Modon Holding posts AED 2.1bn net profit in H1 2025    Egypt's Electricity Ministry says new power cable for Giza area operational    Egypt exports first high-tech potato seeds to Uzbekistan after opening market    Egypt's Al-Sisi, Italian defence minister discuss Gaza, security cooperation    Egypt's FM discusses Gaza, Nile dam with US senators    Aid airdrops intensify as famine deepens in Gaza amid mounting international criticism    Health minister showcases AI's impact on healthcare at Huawei Cloud Summit    On anti-trafficking day, Egypt's PM calls fight a 'moral and humanitarian duty'    Federal Reserve maintains interest rates    Egypt strengthens healthcare partnerships to enhance maternity, multiple sclerosis, and stroke care    Egypt keeps Gaza aid flowing, total tops 533,000 tons: minister    Indian Embassy to launch cultural festival in Assiut, film fest in Cairo    Egyptian aid convoy heads toward Gaza as humanitarian crisis deepens    Culture minister launches national plan to revive film industry, modernise cinematic assets    Sudan's ambassador to Egypt holds reconstruction talks on with Arab League    I won't trade my identity to please market: Douzi    Sisi calls for boosting oil & gas investment to ease import burden    Egypt welcomes 25-nation statement urging end to Gaza war    Sisi sends letter to Nigerian president affirming strategic ties    Egypt, Senegal sign pharma MoU to unify regulatory standards    Two militants killed in foiled plot to revive 'Hasm' operations: Interior ministry    Egypt, Somalia discuss closer environmental cooperation    58 days that exposed IMF's contradictions on Egypt    Egypt's EHA, Huawei discuss enhanced digital health    Foreign, housing ministers discuss Egypt's role in African development push    Egypt reveals heritage e-training portal    Three ancient rock-cut tombs discovered in Aswan    Sisi launches new support initiative for families of war, terrorism victims    Egypt expands e-ticketing to 110 heritage sites, adds self-service kiosks at Saqqara    Egypt's Irrigation Minister urges scientific cooperation to tackle water scarcity    Palm Hills Squash Open debuts with 48 international stars, $250,000 prize pool    On Sport to broadcast Pan Arab Golf Championship for Juniors and Ladies in Egypt    Golf Festival in Cairo to mark Arab Golf Federation's 50th anniversary    Germany among EU's priciest labour markets – official data    Paris Olympic gold '24 medals hit record value    A minute of silence for Egyptian sports    Russia says it's in sync with US, China, Pakistan on Taliban    It's a bit frustrating to draw at home: Real Madrid keeper after Villarreal game    Shoukry reviews with Guterres Egypt's efforts to achieve SDGs, promote human rights    Sudan says countries must cooperate on vaccines    Johnson & Johnson: Second shot boosts antibodies and protection against COVID-19    Egypt to tax bloggers, YouTubers    Egypt's FM asserts importance of stability in Libya, holding elections as scheduled    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt records 36 new deaths from Covid-19, highest since mid June    Egypt sells $3 bln US-dollar dominated eurobonds    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



OPIC establishing $225 million regional private equity fund
Published in Daily News Egypt on 18 - 02 - 2006

CAIRO: The Overseas Private Investment Corporation (OPIC), an agency of the United States government that supports American private sector investment in the developing world, is in the process of establishing a $225 million private equity fund for the Middle East and North Africa region. The head of the agency is also in Cairo to explore investment opportunities for the fund and possible OPIC assistance for affordable housing in Egypt.
OPIC President and Chief Executive Officer Robert Mosbacher Jr., who is in the region for an OECD conference on investment in Jordan, discussed his agency s work and strategy for Egypt in a gathering of journalists at the U.S. Embassy. Mosbacher will meet with government officials and businesses during his visit.
The agency is a self-funded organization and its primary business is political risk insurance. This insurance, which protects U.S. businesses against expropriation, currency inconvertibility and political violence, accounts for approximately half of its portfolio amounting to $13 billion of insured assets globally. The balance of its activity is in loan guarantees and private equity funds.
In Egypt, OPIC currently provides $300 million of political risk insurance to U.S. energy companies. It also has outstanding loan guarantees of approximately $20 million.
OPIC will contribute one-third, or $75 million toward the new regional private equity fund. A U.S. fund manager, which has been selected although Mosbacher declined to disclose its identity, will raise up to $150 million and will be responsible for preparing the fund s investment strategy. It s significant money, says Mosbacher, that would be invested particularly in small and medium sized businesses in the host countries that are identified by the equity fund.
Mosbacher explains that his agency focuses on countries that endeavor to create an improved business environment for foreign investors, which requires clear and predictable commitments to the rule of law, as evidenced by not just a legal system in practice, but one that you are convinced there will be sanctity of a contract and if the contract is not observed you have legal alternatives.
Egypt, according to Mosbacher, is one of a few countries in the region that struck me as being quite aggressive and quite committed about improving the investment climate and attracting more foreign direct investment.
The housing market, however, continues to suffer from a shortage of supply, particularly for the low-income segment of society. A number of factors have inhibited investment in this sector, including arduous property registration procedures and the lack of appropriate financing instruments.
A mortgage finance law was passed in 2001 to facilitate the creation of a primary mortgage market. To date, however, the law has failed to stimulate the housing market, which continues to be beset by prolonged registration process and high fees. As a result, the majority of properties are not legally registered.
The lack of affordable long-term financing also discourages home buyers. Because OPIC can lend money over a 15, 20 or 25 year period, says Mosbacher, we are uniquely qualified to help with the creation of a primary mortgage market, meaning the ability to create borrowing potential for low and moderate income people to be able to buy homes without having huge down-payments that have to be made that are unaffordable, or monthly payments that are so steep that you have to try to buy the house in two or three years.
While the agency is in the preliminary stages of exploring the local mortgage market and has not determined any budget for lending to this market, OPIC projects are typically in the range of $250 million.
The agency was involved in a project in Zambia which provided 5,000 housing units to low and middle income families. A non-profit organization was responsible for the screening and selection of families and the United States Agency for International Development created a title registration system for the project.
A South African firm is now considering raising $500 million to expand the Zambian project to other African countries. Mosbacher says that this demonstrates that affordable housing can be a viable business venture.
The fact that one is of low income does not suggest that they re a bad credit risk, Mosbacher explains, adding that the risk of non-payment can be mitigated by appropriate systems and legal structures. Low income people around the world in a variety of home ownership programs are better credit - in other words, they re more faithful at paying their bills - than some people that are much richer.
OPIC follows the foreign policy directives of the U.S. administration. As a result, it has numerous investments in Iraq, Afghanistan and Pakistan. The agency was also in the process of implementing a project in Palestine, but this was suspended following Hamas victory in the recent parliamentary elections.


Clic here to read the story from its source.