Improving municipal services and resilient infrastructure for 4.5 million Salvadoreans

The World Bank Group Executive Board approved a project to improve the institutional performance of municipalities and increase access for citizens to services and infrastructure resilient to adverse natural events in El Salvador. The US$200 million Local Economic Resilience Project will benefit approximately 4.5 million Salvadoreans in all 262 municipalities.

The Project aims to boost local economic development by aligning public finance management goals and results with financing for resilient municipal investments. It will also support the creation of a competitive fund available to all municipalities to finance strategic regional investments at a multi-municipal scale.

The Project, to be implemented by El Salvador’s Social Investment Fund for Local Development, includes five components:

• Investments in services and resilient municipal infrastructure to support local economic development (US$116 million).
• A competitive fund for high-impact investments at the regional scale through inter-municipal cooperation (US$54 million).
• Institutional strengthening and capacity building to improve public finances, disaster risk management and climate resilience at the municipal level (US$10 million).
• A Contingent Emergency Response Component to allocate funds for disaster response and recovery in case of adverse natural events (US$10 million).
• Project management and implementation activities (US$9.5 million), including evaluations of activities and results and the creation of an engagement platform for citizens to access the status of infrastructure works funded by the Project and provide feedback.

“Investments to promote economic development and resilience can generate new jobs and new economic opportunities at the municipal level, which help in reducing unemployment, crime and migration, especially of the youth. Enhancing the municipalities’ performance, transparency and capacities will lead to sustainable investments and better livelihoods for Salvadoreans, primarily the poor and vulnerable,” said Oscar Avalle, World Bank Country Manager for El Salvador and Costa Rica.

The US$200 million loan for the Local Economic Resilience Project in El Salvador has a final maturity of 25 years including a grace period of 5 years.

Original source: World Bank
Published on 22 April 2019