$300 million line of credit; support for projects affected by terrorism; loans for humanitarian NGOs

Joins task force with Ex-Im Bank, Trade & Development Agency; new bilateral agreement to allow for co-insurance

WASHINGTON, D.C. – During a meeting with visiting Pakistani Finance Minister Shaukat Aziz, Dr. Peter S. Watson, president and CEO of the Overseas Private Investment Corporation (OPIC), confirmed that OPIC programs were "open for business in Pakistan."

Dr. Watson also announced a series of extraordinary OPIC initiatives for Pakistan, including extension of a $300 million special line of credit; OPIC financing and political risk insurance for U.S.-sponsored projects affected by the war on terrorism; the availability of OPIC loans to US non-governmental organizations (NGOs) currently assisting humanitarian efforts in Pakistan; and an updated bilateral agreement between the U.S. and Pakistan enabling private insurers to co-insure developmental projects in Pakistan with OPIC.

Dr. Watson stated that OPIC would participate in a task force with the U.S. Export Import Bank and the U.S. Trade and Development Agency to develop and coordinate these initiatives.

"Pakistan’s commitment to the war against terrorism becomes even more meaningful for ordinary Pakistanis when foreign direct investment supports the country’s economic development, tapping the initiative of Pakistan’s entrepreneurs," Dr. Watson said after meeting with Minister Aziz. "OPIC, as the sole U.S. agency charged with helping American companies invest overseas, will work hard to enable U.S. investment to access the Pakistani market in a mutually beneficial way."

"We at OPIC see support of U.S. investment in Pakistan as a clear demonstration of the Bush Administration’s long-term commitment to Pakistan’s economic growth, one that will endure beyond the extraordinary circumstances we currently face," Dr. Watson said. "Pakistan’s economic development is surely a result we all support."

Dr. Watson detailed each of the special initiatives:

Special line of credit: OPIC will offer Pakistan an immediate special line of credit of up to $300 million to access OPIC insurance and finance products for investment in Pakistan. 
Project stabilization facility: OPIC will extend political insurance and term loans or guarantees to existing, U.S. business-sponsored projects facing loss of coverage or the inability to refinance existing, maturing debt as a consequence of the war on terrorism. 

Bridge loans to NGOs: OPIC will make direct loans to American NGOs currently assisting humanitarian efforts in Pakistan. The loans would go to NGOs that had exhausted their operating cash flow, enabling them to continue to operate. 

Updated U.S.-Pakistan bilateral agreement: OPIC will update its bilateral agreement with Pakistan to the highest level by adding a co-insurance provision, which would enable OPIC to work more closely with private insurers on the most developmental projects in Pakistan. OPIC programs have been available in Pakistan according to a 1955 bilateral agreement between the U.S. and Pakistan. The agreement was amended in 1968, then replaced in 1997. 

"OPIC believes that these initiatives in Pakistan will serve as a powerful symbol of support to a faithful ally, with the practical result of facilitating U.S. developmental investment in emerging markets," Dr. Watson said.

Historically, OPIC has committed $650 million in political risk insurance support to 79 projects in Pakistan, as well as $60 million in financing to 17 projects.

OPIC’s political risk insurance and financing help U.S. businesses of all sizes invest in 140 emerging markets and developing nations worldwide. Over the agency’s 30-year history, OPIC has supported $138 billion worth of investments that have helped developing countries to generate over $10 billion in host-government revenues and create nearly 668,000 host-country jobs. OPIC projects have also generated $63.6 billion in U.S. exports and create nearly 250,000 American jobs.

Link: http://www.opic.gov/pressreleases/2001/1-38.htm