November 8, 2006
Millennium Challenge Corporation Approves $461 Million Anti-Poverty Grant for El Salvador to Strengthen Rural Communities, Support Small Farmers, and Improve Roads
Washington, D.C. The Millennium Challenge Corporation (MCC) Board of Directors today approved a five-year, nearly $461 million Compact with El Salvador that seeks to stimulate economic growth and poverty reduction in the countrys northern region where more than 50 percent of the population live below the poverty line. The grant will improve the lives of approximately 850,000 Salvadorans through strategic investments in education, public services, enterprise development, and transportation infrastructure.
Congratulations to the people and government of El Salvador for developing an ambitious, results-oriented anti-poverty program, said MCC CEO Ambassador John Danilovich. This grant seeks to transform the lives of Salvadorans living in the northern zone by providing access to basic services such as education, water, sanitation and electricity, helping small businesses and farmers increase productivity and competitiveness, and improving access to markets through road improvements.
The first of three components, the $95.07 million human development project is designed to support formal and non-formal education as well as expand access to water, sanitation, and electricity that will benefit poor communities. Second, the $87.47 million productive development project seeks to help poor farmers and small and medium sized enterprises successfully transition to higher-profit activities, generating new investment, expanding markets and sales, and creating new jobs and increased incomes for the poor. Finally, the $233.56 million transportation project includes the design, construction, and rehabilitation of roads that connect rural households to national and regional markets and decrease shipping costs and travel times. The Compact also includes $44.85 million for program administration and monitoring and evaluation.
Ambassador Danilovich added, MCC applauds President Sacas leadership and El Salvadors commitment to good governance and to building the necessary institutional framework for MCC funds to be used effectively. El Salvador is a valued partner in the fight against poverty and we are proud to support the people of El Salvador in their program to build a better life for themselves and their children.
Since its establishment in 2004, MCC has approved Compacts totaling almost $3 billion with eleven nations: Madagascar, Honduras, Cape Verde, Nicaragua, Georgia, Benin, Vanuatu, Armenia, Ghana, Mali, and El Salvador. MCC is also actively engaging with other eligible countries in Compact negotiations.