El Salvador politics prevent approval of US$580mn infra loans

Loans that would serve to finance major infrastructure projects in El Salvador are still pending approval by the legislature and opposition lawmakers are refusing to ratify them due to political reasons, according to President Salvador Sánchez Cerén.

The 11 loans amount to US$578mn and would specifically be used to finance road infrastructure, health and education projects, reports local daily Diario Co Latino.

Sánchez Cerén (pictured) urged citizens to mobilize in demanding the approval of the loans.

"Loans related to health, education, women's care are currently on hold, as well as loans to finance road construction. It is time for the people affected by this to mobilize," the daily reported the president as saying.

Other offers of financing pending approval are a US$30mn loan from the Spanish Agency for International Development Cooperation AECID, which would serve to finance the construction of rural roads, and a US$16.9mn loan from Central American development bank Cabei to carry out works on the Las Pavas potable water treatment plant serving capital San Salvador.

Meanwhile, Ignacio Nicolau, AECID's representative in El Salvador, also lamented the assembly's refusal to ratify the loan approved for the rural roads program. Some US$5.3mn of that credit line were already invested to build roads in the departments of Cabañas and Morazán.

Nicolau noted that although the loan was not ratified, the funds already invested are not refundable, according to local daily La Prensa Gráfica.

The approval of the loans in question requires at least 56 votes and ruling party FMLN holds only 31 seats in the lower house. According to Sánchez Cerén, the votes of some legislators from opposition party ARENA would be needed to for approval.

This is not the first time that the government credits the role of the opposition as one of the factors delaying the development of infrastructure projects.

Earlier this year, a number of construction projects for San Salvador were on hold due to the government's decision not to issue water permits, which is a mandatory condition for projects to move forward in El Salvador.

At the time, the government said the permits could not be issued until a US$16.9mn loan from the French government to complete urgent work at the Las Pavas plant received the assembly's approval. The loan was approved in February, a year after it was awarded.