Support for strengthening Peruvian public institutions

(Lima, November 18, 2011).- In keeping with its commitment to improve countries’ competitiveness and strengthen government institutions, CAF - Latin American development bank - signed technical cooperation agreements with the MIVIVIENDA Fund and the Supervisory Agency of Investment in Public Transport Infrastructure (OSITRAN), both with the aim of the institutional strengthening of public entities in Peru.

During his official visit to Peru, CAF President & CEO Enrique García signed an agreement with the general manager of MIVIVIENDA Fund, Javier Rojas Chang, to introduce good corporate governance practices in an effort to help public and private companies operate more efficiently, attract capital and improve transparency.

García said CAF - as part of its integrated agenda for sustainable development in the region - promotes good corporate governance practices as an effective way of contributing to responsible competitiveness in business and at sectoral and macroeconomic level.

He added that the CAF Corporate Governance Program develops projects in partnership with governments, employers and academics, offering technical and non-reimbursable financial assistance for a range of activities, including conceptual contributions, tools, implementation of pilot projects and dissemination.

"With the backing of the Italian Technical Cooperation Fund, the CAF program is promoting the introduction of Good Corporate Governance Practices in private companies and 10 selected representative state-owned entities, including the MIVIVIENDA Fund. Our objective is to provide tools that improve business practices and stimulate interest in creating a culture of efficiency, equity and transparency in the management of state-owned enterprises," the CAF president added.

Institutional Strengthening

The second technical cooperation agreement was signed with OSITRAN President Juan Carlos Zevallos Ugarte to support the strengthening of the institution, and training of supervisory and regulatory staff for the new Lima Metro System and Lima Urban Electric Train.

After reaffirming CAF's commitment to the development of the region, García said the multilateral financial institution had invested over US$30 billion in the infrastructure sector in the region in the last 10 years, mainly to finance works in the areas of electric power, telecommunications, natural gas, drinking water and sanitation, but above all transport in all its forms.

In the case of Peru, CAF has provided US$300 million for implementation of the first phase of Metro de Lima, whose construction from Villa El Salvador to Avenida Grau has been completed. Another US$300 million was approved for the second phase of Line 1 of the Electric Train from Avenida Grau to San Juan de Lurigancho, considering that it is an affordable, safe and clean mass transit system which will benefit millions of people living in and around the capital.

"In addition to financing the civil and electromechanical works of the Lima Metro, we are also committed to supporting the institutional strengthening of OSITRAN through the work of supervision and regulation which it will execute, in an effort to create a regulatory culture which oversees high quality infrastructure and transport services," García added.

Finally, on the signing of these technical cooperation agreements, the CAF CEO said the strengthening of institutions, with emphasis on efficiency and transparency, as well as development and supervision of infrastructure projects are vital mechanisms for effective implementation of social inclusion plans.