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US development finance arm OPIC keen to expand presence in India

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Overseas Private Investment Corporation (OPIC), the US government’s development finance arm, is keen to expand its presence in India and partner the world’s largest democracy as a “key anchor” of the Trump administration’s Indo-Pacific strategy, a top visiting official said.

With the US President Donald Trump signing into law the BUILD Act last Friday, the US development finance institution has $37 billion more of resources, which would allow it to carry out more projects in India and around the world, said David Bohigian, Executive Vice-President, OPIC.

OPIC is looking for opportunities to deploy more capital in India, he said.

“US development finance institution now has expanded capabilities. The BUILD Act will give the US development finance institution a potential portfolio of $60 billion, which is $37 billion more than the current global portfolio level of $23 billion. BUILD Act is going to help us work better with partners around the world,” he said.

In India, OPIC, which has been active for decades, has an investments of $1.5 billion across 40 projects, helping India develop SMBs and large enterprises.

With the passage of the Better Utilisation of Investment Leading to Development, or BUILD Act, the US has gained a new development finance institution. This new institution – to be called the US International Development Finance Corporation – is expected to combine OPIC and USAID’s Development Credit Authority.

Bohigian, who separately met Finance Minister Arun Jaitley and top External Affairs Ministry officials, on Tuesday, also said that the new US development finance institution will have new capabilities, including the authority to invest in equities.

Venture capital

OPIC launched a venture capital programme a few days back as a global initiative, and made its first fund commitment ($25 million) under this initiative to India-focussed Iron Pillar, a venture growth investor specialising in technology businesses in India.

Moving into an asset class like venture capital has a different risk reward ratio, Bohigian pointed out.

“We believe that the impact that venture capital can have in the world in creating an entrepreneurial economies is worth the additional risk.

While we will continue to look at other opportunities for venture capital in India, we are looking across every sector not just venture capital but in infrastructure, hospitals, education and solar so as to supporting the development needs of the Indian economy,” said Bohigian.

OPIC has already invested $3.5 billion in private equity across 35 funds globally.