The Government of El Salvador and MCC sign the FOMILENIO Compact

September 30th, 2014.

The Minister of Foreign Affairs, Hugo Martinez, and the Vicepresident, Department of Compact Operations of the Millennium Challenge Corporation (MCC), Kamram M. Khan, signed this morning the second Compact, known as FOMILENIO II. 

The President of El Salvador, Salvador Sánchez Cerén and the United States Ambassador, Madame Mari Carmen Aponte, participated as guests of honor in this event which marks the beginning of a program that will have at its disposal over USD$365 million during a five year term. 

The event was held at the Presidential Honorary Hall “Óscar Arnulfo Romero”, and after the document was signed, the country will be the recipient of a USD$277 million donation, complemented by a contribution by the Salvadoran Government of USD$88.2 million.

FOMILENIO II is a country program, with interventions at a national level and others focused on the Marine-Coastal Strip. The Compact includes three projects: Human Capital, Logistical Infrastructure and Investment Climate. With this support, the focus will be on improving the education quality and vocational training, attracting quality investment that generates employment and expediting the crossing over one of the country’s most important logistical corridors.

The Human Capital Project will strengthen and increase the implementation of the Full- time inclusive  school model, benefiting an estimated 50 systems (approximately 400 cluster schools, with 175,000 students), randomly selected after signing the agreement and will focus on resources between seventh grade and high school. 

These schools are located in the 75 municipalities within the Marine-Coastal Strip. The investment implies an improvement in the school infrastructure and the provision of educational materials and equipment. Furthermore, a curricular improvement focused on English, math, science and information technologies will be provided. 

The activity in question will include training over 3,000 teachers and developing study plans based on Technical and Vocational Training competencies. 

The Investment Climate Project seeks to increase private investment in the country by improving its business climate, increasing institutional efficiency, and providing key Public Investment to leverage private investment. 

After the call for entries conducted in 2012, in which 72 investment proposals were received, 13 projects have advanced to the last evaluation phase so they may receive support from the “El Salvador Investment Challenge” fund, known as API in Spanish. Said evaluation took place based on technical criteria and in a transparent fashion to ensure equal opportunity for all.

With this tool, it is expected to support projects which are sustainable over time, generate employment and promote development. The current proposals belong to international service areas, tourism and alternative energies, amongst others. And with the Compact’s entry to force, the idea will be to conduct a second call for entries in 2015. 

The Logistical Infrastructure Project seeks to reduce the costs of logistical and transportation to increase investment and trade productivity of goods and services; efforts will be focused on expanding the road leading to international airport “Óscar Arnulfo Romero” to Zacatecoluca (La Paz) into four lanes and building infrastructure at the border crossing in El Amatillo (La Unión).

After FOMILENIO II’s signing, the phase to begin preparing for implementation will get started –which will count with the MCC’s financial support for a total of $10 million, also part of the Compact  – and one of the first steps will be to send the Compact o the Legislative Assembly in order for it to be ratified, as well as the draft bill to create the autonomous institution that will be in charge of implementing the program. 

The five years of the a Compact do not begin on September 30th, its entry to force will begin after having set up the institutionality, having established the Board of Directors and hiring key personnel, amongst other technical issues.