El Salvador Congress approves multimillion dollar works and security loan

RIO DE JANEIRO, BRAZIL – The Legislative Assembly of El Salvador on Tuesday (6) passed and ratified a package worth US$654.8 million intended to build an overpass and US$109 million for the third phase of the Territorial Control Plan aimed to better equip the country’s police and military.

The loans, of which 3 are financed by the Central American Bank for Economic Integration (CABEI) and one by the Inter-American Development Bank (IDB), were passed with the votes of ruling parties, representing 64 of the 84 deputies,

The largest US$245.8 million loan is for the construction of an overpass on the highway connecting the western part of the country with the capital, which is constantly experiencing landslides.

A total of US$100 million was also ratified for an early childhood education program and US$109 million for the security Territorial Control Plan.

President Nayib Bukele failed to push through the security plan’s approval in February 2020, prompting Police and army soldiers to enter the parliament building in a show of support to the president.

The money was granted in October 2019 by CABEI, but it had to be endorsed with the votes of at least 56 deputies, a qualified majority, which did not occur in the previous opposition-controlled legislature which challenged the allocation of several amounts.

Legislators on Tuesday approved the Government to negotiate a US$200 million loan which must be ratified in a new vote to finance the “My New School” program.

GOVERNMENT REQUESTS MORE FINANCING

After the vote on the referred loans, Minister of Finance Alejandro Zelaya requested the approval of a US$600 million CABEI loan for “the country’s economic recovery.” The official pointed out that this is the “largest fiscal support in CABEI’s history.”

According to CABEI information, the bank approved the loan on April 27, consisting of a “support program for economic recovery measures implemented to benefit companies and employment affected by the Covid-19.”

This loan is the highest approved for the “sovereign public sector”, more than two programs approved for Costa Rica for US$550 and US$500 million in 2019 and 2021, respectively.