The federal Overseas Private Investment Corp. and Liberty Mutual Insurance Co. are launching a $1 billion risk-sharing agreement to facilitate private-sector investment in emerging markets, the two organizations announced Thursday.

OPIC is a Washington-based independent federal agency that helps U.S. businesses invest in designated emerging markets. It does so by, among other things, providing political risk insurance for U.S. companies operating in 160 developing and post-conflict countries.

“This new and innovative co-investment platform is a major milestone in OPIC’s efforts to mobilize private capital to advance the U.S. government’s development finance goals through investments that drive economic growth, build critical infrastructure, and empower women throughout the developing world,” said OPIC in a statement. “This is OPIC’s first agreement with a U.S. owned insurance company to share credit risk across a global portfolio of new OPIC-originated loans to commercial banks and other non-bank financial institutions.” 

For Liberty Mutual, “the partnership with OPIC is part of a larger strategic initiative aimed at developing long-term partnerships with international development institutions that can bring significant diversification to its credit insurance portfolio and access to new markets,” according to the statement.

“Liberty Mutual is fully committed to providing effective credit and political risk insurance products globally,” said Peter Sprent, London-based head of financial risk solutions at Liberty Mutual’s Liberty Specialty Markets, in the statement. “Partnering with public agencies like the Overseas Private Investment Corp. is an important way for us to approach this market.  We benefit from OPIC’s high standards of due diligence — including environmental and worker rights safeguards — and credit monitoring.” 

“Today’s launch of its first co-investing platform is an important day for OPIC and development finance,” said David Bohigian, OPIC’s executive vice president, in the statement. “This billion-dollar platform is a significant milestone in creating innovative approaches to catalyzing private sector capital to meet global challenges.”

The statement said that In conjunction with the launch of the co-investment platform, over $235 million of funding is being deployed to several financial institutions operating in Central America, South America and Africa. “OPIC’s experts will originate, underwrite and monitor creditworthiness and developmental impact — including labor, human rights, social, gender, and environmental impact — throughout the life of the projects and Liberty will take a significant risk interest in those loans that are part of the facility,” said the statement.