilize existing power.
And in a notational OPIC Board of Directors vote held in August between scheduled quarterly meetings, the following projects were approved:
Apollo Towers in Burma – Up to $150 million in political risk insurance
Apollo Towers will use OPIC political risk insurance and up to $250 million in financing approved earlier this year to develop a network of 2,500 telecommunications towers across Burma – one of the last places in the world without widespread infrastructure for this technology. Only three percent of Burma’s 50 million residents had access to mobile phones in 2011. OPIC’s support to Apollo Towers is expected to create the infrastructure that will contribute to a goal of 75% mobile access for Burma’s people by 2016. In addition to bringing widespread information access to millions of people, OPIC’s support to Apollo Towers will provide a valuable demonstration effect for development in this newly-opened market.
BancABC in Southern Africa – Up to $200 million in financing
BancABC – the Southern African banking platform of Atlas Mara, Ltd. – will use OPIC funds to scale up its SME loan portfolio, increase on-lending for financial inclusion products, and invest in information technology upgrades to quicken implementation of its new financial technology and mobile banking initiatives. Up to $130 million of the OPIC funds is dedicated toward financing strategic acquisitions to expand Atlas Mara’s platform, increase its presence in sub-Saharan Africa, and bolster its developmental impact reach.
OPIC is the U.S. Government’s development finance institution. It mobilizes private capital to help address critical development challenges and in doing so, advances U.S. foreign policy and national security priorities. 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, political risk insurance, and support for private equity investment funds, when commercial funding cannot be obtained elsewhere. 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.
All OPIC projects adhere to high environmental and social standards and respect human rights, including worker's rights. By mandating high standards, OPIC helps raise the industry and regional standards of the countries in which its projects operate. OPIC services are available for new and expanding business enterprises in more than 160 countries worldwide.