Press Release

U.S., El Salvador Sign Investment Compact

For Immediate Release

September 30, 2014

Washington, D.C.—The Millennium Challenge Corporation signed a $277 million compact with the Government of El Salvador, the second-largest investment in Central America by the U.S. Government agency since its creation 10 years ago.

The El Salvador Investment Compact is designed to enhance the country’s competitiveness and productivity in international commerce through an integrated set of investments in logistical infrastructure, education and regulatory reform. The compact will play a key role in sparking private sector-led growth and addressing root causes of poverty in El Salvador, including a challenging investment climate, lack of employment opportunities and underdeveloped infrastructure.

“MCC looks forward to a successful partnership with the people of El Salvador as we work together to create a more productive and competitive Salvadoran economy,” said Kamran M. Khan, MCC’s Vice President for Compact Operations. “By improving public sector efficiency and encouraging private sector investment in infrastructure, this compact will lay the groundwork for continued economic growth in El Salvador.”

The new compact with El Salvador, part of the U.S. Government’s Partnership for Growth, will improve the investment climate by streamlining regulations and building capacity to develop and implement public-private partnerships to catalyze private investment to spur economic growth. The compact will also improve the quality of education and skills development for Salvadoran students by expanding access to high schools and strengthening teacher education, as well as reduce transportation and logistical costs by expanding a heavily used section of the coastal highway and easing congestion at a critical border crossing with Honduras.

In the past year, the Government of El Salvador has taken steps to facilitate public-private partnerships and improve the government’s ability to address money laundering and financial crimes—steps that will help ensure that MCC’s investment achieves long-term and sustainable results. As MCC implements the compact, it will expect continued progress by the Government of El Salvador in combatting corruption and creating a positive environment for business.

Mr. Khan and Hugo Roger Martínez Bonilla, Minister of Foreign Affairs, signed the compact in San Salvador. El Salvador’s President Salvador Sánchez Cerén presided at the ceremony, which was attended by Technical Secretary Francisco Roberto Lorenzana, members of the cabinet, Xiomara Salomé Martínez, the Government of El Salvador’s Coordinator for the compact, U.S. Ambassador Mari Carmen Aponte, members of the diplomatic corps, and private sector representatives.

The Government of El Salvador is contributing an additional $88 million to the five-year compact for a total investment of $365 million in three interrelated projects.

This compact builds on MCC’s largest investment in Central America, which was also with El Salvador. The country’s first five-year compact—which was implemented between 2007 and 2012 with an initial investment of $461 million— is expected to benefit more than 700,000 Salvadorans over the next 20 years through improvements in education, public services, agricultural production, and transportation infrastructure. 



MCC is an innovative and independent U.S. agency that is working to reduce global poverty through economic growth. Created by the U.S. Congress in January 2004, with strong bipartisan support, MCC provides time-limited grants and assistance to countries that demonstrate a commitment to good governance, investments in people and economic freedom.