Procedure to avail Overseas Private Investment Corporation (“OPIC”) Financing

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An entity established under Indian law in Indian (the “Borrower”) for the purposes of owning the Project are eligible. The proceeds of the Loan would be used for construction and operation of a solar power generation facility in India using solar technology from USA.
U.S. nexus:
In order to qualify for OPIC financing, either of the following conditions should apply:
1. The Borrower should be owned at least 25% directly or indirectly by a U.S. party; or
2. The Borrower will enter into agreement(s) with a US party for the provision of products, services, or warranties over the long term of the Project. It is within the sole discretion of OPIC to determine the sufficiency of the US nexus on the basis of these proposed agreements.
A loan facility in a principal amount not less than $10 million and not greater than $50 million (the “Commitment”).
The proposed Commitment shall not exceed greater than 70% of Total Project Costs. The remaining 30% equity requirement must be identified from an investor with sufficient financial wherewithal to provide the funding prior to approaching OPIC.
The appropriate leverage in the transaction will be dependent upon: (a) the creditworthiness of the offtaker; (b) the Borrower’s foreign exchange hedging strategy; (c) the strength of contractual arrangements; (d) the investors’ track record in implementing similar projects; and (e) other factors impacting the overall Project economics.
Project proponent can avail the funding for Costs associated with development, construction and early-period operation of the Project including hard costs of assets (plant, property,equipment, civil works, et al.) and soft costs (out-of-pocket pre-operating costs, permitting, engineering, finance and legal costs, etc.)
The Loan Term shall not exceed fifteen (15) years from the date of the Loan Agreement, and shall include a grace period on principal repayment equal to the expected construction period plus six months from the commercial operations date.
Interest shall be paid on a fiscal-quarterly basis (each such date, a “Payment Date”) in arrears, beginning on the Payment Date immediately following the first Disbursement. Interest will be calculated at a fixed rate per annum for each Disbursement equal to:
(a) the base cost of funds which is the fixed rate necessary to fund the Loan through OPIC’s certificates of participation (marketed as set forth in “Funding” immediately below). As an indicative measure, the fixed rate should approximate the interest rate of a US Treasury having a term equal to the weighted average life of the Loan; plus
(b) an agency risk spread assessed by the market at the time of the Disbursement to account for its perceived incremental risk of the certificates of participation above US Treasuries. An indicative measure in recent transactions has been sixty (60) to eighty (80) basis points; plus
(c) an OPIC risk spread assessed based upon the specific risks of the Project. As an indicative measure, compared to recent similar projects in India the OPIC risk spread will potentially range from three percent (3.00%) per annum to three and one-quarter percent (3.25%) per annum.

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