Table Of Content2001 Annual Report
Overseas” * t
Private
Investment
Corporation
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Table of conteyts
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President's message ...... er rae
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A sharper agenda that matters more than ever .../.....
Creating opportunities abroad ..............20% 9
Putting America’s best face forward... ......0.... 15
Fostering entrepreneurial success at home... ..... 19
leveraging investments and result ee Se 23
2001 investment projects 2... ee el 25
2001 investment funds’ projects... 2.2... 02. 002222.. 28
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OPIC countries andwaseas. 2. ee ee 10)
Financial statements... 2.0...ee le ee 31
Board of directors 2... 0.0000. ee ee eee 4]
Officers and management... wa... ee ee 4]
Photography credits... 00.0000 00. ee ee Se, 42
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President’s message )
aving originally ing private U.S. capital to spur sus-
served OPIC in tainable development in new and
the early days of emerging markets. OPIC’s success in
the first Bush fulfilling this mandate has given life
administration, | to the proposition that government
joined anew last leadership in managing the risks asso-
year with a firm belief in the agency’s ciated with foreign direct investment
possibilities. It was a belief that took could effectively mobilize capital and My key priority
root a decade ago from the perspec- human resources for development.
in refocusing
tive of that experience, and one that These resources would not otherwise
has only grown stronger as I have have been made available. One meas-
OPIC ts to
had ample opportunity to observe ure of OPIC’s success is the growth
of some of the countries
strengthen
that OPIC has helped
A refocused strategic plan
develop into mature,
the agency's
open and democratic
market economies. consciousness of
OPIC from other vantage points. OPIC has accomplished this
This agency has had a long-standing mandate on a self-sustaining basis, its developmental
impact in fostering economic devel- with room to spare. OPIC now is in
opment abroad while helping to a strong position to face the continu- mission and
strengthen the U.S. economy at ing challenges wrought by the tragic
to ensure that
home. When President George W. events of September 11 and the eco-
Bush asked me to serve his adminis- nomic uncertainties exacerbated by
OPIC’s products
tration as president and CEO of those events.
OPIC, I accepted the assignment with My key priority in refocusing
are complementary,
enthusiasm. I rejoined OPIC with an OPiC is to strengthen the agency’s
appreciation of the organization’s consciousness of its developmental
not competitive,
outstanding record of accomplish- mission and to ensure that OPIC’s
ments as well as a belief that the products are complementary, not with the
agency can do more and, with a refo- competitive, with the private sector.
cused strategic plan, can do it even The challenge is not static. Not every private sector.
better. investment in a developing country
During the past 30 years, OPIC is developmental per se. The type of
has demoiistrated its unique value as investment that is effective in one
an instrument of U.S. international country may not provide the same
economic policy. First and foremost, balance of costs and benefits in
OPIC has been a catalyst for mobiliz- another. What works in one phase
of a country’s economic development OPIC’s policies on corporate social
may not be as effective in other cir- responsibility and its agreements
cumstances. I intend to strengthen with host governments can further
OPIC’s developmental mandate by reduce risk.
examining critically each proposed While some of the risks that
investment in terms of its develop- OPIC faces can be identified readily
mental impact, using the most as political or commercial in origin,
other sources of risk may arise from
unintended environmental and social
Outreach toward underserved regions
impacts. With guidance from the
U.S. Congress and successive admin-
istrations, OPIC has exercised lead-
advanced methodologics and the bene- ership in finding ways to promote
fit of OPIC’s experience and portfo- economic and social development,
lio. With that knowledge, we will while at the same time protecting the
refocus OPIC’s outreach toward environment, workers rights and
underserved regions like sub-Saharan human rights in developing coun-
Africa, as well as countries and sec- tries. OPIC’s leadership in this area
tors where the developmental benefits has been recognized by other official
are likely to be the greatest. and private lenders and insurers that
I recognize that using our have come to see the value of inte-
resources to support more develop- grating environmental and social
mental projects may pose some considerations into their lending and
added risks. This means that OPIC insurance policies. Now that the pri-
continually must improve its under- vate markets have “gotten the mes-
standing of and capacity to manage sage,” many private companies are
risk. Toward that end, I am going beyond the requirements of
strengthening the risk management law and are taking proactive meas-
function at OPIC by bringing in ures to enhance their relationships
new staff resources and technology with local communities.
to bette> manage OPIC’s exposure Exercising leadership in this
on both a portfolio and a project area means that OPIC must strive to
level. I also am exploring how learn from the best practices of the
emerging markets. OPIC therefore
needs to work in tandem with private
business to leverage private sources of
financing and insurance to the maxi-
253,128
mum extent possible, while function-
221,878
ing as the “market of last resort” for
projects that private investors and
147,201
insurers would not or could not sup-
115,508
port on their own.
72,765 U.S. Job To enhance OPIC’s cooperation
Creation
with the private market, I have taken
cumulative
4,712 number of steps to initiate a much greater level
, jobs created
of cooperation between OPIC and
the private insurance markets. OPIC
most progressive companies and to needs to do things that the private
use those practices in its approach to market will not — such as offering
issues of corporate social responsi- greater tolerance for risky countries
bility. The practice of corporate
social responsibility is an integral
part of risk management. As part of
the reallocation of OPIC’s staff
resources, | have combined the risk
management, environmental and
labor rights, and economic analysis 64,684
J]
and project monitoring units into a
$2,782
1996
new office headed by a vice presi-
dent for investment policy. This
office will have the same status as 28,919
}Y9Y]
OPIC’s product divisions. 19,158
“U.S. Exports
OPIC recognizes that the private 6,310 cumulative im millions
sector is in the best position to recog- 687 198] of dollars
174
nize and respond to business oppor-
tunities and risks in developing and
or projects, longer tenor, or larger sector. And it will provide an oppor-
per project capacity. tunity to refocus our activities to
To show our good faith in better reflect our mission by helping
demonstrating that we are not com- to mitigate risk and support invest-
peting with the private market, we ment in the emerging markets. In
plan to initiate a program that will other words, everyone will win.
help to ensure that OPIC’s involve- Both overseas development and
ment is necessary — not a substitute U.S. economic growth increasingly
for what already is available in the are dependent on the vital role of
private market. From now on, the small and entrepreneurial busi-
anyone applying for OPIC insurance ness sector. Despite its small staff,
will have to demonstrate that a valid OPIC has done remarkably well in
attempt was made to place the cover- reaching out to small and medium-
age in the private market and that sized enterprises (SMEs), which con-
such coverage was either not avail- stitute a growing percentage of
able at all or not available at terms, project participants. In addition,
conditions or rates that would allow thousands of SMEs participate as
the investment to proceed. suppliers to OPIC-supported proj-
This new test of additionality ects. However, OPIC’s location in
will help to fulfill OPIC’s responsibil- our nation’s capital does not leave
ity to find avenues for cooperation it well positioned to support compa-
with the private market. It will nies that are geographically remote
respond to OPIC’s need to comple- from Washington and are at the
ment, not compete with, the private smaller end of the SME spectrum.
Therefore, one of my first actions
at OPIC has been to create a struc-
tured arrangement with the U.S.
Small Business Administration
(SBA). This arrangement is designed
to complement SBA’s capacity to
reach and support small business
with OPIC’s international expertise.
61
Finally, as both a government
agency and a business, OPIC has an
Number
increasing obligation toward its stake-
= of Small
12. Business holders to operate in a fully transpar-
1Y Projects ent manner. New telecommunications
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technologies, including but not limited
to the Internet, have created greater
expectations among the public for
increased disclosure of all informa-
tion, with the important exception of
OPIC has
that which is vital to national security
or business confidentiality. | am com-
exercised ~
mitted to enhancing the transparency
of OPIC’s reporting and disclosures, leadership in
as should be evident in this annual
report. finding ways to
promote CCONOMIUC
and social
devel yprient,
Peter S. Watson
while at the same
President and CEO
time protecting the
environment,
workers rights and
human rights in
developing
COUNTTICS.
usS Ss - Our work ts
¥ re well aligned
~~
CCOMOINIIC,
POreien,
environmental
and labor
policies.
Streamlining the agency
OPIC has taken measures to make our work more transparent to
the public and@o make it easier for businesses to access resources
and results. We responded to customer satisfaction surveys by
making more information available electronically, including
publications, press releases and applicafion forms. Now, business
people can le9 arn about OPIC products and services in a matter of
minuses. And they can use the investor's gateway section of our
Web site to link to other sources of information about the countries
in which OPIC operates. Online training programs for small
businesses supply customized information. Doing business with
OPIC has never been easier. www.opic.gouv
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A/sharper agenda that matters more.than ever
Know this about OPIC: No other OPIC plays an uncommon and
American public or private organiza- indispensable leadership role
tion invests in developing countries in developing emerging markets,
with the scope and focus that we do. expanding global commerce and fos-
We operate in more than 140 coun- tering democratic values worldwide.
tries — financing economic develop- The unprecedented events of 2001
ment projects large and small and brought a fresh relevance to our
mitigating economic and political work. People who have the economic
risks. And we operate at no net cost and social opportunities that iead
to American taxpayers. Over our to prosperity are far less likely to
30-year history, OPIC has built up become estranged from society or
reserves of more than $4 billion and engage in violence than people with-
has recovered or settled more than 94 out these opportunities. A strong
percent of our insurance claims. defense against terrorism, then, is
We make it possible for parched investing in the developing countries
communities in Kenya to drill for that may harbor terrorists and forg-
potable water and meet a basic human ing strong, positive bonds wth those
need. We enable farmers in Guatemala nations. For 30 years, this has been
to cultivate a new coffee plant, build a our core mission, and it matte:s more
family-owned business, provide train- than ever in today’s uncertain times.
ing and health care to workers, and In 2001, we sharpened our
transport children to school. In Central focus, renewing our commitment to
Europe, we pave the way for advanced economic development in places
medical diagnostic facilities and skilled where it makes a profound difference
jobs, while in Asia and Latin America, to human welfare. We are well posi-
our support leads to affordable hous- tioned to stre:_gthen this impact in
ing and the new beginnings it offers. the future. Our work is well aligned
We make it possible for emerging mar- with U.S. economic, foreign, environ-
kets to develop the infrastructure of mental and labor policies. In short,
airports, utilities and telecommunica- OPIC is good for the world and good
tions that will bring millions of people for America.
into the global economy. We accom-
plished this and much more in 2001.
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Economic development in emerging
markets around. the world
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