The agencies which make up a U.S. Government mission overseas are not merely an alphabet soup of acronyms along for the ride. Working long hours behind the scenes both before and after the mission itself, applying skill and expertise to complex international negotiations under deadline pressure, they provide the very substance that makes foreign policy real, and which might just make the world a little smaller and a little more interconnected.
For that reason, one such agency
– the Overseas Private Investment Corporation (OPIC), the U.S. Government’s
development finance institution – appreciated Commerce Secretary Bryson’s
shout-out during his remarks to the Indo-American Chamber of Commerce in Mumbai
“I have a good piece of news from OPIC,” Secretary Bryson said. “I’m sure that many of you are familiar with India’s Infrastructure Development Finance Corporation – IDFC. Yesterday (March 29), OPIC’s Board approved $250 million in financing to help IDFC expand lending for renewable energy projects, including solar, wind and energy efficiency, as well as for infrastructure projects. This will help meet an important need for more long-term capital to support India’s growing renewable energy sector.”
Indeed, it will. IDFC is India’s premier infrastructure lender, with an enviable track record in the sector. As a specialized financial institution, it provides end-to-end infrastructure financing and integrated project implementation services for India’s most important priority sectors.
Under its “Go Green” initiative, IDFC aims to minimize the carbon footprint of its portfolio, by implementing comprehensive environmental management systems that will mitigate the social, environmental and carbon effects of its projects.
That’s where the OPIC financing comes in. IDFC will use the OPIC guaranty to expand its lending to solar photovoltaic projects, energy efficiency projects, projects that reduce energy consumption and/or demand, and wind farm projects, among others.
OPIC’s support will be a key component in the prospective success of the “Go Green” initiative, in large part because OPIC’s financing will have a longer term than IDFC’s existing financing. Simply put, OPIC expects that the term of the OPIC financing will lead to IDFC making longer term loans itself.
Some context: despite significant growth over the past few years, India’s renewable energy sector remains underserved, primarily due to the inability of financial institutions to offer long-term lending. The lack of long-term funding options, especially given current financial market conditions, has made bi-lateral and multi-lateral support much more critical.
“India’s renewable energy industry has grown by leaps and bounds these past few years, but in order for it to reach the next level and achieve the scale and sustainability we all wish to see, it must get long-term financing,” said OPIC President and CEO Elizabeth Littlefield. “In a current environment of limited liquidity, this OPIC facility will provide IDFC with precisely the long-term funding it needs to serve India’s vast capital needs for the renewable energy and infrastructure sectors.”
Dr. Rajiv Lall, Managing Director and CEO of IDFC, seconded Ms. Littlefield’s point: “Only about a sixth of India’s renewable energy resources have been tapped so far, leaving huge potential for future market growth. The OPIC facility will provide valuable support for India's renewable energy strategy which aims not only to lower the carbon intensity of the country's growth, but also to address the need for energy security."
So, a good piece of news, indeed. Pull back the curtain on the alphabet soup of a U.S. Government mission and – mixed metaphors aside – you’re bound to find quite a bit of good news.
For more information about OPIC, the U.S. Government’s development finance institution, visit the OPIC website at www.opic.gov.