Eligibility requirements
Eligibility requirements
Eligibility requirements are similar to those for OPIC insurance and there is no distinction between direct and guaranteed loans. Again, the project must be sound and conducted by management with a proven track record in closely related areas. A wide range of enterprises are eligible, but projects involving the poorer countries or American small businesses have preference. The project can be wholly owned or a joint venture with local citizens, but at least 51 percent of the voting shares should be held by privately owned firms or by individuals. An exception to this can be made if there is a contract to the effect that management will stay in private hands. However, wholly owned government projects are not eligible.
Sound debt to equity ratios are required. Typically, OPIC likes 60/40 debt to equity ratios or better, although there is some flexibility. OPIC must feel assured of a satisfactory financial plan and adequate funding to assure completion, and it avoids excessively leveraged situations. The same host country and American national considerations described for the insurance programs apply. In addition, the American sponsors should have a significant equity interest of 25 percent or more and either the American or local sponsor must have a successful operating track record on a similar project.
Unlike Eximbank, OPIC does not offer concessional financing or OECD interest rates because it is oriented to the private sector and projects that amortize themselves on an economic basis. OPIC does, however, creative financing and is prepared to schedule repayment terms to fit cash flow projections and other flexible schemes.
Relative
debt to equity ratios flexible schemes cash flow projections guaranteed loans economic basis insurance programs government projects private hands similar project proven track record repayment terms equity interest eligibility requirements host country creative financing opic oecd joint venture small businesses private sector
Eligibility requirements are similar to those for OPIC insurance and there is no distinction between direct and guaranteed loans. Again, the project must be sound and conducted by management with a proven track record in closely related areas. A wide range of enterprises are eligible, but projects involving the poorer countries or American small businesses have preference. The project can be wholly owned or a joint venture with local citizens, but at least 51 percent of the voting shares should be held by privately owned firms or by individuals. An exception to this can be made if there is a contract to the effect that management will stay in private hands. However, wholly owned government projects are not eligible.
Sound debt to equity ratios are required. Typically, OPIC likes 60/40 debt to equity ratios or better, although there is some flexibility. OPIC must feel assured of a satisfactory financial plan and adequate funding to assure completion, and it avoids excessively leveraged situations. The same host country and American national considerations described for the insurance programs apply. In addition, the American sponsors should have a significant equity interest of 25 percent or more and either the American or local sponsor must have a successful operating track record on a similar project.
Unlike Eximbank, OPIC does not offer concessional financing or OECD interest rates because it is oriented to the private sector and projects that amortize themselves on an economic basis. OPIC does, however, creative financing and is prepared to schedule repayment terms to fit cash flow projections and other flexible schemes.
Relative
debt to equity ratios flexible schemes cash flow projections guaranteed loans economic basis insurance programs government projects private hands similar project proven track record repayment terms equity interest eligibility requirements host country creative financing opic oecd joint venture small businesses private sector
Comments
Post a Comment