OPIC Board Approves $33 Million for Investment Fund Targeting Water and Energy Sections in Middle East and North Africa
Washington, D.C. – The Board of Directors of the Overseas Private Investment Corporation (OPIC) approved $33 million in OPIC financing to support a new private equity investment fund designed to improve performance of the water and energy sectors in the Middle East and North Africa (MENA), and to invest in environmentally-friendly technologies in the region.
The Catalyst Private Equity Fund is investing in small and medium-sized enterprises (SMEs) in the energy and water industrial and technology sectors in Jordan, Lebanon, Egypt, West Bank and certain OPIC-eligible countries in the MENA region – one of the world’s largest markets for oil/gas industrial and technology products and water treatment technologies, particularly desalination. Capital may be made available for other high-priority OPIC-eligible countries, such as Pakistan and Afghanistan. The fund has a target capitalization of $100 million.
The fund will also target investments in companies that develop technologies that benefit the environment, such as water treatment and alternative energy technologies.
OPIC selected as fund manager Catalyst Investment Management Company, established in 2005. The firm has already invested in solar technology and oil/gas tool manufacturing companies in Jordan and North Africa.
OPIC President and CEO Robert Mosbacher, Jr. said the fund should foster economic diversification in the MENA region, by focusing on SMEs that are currently undercapitalized. It should also have a significant impact on the transfer of technology: the fund will work closely the portfolio companies’ management, to help recruit personnel, establish new markets, and institutionalize management processes.
“Private equity financing in the MENA region is limited, especially for SMEs in the sectors targeted by this fund,” Mosbacher said. “The mission of the fund is to become a catalyst for the creation of globally competitive technology and product sectors in the MENA region, and to generate competitive returns through the establishment of industrial, energy and water technology and product firms. Investments in companies that serve these sectors will increase efficiencies in the market, ultimately leading to lower prices for suppliers and consumers.”
“The fund will have the added benefit of investing in environmentally-friendly technologies in these sectors. OPIC is pleased to support the establishment of an investment fund with so many positive developmental benefits for the MENA region,” Mosbacher added.
OPIC was established as an agency of the U.S. government in 1971. It helps U.S. businesses invest overseas, fosters economic development in new and emerging markets, complements the private sector in managing risks associated with foreign direct investment, and supports U.S. foreign policy. Because OPIC charges market-based fees for its products, it operates on a self-sustaining basis at no net cost to taxpayers.
OPIC’s political risk insurance and financing help U.S. businesses of all sizes invest in more than 150 emerging markets and developing nations worldwide. Over the agency’s 35-year history, OPIC has supported $177 billion worth of investments that have helped developing countries to generate over $13 billion in host-government revenues and create over 800,000 host-country jobs. OPIC projects have also generated $71 billion in U.S. exports and supported more than 271,000 American jobs.
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