Caribbean & Central America - June 2025

On 22 May Guatemala’s President Bernardo Arévalo agreed a deal with the US to provide technical assistance for expansion projects at the country’s two main ports.

The 30-year agreement was signed by the Guatemalan army and US Southern Command (Southcom), the military department that oversees activities in Latin America and the Caribbean. Work will be led by the US Army Corps of Engineers (Usace) but entirely funded by Guatemala. The deal was first discussed during US Secretary of State Marco Rubio’s visit to Guatemala in February, and a team of military engineers carried out an initial analysis of the existing port infrastructure shortly after. 

It aims to expand and modernise port infrastructure to be “modern and efficient,” according to Arévalo, who called the agreement “a significant and historic step”. In the first stage, worth US$63m, work will focus on Puerto Quetzal, on the Pacific coast in Escuintla department, a vital conduit which handles 46% of Guatemala’s maritime trade. Planned improvements include extending the port terminal by 800m, doubling the number of berths to eight, and modernising infrastructure to allow the port to receive larger commercial vessels, significantly increasing operational capacity, according to a 30 April report by Southcom’s news website Diálogo Americas.

It aims to speed up the passage of goods, which currently suffer from significant congestion that increases shipping times and thereby costs, while positioning Puerto Quetzal as a regional logistics hub that can benefit from its proximity to the Panama Canal. This will boost Guatemalan exports, as well as benefiting the local economy by providing more jobs during construction and operational phases. More ships will also mean more revenue for the national government, which receives 20% of the port’s annual profits, and the local municipality, which gets a 15% share according to the same report.

In a second stage, similar efforts will be undertaken at the Puerto de Santo Tomás de Castilla, on the Atlantic side in Izabal department. The country’s ports have long been associated with corruption and illicit activity. By working with the US military, Arévalo will be able to reduce corruption risks at the ports, although the project will be funded by the Guatemalan state.

Usace has also analysed the feasibility of revitalising Guatemala’s railway network, which is currently not in use, with the media reporting that the Usace mission presented a preliminary report regarding its findings on 23 May. An initial assessment concluded that freight and passenger services could be restarted, and a new light rail system known as Metro Riel built in Guatemala City. Arévalo has said that agreements similar to those signed for the port expansion project will be finalised in August this year. This chimes with Arévalo’s efforts to modernise the country’s infrastructure, including a road building programme designed to improve connectivity in rural areas, while combating corruption. 

According to a statement from the US embassy in Guatemala published 21 February, the Usace visit “underscores the strategic importance of US-Guatemala relations and advances President [Donald] Trump’s America First policy of protecting our region by strengthening economic ties and developing infrastructure in partner countries, like Guatemala. These collaborations aim to position Guatemala as a regional hub of economic activity by creating jobs and fostering economic growth, while cementing trusted partnerships.”

However, the US has not currently agreed to fund the projects, meaning that the timeline for completion will depend on Arévalo’s ability to secure the necessary investment. For now, Arévalo appears to be maintaining a strategy of close ties with the US, rather than turning to China for investment, as other Central American nations have done, but he will likely hope that his loyalty is rewarded with financing in the future.

Other benefits

Modernising port infrastructure will also help to deal with the threat of trafficking networks, criminal networks, and irregular migration, said Guatemalan defence minister Henry David Sáenz Ramos in an article published by the state news agency Agencia Guatemalteca de Noticias (AGN) on 22 May.