El Salvador Compact

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.

Financials

Compact Budget

Milestones

  • Signed:
    November 29, 2006
  • Entry Into Force:
    September 21, 2007
  • Closed:
    September 21, 2012

Compact Projects

Connectivity Project

  • $269,212,588Project Total Amount

This project intends to physically unify El Salvador’s Northern Zone with the rest of the country, enabling new economic opportunities for rural households, lower transportation costs, and decreased travel times to markets. MCC funding aims to:

Design, construct, and rehabilitate secondary roads on the Northern Transnational Highway.

Projected Long-Term Results

  • Estimated Beneficiaries 644,190
  • Estimated Net Benefits $185,230,000

Human Development Project

  • $89,146,523Project Total Amount

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.

Projected Long-Term Results

  • Estimated Beneficiaries 243,395
  • Estimated Net Benefits $102,967,000

Project Activities

This project consists of the following activities:

  • Community Development

  • Education and Training

Productive Development Project

  • $68,215,522Project Total Amount

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.

Projected Long-Term Results

  • Estimated Beneficiaries 47,600
  • Estimated Net Benefits $78,510,000

Project Activities

This project consists of the following activities:

  • Financial Services

  • Investment Support Activity

  • Production and Business Services