Tuesday, 22 November 2022 16:52

Commission in favor of accessing loan to improve 300 kilometers of rural roads

Written by Evelyn Alas

The plenary of the Legislative Assembly will vote on a favorable opinion issued by the Finance Committee to authorize the Executive Branch, through the Ministry of Finance, to subscribe a loan of up to $100 million with the Inter-American Development Bank (IDB).

These funds will allow the Ministry of Public Works to make 12 interventions (a total of 300 kilometers) in the national unpaved tertiary and rural road network in different departments, among them Chalatenango, La Unión, San Vicente, Usulután and Santa Ana, according to Marlon Herrera, general director of Investment and Public Credit of the Ministry of Finance, who explained to the parliamentarians.

The legislators unanimously voted in favor of the initiative, as they agreed that the execution of this project will contribute to improve circulation on the unpaved road network, increase economic activity and generate employment opportunities for the population.

The term for repayment of the loan is 25 years from the date of subscription, with a five-year grace period and the first installment to be paid in 66 months.

"When we talk about improving rural roads, don't just think about asphalting a street, think about the daily life of our people. They have to go out of their houses with a crate to throw some water so that they don't get dust when a car passes by, or in the winter when the children have to jump from stone to stone to avoid getting their shoes dirty", reflected the deputy of Nuevas Ideas, William Soriano.

In another matter, the legislative board also prepared a favorable opinion to authorize the Government to make the first modification to loan contract No. 2253, for an amount of $250 million, called Operación de Políticas de Desarrollo (OPD) to support Public Policy Actions. This change was signed by the Minister of Finance, Alejandro Zelaya, and a representative of the Central American Bank for Economic Integration (CABEI).

The committee explained that last october 10, the ministry and the financial institution agreed to make changes in the sections that establish the amount and type of resources, the term and grace periods, interest, commissions and other charges.

Thus, the endorsed opinion indicates that in order to improve the financial conditions of the loan in favor of El Salvador, the content of Section 3.01 of the contract is replaced so that the total amount of the loan is broken down as follows: up to $235 million from CABEI's ordinary resources and up to $15 million from external resources of the Republic of Korea, which have been channeled by the multinational organization.

For the first loan, the initial conditions will be maintained, but for the second, a payment term of up to 30 years will be established, with a grace period of 10 years and a fixed interest rate of 2.3% per annum.

"CABEI has offered good financial conditions for the country, through a credit facility. They are better conditions for a portion of the loan: for $15 million coming from the Republic of Korea", expressed the Treasury delegate to the parliamentarians.