Central America Briefing

Think Tank Highlights Columbus Speed Cargo in Central America

28 March 2025

Central American cargo moves at 16 km/h, equivalent to Christopher Columbus’s caravans, according to Think Huge president Juan José Daboub. The business think tank suggested that containers from Panama-Mexico need to move around 90 km/h which would require fundamental changes to road building and customs. Daboub highlighted that part of the US$7bn that has been channelled through Think Huge has gone on motorways in the Northern Triangle of El Salvador, Guatemala and Honduras. Yilport’s entry into the El Salvador port market is seen as critical to improving regional infrastructure with a 50 year, US$1.6bn commitment.

Panama Port Sale Delayed after China Pressure, Criminal Complaint

28 March 2025

Chinese antitrust regulators will review the deal between CK Hutchison and BlackRock over the US$19bn deal for two Panama ports. BlackRock has admitted that this could mean a delay of at least nine months on the sale of 43 ports in 23 countries. Further complicating the transaction is Panama’s Comptroller General Anel Flores filing a criminal complaint against Panama Ports, Hutchison’s Panama subsidiary, alleging an over US$300mn breach of contract with the government. This follows an audit of the Cristóbal and Balboa ports that began in January. The total loss to Panama’s public finance could reach up to US$1.2bn. Following a visit by US Secretary of Defense Pete Hegseth, Panama has agreed to an increased US military presence and cost neutral passage for US ships.

BlackRock Seals US$22.8bn Panama Ports Sale from Hutchison

14 March 2025

14 March 2025

CK Hutchison Holdings Ltd have agreed a deal in principle to sell 90% of Panama Port Company to BlackRock-TiL for US$22.8b. This will give BlackRock Inc through Global Infrastructure Partners and Terminal Investment Ltd control over the concession to operate ports in Cristobal and Balboa in Panama. The consortium already has interest in 43 ports, 199 berths in 23 countries. The final signing of the agreement is expected to be completed on or before 2nd April. The deal comes as the US places significant regional pressure on Chinese influence and maintains an interest in acquiring the Panama Canal, something Panama President José Raúl Mulino has repeatedly stated is not an option. Panama’s Attorney General, Luis Gómez, stated in January the concession contracts between the state and PPC were unconstitutional. There is a lawsuit pending before the country’s Supreme Court.

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CABEI Debuts on Sterling Market

28 February 2025

28 February 2025

The Central American Bank for Economic Integration (CABEI) issued its first benchmark-size bond for £750 million in London. Bids reached over £3.1 billion with over 100 investors, a 10.3 oversubscription of the initial target amount and 4.1 times the issuance. The allocation was distributed among central banks, official institutions, investment funds, insurance companies, pension funds and bank treasuries. It is the first test of a renewed financial strategy to launch issuances in more liquid markets. CABEI is the highest rated Latin American issuer with a AA/Aa3 rating by S&P/Moody’s. Following January’s historic $1.5 billion global issue, CABEI has placed $2.43b so far in 2025, all of it considered sustainable. The money generated will be used for green and blue projects in Central America.

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US Considering CAFTA Changes to Remove Nicaragua

14 February 2025

14 February 2025

The new US government is considering a renegotiation of the CAFTA trade treaty that would remove countries from it. This could include Honduras and Nicaragua or any country that refuses to accept deportees. The US considers that Nicaragua is actively dealing in the trafficking of migrants and the special envoy for Latin America, Mauricio Claver-Carone has said the US is not interested in Nicaragua as a commercial partner. DR-CAFTA has been in force since 2004. The US remains Nicaragua’s largest trading partner and being removed from the treaty would imperil hundreds of thousands of jobs. Experts estimate being left out of new negotiations would cost US$1.5 billion a year in trade to Nicaragua.

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CABEI Issues US$1.5b Sustainable Bond after Record Year

31 January 2025

31 January 2025

The Central American Bank for Economic Integration (CABEI) issued a US$1.5b sustainable bond. The bond will expire in 2028 with a rate of 4.75% and had US$4b of offers from 110 investors with the majority being central banks and institutions. The funds raised will go towards regional social, green and blue projects. CEO Gisela Sánchez stated that 2024 had been an historic year for CABEI with US$2.59b raised through ten bonds and a further US$329m through bilateral loans and credit lines.

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IMO says Panama will Maintain Canal Control

17 January 2025

17 January 2025

The International Maritime Organization has poured cold water on US president-elect Donald Trump’s plans to take over. Marco Rubio, the potential Secretary of State, had suggested that Panama had broken treaty agreements. However, the IMO Secretary General Arsenio Domínguez stated that the route will remain in Panamanian hands. Trump has repeatedly stated he wants to take control of the Canal if the toll price for US ships is not reduced and has not ruled out military action to achieve it.The leaders of Canada, Mexico and Panama have also rejected US intervention.

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Guatemala’s Congress Passes Q148.8 billion Budget

6 December 2024

06 December 2024

A busy session in Guatemala’s Congress saw members pass the 2025 budget of Q148.83bn (US$19.27bn), a 7% increase on the previous year’s. 148 of the 160 deputies voted in favour of the budget which saw increases to security, health and care for the elderly. However, critics pointed to poor budget execution and the fact most of it goes on operating expenses. Legal challenges have been presented against the salary increase to members of Congress. A police law which will see officers not be jailed for using their weapon in the course of duties and amendments to the organised crime law that may lift legal proceedings against the official party Semilla were also passed.

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Bukele and Chaves Propose “League of Nations”

22 November 2024

22 November 2024

The Presidents of Costa Rica and El Salvador proposed a “League of Nations” for the world’s smaller countries to seek common goals in economy and security. Something between a BRICS-lite and the mediaeval Hanseatic League, it was proposed following a “spark” between the two leaders. President Rodrigo Chaves said that the objective was to transform crisis into prosperity and stated the project would be called, “The League”. However, President Nayib Bukele said that it would not be a large group but one of like-minded countries that did not want to miss out on opportunities.

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