Tuesday, 13 February 2024 00:54

Ministry of Finance presents initiative to subscribe loans with CAF

Written by Karla Gutiérrez

The General Director of Investment and Public Credit of the Ministry of Finance of El Salvador, Marlon Herrera and the deputy director of Budget, Michelle Arce, appeared before the Finance Committee of the Legislative Assembly, to request loans from the Development Bank of Latin America and the Caribbean.

Among the financing from the Development Bank of Latin America and the Caribbean (CAF) are the following:

  • Subscription of loan agreement with the Development Bank of Latin America and the Caribbean (CAF), called Program for the Strengthening of Public Spaces for the Sustainability of Security and the Recovery of the Social Fabric in El Salvador.


  • Financing with CAF for the Environmental Improvement, Drinking Water and Sanitation Program in the Upper Lempa River Basin and Port of La Libertad. This program will finance works in La Libertad, Santa Ana and Chalatenango. This will complement the actions that are already being executed and guarantee the improvement in the quality of life of the inhabitants through sustainable interventions.

This includes the construction, rehabilitation and improvement of waste treatment plants in Santa Ana, Chalatenango and La Libertad, as well as a sewage sludge plant at the Torogoz water treatment plant.


  • In addition, the amendment to Legislative Decree 823, which authorized the Executive to issue credit securities for up to US$500 million to be placed in the national, regional or international market.

Marlon Herrera, director of Investment and Public Credit of the Treasury, explained to the parliamentarians that the reform proposal intends to define and incorporate additional conditions and characteristics to the already approved decree in order to generate more attractive financial conditions and to promote greater convertibility.


Therefore, an article will be added establishing that in the case of placements in the domestic market, after the first year of their issuance and placement, the face value of these securities may be used for the payment of taxes and tax obligations up to 50% of the total face value of the bonds acquired.

The other 50% may be used for the same purpose at the maturity of such securities. Likewise, when the debt securities are used for the payment of taxes or other tax obligations, the interest accrued on these securities will be paid on the redemption date of the securities.


Translated by: A.M