New Investment in Northern Central America
On June 7th, 2022, the White House released a Fact Sheet, detailing New Investment in Northern Central America. The Vice President, U.S. Department of State, and the Partnership for Central America (PCA), announced private sector commitments now total more than $3.2 billion.
Following, are the details published in the Fact Sheet.
“Vice President Kamala Harris today announced more than $1.9 billion in new private sector commitments to create economic opportunity in northern Central America, more than doubling the value of initial private sector investments in response to her Call to Action.
As part of her role addressing the root causes of migration from Central America, in May 2021, the Vice President launched the Call to Action for businesses and social enterprises to make significant commitments to promote economic opportunity for people in the region.
This is in support for the U.S. Strategy to Address the Root Causes of Migration which the Vice President launched in July 2021. A summary of progress in implementation of the Root Causes Strategy can be found here.
The announcement today builds on the announcement the Vice President made in December 2021 of $1.2 billion in private sector commitments. Aggregate commitments under this initiative now total more than $3.2 billion.
Taken together, these investments are creating an ecosystem of opportunity and helping to provide hope for people in the region to build safe and prosperous lives at home.
The Biden-Harris Administration recognizes that long-term development in northern Central America requires more than just the resources of the U.S. Government.
For this reason, Vice President Harris called upon the private sector to draw upon its resources and expertise to support inclusive economic growth in northern Central America.
Over the course of the past year, the Vice President has convened CEOs and philanthropic leaders to advance this effort, and will do so again on the margins of the Summit of the Americas in Los Angeles at events hosted by the Partnership for Central America and Chamber of Commerce.
The following 10 companies and organizations announced major new commitments today, joining 30 companies that have already invested since the launch of the Call to Action in May 2021:
Agroamerica: Agroamerica, a family-owned sustainable food and ingredients corporation, will invest more than $100 million in six new projects that will generate 1,000 permanent, living-wage jobs in northern Central America over the next 5 years.
Future projects include a food ingredients refinery, a 600-hectares banana plantation, a large avocado plantation and processing plant, and the expansion of a Natural Ingredients Processing Plant.
Agroamerica expects to drastically reduce food waste in the region while presenting an innovative business line for small and independent producers of raw ingredients and tropical fruits produced in Central America.
COATL: COATL, a digital service firm, will invest $35 million in El Salvador to expand rural access to high-speed internet over the next 5 years by expanding and operating a highly reliable rural broadband network over existing high-power electricity lines. This work will allow equal access to a digital ecosystem in rural areas, enabling online education, financial inclusion, and e-services.
Fundación Terra: Fundación Terra, an independent foundation funded by contributions from Terra Inversiones, which works in the energy, petroleum, retail, and real-estate sectors, will invest $24.5 million in new programs over 5 years.
These programs will support secondary education, digital access, entrepreneurship, and environmental conservation, including scholarships to tutor 40,000 students in El Salvador, Guatemala, and Honduras in Math and Spanish, which will promote financial inclusion.
Gap Inc.: Gap Inc. is committed to sourcing in Central America, and their current production in Central America supports an estimated 8,200 manufacturing jobs in the region held primarily by women.
Gap Inc. plans to increase its sourcing in Central America by approximately $50 million per year, for a total growth commitment of $150 million by 2025, as part of its strategy to increase supply chain resilience by nearshoring more production to the Western Hemisphere.
These increased purchases from the region will support an estimated 5,000 additional jobs in Central America.
Millicom: Millicom, a telecommunications company, will invest $700 million to expand and maintain its mobile and broadband networks in Guatemala, Honduras, and El Salvador over the next two years.
This investment will advance Millicom’s efforts to accelerate economic growth in the region via increased connectivity as penetration rates for broadband in these markets are well below regional averages.
In addition, Millicom’s investments will be made in line with the Race to Zero, the UN-backed campaign aimed at promoting a healthy, resilient, zero-carbon recovery.
Pantaleon: Pantaleon, a conglomerate including investments in agroindustry and real-estate, will invest $9.4 million to fund the initial phase of a 1,200-acre industrial park on Guatemala´s Southern Coast. Once completed, the park is expected to house a mix of manufacturing, logistics, and distribution businesses, among others.
SanMar: SanMar, a U.S.-based apparel wholesaler, will increase its purchases of products manufactured in northern Central America by $500 million by 2025.
These purchases will support the supply of products to SanMar’s over 60,000 customers, the overwhelming majority of which are American small businesses engaged in domestic light manufacturing.
The increased capacity required for this growth will lead to the creation of 4,000 additional full-time jobs at Elcatex, a Honduras-based apparel manufacturer owned in part by SanMar.
Unifi: Unifi, a company that produces recycled and synthetic yarns, established its manufacturing and sales operation in El Salvador (Unifi Central America) in 2010 and has been invested in El Salvador and the region since then.
Unifi is making significant investments in the footprint capacity and innovation of its El Salvadoran operation and has committed to investing $15 million over the next five years to expand capacity, improve efficiency, and reduce energy use.
The investment includes new innovative texturing technology that will increase the company’s polyester yarn production in El Salvador by 40% and support continuous training and job growth in the region.
Visa: Visa will invest more than $270 million over the next five years to expand financial inclusion and digital infrastructure, with the goal of adding 6.5 million people and 1 million small and medium enterprises (SMEs) into the formal financial system in Guatemala, El Salvador, and Honduras.
Visa will focus on helping the local financial sector deploy innovative payment technology, improving citizens’ financial capabilities while driving efficiencies in key areas of the economy including: agriculture, digital disbursement of government subsidies, and remittances, while also expanding financial education for citizens and SMEs, thus increasing acceptance of digital payments and bringing more people into the formal economy.
Yazaki: Yazaki North America, an automotive components producer, will invest an additional $110 million to hire over 14,000 new employees in Guatemala and El Salvador by the end of 2026.
This builds upon a recent announcement to invest $10 million in a new factory in Guatemala, which is scheduled to start production with its first 1,000 employees in January 2023. Yazaki NA provides electrical wire harnesses for General Motors, Ford, Stellantis, and other global automakers.
Updates on Previously Announced Commitments
Starting with just 12 companies and organizations, the Call to Action now includes 40 companies and organizations that have made commitments to invest in the region, representing financial services, textiles and apparel, agriculture, technology and telecommunications, and nonprofits.
In addition, the Call to Action has generated new collaboration across participating companies, further boosting the initiative’s impact.
Highlights of progress to date include:
- Microsoft announced in December that they have expanded broadband internet access to nearly 2 million people. The company anticipates reaching 3 million individuals across the region by July 2022. Additionally, Microsoft expanded on its initial commitment and will provide digital skills training for 1 million individuals by 2025.
- Nespresso committed in May 2021 to support regional economies with a minimum of $150 million in investment by 2025. To date, Nespresso has signed over $100 million in contracts for coffee procurement, including the first-ever Nespresso coffee shipments from Honduras and El Salvador, which will increase incomes for thousands of farmers.
- Accion through its work with partners in northern Central America, has brought over 140,000 people living in Guatemala — including 90,000 women — into the formal financial sector.
- Davivienda has brought over 201,000 individuals into the formal financial sector through expansion of digital services, signed a new Loan Portfolio Guarantee Agreement with the U.S. International Development Finance Corporation and the U.S. Agency for International Development (USAID), and extended over $100 million in low-cost loans for housing and small businesses.
How to Respond to the Call
The Call to Action is facilitated through a public-private partnership between the State Department and the independent organization the Partnership for Central America, in close coordination with USAID.
The Call to Action’s six focus areas are intended to support long-term development of the region, including: promoting a reform agenda; digital and financial inclusion; food security and climate-smart agriculture; climate adaptation and clean energy; education and workforce development; and public health access.
It serves as one component of the Biden-Harris Administration’s comprehensive Strategy to Address the Root Causes of Migration, which involves significant commitments of U.S. government resources to support the long-term development of the region—including by fostering economic opportunity, strengthening democratic governance, combatting corruption, and improving security.
This approach will leverage commitments and resources from the governments in the region, as well as partnerships with multilateral development banks, international financial institutions, and other partner countries.
The Biden-Harris Administration looks forward to increased collaboration with private companies from around the world to build upon this Call to Action in the months and years to come.
The Administration welcomes additional commitments to participate in this initiative and promote economic opportunity in northern Central America.
More information can also be found in the initial Fact Sheet announcing the Call to Action on May 27.
More information about the Partnership for Central America can be found at www.centampartnership.org.
The Partnership can be contacted at [email protected].”