By Margaret Kuhlow
Vice President, OPIC Office of Investment Policy
OPIC seeks to support projects that will serve as foundations for sustained economic growth, and the projects we support typically bring far-reaching benefits. A power plant, for example, has the immediate benefit of bringing new electricity to market. But it may also create jobs, generate tax revenue and introduce advanced technologies into the host country – all contributing to economic stability and improved quality of life.
Each year OPIC produces a report that takes a detailed look at the impact of the development work we support around the world. As the data and the projects highlighted in the report illustrate, there is no single way to advance development. The projects OPIC supports include financing for a chain of schools in Kenya that will not only educate thousands of children, but create thousands of jobs; financing to a microfinance institution in Georgia that provides thousands of customers with loans averaging about $600; and financing for the construction of two major solar power plants in Chile that will not only increase the supply of renewable energy and create local jobs, but will help introduce advanced solar generation technologies into that country and demonstrate the financial viability of such an investment.
All of these projects bring multiple benefits. Some highlights from our latest Annual Report on Development Impact, covering our work in fiscal 2013, include:
- Job creation: There is arguably no better way to support sustained development than by creating opportunity and jobs. The projects OPIC supported last year alone are projected to create nearly 18,000 host country jobs over five years, most of them skilled or managerial positions that pay higher wages and greater benefits than the local norm. It’s important to note that this number reflects only the jobs expected to be created from new projects committed last year. OPIC maintains an active portfolio of projects committed in earlier years, and our clients reported that these projects support almost 250,000 local jobs. Considering that OPIC has just over 200 full-time employees, that’s equivalent to more than 1,000 jobs per OPIC employee.
- Procurement of local goods and services: The process of building a hotel or a power plant, or providing loans to small businesses, often requires additional raw materials or services – the purchase of which creates additional economic activity. The projects OPIC supported last year are expected to spend $7.8 billion locally.
- Tax revenue: Likewise, projects that generate new business activity also generate tax revenues. The projects OPIC supported in 2013 are expected to generate $615 million in tax revenues for their host countries. These additional domestic resources are essential for critical local investments in sectors such as education and infrastructure.
- Environmental and community benefits: OPIC is committed to projects that advance greater resource efficiency. The new projects we committed last year are expected to create 1,000 megawatts of installed renewable energy generation capacity and avoid 2.3 million tons of CO2 equivalent emissions per year. The businesses that OPIC supports also frequently seek to incorporate community benefits into their work; the Annual Report on Development Impact shows that 65 percent of OPIC-supported projects were involved in at least one type of community outreach program.
These are just a few highlights from the 39-page report, which is a great window into the impact of our work from Africa to the Middle East, Asia and Latin America. For a more detailed look at OPIC’s development impact, see the report.
