Bitcoin City vision: Turkish firm Yilport invests $1.6B in El Salvador ports
Ships are seen at the Acajutla Port in Acajutla, El Salvador, Sept. 27, 2018. (Reuters Photo)
El Salvador announced a significant partnership with Turkish holding company Yilport, which will invest $1.6 billion to expand and co-manage two major ports in the country. This collaboration is poised to transform El Salvador’s maritime infrastructure.
Why it matters?
- The investment by Yilport is considered as the largest private investment in the history of the Central American country.
- The new agreement will establish what is known as a “mixed-economy corporation,” which is not subject to the legal limit.
- This project is integral to El Salvador’s broader strategy of integrating cryptocurrency into its financial system and attracting global investment.
Yilport’s bold port investment
- Acajutla Port expansion: Yilport, which also operates ports in Guatemala, Ecuador, Peru and Europe, plans to triple the capacity of Acajutla, El Salvador’s largest port, enhancing its role in international trade.
- La Union Port renovation: Yilport will also invest in reopening the eastern La Union port, which has been inactive since its completion in 2008. The renovation will include dredging to accommodate larger vessels.
Zoom in: Bitcoin City vision
La Union is the planned site for Bitcoin City—a futuristic metropolis powered by geothermal energy, designed to be tax-exempt and crypto-friendly. This city is part of El Salvador’s vision to become a global hub for cryptocurrency.
- Financial integration: Bitcoin City was first announced in 2021, following El Salvador’s decision to make Bitcoin legal tender. The city is designed to operate entirely on Bitcoin, with no taxation other than value-added tax.
- Volcano Bond: Originally, the $1 billion Bitcoin City project was to be financed by the Volcano Bond, backed by geothermal energy from extinct volcanoes. Although the bond has faced delays, the Yilport partnership is expected to advance the port’s development, with dredging and equipment purchases set for completion by the end of the year.
Turkish firm’s 50-year concession agreement
- El Salvador’s President Nayib Bukele announced the investment via the X platform on Sunday evening, highlighting its importance for the country’s economy. According to the video, Yilport will modernize Acajutla and La Union with “the largest private investment the country has ever seen.”
- Yilport will operate both ports jointly with the Salvadoran Autonomous Port Executive Commission (CEPA) under a 50-year concession agreement.
- This agreement was reportedly a result of Bukele’s visit to Türkiye in 2022.
Regulatory challenges for the Turkish firm
- Salvadoran law currently allows a maximum of 40-year concessions for joint operations, raising questions about potential legal amendments to accommodate this new agreement.
Between the lines: This strategic investment is expected to boost El Salvador’s position in global maritime trade, but it also brings forth regulatory challenges that need to be addressed for long-term success.
