Arizona is earning its nickname “Chip Corridor” as the epicenter of a new semiconductor boom across the United States. Announced expansions, investments, and job projections have flooded the headlines of Arizona business news since 2020.

But this is not a playbook for Guatemala to start making chips. It’s a playbook for how Guatemala can enter through Arizona’s door by aligning to standards, training technical talent, and building credibility as suppliers in the portions of the value chain where global buyers are already sourcing today.

Opportunities for Guatemala Start with Arizona

Arizona represents a realistic opportunity for Guatemala to participate in the semiconductor supply chain. The secret? Don’t try to announce a mega-project. Focus on compliance, training, and the kind of execution buyers take for granted.

How is Arizona Becoming a Semiconductor Cluster?

The semiconductor corridor is an actual industrial cluster. This means anchor companies and suppliers are clustering near one another around Phoenix, Arizona. The resulting density breeds repeat demand for services, technicians, and suppliers that can demonstrate compliance.

Guatemala does not need to start making “the chip” to break into the semiconductor value chain. As long as Guatemala plays to its strengths in services and support, there are many ways to plug into the growing semiconductor corridor from assembly and packaging to testing, logistics, and technical services.

In Arizona alone, there have been over 60 semiconductor-related expansions since 2020, according to the Arizona Commerce Authority. Industry investors have announced USD 205 billion in total planned investment, with roughly 25,000 total jobs expected to come online.

Semiconductor companies still account for 50.4% of global sales, yet U.S.-based manufacturing has shrunk from 37% in 1990 to approximately 10% in 2022. Arizona’s semiconductor boom and accompanying reshoring policies reflect this shortfall in a semiconductor global market expected to hit USD 701 billion in sales by 2025.

Anchor companies like TSMC (Taiwan Semiconductor Manufacturing Company) and Intel are also attracting ancillary firms, including packaging companies, equipment manufacturers, and materials suppliers.

“There is a ripple effect coming from TSMC.” Stated Wendy Mena, Strategy and Promotion Manager of Invest Guatemala

Ripples create more business, but they also create procurement budgets, certified suppliers, and industry standards that dictate who can participate in the semiconductor supply chain and who can’t.

Compliance is the Barrier to Entry

The excitement around Arizona’s semiconductor cluster is fantastic publicity. The reality of participating in the semiconductor supply chain is dominated not by press releases but by fabs turning on production.

Chip fabrication occupies hundreds of precisely controlled steps, including clean rooms, chemicals, water quality, and even electricity. “Standards” are not political speaking points: they are the literal barrier to entry for any company trying to build a semiconductor fab from scratch.

That’s why the trusted publication Arizona Republic features companies like Amkor Technology, a testing and packaging company. “Packages” are the finishing layer of semiconductor hardware: not every company needs to make wafers, but every company in the semiconductor supply chain must understand traceability, quality control, and industrial operational excellence.

Semiconductor fabrication takes weeks, sometimes months, depending on the process. The environments needed to build chips are some of the most meticulously controlled spaces on earth. That’s why compliance isn’t nice-to-have: security, standardized repeatability, and documentation often matter more than price.

What Matters to Guatemala

Guatemala will not be building semiconductor fabs overnight. If Arizona is the gateway, Guatemala must identify its insertion point into the supply chain and climb the learning curve as quickly as possible. Invest Guatemala suggests two tracks:

• Replicate U.S. technical training models
• Identify where Guatemala can insert into existing value-chain opportunities

Guatemala is not looking to produce semiconductor chips. It is looking to produce technical profiles and fill tasks that the industry is already buying.

Short-Term Entry Points Matter

In the near term, Guatemala should look no further than its own educational ecosystem. By training to global standards that align with industry requirements, there is less guessing. When hires are not trained “for chips” but for process control, quality, equipment maintenance, and automation, Guatemala ups its chances of meeting procurement requirements from day one.

Value chain segments ripe for near-term entry include:

• Packaging
• Assembly
• Testing
• Distribution / Logistics
• Sub-assembly for electronic components

Starting at the assembly or sub-assembly level allows Guatemala to build credibility and standards as a supplemental supplier to the semiconductor supply chain.

“It’s socio-technical, and it cuts across many disciplines. You need a pyramid of technical talent,” states Gabriela M. Bethancourt, National Secretary for Science and Technology (Senacyt), Guatemala

This pyramid starts with operators and extends to maintenance technicians, quality specialists, automation engineers, and data analysts.

Without staffing pyramids that support the semiconductor supply chain, countries will not meaningfully insert themselves into it.

Proof, Not Promises

Proof. That’s what Arizona is going to ask of Guatemala. Megaprojects may win press releases, but they do not win market access. Arizona may be Guatemala’s ticket into the semiconductor supply chain, but that ticket will only be stamped by demonstrating what the market recognizes: standards, provable capacity, and reliable delivery windows. Ask, “What can Guatemala prove it can do right now?”

1. Talent

The first step to entry is integrating existing talent pools AND ensuring Guatemala can competitively close any access gaps.

“We are not starting from zero,” Senacyt clarifies.

That means leveraging existing talent with industry-recognized certifications and the ability to meet employer demand.

Key capabilities include:

• Industry-certified technical skills
• Industry-connected vocational training programs
• Apprenticeships and dual education programs

2. Minimum Viable Standards

The second step is ensuring minimum infrastructure actually meets industry standards.

• Laboratories for metrology and calibration
• Prototyping centers connected to industry partners
• QA assurance and traceability software

These levers convert technical talent into auditable capacity.

3. Logistics Are Product

Finally, prove your operational reliability on a national level. For logistics and service providers, time is your product.

Delivering on time once does not prove you can access a market. Access is proven by consistent on-time deliveries, without renegotiating windows every month. If your country cannot do that, it is immediately devalued in the semiconductor supply chain.

Why This Matters

Countries like Guatemala have an opportunity to integrate into semiconductor supply chains by meeting the needs of global companies looking to diversify their supplier base and friend-shore production. Companies operating in this space face heightened geopolitical risk, creating demand for compliant suppliers with technical capacity.

Other segments ripe for Guatemala include:

• PCB assembly
• Precision metalworking/plastics
• Clean-room garments and materials
• Maintenance, repair, and operations (MRO) services
• Technical writing and regulatory compliance services

Some of these segments require fabs to operate, but they all require ISO-class quality management systems such as ISO 9001, ISO 14001, and IATF 16949.

The lowest-cost labor will not win in semiconductors. Predictability will.

Nobody wants to be Timex if they’re buying Swiss watches. THAT is why Guatemala must focus on certifiable consistency if it wants to enter the semiconductor supply chain.

Plan to Increase the Capacity of the Honduran Port

Honduran President Nasry Asfura announced Monday the plan to invest $100 million into Puerto Cortés with aims to expand the Honduran port facilities and operations to further develop Puerto Cortés into Central America’s logistics hub and trade center servicing the Caribbean basin. The expansion plans come as part of continued efforts to modernize the infrastructure of Honduras.

“We will continue converting rooftops into storage yards and bulk goods docks,” Asfura announced. “In Puerto Cortés, we are going to reduce wait times for vessels that come to load and unload, positioning our port as a logistics hub in Central America.”

Central America’s Trade Gateway Receives Major Investment Announcement

Puerto Cortés, Honduras, plans to increase capacity, improve efficiency, and drive down logistics costs after Honduran president Nasry Asfura announced an investment of $100 million in the port this week.

As part of the plan, the president said the expansion of Puerto Cortés will “directly benefit imports and exports” throughout Honduras, while also attracting international investors seeking stability, transparency, and reliability.

Areas of Investment for Puerto Cortés to Become a Logistics Hub in Central America

Furthermore, Asfura said he wants Puerto Cortés to reach a capacity of up to 1.4 million TEUs by early 2027 as opposed to the 816,000 TEUs the port handles currently. These improvements will allow mega-container vessels between 10,000 and 13,000 TEUs to arrive at the Honduran port.

Investments will also focus on:

• Allowing the port to handle more containerized cargo
• Open the port for large container vessels and deep draft ships
• Cutting down on wait times for arriving vessels
• Converting idle rooftops to bulk cargo yards and storage facilities
• Digitization and automation technology

Attracting Foreign Investment to Become a Logistics Hub in Central America

Improving port infrastructure at Puerto Cortés will decrease logistics costs for importers and exporters in Honduras while improving service reliability and overall trade competitiveness for the country.

Operadora Portuaria Centroamericana (OPC) and parent company International Container Terminal Services, Inc. (ICTSI) – a global port operator based out of Manila, Philippines – have both expressed their support for this initiative, showing that foreign investors have faith in Honduras.

Opportunities in Honduras’s Undeveloped Spaces

In addition to announcing the investment into Honduras and Puerto Cortés’ development, Nasry Asfura made a tour of the port on Monday, where he signaled “underutilized rooftops” that will be transformed into storage yards and bulk cargo areas.

Areas of the port that are going to be developed include:

• Cargo yards
• Storage facilities
• Operational spaces

Ports are a critical part of any country’s economy. They allow for trade to flow in and out and can act as a catalyst for foreign direct investment (FDI). As FDI comes into Honduras, more companies will develop around Puerto Cortés, providing jobs and economic support for Honduras.

According to President Asfura, companies currently situated in Honduras’ ample trade corridor of Naco, department of Cortés, are looking to invest up to $1.7 billion, creating approximately 8,000 to 10,000 new jobs.

Economic Impact Puerto Cortés Expansion Plans Will Have on Honduras

As these companies develop, they will not only be providing jobs at their facilities but will be creating more jobs indirectly through the need for transportation, warehousing, and other logistics service providers.

The increased capacity at Puerto Cortés will help facilitate these exports, allowing Honduras to become even more competitive in the realm of  global trade.

“We’re going to increase capacity so that we can handle more of our own imports and exports as well as those of other countries that require services from our port,” Asfura continued.

Investing without Taxing the People of Honduras

Asfura went on to say that Honduras has enough money from organizations and private banks, but has not executed on it. These funds include, but are not limited to, international financing from multilateral banks such as the World Bank.

President Nasry Asfura Did NOT Say This about Puerto Cortés Becoming a Logistics Hub.

“The truth is, we have those funds. We have unused resources from private banking institutions, Europe-based organizations, and multilateral agencies. If we manage them correctly, we can invest in our nation’s development without raising anyone’s taxes or adding to the debt of our state,” Asfura tweeted.

Private capital and support from the international community will be key to developing the strategic ports of Honduras and allowing the country expand its footprint on the global stage.

Reducing Red Tape and the Size of Honduras Government

Monday’s announcement by the President of Honduras did not stop at talking about investments in the port of Puerto Cortés. Asfura ended his briefing, stating he will be closing, extinguishing, or merging between 20 and 23 decentralized institutions of the Honduran government.

The reasons for this move are to increase the government’s efficiency and allow more funds to be directed towards infrastructure projects like the expansion of Puerto Cortés. While there was no breakdown on which entities will be closed, merged, or extinguished.

Reducing the government’s size should allow Honduras to be more attractive to international investors.

Puerto Cortés is Honduras’ primary maritime trade gateway connecting it to both the Atlantic and Caribbean basins. As such, the president of Honduras says improvements to the port will allow it to be competitive with regard to cargo volume, technology, and port operations.

“We will turn Puerto Cortés into a benchmark port in Central America at the service of production and exportation,” President Nasry Asfura tweeted. “With this modernization, we will be able to position Honduras as a regional logistics center.”

Conclusion

Investments into the development of Honduras and Puerto Cortés are the first steps towards becoming a logistics hub in Central America. By improving the country’s primary port and increasing capacity for imports and exports, Honduras will be able to further develop its economy and create thousands of jobs for its people.

Mexico’s aerospace industry faces a new reality defined by geopolitical conflicts and nearshoring. MRO and Sustainable Aviation Fuel (SAF) may be central.

The aerospace sector is currently going through its largest period of change since the introduction of composite materials in aircraft structures during the 1990s and the integration of digital technologies into avionics systems. Industry players must now adapt to new geopolitical rivalries, the realignment of supply chains, inflationary pressures, technological disruption, and volatile energy markets.

In addition, uncertainty over logistics derived from conflicts between nations and stricter trade policies is forcing companies to look for regional partners closer to home.

“Never before has there been such pressure for the industry to change its competitiveness model,” states the Keys to Positioning the Aerospace Industry in Mexico analysis prepared by KPMG partners.

Mexico aims to consolidate itself as a center for advanced aerospace manufacturing, but also seeks to climb up the value chain by capitalizing on four key pillars:

• The integration of aerospace supply chains throughout North America
• Stabilization of OEM manufacturers
• Boosting the country’s MRO ecosystem

Transitioning to sustainable aviation

Through these strategies, Mexico hopes to become more than just a low-cost manufacturing destination but instead play a leading role in aerospace design, engineering, certification, and specialized services with higher levels of added value.

Attracting and Integrating North America’s Aerospace Supply Chain

Experts Eliseo Llamazares, KPMG’s Aviation and Tourism Lead Partner, and Mario Hernández, KPMG’s IMMEX Segment Lead Partner, pointed out that one of Mexico’s biggest objectives is going to be stabilizing and restructuring North America’s aerospace supply chain under the recently renegotiated United States–Mexico–Canada Agreement (USMCA).

“Aerospace was one of the sectors most impacted by the pandemic due to shortages in the supply of critical components and interruptions to international transportation,” they explained. “This was the result of having a fragile supply chain overly concentrated in Asia.”

Other challenges that impacted aerospace manufacturers globally included inflation, strong demand for commercial and cargo aircraft, nearshoring, and trade restrictions and tensions surrounding tariff policies.

In spite of these issues, Mexico remains “one of the countries that strategically allies itself most with the United States and Canada due to its geographic location, cost-competitive labor market, network of free trade agreements, and consolidated industrial base,” the report stated.

“The current geopolitical scenario in which we find ourselves can be an opportunity for Mexico to strengthen and integrate production processes throughout North America,” they added. “Decreasing dependencies with nonregional countries could accelerate the aerospace manufacturing regionalization process.”

Addressing OEM Volatility

The analysis also indicated that OEMs are struggling with worldwide delivery delays on new aircraft produced due to:

• Shortages of a qualified workforce
• Limited availability of certified suppliers
• Bottlenecks in Tier 1 and Tier 2 parts, especially engines, electronics, and advanced composites

Restrictions caused by international trade agreements and new regulatory requirements

These are compounded by tighter sustainability regulations and increasing requirements to adopt new technologies such as AI, advanced robotics, and additive manufacturing.

“Mexico has the opportunity to position itself as a strategic hub due to our country’s extensive pool of talent and capabilities in high-precision manufacturing,” says the report. Mexico’s abundance of suppliers, both Tier 1 and Tier 2, also makes it attractive as a platform to deploy new technologies while scaling design and engineering capabilities.

Growing MRO in Mexico

The MRO segment is quickly gaining importance as commercial aviation continues to grow globally and new aircraft deliveries continue to be delayed. A lack of components, especially engines and parts needed for repairs, has driven up TAT times, which has forced more aircraft to remain grounded and harmed airlines’ bottom lines.

A lack of skilled maintenance technicians has also created a bottleneck for MRO growth. Ironically, while new planes are being delayed production-wise, the planes that are flying are flying more cycles and hours, which is resulting in greater demand for MRO services in Mexico such as inspections, repairs, and overhauls.

Mexico is no stranger to the MRO industry, but by increasing investment in the sector, obtaining international certifications, and adopting new technologies MRO in Mexico could begin serving not just national demand but international customers as well.

Opportunities for MRO services in Mexico include:

• Engine overhauls and component repair services
• Line maintenance and heavy maintenance services for commercial fleets
• Digital solutions for predictive maintenance and AI-based diagnostics
• Regional MRO hub for North American and Latin American airlines

Mexico has the potential to be one of the most competitive MRO service providers in the Western Hemisphere if it continues to invest in policy reforms and training programs to develop a skilled workforce.

Transitioning to Sustainable Aviation

Transitioning toward sustainable aviation and lowering carbon emissions across all areas of aviation will be one of the biggest changes the industry will have to undergo in the coming years. Some key areas include:

• Adoption of sustainable aviation fuel (SAF) as a pillar of decarbonization
• Technological innovations in engines and advanced materials
• Improving the aerodynamics of aircraft
• Reducing emissions during manufacturing and industrial processes

Promoting circular economy strategies, such as repairing and reusing components rather than disposing of them.

Mexico, along with other Latin American countries, has the raw materials needed to produce Bio- Sustainable Aviation Fuel. Agricultural waste, biomass, and used oils can be utilized for domestic SAF production. Mexico and other countries in the region also have high potential for clean power generation through solar and wind energy.

As a result, a new era of aerospace manufacturing could arise in which Mexico doesn’t just produce parts but designs, innovates, repairs, integrates, and certifies sustainable aircraft and aerospace components in partnership with the United States and Canada.

Gearing Up for the Future

To remain competitive in the aerospace sector, nations will have to pivot toward purposeful manufacturing by integrating vertically and horizontally throughout the supply chain. The implementation of the USMCA, nearshoring, and the renewable energy transition may provide Mexico with a once-in-a-generation opportunity to move up the aerospace value chain and become the leading aerospace producer in Latin America.

“If public policies are adjusted to meet these new realities, attract investment, and prioritize the development of human capital while strengthening the industrial infrastructure, we could turn the current global realignment into a platform for long-term growth,” experts concluded.

One key area where Mexico could capitalize is MRO. Experts believe MRO in Mexico could be one of the aerospace industry’s fastest-growing sectors as FDI begins to enter the region and airlines look for more reliable service partners throughout North America.

Overview

Foreign Direct Investment (FDI) to Brazil totaled US$ 84.1 billion from January to November 2025, the highest level since 2014. According to the Presidency of Brazil’s Planalto Palace, this new record was made possible thanks to President Luiz Inácio Lula da Silva’s foreign policy “moving Brazil forward again,” referring to his international repositioning and diplomatic blitz over the past three years. These investment inflows into Brazil show that the country is regaining confidence from global investors such as multinational companies.

Brazil attracted US$ 9.8 billion in Foreign Direct Investment (FDI) in November 2025, an annual increase of 72%. Investments so far this year are 13.5% higher than the US$ 74 billion accumulated in the same period of 2024. Investment inflows into Brazil closed 2025 near record highs experienced during former President Dilma Rousseff’s years from 2011 to 2014, when Brazil averaged US$ 102.4 billion per year.

A Brazilian presidential official affirmed:

“The real challenge is no longer whether we have a foreign policy or not. Brazil’s foreign policy is rebuilding the country and repositioning it internationally to make our economy modern again.”

Investments by Moving Brazil Abroad

Palácio do Planalto stated that moving Brazil forward internationally is a crucial axis for the country’s economic recovery. Brazilian diplomacy has traveled to over 500 markets worldwide since 2023.

Highlights of moving Brazil forward internationally include:

• Expansion of economic partnership with Europe on clean commerce and Net Zero commitments.
• Outreach to China and India on agricultural commodities, minerals, and greenfield tech investments.
• Restored convergence agenda with the United States on climate, industrial policy, and infrastructure financing.
• Trade expansion with Latin America, Africa, and Asia, with Brasília becoming a champion of South-South collaboration.

Investments were the direct result of companies viewing Brazil as a safe destination in Latin America, reinforcing strong inflows across multiple sectors.

Key Sectors Attracting Investment

The sectors that saw the most investments were:

• Green Energy and Hydrogen (34%)
• Investment in solar and wind farms in Brazil’s northeast and central-west.
• Hydrogen hubs in Porto Seguro (Bahia), Pecém, and Suape ports.
• Partnerships with Europe and Asia to purchase Brazil’s clean fuels.
• Agribusiness and Infrastructure (28%).
• Processing plants for soy, corn, and meat.
• Railroad, port, and corridor investments to reduce logistics costs.
• Technology and AI / Data Centers (18%).
• Cloud companies establishing hyperscale operations in Brazil.
• Investments in fintech, e-commerce, and knowledge market platforms.
• Oil and Gas (12%).
• Offshore pre-salt oil extraction.
• Investments in refineries and oil-to-chemical plants.

Keeping the Real Strong

Analysts explained that foreign investment has helped keep the Brazilian real firm, as Brazil, like most of the world, faces high interest rates. Investment inflows into Brazil came at a key moment as dollars were being poured into the Brazilian economy.

Additional positive indicators include:

• Dollar reserves around US$ 355 billion.
• Positive evolution of payments.
• Less volatility of the real compared to other emerging countries.

A Banco Central do Brasil (BCB) official claimed:

“Foreign Direct Investment helped anchor expectations and kept the real stable during turbulent times for Brazil and the world.”

FDI Into Brazil vs. Neighboring Countries

Brazil was the largest receiver of foreign capital in Latin America during 2025. While Brazil reached new highs, Argentina continues to undergo economic uncertainty and political transition. Neighboring Chile has seen moderate growth and weaker capital inflows so far this year.

Some of Brazil’s advantages include:

• One of the largest consumer markets in the world, with over 210 million people.
• A broad industrial sector and abundance of natural resources.
• A robust agriculture sector.
• A rapidly developing renewable energy sector.
• A growing technology ecosystem.

FDI Inflows into Brazil by Sector and Policy Reforms

Brazil has reduced the tax burden on businesses by advancing tax reform in Congress and recently established public-private partnership programs to incentivize private capital to invest in infrastructure and logistics. Tax, PPP, sustainability, and governance reforms are helping move Brazil closer to developed-country capital market standards.

Additional incentives for investment were developed under Brazil’s industrial policy, including:

• Hydrogen policy
• Lux initiatives
• Ethanol vehicle production policy
• Semiconductors
• Biotechnology
• Solar energy
• White goods manufacturing
• Food industry
• Regional airline market

President Lula’s international agenda aims not only to increase investments into Brazil but also to diversify the economy away from commodities.

An investment analyst told Brazil Business:

“It is not common to see capital flows like this with higher global interest rates. Brazil is showing that if governments make serious policies and can show growth prospects, investors will come.”

The Megaproject Could Upgrade Logistics Across El Salvador

Overview

President Nayib Bukele announced that his administration would sign agreements with the private sector to implement a PPP model for an infrastructure megaproject widely known as the “Pacific Train.”

Financing is expected to come from:

• Domestic public resources from the Salvadoran government
• Private foreign investment
• Multilateral loans

Discussions continue with private investors and multilateral lenders to complete financial closure. While information is scarce, government officials have touted the corridor as a flagship infrastructure project that will:

• Upgrade the infrastructure for logistics in El Salvador
• Enhance supply chains
• Improve logistics quality to meet regional standards

“The train will not only become a new transport modality for cargo and passengers but also a catalyst for development,” officials said.

What Will Pacific Train 2026 Look Like?

Initial details of the megaproject suggest that construction will be performed in phases, with the first development focusing on a corridor between the Port of Acajutla and Sitio del Niño, one of Central America’s largest industrial parks specializing in logistics in El Salvador.

Highlighted features from this first section include:

• 63 kilometers (39 miles) of rail corridor
• Several cargo stations and container yards along the Port of Acajutla
• Agreements with terminal operators to improve efficiency logistics in El Salvador and freight movement
• Sitio del Niño serves as a hub for passenger trains and cargo services
• Seven passenger boarding stations along the corridor
• 12 bridges built to pass through seasonal rivers
• 17 rail crossings with safety components (bridges/tunnels or signalized intersections)

Cost estimates for this first phase are USD 300 million, and officials have dubbed it a pilot project meant to validate technical hypotheses, operations model, and consumer demand.

“From Acajutla to Sitio del Niño, we want to show that rail transport is feasible, it can compete favorably with other transport modes, and that it’s a sustainable option for logistics in El Salvador,” said the Ministry of Public Works and Transportation.

Connecting El Salvador with Central America and North America

Officials have positioned the project as a regional initiative that could, in future phases, connect:

• To San Salvador
• Cross-border connections with Guatemala and Honduras
• Mexico’s Maya Train megaproject

If brought to fruition, these connections could allow for an uninterrupted rail corridor from Mexico to Honduras. Not only would this help improve connectivity across Central America, but it could also help improve El Salvador’s connections with supply chains traversing North America and Central America.

“This project is just one of many that the Salvadoran government is pushing to turn the country into a regional hub for logistics,” said a representative from Invest in El Salvador.

Pacific Train Route in the Context of National Infrastructure Plans

The railway project is only one component of the Salvadoran government’s expansive national infrastructure plan. Officials have set a goal to attract USD 10.7 billion dollars in infrastructure-related investments by 2035. Investments will focus primarily on improving:

• Port capacity at Port Acajutla
• Construction of a new shipyard at La Unión
• Regional ferry services
• Roads, airports, and digital infrastructure

In combination, these investments are expected to allow the government to establish a comprehensive logistics ecosystem and enhance El Salvador’s intermodal capabilities.

Pacific Train Financing Likely to Come Through PPPs

While early phases are expected to be predominantly publicly funded through domestic resources, future operations could be undertaken through PPPs that will allow foreign investors to participate in the operation and financing of the railway. Groups that may participate through these PPPs include:

• Infrastructure development firms
• Railway operators
• Investment banks

“Public-private partnerships are key in infrastructure projects, especially in developing countries,” said Juan Pablo Cordoba, lead analyst at Infrastructure Finance Corp. “Through PPPs, you can share risks with the private sector and learn from international best practices.”

When Will the Project Begin?

President Bukele plans on having financing secured before the end of his second term in office (2024–2029). An official start date for construction has not been released as work is still being performed on:

• Final financing details
• Independent feasibility studies
• Approvals from pertinent government agencies

Infrastructure megaprojects have become a hallmark of Bukele’s economic policy to drive FDI into the country and create employment.

“The biggest signal you can send to investors is mega-projects,” Gabriela Rubinstein, Lead Economist for Central America at XYZ ThinkTank. “Building roads and railways tells politicians and investors you’re in it for the long run, and you’re committed to performance.”

Investment at an Economic Level

Implementation of the Pacific Train project could provide an instantaneous boost to various sectors of El Salvador’s economy by:

• Decreasing logistics costs for producers
• Increasing export competitiveness
• Improving passenger mobility and transportation alternatives
• Cutting greenhouse gas emissions by moving freight transportation from road to rail
• Opening up access to Port Acajutla from industrial parks located along the corridor
• Creating jobs in engineering, construction, logistics, and supporting services

“Trains have played a key role in the development of many industries throughout history,” said Alberto Palau, Principal Consultant at Arellano Engineering. “Trains open up economic geography and make certain areas more economically attractive for firms to develop operations.”

Risks to Consider Before Investing

Investors interested in the opportunity should know that there are risks associated with the project such as:

• Financing (both the railway and USD 10.7 billion national infrastructure plan)
• Ensuring technical feasibility
• Land acquisition and potential environmental impacts
• Coordination with Guatemala, Honduras, and Mexico
• Long-term operational sustainability

“It’s not enough just to build these mega-projects,” said Luz Maria Arce, Transportation Policy Consultant. “If you don’t have enough demand or don’t operate it efficiently, you will not see the expected results.”

Conclusion

The Pacific Train could serve as a transformative megaproject for El Salvador, creating a rail corridor from its southern port to major industrial parks and potentially linking up with rail networks from neighboring countries. By upgrading logistics in El Salvador, the country may be able to position itself as a Central American leader in logistics and distribution.

While only the first phase has been formally announced, the Acajutla–Sitio del Niño corridor should be viewed as a first step towards a much larger plan of modernizing El Salvador’s infrastructure and connecting the country to supply chains from around the world.

“The train of the Pacific is much more than a railway that will unite different points in El Salvador,” said a Salvadoran official. “It is a vision that will unite El Salvador with the world.”