SRI LANKA IN OVERSEAS PRIVATE INVESTMENT CORPORATION (OPIC) US$90 MILLION INVESTMENT FUNDS FOR ASIA

US$50 million fund for investments in high growth sectors to target investments in South Asia including Sri Lanka

Ambassador Subasinghe says the OPIC Asia investment funds will stimulate growth in the region and the real beneficiaries of these investments will prove to be the entrepreneurs in South Asia

The Board of Directors of OPIC recently approved a total of US$ 90 million in investment guarantees for the establishment of two private equity investment funds to support growth of businesses in Asia. The combined target capitalization of the two funds is between US$250 million and US$300 million.

OPIC’s investment funds program seeks to inject equity capital into emerging markets and thereby seek to lay the foundation for subsequent investment. This process is seen to help modernize business practices in developing countries with good governance as a concomitant of this process enabling markets to grow further.

OPIC will provide an investment guaranty up to US$ 50 million. This fund will pursue expansion, management buy –outs/buy-ins, and private investments in public equities, privatizations, consolidations and infrastructure investments. It will especially target investments in high growth sectors such as pharmaceutical products, health care, manufacturing, consumer goods, retail, oil and gas and financial services. The capitalization target of the fund is between US$150 million and US$200 million. The fund will seek investments in Sri Lanka, Pakistan, Afghanistan and Bangladesh in South Asia.

OPIC has selected as fund manager Actis Capital LLP, a fund management company focused on managing capital primarily in Africa and South Asia.

OPIC President and CEO Dr. Peter Watson said, “this fund will help support the establishment of a financial infrastructure for long –term debt markets in Asia, by creating market mechanisms that will have a positive impact on both industrial and financial sectors. Many of the fund eligible countries are making regulatory changes to facilitate the establishment of this infrastructure, but need private sector participation to stimulate the market.”

Sri Lanka’s Ambassador to the United States says, “the OPIC Asia investment funds will stimulate growth in the region and the real beneficiaries of these investments will prove to be the entrepreneurs in South Asia. In Sri Lanka, this fund could be utilized in the health care, manufacturing, financial services and infrastructure development sectors. ”

Ambassador Subasinghe further stated that the Mission initiated action in 2003 to have the Government of Sri Lanka fulfill all legal requirements for entry into force of the Investment Incentive Agreement (of OPIC) between the Government of Sri Lanka and the US Government signed in October 1993 in Washington DC. Following this the Agreement entered into force on August 8, 2003. This Mission is in the process of working with OPIC to define a program for Sri Lanka as OPIC had evinced an interest to play an active role in the country following OPIC’s participation in the second Trade and Investment Framework Agreement Joint Council meeting in March 2003 and the Pre-Tokyo Sri Lanka Seminar in April 2003.

Embassy of Sri Lanka
Washington DC
USA

09 June 2004