OPIC -- a U.S. government agency designed to help U.S. companies invest overseas by offering loans, loan guarantees and political risk insurance -- announced Tuesday that it would guarantee $75 million of the debt portion of the fund.
"This fund will invest in a whole range of agricultural enterprises -- from fisheries to feed storage to consumer foods -- and in the process improve production, packaging and distribution of food," said OPIC president Ruth Harkin. "This should mean more, higher quality food and greater choices for consumers in many former Soviet states."
The fund will be managed by the Omaha, Nebraska-based Agribusiness Management Co., a subsidiary of the America First Companies, and investors are expected to include major U.S. agribusiness firms, OPIC said in a press release. The fund will be advised locally by the International Moscow Bank.
According to OPIC, the fund intends to make equity investments in 10 to 15 companies over the next three to five years. The investments are likely to be in the range of $15 million to $20 million each.
OPIC says the investment funds it supports operate only in conjunction with other investors, usually generating a total investment of 10 times the amount invested by the fund. Thus, the agribusiness fund could leverage up to $1 billion in investment, the agency says.
"Projects can apply to the fund when they don't have sufficient equity," Eric Luhmann, OPIC's chief representative in Moscow, said Wednesday.
OPIC supports three other private equity funds in Russia and the former Soviet Union, guaranteeing:
?75 percent of up to $300 million for the NIS Major Projects Fund managed by Lehman Brothers;
?$20 million of the $180 million First NIS Regional Fund managed by the Barings group;
?$112.5 million of the $155 million Russia Partners Fund, sponsored by Paine Webber Inc.
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