Loan guarantees: OPIC provides loan guarantees to third-party  lenders. In fiscal years 2008 through 2014, OPIC committed the majority of its new  financing support to projects in two regions: Latin America and the  Caribbean and Sub-Saharan Africa. In fiscal years 2008 through 2014, OPIC’s  new commitments for projects in low per capita income countries  represented 34 percent of the total number of new commitments and 25  percent of the total value. OPIC Policies Guide Project Selection, and OPIC Recently Adopted Additional Guidance to Enhance the Policy Clearance Process

		OPIC’s Policies Guide the Project Selection Process

OPIC has established policies that guide its project selection process,  which includes a review of projects’ eligibility against OPIC policy and  statutory requirements and due diligence reviews, among other  evaluations. OIP officials are to conduct these  reviews, based on applications, responses to questionnaires, other client- provided documentation, and other information. In reviewing the clearances for 21  projects, we identified 2 projects for which OPIC did not document its  review of human rights issues in the environmental and social  clearance or the worker rights clearance. In  response, OPIC developed additional guidance establishing roles and  responsibilities for human rights reviews. OPIC Monitors Projects, but Site Visit Reports Are Not Always Timely, and Use of Client- Reported Data Involves Risks OPIC Uses Several Tools to Monitor Policy Compliance and Development Impacts of Its Projects

OPIC is required to monitor ongoing projects’ compliance with  environmental, social, labor, and human rights requirements, and  assesses U.S. economic impact and host-country development impact. Two of the 3  site visit reports we reviewed were written several years after the site  visits occurred. OPIC  policy does not require that site visit reports be completed and submitted  to management in a designated period of time. Officials stated that these reports provide  additional information on policy compliance. OPIC has  established policies and processes for reviewing, selecting, and  monitoring projects, and in our review of a sample of projects we found  that OPIC generally followed these policies. In addition, OPIC has recently sought to  enhance its process for assessing cumulative environmental and social  impacts by adopting new guidelines that may support more systematic  analyses. Thus, OPIC’s current monitoring  processes may not provide adequate information on projects’ annual  policy compliance and development impact status to support program  goals. Assess the current monitoring processes to ensure that the risk  associated with the use of client-reported data and limited site visits  for monitoring is acceptable for meeting OPIC’s program goals. Appendix I: Objectives, Scope, and Methodology

This report examines (1) the amounts and types of Overseas Private  Investment Corporation’s (OPIC) global financing support from fiscal year  2008 through fiscal year 2014, (2) how OPIC selects projects, and (3)  how OPIC monitors projects. To analyze the amounts and types of OPIC’s global financing support, we  reviewed data provided by OPIC about its new commitments for fiscal  years 2008 through 2014 to reflect recent activity. We also visited two of the four focus countries, Honduras and Pakistan, to  augment information we obtained from OPIC and other sources. Status: Active.
Why GAO Did This Study

OPIC helps mobilize private capital to address development challenges globally and advance U.S. development assistance objectives.
GAO was asked to provide information on OPIC's financing commitments and its project selection and monitoring practices. This report examines (1) the amounts and types of OPIC financing support for fiscal years 2008 through 2014, (2) how OPIC selects projects, and (3) how OPIC monitors projects.
To address these objectives, GAO analyzed OPIC data for its commitments made in fiscal years 2008 through 2014, to reflect recent activity. GAO also reviewed OPIC policies, annual reports, and selection and monitoring documents for a nongeneralizable sample of 21 projects in four countries. The country and project selections were based on several factors, including OPIC financing amounts, ease of doing business ratings, and project sector. GAO interviewed officials from OPIC and other organizations as well as officials and clients in Honduras and Pakistan, two countries with particularly challenging business climates.

What GAO Found

The Overseas Private Investment Corporation (OPIC) provides loans, loan guarantees, and political risk insurance to private entities to support development in over 150 countries. In fiscal years 2008 through 2014, OPIC made 718 commitments worldwide valued at about $20 billion. OPIC committed the majority of this financing support to projects in Latin America and the Caribbean and in Sub-Saharan Africa, and 25 percent to countries with low per capita incomes.
OPIC has policies to guide its project selection process, including confirming a connection to the United States and reviewing potential environmental and social, worker rights, and human rights impacts. In its review of a nongeneralizable sample of projects, GAO found that OPIC generally followed these policies. While GAO found that OPIC completed required human rights reviews, the responsibility for reviewing human rights-related information is spread across groups, and OPIC lacked clear guidance for conducting these reviews. OPIC recently developed new guidance that identifies roles and responsibilities for these reviews. GAO also found that OPIC has recently adopted additional guidelines which may support more systematic cumulative environmental and social impact analyses.
OPIC monitors ongoing projects but may lack adequate information about some projects' policy compliance and impacts. OPIC uses annual client-reported data, a limited number of site visits, and independent consultant reports, among other things, to monitor projects' policy compliance and impacts. OPIC policy does not designate time frames for submitting site visit reports, and some reports GAO reviewed were written several years after the visits. OPIC's policy teams visit about one-tenth of active projects each year. Site visit reports GAO reviewed identified compliance issues that clients had not reported, indicating that OPIC may lack complete and accurate information on the status of some projects. Thus, OPIC's current monitoring processes may not provide adequate information on projects' annual policy compliance and development impact status to support program goals.

What GAO Recommends

GAO recommends that OPIC (1) establish time frames for submitting site visit reports and (2) assess its monitoring processes to ensure risks associated with current practices are acceptable for meeting OPIC's program goals. OPIC concurred with these recommendations.