U.S. SMALL BUSINESS USES OPIC LOAN TO EXPAND CLEAN ENERGY TECHNOLOGY IN BRAZIL

U.S. small business will use a loan from the Overseas Private Investment Corporation (OPIC) to expand its natural gas distribution project in Brazil, helping that nation meet a growing demand for clean-burning natural gas, OPIC President and CEO Robert Mosbacher, Jr. announced today.

As part of OPIC's commitment to the Clean Energy Technology Exporters initiative, multi-agency initiative to encourage U.S. clean energy technologies, OPIC will provide a $5.4 million loan to Houston-based NEOgas to expand its operations. The project is expected to drastically increase the feasibility of using clean-burning compressed natural gas (CNG) in rural areas that are not currently served by natural gas pipelines, as well as its use in natural gas-powered vehicles.

Although Brazil has a growing network of gas pipelines, much of the country still lacks access to branch pipelines, thereby denying direct availability of natural gas to consumers and industries. NEOgas transports gas that is available through the state gas distribution companies and delivers it to industrial and natural gas vehicle sites.

Specifically, the company works with Brazilian state agencies to identify areas of demand and negotiates with natural gas distributors for the right to connect a compression station to a pipeline. Natural gas is then compressed and downloaded from the station into NEOgas transport vehicles. The gas is transported to retail gas stations and industrial parks.

“This project achieves several important developmental goals for Brazil: it extends the country’s energy infrastructure to underserved rural areas, and does so by providing clean-burning natural gas to both retail and industrial customers,” Mosbacher said. “OPIC is pleased to work with a U.S. small business on a project with so many developmental benefits.”

The project was processed through a small business fast-track system established by a framework agreement concluded last year between OPIC and Interlink Capital Strategies, a Washington, D.C.-based financial consultant.

NEOgas was founded in 2001 as part of a venture capital-backed enterprise to create niche oil service business units. Later that year, NEOgas signed a cooperative research and development agreement with the U.S. Department of Energy through its Initiatives for Proliferation Prevention program to improve CNG economics through the development of new gas compression technologies and high-pressure gas storage vessels. By using their systems NEOgas costumers are able reduce costs by up to 50 percent, thereby increasing the feasibility of using clean burning CNG in rural areas that are not currently served by natural gas pipe lines.

OPIC was established as an agency of the U.S. government in 1971. It helps U.S. businesses invest overseas, fosters economic development in new and emerging markets, complements the private sector in managing risks associated with foreign direct investment, and supports U.S. foreign policy. Because OPIC charges market-based fees for its products, it operates on a self-sustaining basis at no net cost to taxpayers.

OPIC’s political risk insurance and financing help U.S. businesses of all sizes invest in more than 150 emerging markets and developing nations worldwide. Over the agency’s 33-year history, OPIC has supported $164 billion worth of investments that have helped developing countries to generate more than 732,000 host-country jobs and $13 billion in host-government revenues. OPIC projects have also generated $69 billion in U.S. exports and supported more than 264,000 American jobs.