Press release: OPIC and Liberty Mutual Insurance Launch $1 Billion Agreement to Catalyze Private Sector Investment in the Developing World
Thursday, November 8, 2018
Today, the Overseas Private Investment Corporation (OPIC), the U.S. government’s development finance institution, and Liberty Mutual Insurance announce the launch of a $1 billion risk-sharing agreement to facilitate private sector investment in the world’s most challenging markets.
This new and innovative co-investment platform is a major milestone in OPIC’s efforts to mobilize private capital to advance the U.S. Government’s development finance goals through investments that drive economic growth, build critical infrastructure, and empower women throughout the developing world. This is OPIC’s first agreement with a U.S. owned insurance company to share credit risk across a global portfolio of new OPIC-originated loans to commercial banks and other non-bank financial institutions.
“Today’s launch of its first co-investing platform is an important day for OPIC and development finance,” said David Bohigian, EVP, OPIC. “This billion dollar platform is a significant milestone in creating innovative approaches to catalyzing private sector capital to meet global challenges. Partnering with Liberty Mutual, a U.S. owned insurance company recognized as a global leader in providing risk solutions, demonstrates that working with OPIC balances risk and return while having a positive impact on the lives of the people who need it the most. Today’s announcement continues OPIC’s tradition of innovation and demonstrates the creativity and execution that forms the foundation of next year’s US International Development Finance Corporation.”
For Liberty Mutual Insurance the partnership with OPIC is part of a larger strategic initiative aimed at developing long term partnerships with international development institutions that can bring significant diversification to its credit insurance portfolio and access to new markets.
“Liberty Mutual is fully committed to providing effective credit and political risk insurance products globally,” notes Peter Sprent, Head of Financial Risk Solutions, Liberty Specialty Markets. “Partnering with public agencies like the Overseas Private Investment Corporation, is an important way for us to approach this market. We benefit from OPIC’s high standards of due diligence – including environmental and worker rights safeguards – and credit monitoring.
“We were able to demonstrate to OPIC our leadership in this space following agreements recently concluded with other development finance institutions.”
In conjunction with the launch of this co-investment platform, over $235 million of funding is being deployed to several financial institutions operating in Central & South America and Africa underscoring OPIC’s strong interest to quickly achieve the intended objectives. These funds will provide benefits to hundreds of women-owned businesses and SMEs.
OPIC’s experts will originate, underwrite and monitor creditworthiness and developmental impact – including labor, human rights, social, gender, and environmental impact – throughout the life of the projects and Liberty will take a significant risk interest in those loans that are part of the facility. Over time, this will allow OPIC to do more business and have a greater impact, particularly in those important markets where development is most needed.
Photo courtesy of OPIC.