A. M. The Finance Committee approved a favorable ruling for the government to sign a loan with the International Bank for Reconstruction and Development (IBRD) for up to US$100 million. This financing will be used to strengthen the country’s response capacity to natural disasters or health emergencies.
The project, called “Development Policy Loan for Fiscal Sustainability and Resilience in El Salvador with a Deferred Disbursement Option in the Event of Catastrophes”, will have a term of up to 30 years, with a grace period of five years. The funds will only be available in the event of an emergency.
According to Marlon Herrera, director general of Investment and Public Credit, this tool will allow El Salvador to have immediate access to funds under concessional conditions when a crisis occurs. This will facilitate the planning and management of high-impact events.
The country faces constant risks such as hurricanes, tropical storms, earthquakes, and health threats. This contingent loan adds to existing mechanisms for responding to disasters, but provides an additional source of financing to respond quickly and effectively.
With this measure, the government seeks to minimize the fiscal impact of catastrophic events and ensure macroeconomic stability even in the most adverse scenarios, thereby protecting the population and the national economy.
