Press Releases

IFC Supports The Private Pension System In El Salvador

Adriana Gomez
Phone: (202) 458-5204

Fax:     (202) 974-4384


IFC Global Financial Markets

Shamsher Singh/ Matias Eliaschev

Phone:     (202) 473-2702/ 473-1418

Fax:         (202) 974-4393


San Salvador, El Salvador, May 4, 2004—The International Finance Corporation, the private sector arm of the World Bank Group, has signed an agreement to acquire up to 25 percent of  the share capital of AFP Confia S.A., one of the leading pension fund administrators in El Salvador.

AFP Confia is fully owned by the Cuscatlán Group, a major financial conglomerate in Central America. In December 2003, Cuscatlán Group entered into a share purchase agreement with Citigroup International, controlling shareholder of Confia, to acquire 100% of the shares of Confia AFP.

IFC’s financing, through an equity investment in AFP Confia, will help Cuscatlán develop its new pension administration business and support its regional growth strategy. This is IFC’s third transaction with Cuscatlán Group. In October 2002, IFC provided a $40 million financing package to support the expansion and consolidation of the Group's operations within Central America. In addition, in 1998 IFC provided the Group with a $25 million long-term credit line for on-lending to Salvadoran companies.

The agreement was signed today in San Salvador by IFC’s Chief, Peter Woicke, and Mauricio Samayoa, President of Cuscatlán Group.  

Mr. Woicke, also Managing Director of the World Bank Group, said, “As has been demonstrated in several countries in Latin America, the development of a private pension system can have a strong developmental impact, not only by improving social security, but also in developing domestic capital markets and the private sector. Through this investment, IFC has the opportunity to contribute significantly to the development of the financial services industry in Central America.”

Mr. Samayoa said, “We are extremely pleased with the successful partnership we have developed with IFC. They fully understand and appreciate our vision for creating the leading integrated financial services group in Central America and have demonstrated their support with a very timely decision to assist us in the acquisition of AFP Confia. We thank IFC for the confidence placed in us and look forward to continue working together in the future.”

Jyrki Koskelo, IFC’s Director for Global Financial Markets, added, “IFC has had a strong institution-building role in the development of El Salvador’s private pension fund system. By strengthening one of its leading pension fund administrators, IFC has the opportunity to continue supporting the development of the country’s private sector. This investment will support Cuscatlán’s regional growth strategy and help consolidate the Group as one of the leading providers of integrated financial services in Central America”

The private pension system in El Salvador began operations in July 1998, making it the first country in Central America to replicate the successful Chilean model of a defined-contribution private pension system.  Reform of the former state-run, "pay-as-you-go" social security system was part of the Government's ambitious agenda for market-based reforms. By the end of 2003, the system had enrolled 1,074,493 affiliates and $1.5 billion in assets under management.

Cuscatlán Group, through its holding company Corporación UBC Internacional S.A. (UBCI), is the second-largest financial group in Central America. Through its banking groups in Costa Rica, El Salvador, Guatemala, and Panama, it provides corporate banking, credit cards, mortgages, factoring, insurance, stock brokerage, trade finance, and asset management to a range of clients in the region. UBCI was listed on the Costa Rican stock market through an initial public offering in July 2002, and in November 2003 its shares were listed on the LATIBEX program in the Madrid Stock Exchange. As of December 31, 2003 UBCI had US$3.6 billion in assets and US$351.0 million in equity.

IFC's mission
( is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY03, IFC has committed more than $37 billion of its own funds and arranged $22 billion in syndications for 2,990 companies in 140 developing countries. IFC's worldwide committed portfolio as of FY03 was $16.8 billion for its own account and $6.6 billion held for participants in loan syndications.

Banco Cuscatlan de El Salvador, S.a.
Patricia de Jove
Phone: (503) 212-3601