Loan agreement to finance Majes Siguas Stage II Project signed

(Lima, February 8, 2011).- The Republic of Peru and CAF - Latin American development bank - today signed a US$150 million loan agreement to co-finance the Majes Siguas Stage II project

During a ceremony at the Ministry of Economy and Finance, the document was signed by CAF President & CEO Enrique García, Peruvian Minister of Economy and Finance Ismael Benavides, and Arequipa Regional President Juan Manuel Guillén as representative of the Executing Agency.

After highlighting the sustained economic growth that Peru has been experiencing, the CAF chief executive said the government had executed various projects to increase productivity and competitiveness.

"The Majes Siguas Stage II Project is very important for CAF. Its execution will stimulate regional development by improving the competitiveness of southern Peru, as a contribution to economic growth and a better quality of life for the people of the southern regions of the country," Garcia said.

The project will exploit the surplus waters of the Apurimac river by building diversion, regulation, collection, conveyance and distribution works with a view to developing regional agriculture -oriented to agro-exports and planting of highly profitable crops. By irrigating 38,500 hectares, the project will develop land suitable for cultivation in Pampas de Siguas in Arequipa department.

The CAF loan will finance Phase I, whose main works are the Angostura Dam and the Angostura-Colca Derivation.