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The Overseas Private Investment Corporation (Opic) has concluded a new bilateral investment incentive agreement between the governments of the US and Honduras, paving the way for streamlined Opic support for US investment in the Central American nation.
The new agreement, which updates one signed in 1966, is a prerequisite for Opic activity in a country. The updated version reflects a contemporary approach to foreign investment, by eliminating outdated procedures which can delay projects “approval.
Opic President and CEO Peter Watson says the new agreement “heralded streamlined Opic efforts to encourage US investment in Honduras. In tandem with the Central American Free Trade Agreement (Cafta), we can expect greater levels of American investment in the dynamic and growing market that is Central America.”
Watson notes that US trade and investment with Central America verges on US$20bn per year, and is likely to increase three-fold as a result of Cafta, as well as expansion of capital markets in the Caribbean Basin.
Over the last fiscal year, 40% of Opic insurance projects and 65% of its small business deals came from Central America and the Caribbean. The region now represents 7% of Opic’s total combined portfolio and nine percent of the total Insurance portfolio.
During its 33-year history, Opic has supported 53 projects in Honduras with more than US$108mn in financing and political risk insurance, in sectors ranging from financial services and construction, to manufacturing and tourism.