Bob Svensk is a counselor at Greater Bridgeport SCORE
The International Executive Service Corps (“IESC”) of Washington, DC has partnered with the Overseas Private Investment Corporation’s (“OPIC”) in promoting OPIC’s Enterprise Development Network (the “EDN”). This program is aimed at increasing the use of OPIC’s finance programs by smaller and medium size companies.
IESC was founded in 1964 by David Rockefeller and other corporate leaders with the mission of promoting stability and prosperity around the world through private enterprise development. Since its first assignment in Panama in 1965, IESC now has 8,500 volunteers and has completed more than 25,000 technical and managerial consultancies in more than 130 countries.
OPIC is the US government agency that promotes foreign direct investment in the Developing World through the provision of Political Risk Insurance and Project Loans.
Under this cooperative program, IESC will assist an SME in:
- Completing the OPIC loan application;
- Providing guidance through the loan approval process;
- Reviewing business plans and financial projections;
- Identifying technical, legal and consulting services for the client as appropriate; and
- Assessing the viability of the potential deals and their fit with OPIC policies.
OPIC’s financing criteria require the US sponsor to:
- Have a minimum 25% equity stake in the foreign entity although a lower participation may be considered for franchises or high impact projects;
- Have annual sales between US$20 million and US$250 million;
- Be able to show proof of profitability for last three years; and
- Be 50% beneficially owned by US citizens.
The typical loan sizes under the EDN program will be $2 million to $15 million and have a tenor of up to 7 years. Loans under this program can take the form of either Corporate Loans or Project Loans and OPIC will finance up to 50-65% of total project cost for new ventures and up to 75% for expansions. Interest rates on OPIC’s loans are fixed for the term of the loan and are set at a margin over the comparable US Treasury Note rate.
Under the EDN program, key sectors for OPIC include projects that support:
- Housing Development
- Clean Energy / Energy Efficiency
- Infrastructure Development
- Water
- Tourism
- Financial Services
- Franchising
OPIC cannot support projects in countries with a history of violating human rights or projects in certain industries such as Tobacco, Alcohol, Gambling and Arms. OPIC supported projects must also meet certain environmental standards and not have a materially adverse impact on US labor or the US Balance of Payments.
Further questions can be directed to Javed Hamid or Kamil Madanat at IESC in Washington, DC; Telephone: 202 589 2600; E-Mail: jhamid@iesc.org.
Comments