By Roman Olearchyk, Kyiv Post Staff Writer
Kyiv Post, Kyiv, Ukraine, Mar 18, 2004
KYIV - The Overseas Private Investment Corporation, a United States
government agency, announced plans to resume operations in Ukraine that
were suspended five years ago after a dispute with the Ukrainian government.
On March 12, OPIC announced plans to provide $3.8 million in political risk
insurance to Hansen, Inc., an American company involved in establishing a
joint venture to manufacture suspension systems for railroad freight cars in
Ukraine. OPIC's mission is to encourage private investment in emerging
markets by providing private investors with political risk insurance and
The OPIC insurance will minimize the risk of participating in the joint
venture project, which will be involved in the manufacture of railroad
freight car suspension systems, friction wedges, side bearings, and center
bowl liners, to be sold primarily in Ukraine. Additionally, the OPIC
insurance will cover the lease of Hansen's manufacturing equipment and use
of its patented technology. Hansen, Inc. is based in Pittsburgh,
"This project will help support Ukraine's economy," Peter Watson, president
and CEO of OPIC, said in a March 12 statement. The country's economy
relies heavily on industrial activities and its rail system.
"OPIC is pleased to work with a small American business to bring these
important developmental benefits to the people of Ukraine," Watson said. He
urged the country to resolve outstanding investment disputes with American
companies in order to attract additional private sector investments.
OPIC and the Ukrainian government signed a memorandum of understanding in
December that enabled OPIC to resume activity in the country. The memorandum
stipulated that the two sides would settle an outstanding insurance claim
from a previous OPIC-supported project by Ukraine by Jan. 1, 2005. The claim
went unsettled for some time, prompting OPIC to stop supporting projects in
Ukraine in 1999.
Tim Harwood, a spokesperson for OPIC, said on March 15 that the claim
involves $17.7 million in funds provided by OPIC to a company called Alliant
for a project involving the conversion of munitions into metals.
"In the memorandum concluded between OPIC and the Ukrainian government,
both parties agreed to resolve the case," Harwood said.
Watson said OPIC's return to Ukraine "sends a message to potential U.S.
investors that Ukraine has resolved to be a partner to American companies
interested in doing business in this resource-rich nation."
Continued OPIC activity in Ukraine depends on the prompt settlement of
outstanding disputes with American companies. Only by resolving these
disputes and committing itself irrevocably to economic reforms, will Ukraine
become an attractive destination for foreign investment, Watson said.
"Once settlement is achieved, OPIC looks forward to working with Ukrainian
businesses and the Ukrainian government and expanding our activity in the
country," Watson added.
OPIC, as U.S. government agency, was established in 1971 to help American
businesses invest overseas, and to foster economic development in emerging
markets. OPIC says it charges market-based fees for its services, rendering
it self-sustaining and cost-free for U.S. taxpayers.
OPIC has provided services to U.S. companies in more than 150 emerging
markets and developing nations over its 32-year history, supporting $150
billion worth of investments that have helped developing countries generate
over 690,000 host-country jobs. OPIC says its projects have also generated
$66 billion in U.S. exports and created more than 257,000 American jobs
FOR PERSONAL AND ACADEMIC USE ONLY