CAF Approves USD303 Million to finance Peru's Chavimochic III Water Treatment Project

(Lima, Dec. 3, 2013).CAF-development of bank of Latin America-approved USD303.8 million in financing for the Republic of Peru to finance the third stage of the country's Chavimochic Project located in the La Libertad Region. 

The Chavimochic Project's third stage consolidates the region's irrigation systems through the construction of various projects that will regulate the flow of water throughout the year as well as develop agribusinesses in La Libertad. 

"This operation consolidates our position as a multilateral financial entity for productive agricultural infrastructure and irrigation in Peru. This project will give the agricultural and agribusiness sectors in northern Peru a major boost, enabling the region to triple its exports from USD400 million to USD1.2 billion, creating about 150,000 new jobs in that area of the country," said CAF Executive President Enrique García 

Investments in the project bring new irrigation services to 63,000 hectares in the Chao, Virú, Moche and  Chicama valleys as well as improve irrigation services in 48,000 hectares in the Chicama valley. Furthermore, the project will secure water sources for the city of Trujillo and its surroundings as well as generate electricity. 

Proceeds from the loan will fund construction costs, engineering studies, insurance, environmental and social impact plans, external audits and Chavimochic Special Project (PECH) administration costs, among others. 

Financing Agreements 

Separately, CAF Executive President Enrique García and Peruvian Economy Minister Luis Miguel Castilla signed an agreement opening up USD300 million in contingent financing to fund responses to natural disasters. 

Garcia and Castilla also signed a USD16 million loan agreement to partially finance the Public Investment Program for the Strengthening of Environmental and Social Management of Indirect Impacts of the South Inter-Ocean Corridor - Stage II 

Non-Reimbursable Resources for Environmental and Social Projects 

Elsewhere, CAF and Peruvian officials signed three technical cooperation agreements in Lima to support Diagnostic Study for the Peru-Ecuador Border  as well as the Sustainable Irrigation for a Greener Lima  project and the SOMOS "Un GolPara La Vida"  program that uses sports to attend to at-risk youth. 

The Non-Refundable Technical Cooperation agreement signed between CAF and Peru's the National Tax Administration Superintendence (Sunat) and the National Customs Service of Ecuador (NES) will help develop Diagnostic Study for the Peru-Ecuador Border, which will conduct comprehensive studies on how to improve the economic, social and political conditions along the Peruvian-Ecuadoran border. 

The study will focus on the Peruvian Departments of Tumbes and Piura as well as the Ecuadorian Provinces of El Oro and Loja, and will work to identify the sources of illicit Customs activities and widespread abuses taking place in the informal economy as well as the proposals needed to reduce or eliminate these activities. 

Meanwhile, the Sustainable Irrigation for a Greener Lima  project aims to strengthen the Lima Parks Services by designing and implementing management practices and investments that will guarantee sufficient water supplies needed to irrigate the capital city's "green infrastructure" in a sustainable manner and assist Lima communities to adapt to climate change. 

Finally, a Non-Refundable Technical Cooperation Agreement signed between CAF and the Odebrecht Association will implement over the next three years the SOMOS "Un GolPara La Vida"  program, which uses sports as a social inclusion tool to address the needs of at-risk youth.

The agreement will touch the lives of some 3,000 at-risk children from Lima districts of San Juan de Miraflores, San Juan de Lurigancho, Los Olivos and San Martín de Porres. The program will also operate in the San Felipe and Pomahuaca districts in Cajamarca as well as in the Canaris and Santo Domingo de Olmos districts in Lambayeque, jurisdictions that operate under Lima Metro Line 1 - Section 2 Consortium, New Roads in Lima Project, the Trasvase Olmos Concessionaire and the Olmos Irrigation Project.