Without ever taking off to become the port that was promised, La Union can now add to its dismal history the increased cost of funding due to the differential between the dollar – the currency in which the meager income of the port is received - and the Japanese yen, the currency in which the loan was negotiated with the Japanese Bank for International Cooperation (JBIC) to build it.

In 2011 the sum borrowed in yen was equivalent of $100 million. Today, because of the yen's appreciation against the dollar, the original debt is $160 million, of which apparently about $20 million has been paid.

Carlos Acevedo, president of the Central Reserve Bank of El Salvador, said, "The loan has an interest rate of 2% per year. El Salvador disburses about $8.8 million a year to pay its debt, as well as $700,000 for debt insurance. In April CEPA disbursed $4.8 million to pay principal and interest. "If the fee was adjusted, the payment would be $15 instead of $10, but what happens is that the repayment period is extended, which ends up being more expensive. "

Source: laprensagrafica.com

More on this topic

Who will pay for Dredging of La Union Port ?

December 2014

Companies interested in the concession are not yet clear how the dredging of the access channel to the port will be financed and what impact will have the cost on the profitability of the project.

According to authorities at the Autonomous Executive Port Commission (CEPA), the cost of dredging must be assumed by the government of El Salvador, through them. However, the government has not included this project in its budget.

Securitization of Income from Comalapa airport

November 2012

In El Salvador plans are afoot to launch a tender at the International Airport at the beginning of 2013, after securitization that could take shape in December 2012.

Elsalvador.com.sv reports that "The Autonomous Executive Port Commission (CEPA) said yesterday that they will wait until December to securitize part of the revenue from International Airport El Salvador (AIES) and that it will be used to improve the facilities of this terminal. "

Loans for Infrastructure in El Salvador

October 2012

The CABEI has approved loans for infrastructure work in ports and airports, and construction of prisons amounting to $92 million and $71 million respectively.

A statement from the Central American Bank for Economic Integration (CABEI) reads:

The Central American Bank for Economic Integration (CABEI) has approved funding for the Autonomous Executive Port Commission (CEPA in Spanish) of the Republic of El Salvador for an amount of up to U.S. $92 million to partially finance the "Program for Development and Sustainability of Air and Sea Ports ".

Port of La Union Continues to Drift

January 2012

Even though the few ships that dock in La Union are not sufficient to cover operating expenses, plans are afoot to spend $25 million on dredging an access channel.

Cleaning the canal to make its depth 9 meters at low tide and 11 at high tide, would increase maritime operators' interest in including the port of La Union in their transportation routes by sea.