CABEI will channel US$350 million to El Salvador to support development and economic recovery policies
• The resources will be used for the protection of vulnerable groups, climate change and strengthening public sector management.
Tegucigalpa, December 14th, 2022. - Inorder to support the Republic of El Salvador in its economic recovery through a resilient development strategy aimed at mitigating and adapting to climate change, the Central American Bank for Economic Integration (CABEI) approved US$250 million from its Development Policy Operations Program (DPO), which seeks to promote balanced economic growth, poverty reduction, sustainable development and the fight against climate change in its member countries.
In order to achieve this objective, CABEI will make its best effort to manage resources from external sources for up to US$100 million, under the co-financing mechanism, subject to the approval established in the financing from such sources.
Among the development policies to be supported by this financing are the strengthening of the administration of government revenues and expenditures through measures to reduce the fiscal gap, focused on increasing tax collection, reducing smuggling and tax evasion, improving tax control through the implementation of electronic invoicing, as well as economic reactivation and the promotion of trade and local and foreign direct investment.
"We are pleased to approve a second DPO to our founding partner the Republic of El Salvador to support it in the implementation of the policy actions with development results that it has established as a priority to maintain its macroeconomic stability and ensure the welfare of more than 6.5 million inhabitants, with special emphasis on vulnerable groups," highlighted CABEI Executive President Dr. Dante Mossi.
This operation also contemplates climate action and the low-emission energy transition, encouraging actions related to adaptation and mitigation, as well as promoting the technological transition of the mobility sector; in addition to protecting vulnerable groups, promoting actions aimed at improving social conditions that support the reduction and social prevention of violence, with emphasis on the eradication of violence against women.
This is the second DPO that CABEI approves for El Salvador, the first was on August 26, 2020 for the country's economic reactivation, attention to vulnerable groups, safeguarding employment and strengthening macroeconomic stability.
The financial terms will be for a 20-year term, including a 5-year grace period and an indicative annual interest rate of 7.41%.
