Through an agreement with FOMILENIO II, $11 million will be allocated for the construction of three hotels and a treatment plant in the municipality of Chiltiupán.
From a statement issued by Fomilenio II:
The Alliance El Zonte signed an investment agreement with FOMILENIO II and the municipality of Chiltiupán for $10.8 million that will improve the quality of life of more than 2,000 people in the locality, avoid pollution of the El Zonte River, maintain the attractiveness of the beach area and encourage a greater influx of tourists.
A wind farm, street lighting, improvements in the airport's cargo terminal, a technology park and improvements in customs offices, are the five proposals which have been passed on for a further stage of analysis.
The five projects will be evaluated in a second instance to determine whether they are viable for development via public-private partnerships using funding from the Fomilenio II program.
Construction of roads, renovation and expansion of airports, an industrial park in Zacatecoluca and works at the border crossings in La Hachadura and Anguiatú are the top five proposals to be developed using funding from the U.S. aid program.
The proposals presented to the Millennium Challenge Corporation (MCC) will be developed through public-private partnerships, and will receive technical and financial support for the creation of the partnerships. Wiliam Pleites, executive director of the board of FOMILENIO II, presented the first five projects and said that three new proposals will be presented to be analysed and approved by the MCC.
The government has announced that work will begin in September with the development of infrastructure projects in the coastal zone.
According to the government, the decision was made to start in September in conjunction with representatives of the Millennium Challenge Corporation in Washington, USA. Roberto Lorenzana, technical secretary of the presidency, said: "... the preparation phase of the roads that is part of the agreement has now been finished, and the census of the people who will be relocated by development of these works."
Lack of official results from the March 1st elections creates uncertainty among employers and undermines the country's image as a destination for foreign investment.
Representatives from the Salvadoran Association of Industries (ASI) argue that "... the political environment in the country could deter foreign investors. " In addition, this could affect the disbursement of Fomilenio II.
The government plans to make a second call so that investors can submit eligible projects to the investment program 'Apuesta por InversionES', a nonreimbursable fund created as part of Fomilenio II.
With the recent approval of Fomilenio II, the government of El Salvador is considering extending the call for investment projects eligible for funding from the program 'Apuesta por Inversiones ' (API), for which there are 13 projects that passed the eligibility phase in the first call, "... and which represents $14 million in private investment and $48 million in public investment. Of these, six are related to the tourism area, three in agribusiness, two energy, one aquatic and one for aircraft. "
The United States will spend $277 million on investment in public infrastructure, with an additional contribution from the Salvadoran government of $88 million.
From a statement issued by The Millenium Challenge Corporation (MCC):
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.
The United States Embassy in El Salvador has announced the approval of a second phase of the Millennium Challenge, through an investment of $277 million.
From a statement by the US Embassy in El Salvador:
MCC Will Sign Second Compact with El Salvador
The U.S. Embassy is pleased to announce that the Millenium Challenge Corporation (MCC) will proceed to signing a second Millennium Challenge Compact with El Salvador.
U.S. Senators are questioning the Legislature about the delay in the approval process of the law against money laundering, required before any funds are released.
The Legislature continues to delay the adoption of legal reforms required for the U.S.
A request has been made for the law against money and asset laundering to meet international standards, a condition required to obtain funds from FOMILENIO II.
The Salvadoran Foundation for Economic and Social Development (FUSADES) requested that the Legislature take into account the reforms recommended by the Caribbean Financial Action Task Force (Gafic) to the Anti-Money and Asset Laundering law, as it is a condition required by the U.S. government in order to release funds from FOMILENIO II.
The U.S. government is insisting that the purchase of seeds planned by the Salvadoran government should be made using an international tender, adhering to the provisions of the trade agreement.
The United States is claiming that the last purchase of seeds made by the Salvadoran government occurred through a decree and not a competition, leaving out U.S.
The U.S. is awaiting reforms promised in the Laws of Partnerships and Private Money Laundering, before releasing $277 million in aid to El Salvador.
An article on Nacion.com reports that "... In a meeting with journalists, representatives of the Millennium Challenge Corporation (MCC) and the Embassy of the United States spoke about FOMILENIO II. At the conference, U.S. officials insisted they are waiting for the approval of legislative reforms that will lead to the signing of the second agreement, which would benefit the coastal area of El Salvador. "
A proposal has been made to reduce the number of times a public-private partnership project would pass through the filter of the Legislative Assembly.
Among the reforms to the Law on Public-Private Partnerships that the Council for Growth has suggested to Congress is a reduction, from three to one, of the number of times a Public- Private Partnership (PPP) project should go through the filter of parliamentary approval.
The coastal areas contain half of the most fertile land in the country with substantial resources for fisheries and tourism.
With the implementation of Fomilenio II in the coastal area of El Salvador, there is great opportunity for the development of agriculture, leveraging funds expected to be provided by the U.S. government with a counterpart by the Salvadoran government, in addition to the private investment that could go along with production projects.
The adoption of the standard was a requirement imposed by the U.S. for the disbursement of the Fomilenio II program.
From a press release issued by the Legislative Assembly of El Salvador:
The National Assembly passed with 83 votes a list of amendments to the Law Against Money and Asset Laundering, ensuring that legislation of El Salvador is in accordance with International Standards on combating money and asset laundering, financing of terrorism, organized crime, drug trafficking and all its variants. The approval of these modifications also complies with the recommendations of the Financial Action Task Force (GAFT by its initials in Spanish).
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