The Legislative Assembly, controlled by the ruling party, on Monday authorized the Government of El Salvador to sign a new loan for up to 75 million dollars with the Development Bank of Latin America and the Caribbean-CAF.
The loan was endorsed without a prior study or analysis and with the votes of the 64 pro-government deputies and their allies, out of 84 in the Legislative body during the plenary session corresponding to this week.
According to the decree, the money will be used to finance the Low Emission Urban Mobility program, strengthening State institutions so that “sustainable, inclusive, safe, affordable, accessible and low-emission urban mobility is promoted.”
This program, as written in the document, “requires the support of international bodies to promote the transition towards more efficient, inclusive and environmentally friendly urban mobility.”
The loan, which contemplates the modality of freely available and rapid disbursement, has a term of 15 years, including a grace period of 54 months.
In addition, the installments will be paid semiannually consecutively and, if possible, equal until the same is paid, an interest rate of 2% is established and the Government must pay CAF 40,000 dollars after the disbursement of the loan, which will be deductible from the total amount. , states the decree.
Orders were immediately issued to bury with a state secret the uses given to said funds, or to whom they are transferred with or without competition.
In 2023, the Legislative Assembly authorized four loan contracts with the CAF totaling $377 million, their use is unknown.
According to the Central Reserve Bank, El Salvador’s public debt amounted to $34,015 million at the end of 2023, equivalent to 82% of Salvadoran GDP.