November 1, 2005
The Americas Capital
Initiative (ACI) is a U.S. Government effort to expand the
circle of prosperity in Latin America by priming what President
Bush called "the real engines of hope in the Americas:
its small business and private enterprises and entrepreneurs."
ACI seeks to help Latin America’s
private sector by building on the existing programs of the
Export-Import Bank of the U.S. (Ex-Im Bank), the Overseas
Private Investment Corp. (OPIC), and the U.S. Trade and
Development Agency (USTDA) in the hemisphere. The Initiative
will expand efforts to publicize how these agencies can
facilitate increased private sector growth. Latin American
firms of all sizes can benefit as partners of U.S. businesses
that are utilizing the Ex-Im Bank and OPIC programs. The
Latin American private sector also benefits from USTDA’s
diverse assistance for capacity building, project analysis,
and other activities.
These three agencies are already significant
players in the Americas. In FY 2004, they provided more
than $5 billion in loans, guarantees, and technical assistance
to expand Latin America’s private-sector trade and
investment and to improve technical capacity.
Export-Import Bank of the United
States (Ex-Im Bank)
The Ex-Im Bank’s main products are
export insurance and loan guarantees.
Export Insurance: Most
commonly for short-term finance (less than 360 days) of
export sales of U.S. products, but may be used for up to
five year terms. The U.S. exporter can sell on an open account
to a single or multiple buyers, or can use a bank letter
Guarantees: Ex-Im guarantees
commercial loans made by private lenders to foreign buyers
to purchase, most often, U.S. capital goods and services.
The program offers repayment terms of 5 to 7 years in the
medium term; 8 to 10 years in the long term; and in certain
transactions, such as project finance and aircraft, 12 years.
Environmental Exports Program (EEP):
Ex-Im has special insurance and guarantee programs for exports
that contribute to the clean up of land, air, or water.
Special terms include repayment of up to 15 years for certain
products; local cost financing of up to 15 percent of U.S.
contract price, and interest capitalized during construction
or disbursement period.
Ex-Im also has a financing program for working
capital loans for eligible U.S. companies to facilitate
At the end of FY 2004, Ex-Im’s exposure
in Latin America totaled $15.6 billion – one-quarter
of its worldwide total. Small and medium-sized U.S. companies
account for about 80 percent of Ex-Im’s transactions.
More information about Ex-Im programs can
be found at: www.exim.gov.
Ex-Im has a web page for programs in Mexico and Brazil.
These pages are in English, Spanish and Portuguese with
links to other USG trade agency sites, such as USTDA, OPIC
and the Commercial Service.
Overseas Private Investment Corporation
OPIC helps U.S. companies investing overseas
by providing political risk insurance, financing, and supporting
Insurance: Political risk
insurance mitigates investor’s non-commercial risks
stemming from the threats of political violence, inconvertibility
of currency, and expropriation. OPIC insurance can provide
up to $250 million in coverage per transaction or project
for up to 20 years.
Finance: OPIC provides
financing through loan guarantees and direct lending for
medium- and long-term investments. OPIC can guarantee or
lend from $100,000 to up to $250 million per project. Oil
and gas sector projects with offshore, hard currency revenues
may be approved for up to $400 million under certain conditions.
When both insurance and financing are used
the exposure limits are the same -- $250 million per transaction
or project, $400 million under certain circumstances.
Investment Funds: OPIC
supports private equity funds that target investments in
developing countries. These privately managed funds use
OPIC debt to leverage direct equity investments in new,
expanding, or privatizing companies. Three OPIC investment
funds concentrate on investment in Latin America.
OPIC has a Small Business Center that offers special programs
for smaller companies.
Over the past 34 years, OPIC has supported
more than 3,000 projects worth over $160 billion in 150
countries. Latin America is OPIC’s largest geographic
concentration of invested capital, accounting for approximately
one-third of the global active portfolio. More information
about OPIC programs can be found at: www.opic.gov.
U.S. Trade and Development Agency
USTDA is a U.S. foreign aid agency that
provides technical assistance to developing countries. Nearly
half of its 2005 budget was allocated to trade capacity-building
projects that help developing countries meet international
standards, comply with trade agreements, conduct market
liberalization, and make other policy reforms. USTDA assistance
is grouped as:
Trade Capacity-Building and Sector
Development: This includes technical assistance
to help governments develop economic sector strategies,
industrial standards, and legal and regulatory regimes favorable
for business and trade. USTDA also provides training for
foreign officials in sectors where there are sales opportunities
for U.S. companies and awards grants to overseas project
sponsors to use in hiring trade and industry advisors.
Project Definition and Investment
Analysis: USTDA conducts "orientation visits"
for foreign project sponsors by bringing them to the United
States to learn about the U.S. products and services that
would be useful to them in achieving their development goals.
USTDA also provides grants for project feasibility studies
and assistance in establishing transparent procurement processes.
In addition, the agency organizes workshops, conferences,
and technical symposia worldwide aimed at connecting overseas
project sponsors with U.S. firms.
More information about USTDA programs can
be found at: www.ustda.gov.