Cabei unveils over US$1bn in financing for Guatemala, El Salvador

The Central American Bank for Economic Integration (Cabei) unveiled its latest COVID-19 emergency support measures, including more than US$1bn in additional economic assistance to El Salvador and Guatemala. 

Cabei, in the largest of three packages announced Thursday, said it had approved financing of US$899mn to bankroll programs to improve living conditions in Guatemala, improve inmate care in the penal system, modernize elements of the justice system and fund a hospital infrastructure and equipment investment program that seeks to expand capacity at five hospitals.

Other programs funded included a program to improve facilities at the Universidad de San Carlos and re-activate the coffee-production sector that has been hard hit by the pandemic. 

MSMEs

Cabei also said Thursday it had made the first disbursement to Guatemala of US$12mn through a special facility designed for micro, small and mid-sized enterprises (MSMEs) to restore productive capacity and boost the economy, as well as maintain and recoup jobs lost during the health crisis. 

The program is open to MSMEs in the tourism, industrial, services and agribusiness sectors.

The development bank said the funds were channeled through Guatemala’s largest financial institution, Banco Industrial, a partner of Cabei for more than 10 years. 

The disbursement was the first under a COVID-19 emergency support and economic reactivation program that Cabei approved March 31 involving total financing of US$2.36bn. 

Cabei received wide-ranging international support to fund the MSME program, including from the German government through KfW, the European Union and TaiwanICDF. The facility will be complemented with other types of resources such as seed capital, non-reimbursable technical assistance and partial loan guarantees, according to a release.

El Salvador

Cabei also approved US$250mn in financing for El Salvador aimed at bolstering healthcare and supporting vulnerable sectors of the population, as well as improving stability and reactivating the economy.

El Salvador finance minister José Alejandro Zelaya said in a statement the funding “is crucial in the efforts and actions of the government of the republic of El Salvador, to contain the health crisis derived from the pandemic and to support the country's economic recovery.”