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LatinNews Daily - 11 February 2019

US congratulates El Salvador’s Bukele

Chile: On 1 February, the Office of Inspector General for US Agency for International Development (USAID OIG) published a report on the US government’s development finance institution, the Overseas Private Investment Corporation (OPIC), which highlighted key weaknesses in the latter’s dealing with solar and hydroelectric projects in Chile. OPIC is a US agency which works with the US private sector to provide US firms with funds to help them establish themselves in emerging markets. The body has, however, recently been facing a large amount of criticism. OPIC currently holds US$900m in US guarantee investments which support the construction and operation of six renewable energy projects in Chile. This comes as a response to an attempt by the Chilean government to develop a renewable energy market, which had led several OPIC-supported US businesses to invest in Chile’s solar energy market. Although Chile’s capacity to generate nonconventional renewable energy has increased due to these projects, according to the report, OPIC lacks rigour in approving, assessing and reporting on projects, highlighting broader weaknesses in the institution’s internal control system. An analysis of the projects also showcased that labour rights like employment benefits, and environmental concerns, were not being sufficiently protected. USAID OIG made 16 recommendations to improve OPIC’s approach to better advance US foreign policy, as well as strengthen its internal controls. Overall, it calls for OPIC to improve its business practices by changing and formalising the ways in which it manages records and monitors projects.

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