US$300 million loan for South Inter-Oceanic Road Corridor

(Lima, December 22, 2008).- The Andean Development Corporation approved a US$300 million loan for execution of additional works of sections 2, 3 and 4 of the South Inter-Oceanic Road Corridor (CVIS).

CAF director in Peru Eleonora Silva Pardo said the objective of the loan was to partially finance public investment requirements of the road corridor during the 2009-2010 period.

"The project will now be established as the structuring element of the development of Peru’s South Macro Region and its integration with Brazil and Bolivia, generating direct and indirect benefits to a population of around six million Peruvians and almost one million more Brazilians and Bolivians," she said.

The CAF official added that the project was part of the South American Regional Infrastructure Integration Initiative (IIRSA), as "one of the high priority projects which merits follow-up and special attention from governments and international financial organizations."

At the request of the Peruvian government, CAF has been involved from the start of this strategic project for national development and regional integration, as reflected in its active participation in the first financing program, Silva said.

"CAF supports execution of this major road integration corridor because, based on its conception as a central element of the Peruvian government’s strategy of decentralization, inter-territorial compensation and social equity, it will generate important socioeconomic changes in a region with a population of six million and higher poverty levels than the national average," Silva concluded.

Considered the largest individual road project in Peruvian history, the Corridor has a total length of approximately 2,600 kilometers of roads between Peru and Brazil and includes the departments of Madre de Dios, Cuzco, Apurímac, Ayacucho, Puno, Arequipa, Moquegua, and Tacna. At national level, the Inter-Oceanic Corridor will stimulate the economic development of the south of the country, which represents 32% of Peruvian territory and 20% of the population. The road system connects the maritime ports of San Juan de Marcona, Matarani, and Ilo with the main cities of Peru’s southern sierra - Arequipa, Puno and Cuzco - and, through Madre de Dios department, with Iñapari and the triple Peruvian, Brazilian and Bolivian border.

Section 2 of the Corridor connects Urcos in Cuzco department with the locality of Puente Inambari in Madre de Dios department; Section 3 goes from Puente Inambari to the locality of Iñapari on the triple border; while Section 4 also starts from Puente Inambari going to the locality of Azángaro a few kilometers from the city of Juliaca in Puno department.