US$300 million agreement for natural disaster response signed with Peru

(Lima, May 28, 2010).- During the Third Meeting of Finance Ministers of America and the Caribbean, CAF President and CEO Enrique García, and the Peruvian Minister of Economy and Finance Mercedes Araóz Fernández today signed a US$300 million agreement for contingent financing for response to natural disasters.

García said the agreement was due to the fact that Peru is constantly exposed to natural phenomena which pose a threat to the safety of the population and infrastructure development, García said. He added that the facility would provide immediate financing when this type of emergency occurs in the future. The funds can be used to rehabilitate critical public services, and later for final reconstruction works.

"This operation is part of our CAF policy of supporting member countries in their preparation for possible risks which are so common today. I would like to reaffirm our commitment to Peru and say we are very satisfied that in the past five years we have approved over US$6.20 billion for the country and already this year about US$900 million in programs and projects for infrastructure, social development, support for small- and medium-sized enterprises, with all the development agenda the country is implementing," he said.

Minister Aráoz said this was a "special facility" granted by CAF, which could allocate funds rapidly to help Peru in case of emergency and also for reconstruction work.

"This facility, which a financial institution of such prestige has granted us, is important because it will be the model for other countries’ structures for managing risks. I want to thank CAF because with this funding we are adopting a clear policy of prevention and preparation for an emergency," he said.