Overseas Private Investment Corporation Definition
An Overseas Private Investment Corporation (OPIC) is a government body of the United States which was established in 1971, that offers medium to long-term funding for projects in developed and emerging markets, including homes, hotels, airports and natural resource exploration for American companies that want to invest overseas. It also provides policy liability protection for the inconvertibility of assets, expropriation, and crime. The company finances itself through service fees and does not use taxpayers’ money. It aims at promoting and mobilizing U.S. private capital to help in developing and growing business enterprises in more than 150 countries around the world and to “promote the development and growth of free markets.”
A Little More on What is an Overseas Private Investment Corporation (OPIC)
The OPIC was the international financing agency of the United States Government until it combined with the United States Agency for International Development’s Development Credit Authority (DCA) to create the U.S. Global Corporation for Financing in Growth (DFC). OPIC encourages American companies to invest in other countries. OPIC funding and political risk policies also help U.S. companies of all sizes succeed in emerging markets. OPIC supports the United States’ best practices by encouraging programs to comply with international environmental and worker and human rights requirements. The strategy of the OPIC is to make its reports publicly available to the greatest extent possible, encouraging transparency and supplying people with knowledge on what their government is doing.
President Richard Nixon founded OPIC in 1971, with political risk insurance at 8.4 billion dollars and loan guarantees at 169 million dollars; it also only disburses political risk insurance and loans to ventures with sound business plans. According to OPIC, its services are available for new and expanding companies that plan to invest in more than 160 countries around the globe.
United States taxpayers have no net cost for these services because OPIC pays market-based fees for its goods. It also offers direct loans and guarantees of up to $350 million for as long as 20 years to aid development in underserved areas that are unable to raise sufficient commercial financing. These indicate that OPIC has a worldwide reach.