US$211 million for sections 2 and 3 of the Peruvian South Inter-Oceanic Road Corridor

(Caracas, June 28, 2006).- The Andean Development Corporation (CAF) approved two Partial Credit Guarantees totaling US$211 million for Peru to guarantee the payment of the obligations of the Republic to the concession companies responsible for construction of sections 2 and 3 of the South Inter-Oceanic Road Corridor. The operation will create the conditions required for implementation of this important South American integration infrastructure project.

CAF President & CEO Enrique García explained that these operations were part of the efforts of the multilateral financial organization to stimulate regional integration and foster competitiveness. "This financing is the result of arduous work by a team from the Republic of Peru, the private sector and CAF to open the way for new forms of financing, executing and maintaining the support infrastructure for regional integration and the economic and social development that the country requires."

The South Inter-Oceanic Corridor consists of a road system that connects the maritime ports of San Juan de Marcona, Matarani and Ilo with the most important cities of southern Peru - Arequipa, Puno and Cuzco – and with Iñapari and the triple border of Peru, Brazil and Bolivia, through Madre de Dios department. This corridor has been conceived as a central component of the national strategy of supporting social equity, decentralization and inter-territorial compensation which will generate important socioeconomic changes in a region with almost six million inhabitants - 20% of the Peruvian population and 32% of national territory - but which has higher levels of poverty than the national average.

"This megaproject has a clear regional integration orientation with the neighboring countries and will be the first interconnection option between Peru and Brazil, fostering trade flows with the Central Western region of Brazil and the north of Bolivia, as well as toward the Pacific Ocean basin," García said. “The South Inter-Oceanic Corridor meets one of CAF’s primary institutional objectives, which is to promote and finance sustainable infrastructure projects that contribute to the physical integration, production and logistics of the region."

The construction of the corridor is accompanied by a parallel program to strengthen the natural resource conservation services of the Peruvian state in an effort to ensure balanced development in the area of influence. This program, which is valued at US$17 million, is also partially financed by CAF.

Peru can count on CAF The objective of CAF’s actions in Peru has been to support the sustainable development of the South American country. During the last five-year period (2001-2005) CAF approved operations for Peru for a global amount of US$2.80 million, an average of US$516 million a year, equivalent to 16% of the total approved in this period.