Last Updated May 30, 2008
The Overseas Private Investment Corporation (Opic) has signed an agreement aimed at supporting political risk insurance for Palestinian export-related businesses and local and foreign investors.The Palestinian Political Risk Insurance Project (PPRI) will establish a facility to provide affordable political risk insurance covering trade disruption and asset damage resulting from delays or closures at borders and checkpoints, as well as political violence. It will combine the resources of Opic, an agency of the US government that aids businesses investment and manages risk in emerging markets, and the Middle East Investment Initiative (MEII), an independent nonprofit organisation that specialises in partnering with the public and private sectors to develop tailored financial products in the Palestinian territories.
The partnerships first initiative will be to reinsure the Palestinian Authority's National Insurance Company (NIC) for US$5mn in political risk insurance that the NIC is providing to small businesses.
PPRI trade disruption coverage will indemnify Palestinian exporters for penalties and fees incurred in the event of an inability to deliver their products and cover the cost of goods being shipped or assets at risk, enabling a resumption or expansion of export programmes. Opic estimates that a 10% increase in coverage take-up could facilitate more than US$400mn in exports from Palestinian businesses.
"The availability of political risk insurance, particularly for small businesses, is a critical piece in strengthening the Palestinian economy. Opic is pleased to support a project that will have important developmental benefits for Palestinian entrepreneurs,” comments Robert Mosbacher, president and CEO of Opic.
Opic's political risk insurance and financing help US businesses of all sizes invest in more than 150 emerging markets and developing nations worldwide. Over the agency's 37-year history, it has supported US$177bn worth of investments.
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