Like most financiers, Mimi Alemayehou is in the business of making investments that are going to pay her back. But Alemayehou works at a development agency. So instead of stocks, bonds, real estate or currency swaps, she spends her days thinking about more unusual investments, like rice husks in India, for example.
Welcome to the world of the Overseas Private Investment Corporation (OPIC), the U.S. government agency where Alemayehou has served as the Executive Vice President since March 2010. A 1998 MALD graduate of The Fletcher School at Tufts University, Alemayehou is charged with helping the agency fulfill an intriguing mandate: to support U.S. investment and foster development in emerging markets worldwide.
“We support U.S. investment in the neediest places, like Liberia and Haiti and Afghanistan. We’re not an export agency, we’re a development agency, that’s what’s in our veins,” she said in a presentation at Fletcher last week, the latest in a series hosted by the school’s Institute for Business in the Global Context.
Similar to governmental aid agencies such as USAID or Britain’s DFID, OPIC is charged with figuring out ways to help build economic and social prosperity and pull people out of poverty in developing countries. But unlike these agencies, OPIC doesn’t provide aid – it supports private sector investment. OPIC has to fulfill its mission on a self-sustaining basis, which means returning money to the U.S. taxpayer every year.
The way OPIC makes this happen, Alemayehou said, is by supporting investments in development that also help U.S. businesses get a foothold in fast-growing emerging markets. Using tools such as political risk insurance, loans, guarantees and support for private equity funds, according to the agency, to date it has supported nearly $200 billion of investment in over 4,000 projects, generated $74 billion in U.S. exports and supported more than 275,000 U.S jobs. Last year OPIC made $270 million for the U.S. government, Alemayehou added.
The rice husk investment is one example of an innovative project that helps further economic prosperity and also makes money. OPIC loaned $750,000 to a group of Indian-American entrepreneurs who came up with a way to take the discarded husks of rice, which are usually dumped in a landfill, and use them to generate electricity in impoverished Indian villages. The loan, the agency says, helped the company, Husk Power Systems Inc., build three dozen mini-power plants and power light bulbs and mobile phone chargers in villages that are off the power grid.
“We look not for just financial return, but also social and environmental returns,” Alemayehou said.
“The things that keep me awake at night are: Do we have the right balance in our portfolio? Are we taking too much risk in a certain country or sector? Are we being innovate enough with our products to meet the demand from our clients? Are we maximizing our developmental impact?” she mused. “The challenge is also to find U.S. firms that are interested in making these types of investments.”
Prior to coming to OPIC, Alemayehou was U.S. Executive Director at the African Development Bank and served as the most senior U.S. Treasury official in Africa. She also founded a development consulting firm, Trade Links, LLC, which worked with clients on emerging markets issues and promoting African exports.
It’s a career track she said wouldn’t have been possible without the multidimensional research and study experience she got while at Fletcher.
“In my job, I regularly rely on what I learned at Fletcher. At OPIC, we are balancing financial returns with environmental impact, social impact, and economic impact,” Alemayehou said. “So the broad curriculum I completed at Fletcher comes in handy.”
Alemayehou cited her Fletcher studies with Prof. Laurent L. Jacque, director of the School’s International Business Studies Program, as being particularly instrumental in influencing her future career. "I didn’t come to Fletcher to get an MBA, but after Professor Jacque’s class, I was hooked,” she said.
Alemayehou went on to pursue coursework in International Business Transactions with Prof. Joel Trachtman, which she said she uses everyday, along with studies in International Negotiation & Conflict Resolution with the program's founder, Prof. Jeswald Salacuse. “I still have his book on my shelf,” she said.
“Fletcher offers what’s missing from most MBA programs: anyone can give students business models, but to truly make an impact you first have to understand the countries, the people and the political situation,” said Alemayehou. “Having a Fletcher degree helps you understand that context.”
--Mike Eckel, F13 MALD Candidate