September 27, 2018
On September 21, the Japan International Cooperation Agency (JICA) signed a memorandum of cooperation (MOC) with the Overseas Private Investment Corporation (OPIC)* for promoting mutual cofinancing to the private sector in developing countries. The MOC was signed by OPIC Executive Vice President, David Bohigian, and JICA Chief Economist and Chief Representative of the JICA U.S.A. Office, Ryosuke Nakata.
In recent years, the amount of private capital flowing from developed countries to developing countries has been on the rise, and this trend is expected to continue. As developing countries have undergone economic growth, the private sector has played an ever-increasingly important role in responding to the socioeconomic development needs in such areas as large infrastructure improvements and fighting climate change.
With this change, developed countries have been utilizing their bilateral development finance institutions (DFIs) to mobilize capital from private financial institutions and other private sector resources while supporting the private sector in contributing to the sustainable development of developing countries. Of the bilateral DFIs, OPIC has the most extensive operations, reaching 3.8 billion USD (112 projects) in committed funds in 2017 and a portfolio of 23.2 billion USD as of the end of 2017.
JICA signed the MOC in order to deepen its cooperation and partnership with OPIC, which has an extensive and long-term track record of private sector financing in developing countries, and to appropriately meet the financing needs of developing countries through cooperation between Japan-US bilateral DFIs. Through the sharing of best practices for cofinancing projects, discussions and other measures, the MOC aims to expand support for effective work by the private sector in project formation and the due diligence process in developing countries with a stronger partnership with OPIC.
JICA will continue to proactively solve development challenges by meeting the demand for private sector finance in developing countries.
* OPIC is an independent agency of the Government of the United States established in 1971 that helps American businesses invest in emerging markets toward fostering economic development.