January 15, 2020 / 11:31 PM / 6 days ago

U.S. agency to provide Guatemala's private sector with $1 billion in financing

GUATEMALA CITY (Reuters) - The United States will pump $1 billion into Guatemala’s private sector to spur investment and create jobs, the head of a U.S. government agency said on Wednesday.

The announcement came as the Central American country’s new president, Alejandro Giammattei, has been meeting with U.S. officials this week to discuss how to attract investment to stimulate economic growth and contain migration to the United States.

“It’s a billion dollars of financing from us, which should catalyze about $4 billion,” Adam Boehler, chief executive of the U.S. International Development Finance Corporation (DFC) told Reuters after he signed a memorandum of understanding.

By $4 billion, he was referring to projected multiplier effects of the private sector financing.

The potential scope of the deal was not previously known. On Tuesday, the U.S. embassy in Guatemala said the two sides would sign a memorandum of understanding to “stimulate” $1 billion of private sector investment.

Acting as a development bank, the DFC partners with private sector companies to bankroll specific projects. The Guatemalan government does not receive the financing.

Worldwide, the DFC invests via debt financing, political risk insurance, equity finance and technical development.

Giammattei, a conservative, who inherited a contentious deal his predecessor struck, is under pressure from U.S. President Donald Trump to stop the number of undocumented migrants from Guatemala to the United States and improve security.

Reporting by Frank Jack Daniel; Writing by Stefanie Eschenbacher; Editing by Tom Brown

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