US$19 million for South Inter-Oceanic Road Corridor

(Caracas, November 28, 2006).- The Andean Development Corporation (CAF) today approved for the Republic of Peru a partial credit guarantee for US$90 million as a contribution to obtaining a total of US$310 million to finance a section of the South Inter-Oceanic Road Corridor. These loans stimulate important infrastructure projects needed for development of the country and regional integration.

CAF president & CEO Enrique García said that "based on the CAF integrationist mission we are supporting this mega-project, which is clearly oriented to regional integration with neighboring countries, and will become the first option in road interconnection between Peru and Brazil, fostering trade flows between Peru and the Brazilian central western and northern Bolivia regions, and the Pacific Ocean basin."

The South Inter-Oceanic Road Corridor (CIVS) is formed by the system of highways that connects the ports of San Juan de Marcona, Matarani, and Ilo, with the main cities of the southern Peruvian sierra, Arequipa, Puno, and Cuzco and with Iñapari and the Bolivia-Brazil-Peru triple border through Madre de Dios Department.

To stimulate infrastructure projects, Peru has decided to implement a Public-Private Partnership model to maximize synergies between the efforts of both sectors.

García explained that CAF was invited to participate as pro bono adviser to this new initiative in Peru, through cooperation with the Ministry of Economy and Finance in the conceptualization and development of an instrument to finance the road sections of the multimodal North Amazon hub and sections 2, 3 and 4 of the South Inter-Oceanic Road Corridor, Peru-Brazil, promoting the technical and socio-environmental quality of the project and ensuring that the concession agreements facilitate financing.

In total the CIVS project involves an added investment of over US$1.07 billion. Due to its size as the largest asphalting project ever undertaken in Peru (approximately 2,600 kilometers including 1,015 not asphalted), its construction has been divided into five sections. This loan operation relates to financing for Section 4.