CAF confirms commitment to economic stability and democratic governability in Peru

To back Peru’s efforts to maintain economic stability and democratic governability, the Andean Development Corporation today approved, at its CVII board meeting, a loan for US$200 million at 12.5 years with a two-year grace period to finance the country’s 2001-2002 public investment program. CAF will contribute 70% of the total cost of US$285 million.

The CAF executive president, Enrique García, said this first loan granted to the Toledo administration will reinforce the objectives of achieving growth with equity by expanding the capacities of all sectors of the population and promoting social welfare.

The loan provides partial financing for a series of public investment projects aimed at improving the Peruvian economic and social infrastructure, which will have a positive impact on development and lay the bases for economic reactivation.

The investments are designed to gradually raise growth rates to the sustained high levels needed to meet the growing social demands of the population. The funds will be allocated to priority sectors for social development such as agriculture, education, health, sanitation, transport, power and the continued the expansion of the electricity frontier. In addition the financing incorporates a 5% component for technical assistance to local governments geared to improving collection of the municipal property tax contained in the Decentralization Program.

The 2001-2002 Multi-Sectoral Public Investment Program, which has been given priority by the Toledo administration, will be executed by the Ministry of Economy and Finance.