US$600 million approved for Peru

(Caracas, August 18, 2009).- CAF approved US$600 million for two operations in Peru: a US$300 million loan for completion and start-up of the Villa El Salvador-Av. Grau section of the Lima Urban Electric Train to be executed by the Ministry of Transport and Communications (MTC) through the Lima and Callao Mass Transport Special Project Autonomous Authority (AATE); and a US$300 million contingent financing facility for integrated response to emergencies caused by natural phenomena, whose executing agency is the Ministry of Economy and Finance.

On the loan granted to the Lima Electric Train, CAF President & CEO Enrique Garc�a said, "for the Corporation, support for projects which improve the quality of life of the population of the largest Latin American cities is priority because they facilitate public transport services primarily for low-income populations." The loan will support completion of a project which has been at a standstill for over 20 years. The new infrastructure will provide the inhabitants of its area of influence with an alternative rapid, safe and affordable means of transport.

"The project is part of a broad plan being executed in Lima by the transport authority and the Metropolitan Municipality, which aims to provide an integrated transport system in the Lima and Callao area, with a population of over eight million, which cuts travel time, transport costs, accidents levels, and pollution emissions," García said.

The CAF financing represents about 55% of the estimated total cost of the project of US$549 million; the rest will be contributed by the other party.

US$300 million for integrated response to emergencies caused by natural phenomena

On the contingent financing facility for US$300 million, Garc�a said, "Peru is exposed to natural phenomena which threaten the safety of the population and development infrastructure. "This facility provides timely financing when this type of incident occurs. The funds will be available rapidly for immediate response for victims and provisional restitution of critical services affected by the natural emergencies."

Funds from the financing facility can also be used to finance pre-investment studies which may be required for final reconstruction of essential works and strengthening the country's disaster prevention institutions.

"The approval will facilitate short-term actions to mitigate the magnitude of the impact of disasters, and in the medium and long term facilitate the organization, planning and response to future emergencies caused by natural phenomena," the CAF president said.