Loans to Female Entrepreneurs in Southern Mexico Will Spur Economic Growth
MEXICO CITY – Officials from the Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance institution, joined senior Mexican officials today to announce support for projects mobilizing more than $80 million that will expand access to capital for micro, small, and medium enterprises (MSMEs), particularly those owned by women, in southern Mexico. The announcement was made by Ryan Brennan, OPIC Chief Operating Officer, alongside Mexican Foreign Secretary Marcelo Ebrard and Chargé d’Affaires at the U.S. Embassy in Mexico City John Creamer.
OPIC also signed letters of interest to mobilize public and private financing to support a $400 million LNG plant and $320 million wind power plant in the region.
The announcements follow a declaration by the United States and Mexico in December 2018 committing to strengthen and expand bilateral cooperation in support of U.S. private sector investment, as well as foster development in southern Mexico.
“By backing U.S. investment in high-impact sectors like financial services and energy, these projects will create new economic opportunities in southern Mexico that empower individuals and lift communities” said Brennan. “OPIC is proud to announce progress on its efforts to support private investment as a stabilizing force in regions of Mexico where it is needed most.”
OPIC works directly with private sector businesses, providing loans and insurance tools to manage risks associated with investment in developing markets. In doing so, the agency generates additional capital alongside its own support. Since 2006, OPIC has mobilized more than $1 billion in capital to support projects that advance development in Mexico.
Through $52 million in OPIC financing announced today, the agency will mobilize more than $80 million to support lending to MSMEs in southern Mexico through local banks and microfinance institutions. Small businesses in Mexico employ nearly half of Mexico’s labor force, yet they face limited access to credit in rural regions. OPIC financing will expand access to the capital entrepreneurs need to grow businesses, create jobs, and help their communities prosper. As part of OPIC’s 2X Women’s Initiative, these projects will focus on reaching female entrepreneurs, who face particular challenges in accessing financing.
OPIC also signed letters of interest to explore providing $250 million in financing to support a $400 million LNG facility in Salina Cruz as well as a $240 million loan to construct a $320 million wind power plant that would supply 200 MW of power to the region. The letters demonstrate OPIC’s interest in supporting the projects, contingent upon their successful completion of the agency’s comprehensive review process.
During the visit, the OPIC delegation, including Brennan as well as Senior Advisor for the Western Hemisphere Kristie Pellecchia, Acting Deputy Vice President for Investment Policy Anne Lesser, and Director for the Western Hemisphere William Thompson, met with senior government officials, visited OPIC-supported projects, and explored opportunities to continue growing U.S. investment in the country.
The visit comes as OPIC prepares to transform into a new, modernized agency called the U.S. International Development Finance Corporation (DFC) in October 2019. Equipped with a more than doubled investment cap of $60 billion and new tools, DFC will have more resources to invest in developing countries.
The Overseas Private Investment Corporation (OPIC) is a self-sustaining U.S. Government agency that helps American businesses invest in emerging markets. Established in 1971, OPIC provides businesses with the tools to manage the risks associated with foreign direct investment, fosters economic development in emerging market countries, and advances U.S. foreign policy and national security priorities. OPIC helps American businesses gain footholds in new markets, catalyzes new revenues and contributes to jobs and growth opportunities both at home and abroad. OPIC fulfills its mission by providing businesses with financing, political risk insurance, advocacy and by partnering with private equity fund managers.
OPIC services are available to new and expanding businesses planning to invest in more than 160 countries worldwide. Because OPIC charges market-based fees for its products, it operates on a self-sustaining basis at no net cost to taxpayers. All OPIC projects must adhere to best international practices and cannot cause job loss in the United States.