El Salvador

El Salvador's PPP framework remains anchored in the Special Law on Public-Private Partnerships (2013) and its implementing regulations (2015). However, institutional responsibilities have been fragmented since Decree 753 of 2023 dissolved PROESA, which housed the country's dedicated PPP unit, and established INVEST with broader investment-promotion responsibilities.¹ This transition dispersed responsibilities and left gaps in dedicated technical capacity and coordination. In April 2026, the government proposed a new PPP law that would replace the existing framework and establish a dedicated National Directorate for PPPs under the Ministry of Finance.² If enacted and implemented, the reform could help restore institutional coordination and provide greater clarity for prospective investors.

El Salvador's PPP market remains relatively small, with limited recent activity under its dedicated PPP framework. The cargo terminal at El Salvador International Airport, awarded in 2021, remains a notable example of a project developed through the PPP model. More recently, private participation in port infrastructure has expanded through a partnership between the Autonomous Port Executive Commission and Turkish operator Yilport. Announced in 2024, the arrangement began operating the ports of Acajutla and La Unión in December that year, with approximately US$1.6bn in planned investment.³ Structured as a mixed-economy partnership rather than a conventional PPP, although without a competitive tender, the project represents a significant expansion of private participation in the country's port infrastructure.^4,5

Political support for PPPs has been uneven in recent years, with the dissolution of PROESA in 2023 raising questions about the government's commitment to the model. However, the current administration's proposal for a new PPP law in April 2026 signals renewed interest in attracting private infrastructure investment. Legislative discussions have also revealed continued political sensitivities, particularly over the potential involvement of private operators in essential public services. Opposition legislators sought explicit exclusions for healthcare, education and water services, while governing-party representatives argued that existing constitutional protections made such exclusions unnecessary.^6,7 The proposed legislation's impact will ultimately depend on its enactment and translation into a functioning PPP program.

Despite its institutional weaknesses, El Salvador performs comparatively well in several aspects of project selection and contractual risk management. It has some of the region's more favorable provisions for project selection, including requirements for assessing infrastructure needs and aligning projects with development priorities. Its framework also provides relatively clear mechanisms for allocating risks, managing contract variations and overseeing contractual changes. In financing, the country's banking-sector debt performance compares favorably with regional peers, although broader access to capital remains constrained.

El Salvador's greatest weaknesses lie in Regulations and institutions and Project preparation and sustainability, scoring 18 and 13 points below their respective regional averages. The absence of a dedicated PPP unit undermines institutional coordination, while gaps in project preparation funding and technical support constrain project development. Environmental and social sustainability provisions are also comparatively weak, particularly regarding climate resilience and social inclusion. Limited public reporting on PPP projects and the absence of systematic ex-post evaluations further constrain transparency and accountability.

El Salvador's overall index score saw only a slight increase since the previous edition, reflecting limited progress in addressing longstanding institutional and project preparation gaps. The value of PPP investment relative to total infrastructure spending has seen a modest bump. The financing category has also improved marginally, supported by changes in broader financial indicators, including the cost of capital and country risk. The most significant recent development is the government's proposed overhaul of the PPP framework, which could restore dedicated institutional capacity, although its benefits have yet to materialize.