CAF and MCDF to support submarine cable project for boosting digital connectivity in El Salvador

CAF, Development Bank of Latin America and the Caribbean, was able to add a new ally to improve digital connectivity in El Salvador. The Governing Committee of the Multilateral Cooperation Center for Development Finance (MCDF) today approved a USD 500,000 grant to support the preparation of a submarine cable project that CAF is leading to promote digital development in El Salvador and the region.

The MCDF grant, which is in addition to the USD 130,000 provided by CAF, will fund a review of the technical, legal, financial, and environmental safeguards of the submarine cable project, to originate in El Salvador and connect through Panama and other countries in the region. In addition, will also ensure that the project complies with technical and other standards required for CAF financing.

“The project will ensure high-speed digital connectivity between El Salvador and the Central American region. High-speed Internet not only accelerates the pace of economic growth, but also enables the development of new services, collaboration possibilities, and channels for the government to reach out to vulnerable populations,” explained Gabriel Felpeto, CAF Chief Financial Officer and Vice President of Finance.

Head of the Program Team at MCDF, Frederic Asseline, said: "We welcome our third grant to CAF this year to support an ICT project in the Latin American region. The MCDF grant will fund key readiness due diligence support for an investment by CAF to develop a submarine cable linking El Salvador to Panama and to other countries in the region. The CAF project will be pivotal in improving El Salvador’s current lack of independent internet connectivity and in supporting the country’s digital development agenda."

The submarine cable project will address El Salvador’s current lack of independent internet connectivity channels and build capacity to harness digitalization in the country and beyond.

MCDF is a multilateral financial mechanism designed to promote investments in high-quality infrastructure and connectivity investments in developing countries. Established in 2020, the MCDF will support developing countries, international financial institutions and new partners in addressing quality and sustainability challenges impacting cross-border infrastructure and connectivity within the scope of their efforts to implement the G20 Quality Infrastructure Principles.