Independent Evaluation Services in Support of the El Salvador Investment Climate Project and the Guatemala Private–Public Partnerships Activity

MCC’s $271 million El Salvador Investment Compact (2015–2020) aimed to improve El Salvador’s competitiveness by increasing private investment through the $41 million Investment Climate Project, comprising the El Salvador Investment Challenge (ESIC), Regulatory Improvement Activity (RIA), and Public-Private Partnerships (PPP) Activity. MCC’s $27.3 million Guatemala Threshold Program (2016–2021) aimed to catalyze private investment in infrastructure through its $1.5 million Public-Private Partnership Activity. MCC commissioned Mathematica to conduct independent performance evaluations of the El Salvador Investment Climate Project and the Guatemala Public-Private Partnerships Activity.

Key findings:

• Mathematica estimated three distinct ERRs for the El Salvador Investment Climate Project. PPP was estimated to be 11.4 percent ESIC was 12.9 percent; and RIA was 13.5 percent, suggesting that they are cost-effective
• In El Salvador and Guatemala, key features of the PPP enabling environment—such as political support, institutional capacity, and a clear legal and institutional framework—have eroded since 2021
• The El Salvador Investment Challenge (ESIC) accelerated private investment around its public infrastructure investments, but additional investment from firms is not expected in the long term.
• Government institutions in El Salvador have utilized the regulatory improvement tools to assess the costs and benefits of regulations and reduced unnecessary burdens on businesses.