Honduras will improve its logistics performance through sectoral reforms

The program will boost competitiveness and regional integration by consolidating the freight logistics services regulatory framework and updating foreign trade processes and technological systems.

The Inter-American Development Bank (IDB) has approved a $118.48 million loan to help Honduras improve its logistics performance with a view to boosting the sector’s integrated planning and upgrading trade facilitation processes.

The proposed reforms will contribute to modernize logistic sector services and foster their insertion into global markets by strengthening their institutional, regulatory, planning, and rule of law capabilities, paving the way and providing incentives for the development of specialized logistic infrastructure, quality transportation and logistics services, and the consolidation of the Central American Customs Union in an environment of greater transparency.

The program’s implementation will generate economic benefits in the areas of production and trade both at national and regional level, in particular to those productive sectors with stronger incidence on the economy. The intended reforms will foster improvements in the institutional environment as well as in planning, regulation of overland transportation logistics services, and customs management across the national territory. Producers and marketers will have greater access to domestic and international markets; logistics operators will have processes and infrastructure that are more orderly and efficient and tailored to needs; and transportation and logistics services users will be able to deliver cost-efficient services.

The infrastructure investment that our region requires to meet the needs of its growing population, support economic growth, and attain Sustainable Development Goals has been estimated at $225 billion-plus per year, or more than 3.5% of GDP. Due to the countries’ limited fiscal space, particularly within the context of the COVID-19 pandemic, boosting financing for the public and private sectors is of the essence, and multilateral banks have a critical role to play in this respect.

The IDB is investing in projects with high potential to generate economic growth and speed up recovery. The program is aligned with the Bank’s Vision 2025 goals of promoting regional integration, strengthening value chains, supporting small- and medium-sized enterprises to help them narrow their financing gaps, and prioritizing gender and climate change issues.

The loan approved by the IDB will be disbursed over one year. It has a 20-year repayment term, with a 5.5-year grace period and interest rate based on LIBOR.