A. M. 
The Ministry of Finance has taken a key step in the search for resources to address emergencies in El Salvador. Accordingly, the Treasury recently submitted to the Legislative Assembly a request for approval of a loan of up to US$50 million from the Andean Development Corporation (CAF). This fund, which is part of the Emergency Response Plan Support Program, seeks to provide a rapid and effective response to future natural disasters.
The loan, already authorized in a legislative decree issued on october 16, 2024, was formalized on November 5. According to the authorities, this financing will strengthen the country’s capacity to respond to emergency situations, such as storms, landslides, and other natural phenomena that directly impact the population and the nation’s infrastructure.
The request for resources responds to a series of recent climatic phenomena to the declaration of a State of National Emergency on june 16, 2024. On that occasion, the Assembly declared an emergency due to flooding and destruction in El Salvador.
The financing arrangement, known as a Sector-Wide Approach Loan (SWAP), will enable the Salvadoran government to use the funds in an expeditious manner to meet emergency needs and rehabilitate critical infrastructure. The loan will have a term of up to 20 years, including a six-year grace period, which will facilitate the implementation of mitigation and recovery measures in the country.
In addition, the salvadoran government will have to assume financial commitments, such as an annual commitment fee of 0.35% on undisbursed balances and a financing fee of 0.85% on the total amount of the loan. The final decision now rests with the Legislative Assembly, which will analyze the terms and decide whether to approve this essential emergency management support.
