OPIC Loan to Support Manufacture of Affordable, Durable Cars in Africa
April 17, 2018
WASHINGTON, D.C. - The Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance institution, has disbursed a $5 million loan to Mobius Motors Kenya Limited, which manufactures vehicles in Africa designed for Africa’s roads and drivers.
Mobius, the only company manufacturing cars in Kenya, will use the OPIC loan to expand production. The company, which has manufactured and sold 50 vehicles to date, will apply the loan proceeds to the development of a new manufacturing facility near Nairobi. Mobius aims to produce an additional 1,900 vehicles by 2019.
“Mobius has developed an innovative solution to the shortage of affordable transportation in Africa, which is one of the biggest hurdles to economic growth,” said Ray W. Washburne, OPIC president and CEO. “By making transportation more affordable and convenient, these vehicles will improve overall mobility in East Africa, and expand access to education, healthcare, and employment.”
Mobius describes its vehicle as a car Designed for Africa and Built in Africa. Only about five percent of the population in Africa owns a car, many of the cars on the road are imported used cars that are not suitable for the challenging road conditions. Public transportation in many regions is also limited and unreliable.
The Mobius vehicles add performance-critical features like rugged suspension, while eliminating nonessentials like parking sensors and automatic windows to keep prices low. The vehicles rides well on unpaved roads and costs about half the price of a five-year-old SUV.
Several of the company’s early customers have been small businesses including a baker who needed a more durable vehicle to complete product deliveries to remote communities, and a tourism company operator who drives visitors through the Nairobi National Park.
OPIC’s $5 million loan is part of an $11 million financing, which also includes investment from the New York-based PanAfrican Investment Co.
The Overseas Private Investment Corporation (OPIC) is a self-sustaining U.S. Government agency that helps American businesses invest in emerging markets. Established in 1971, OPIC provides businesses with the tools to manage the risks associated with foreign direct investment, fosters economic development in emerging market countries, and advances U.S. foreign policy and national security priorities. OPIC helps American businesses gain footholds in new markets, catalyzes new revenues and contributes to jobs and growth opportunities both at home and abroad. OPIC fulfills its mission by providing businesses with financing, political risk insurance, advocacy and by partnering with private equity investment fund managers.
OPIC services are available to new and expanding businesses planning to invest in more than 160 countries worldwide. Because OPIC charges market-based fees for its products, it operates on a self-sustaining basis at no net cost to taxpayers. All OPIC projects must adhere to best international practices and cannot cause job loss in the United States.