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The Finance and Special Budget Committee issued a favorable opinion on the request submitted by the Ministry of Finance to authorize an in-kind loan agreement for the installation of LED streetlights on the national road network. However, final approval will depend on the full Legislative Assembly of El Salvador, which must decide whether to endorse the initiative.
According to the request, made at the instruction of the President of the Republic, the financing would be obtained from the company AGM El Salvador S.A. de C.V. for an amount of US$23,785,985.87, under the in-kind loan modality, which means that payment will be made for the supply and installation of equipment, in this case, LED streetlights.
The project is part of contract C-06/2025, executed by the Ministerio de Obras Públicas y Transporte (MOPT), with a total value of US$26,428,873.19. Of this total, the company will finance approximately US$23.7 million, while the government will contribute US$2,642,887.32, equivalent to 10% of the contract value.
The initiative includes the “Supply and installation of LED lighting on prioritized sections of the national road network”, including strategic areas such as the Sacacoyo-Acajutla section, the Claudia Lars ring road, the Troncal del Norte highway (San Salvador-Apopa), and the Carretera de Oro (Apopa-San Martín). These interventions aim to improve lighting on high-traffic roads, which could impact road safety and reduce accidents.
Regarding the financial terms, the loan would be granted at a fixed annual interest rate of 5%, calculated on the outstanding balance, with a two-year term. The repayment schedule includes semi-annual installments, beginning six months after the MOPT issues the certification of delivery of the progress stipulated in the contract.
During the committee review, the representative from the Ministry of Finance, Marlon Herrera, confirmed that the company responsible for the in-kind financing is AGM El Salvador. However, it was noted that the decree does not explicitly include the company’s name in its text, an aspect that could be subject to discussion in the legislature.
The favorable opinion represents a key step in the process, but the final decision will rest with the Legislative Assembly, which must evaluate the financing terms, its fiscal impact, and the project’s benefits before authorizing or rejecting the agreement.
If approved, the project would allow progress in modernizing the country’s street lighting system, incorporating more efficient technology and potentially reducing energy costs in the long term.
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