El Salvador Compact

A “New Northern Zone” with Greater Opportunities for Salvadoran Dairy Farmers

MCC helped build or improve more than 220 kilometers of roads and 23 bridges in the Northern Zone, helping link El Salvador's poorest region with the rest of the country and creating opportunities for its residents.

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Building a Prosperous Future, One Kilometer at a Time

Elsa Bolaños, a resident of El Salvador's Northern Zone, put her decades of experience in civil engineering to work on building a section of the Northern Transnational Highway.

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El Salvador’s Commitment to Transparency, Accountability and Country Ownership

FOMILENIO, which implemented MCC’s compact with El Salvador, demonstrated a commitment to country ownership, a focus on results and transparency—core principles essential for development to be effective.

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In November 2006, the Millennium Challenge Corporation signed a five-year, $461 million compact with the Government of El Salvador to improve the lives of Salvadorans through strategic investments in education, public services, agricultural production, rural business development, and transportation infrastructure. The largest of the compact’s components, the transportation project, intends to physically unify El Salvador’s Northern Zone with the rest of the country, and to enable new economic opportunities for rural households, lower transportation costs, and decrease travel times to markets. The compact in El Salvador entered into force (EIF) in September 2007, initiating the five-year timeline for project implementation.

For the most up-to-date information on implementation progress, please read the Quarterly Status Report.

This project promotes increased physical and social infrastructure in the Northern Zone through both education and investment in vital community infrastructure. Communities are anticipated to benefit from targeted investment to provide the basic elements of water/sanitation and electrification, and local populations are anticipated to benefit from improved technical education and training activities and renovated regional technical/vocational institutions. Specifically, MCC funding aims to:

  • Provide both formal and non-formal technical vocational education;
  • Provide improved access to potable water systems and sanitation services;
  • Increase electricity coverage in the Northern zone; and
  • Construct and improves community infrastructure.
  • Project Amount: $101,753,001.00

This project aims to assist with the development of profitable and sustainable productive business ventures, with a primary focus on assisting poor farmers shift to the cultivation of high-value crops, forestry, and animal products.  Specifically, MCC funding aims to:

  • Provide technical assistance to farmers and business development services;
  • Support capital investment to selected applicants for commercial activities;
  • Provide credit guarantees and technical assistance to financial institutions; and
  • Provide crop insurance to small producers in the Northern Zone.
  • Project Amount: $71,824,000.00

El Salvador Compact Closeout Video

Learn how MCC’s $461 million compact with El Salvador helped provide clean water, electricity, sanitation, teacher training and student scholarships. And watch first-hand accounts of how this grant helped achieve this and a decades-long dream of completing the Northern Transnational Highway, which opens access to the country’s Northern Zone, improving opportunity and promoting economic growth.

  • November 16, 2005

    El Salvador named eligible for MCC assistance

    MCC announces that El Salvador had been selected to qualify as eligible for funding.

  • April 30, 2006

    El Salvador proposal submission

    El Salvador presents its proposal to MCC. The proposal includes three main projects: human development, productive development and road connectivity.

  • November 7, 2006

    Compact approval

    MCC's Board approves the El Salvador Compact for $461 million.

  • November 28, 2006

    Compact signing

    In a ceremony witnessed by senior leaders of El Salvador and the United States, the two countries sign a $461 million compact.

  • March 28, 2007

    Swearing in of FOMILENIO's board of directors.

    President Elias Antonio Saca swears in FOMILENIO's board of directors, which then elects an executive director and executive assistant director.

  • September 19, 2007

    Compact entry into force

    The implementation phase and five-year program term starts when the compact enters into force.

  • October 9, 2007

    Agreements with Ministry of Education and Salvadoran Institute of Professional Education

    FOMILENIO signs implementing agreements with the Ministry of Education, the Salvadoran Institute of Vocational Training and the Social Investment Fund for Local Development.

  • October 15, 2007

    Agreements with Ministry of Public Works and Multisectorial Investment Bank

    FOMILENIO signs agreements with the Multisectorial Investment Bank and the Ministry of Public Works.

  • November 20, 2007

    Presentation of work program to Northern Zone mayors

    FOMILENIO brings together the 94 mayors of the Northern Zone to discuss implementation, citizen participation, land ownership and environmental and social impact.

  • January 24, 2008

    Launch of scholarship program

    President Elias Antonio Saca and MCC CEO John Danilovich announce the launch of a scholarship pilot program aimed at benefitting 116 Northern Zone. Scholarship recipients will study at the Roberto Quiñónez National School of Agriculture, the Central American Technological Institute and the Technological Institute of Chalatenango.

  • February 17, 2008

    Swearing in of FOMILENIO advisory council

    President Elias Antonio Saca swears in FOMILENIO advisory council members. The council operates independently and is composed of five officials of the National Commission for Development, three Northern Zone mayors and a representative of civil society.

  • February 27, 2008

    Launch of Northern Zone investment pilot project

    The $5 million pilot project supported investments in agriculture, tourism and handicrafts.

  • March 9, 2008

    Launch of technical assistance pilot project

    FOMILENIO and the Multisectoral Investment Bank announce the start of the FOMILENIO's technical assistance pilot plan.

  • April 29, 2008

    First bidding for connectivity projects, electrification, solar systems and water

    Bidding for the design, construction, installation, and supervision of road projects, power lines, solar systems, and drinking water begins.

  • September 18, 2008

    First planting in technical assistance pilot project

    Planting begins for the first technical assistance pilot project, which aimed to strengthen fruit value chains in the Northern Zone.

  • December 15, 2008

    First power contract signed

    The president of the FOMILENIO's Board signs a $3.1 million contract for the construction of the first 115 kilometers of new power distribution and connection to existing distribution networks, which will benefit more than 9,000 people in the Northern Zone.

  • February 2, 2009

    Inauguration of solar energy systems

    FOMILENIO and the Investment Fund for Local Development install the first 250 solar energy systems, which are expected to benefit 1,200 rural inhabitants who cannot access the power grid because of high costs.

  • March 8, 2009

    MOU between FOMILENIO, Ministry of Tourism

    FOMILENIO and the Ministry of Tourism sign a two-year memorandum of understanding to focus on boosting tourism in the Northern Zone.

  • June 25, 2009

    Opening of Sensuntepeque Collection Center

    The business center meets the requirements of vegetable growers, livestock and other agricultural and non-agricultural workers.

  • September 1, 2009

    Asbestos training workshop

    FOMILENIO conducts a workshop on the management of asbestos in educational infrastructure projects, helping to advance the compact's commitment to environmental responsibility.

  • November 3, 2009

    Teacher training begins

    The first training course for teachers in the Northern Zone begins. The courses are part of FOMILENIO’s commitment to formal education and are coordinated with the Ministry of Education.

  • December 8, 2009

    Bridge stone laid, launch of HIV plan

    President Mauricio Funes lays the first stone of the Santa Rosa Guachipilín Bridge, part of the Northern Transnational Highway (NTH). He also launches the associated HIV/AIDS prevention plan.

  • March 22, 2010

    International Forestry Forum

    The International Forestry Forum is held, starting the consultation process for the formulation of the forest policy in El Salvador. FOMILENIO and the Ministry of Agriculture and Environment co-host.

  • April 18, 2010

    Inauguration of improved Institute of San Ignacio

    President Mauricio Funes and MCC CEO Daniel W. Yohannes inaugurate the National Institute of San Ignacio, one of 20 institutes of secondary education to benefit from improvement and equipment.

  • April 19, 2010

    Stone laying at ITCHA , first layer of asphalt on NTH

  • April 4, 2011

    Opening of Technological Institute of Chalatenango

    Technical Secretary of the Presidency Alexander Segovia inaugurate the new facilities of the Technological Institute of Chalatenango.

  • April 5, 2011

    Delivery of proposed forest policy

    Minister of Agriculture and Livestock Guillermo Lopez Suarez receives the proposal of the Forest Policy in El Salvador 2011-2030 from a group of representatives from different sectors related to forestry issues and representing all people who participated in the consultation process.

  • May 16, 2011

    Opening of first section of Northern Transnational Highway

    President Mauricio Funes opens the first 44 kilometers of the Northern Transnational Highway, connecting Santa Rosa Guachipilín and Metapana with Nueva Concepción.

  • July 25, 2011

    Launch of job training plan

    FOMILENIO launches a plan to strengthen the labor market and productivity for 9,400 beneficiaries.

  • November 3, 2011

    Launch of cattle vaccination campaign and delivery of agricultural emergency packages

    Because of a tropical depression's damage to the Northern Zone, FOMILENIO delivers agricultural emergency packages for producers who were affected by the climatic event. It also launches a campaign to encourage vaccination of livestock.

  • December 14, 2011

    MCC selects El Salvador eligible to develop a second compact

    MCC's Board of Directors selects El Salvador eligible to develop a second compact, contingent on successful completion of a first compact, continued good policy performance, development of proposals that have significant potential to promote economic growth and reduce poverty, and availability of funding.

  • January 25, 2012

    Final media education grants awarded

    The 1,000th and final high school student receives a media education grant. The awards went to students from 17 institutes in the Northern Zone.

  • January 31, 2012

    Inauguration of rural infrastructure projects

    FOMILENIO inaugurates rural electrification, drinking water and basic sanitation projects to benefit more than 22,000 inhabitants in Jocoatique, Arambala and Meanguera.

  • February 1, 2012

    Provision of clean water and sanitation

    A $637,000 investment provides clean water and sanitation to more than 600 residents Chagüitillo in San Jose La Fuente.

  • February 7, 2012

    Opening of bee production center

    Officials of the Ministry of Agriculture, FOMILENIO and MCC open a queen-bee production center in a forest reserve in El Paisnal.

  • February 26, 2012

    Festival in Metapan

    FOMILENIO launches the Festival de la Cal in Patas Blancas to promote the history, traditions and beauty of the Northern Zone

  • March 26, 2012

    Agriculture school graduates

    Supported by FOMILENIO scholarships, 34 students receive degrees from the National School of Agriculture.

  • March 29, 2012

    Dairy chain field day

    FOMILENIO hosts a dairy chain field day, which presented results of the organization's support to farmers through improved technologies, training and breeds.

  • April 30, 2012

    Final casting for Nuevo Eden de San Juan Bridge

    FOMILENIO makes the casting of the last segment of the Nuevo Eden de San Juan Bridge of the Northern Transnational Highway.

  • May 24, 2012

    Inauguration of Jutiapa and San Isidro projects

    FOMILENIO holds the inauguration of projects in the municipalities of Jutiapa and San Isidro in Cabañas, including vocational training, electrification and access to water.

  • May 27, 2012

    Cattle congress

    FOMILENIO, the Ministry of Agriculture and Cattle and private sector representatives open the National Congress of Animal Husbandry to publicize the progress of the compact has helped create, teach about new technologies and help build the competitiveness throughout the dairy value chain.

  • June 5, 2012

    Tilapia fair

    As part of closing the aquaculture program, FOMILENIO presents its results at the Tilapia Fair in Santa Tecla. The compact helped boost production and marketing of tilapia, helping more than 500 farmers increase sales and production.

  • June 8, 2012

    Expo sale of handiworks

    FOMILENIO holds a sale of handicrafts, honey, coffee, tourism, vegetables, and fruits produced by beneficiaries of the Northern Zone in a San Salvador shopping center.

  • June 20, 2012

    Inauguration of coffee processing plants

    FOMILENIO inaugurates coffee processing plants strengthened marketing and production in the Northern Zone.

  • June 28, 2012

    Agricultural expo

    Beneficiaries offer vegetables, fruits, home accessories, pottery, colorful textiles, and jewelry at a shopping expo.

  • July 2, 2012

    Presentation of lessons learned document

    Three months before the end of the compact, FOMILENIO presents a document outlining the best practices and lessons learned during implementation.

  • July 9, 2012

    Opening of business centers

    FOMILENIO opens business and multiservice centers for the Northern Zone's cattle-raising beneficiaries.

  • July 11, 2012

    Agreement with Kriete Foundation and FIAES

    FOMILENIO signs two important initiatives to support the development of the Northern Zone after completing the compact. The first, with the Gloria de Kriete Foundation, will promote scholarships. The second, with the Global Initiative for the Americas (FIAES), will fund for environmental projects.

  • July 27, 2012

    First bridge opens

    President Mauricio Funes inaugurates the tallest bridge in El Salvador, located in the town of Nombre de Jesus in Chalatenango. The bridge is part of the Northern Transnational Highway.

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