US$403 million for Peru

CAF approvals to date total US$4.60 billion.

Enrique García, president & CEO, held a press conference to report on the activities of the multilateral organization in 2005.

In Peru the highest percentage of approvals was concentrated in contributions to economic infrastructure.

Major infrastructure works financed were US$200 million for the Peru-Brazil South Inter-oceanic Road Corridor, and US$60 million for the Amazon North Road Corridor.

A report on activities in 2005 was offered at a press conference in Caracas by CAF President & CEO Enrique García, who announced that this year the Corporation had achieved a record US$4.60 billion in approvals, including US$403 million for Peru.

Infrastructure networks to support regional integration and competitiveness

Garcia said that US$293 million was assigned for sovereign-risk operations, especially development of road and transport infrastructure, in favor of Peruvian productivity and competitiveness. Additionally, funds of US$110 million were assigned to private investment initiatives destined for the financial and microenterprises areas, among others.

"Of total approvals, 73% (US$293 million) was assigned to the strategic area of economic infrastructure to finance the construction of major works of conservation and promotion of road infrastructure, with the objective of increasing economic integration with other countries, and fostering development for the inhabitants of the regions. The funds approved for this strategic area will help to develop various provinces in the country, opening up access to vast territories for a larger workforce and other economic agents to stimulate development," Garcia said.

"In this respect, Peru is putting through pioneering initiatives to create incentives for private participation in public works construction, which will strengthen infrastructure for development," the chief executive added. He also specified two important operations, approved in 2005, to support the South American Infrastructure Integration Initiative (IIRSA): US$200 million for the first stage of the Peru-Brazil South Inter-oceanic Road Corridor; and US$60 million for the Amazon North Road Corridor.

In the competitiveness, productive and MSME sectors, funds were approved for various agents in the Peruvian private sector, channeled directly through financial institutions. US$103 million were approved in lines of credit to banks to finance investment projects, working capital and business lines, including the MSME sector. Corporate loans were granted for US$5 million to back financing of investments in capital goods by leading companies in the Peruvian private sector.

Contributions to sustainable development and stimulus for CAF special programs

The chief executive reported approval of non-reimbursable cooperation funds this year for US$2 million from the Technical Assistance, Human Development and Spanish Technical Cooperation Funds. The operations represented the country’s requirements for the private and public sectors, distributed among the CAF strategic areas: Competitiveness, Governance, Community Development and Culture.

With respect to actions in favor of governance, the First Leadership for Transformation Program began in alliance with San Martin de Porres University and other institutions. This program trains natural leaders in a vision of country and civic-democratic values. The execution of the Governance and Political Management Program - Phase III continued with the Peruvian Catholic Pontifical University (PUCP) and George Washington University; along with the Efficient and Transparent Municipalities Program in the subjects of Electronic Government and Land Registry, in alliance with the Organization of American States (OAS) and the Canadian International Development Agency.

In 2005, the Competitiveness Support Program (PAC) began two new initiatives: the Project to Improve the Access of Peruvian Citrus Fruit to the United States and the Competitive Fund for Innovation Projects of Producers Associations, a public-private association for promoting business development.

The work of disseminating the priority areas of the competitiveness agenda in Peru intensified, in view of the start of the next electoral cycle in the country. The following forums were held: II National Competitiveness Forum, called by the National Competitiveness Council; Pending Agenda For Development 2006-2011, called by CONFIEP; and Consensus for State Policies with a Long-Term Perspective in The Annual Executives Conference (CADE) 2005.

Garcia said that CAF, through PAC, had offered support to the Trade Capacity Building Group of the FTA negotiations with the United States, participating with local work teams in coordination meetings between the Andean countries, and also in the negotiating rounds. Apart from technical and logistical support, CAF has financed national projects to help in the negotiating stage, and with the implementation of post-FTA measures.

In the area of cultural and community development, projects were supported to build capacities and strengthen social responsibility and capital. The most important were the consolidation of the music program in its orchestral section (which is forming the first Peruvian Youth Orchestra), and the choir and lute sections. With respect to the sports training program, in alliance with local private enterprise, the first phase was successfully concluded and the second stage began. The program is targeted at the Afro-Peruvian population in Chincha. In the area of productive community management and public services, the project for local cooperation and promotion of self-management in Huaura province concluded. In the provinces of Puno, San Martin and Ucayali, a project was begun to assist 2,500 poor rural women to enter the labor market through training in production, marketing, access to credit and joint planning with local governments.

Lastly, Garcia said that, as in the other Andean countries, CAF is Peru’s main source of multilateral financing, receiving permanent and timely support. The Corporation has become one of the bastions for achieving macroeconomic stability, and a fundamental tool in strategies to combat poverty and generate development. In the last five-year period (2001-2005), CAF approved operations for Peru for a global amount of US$2.79 billion.