Summary of proposed guarantee
Summaries of proposed guarantees are provided prior to Board consideration and before final contract signing, and they are therefore subject to change. Project briefs are disclosed after Board consideration and contract signing and reflect the terms of the project at the time of contract signature. Environmental and Social Review Summaries are provided for projects assigned an Environmental Assessment Category of A or B.
- Project name
- Cotecna de El Salvador S.A. de C.V.
- Project ID
- Fiscal year
- Guarantee holder
Cotecna Inspection Services S.A.
- Investor country
- Host country
- Environmental category
- Date SPG disclosed
- April 25, 2013
- Project Board date
- May 30, 2013
- Gross exposure
- $24.0 million
- Project type
- El Salvador, Cotecna, ESRS, April 24, 2013
This summary covers a shareholder loan from Cotecna S.A. of Switzerland (COSA) to Cotecna de El Salvador S.A. de C.V. The investor has applied for a MIGA guarantee of $24.0 million for a period of up to 12 years against the risks of transfer restriction, expropriation, war and civil disturbance, and breach of contract.
A consortium established by COSA has been contracted to provide import verification services to the government of El Salvador under a 10-year build, operate, and transfer contract. The contract involves the financing, procurement, installation, and operation of import inspection equipment, including nine high-energy X-Ray scanners, six pallet scanners for air freight, seven trace detectors, four truck weighbridges, and one data control center that will coordinate and centralize all scanning operation centers in real time.
The project will introduce scanning technology that will reduce the clearance time for imported, exported, or transit goods, thereby helping to reduce the cost of doing business and facilitating international trade. This paperless technology will also help prevent duty evasion and result in a more accurate assessment of the value of imported goods.
The project is fully in line with the priorities of the government’s 2012 Reform Act aimed at simplifying customs processes. At the end of the 10-year service contract, best-practice inspection equipment and procedures will be transferred to the government. Cotecna El Salvador will provide training to the Customs Administration to prepare capacity for their eventual future takeover of operations. Cotecna El Salvador plans to employ about 135 local staff.