US To Provide Investment For CAFTA States

by Leroy Baker, Tax-News.com, New York

25 May 2006

Robert Mosbacher Jr., president and CEO of the US Overseas Private Investment Corporation (OPIC) has announced that $120 million will be provided for new investments in countries which have signed up to the Central American Free Trade Agreement.

The new financing comprises OPIC support for a private equity investment fund for Central America, Mexico and Colombia; an OPIC loan to fund microfinance institutions in the region; OPIC loans for a series of housing construction and mortgage financing projects that will help relieve the region’s substantial housing need; and an agricultural project in Nicaragua that features both OPIC financing and political risk insurance.

Mosbacher signed the agreements for each of the finance and insurance projects during a four-day trip last week to El Salvador, Honduras and Nicaragua, the three countries where the CAFTA has entered into force. The other signatories to the trade pact are Costa Rica, the Dominican Republic and Guatemala. Costa Rica is the only country which has yet to ratify CAFTA.

“Increasing investment in Central America is a central goal of CAFTA, which is the first trade agreement to establish a Committee on Trade Capacity Building," Mosbacher stated.

"The fact that, in the space of eight months since CAFTA was enacted, OPIC has marshaled $120 million to support investment in the region, demonstrates both OPIC’s commitment to CAFTA and to a growing realization that Central America is a profitable destination for U.S. investment dollars,” he added.

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 35-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.

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