US$946 million for Peru

(Caracas, December 12, 2006).- A report on activities in 2006 was offered in Caracas by CAF President & CEO Enrique García, who announced a record figure of US$5.66 billion for annual approvals. For Peru US$946 million was approved, representing 17% of the total approved by the Corporation for this period.

Support for economic integration As part of the Peruvian government strategy to promote major public investment projects which foster the processes of decentralization, inter-territorial compensation, and social equity, this year US$211 million was approved for the South Inter-Oceanic Road Corridor (sections 2 and 3) as well as a Partial Credit Guarantee for US$90 million for payment obligations of the Republic of Peru for section 4 of the Corridor. Its purpose is to back the actions of the Republic of Peru in relation to promotion of private-public partnerships (PPPs), guaranteeing the obligations of the Republic with Intersur Concesiones, the South Inter-Oceanic concession holder.

García added that "a fundamental issue in most of the countries of the region is reduction of the infrastructure gap that our countries still suffer. Operations of this type are adapted to government plans and - at same time - promote socioeconomic development and a sustainable environment, improving the standard of living of the population and the rural communities adjacent to the works." In this respect, an additional $10 million was approved for the Program for Environmental and Social Management of the Direct Impact of the South Inter-Oceanic Road Corridor.

US$15 million was granted for Integrated Rehabilitation of the Huancayo-Huancavelica Railway Project, confirming the Corporation's commitment to sustainable development, integration and social inclusion; on this occasion through the rehabilitation of a means of transport of vital importance for the population of this area of the Peruvian sierra.

At the same time, in relation to the Puertos de Primera project, the ports of Guayaquil in Ecuador, Cartagena, and Buenaventura in Colombia, and El Callao in Peru, have completed reengineering their processes and are preparing to implement the guarantee mark, all with the Corporation’s support.

Integrated response to Peruvian development The CAF President said the Corporation has concentrated its efforts on an integrated development agenda which aims to improve the living conditions of Latin Americans, through sustained quality growth, meaning inclusive development that generates employment. García proposed that an agenda based on three fundamental aspects: stability, efficiency, and equity. To do this the agenda must take into account the principles of environmental sustainability, increased international participation, and democratic governance, with the joint participation of public and private sectors, civil society, and the international community.

On this basis, as a contribution to macroeconomic stability and structural reforms, CAF is executing - jointly with governments - loan operations for fiscal management, quality of expenditure, debt management and debt reprofiling, as well as contributing to strategies for increased competitive participation in the world economy and the economic programs of the countries. For Peru, this year a total of US$400 million was approved for areas related to debt management, to improve the profile of the total public debt of the country, and release budgetary resources for financing the public investment agenda, by reducing the costs and market risks of these loans.

García also emphasized support for MSMEs in 2006. "This sector is one of the main sources of employment, competitiveness and non-traditional exports of the region. This support is considered a key element of the integrated agenda promoted by the Corporation." Specifically this year an important development is the first disbursement in local currency to the Mibanco financial institution in Peru, as well as support for other microfinance institutions in the country.

With respect to the environmental component executed by the Corporation in this country, the Biodiversity Program (BioCAF) concluded the CAF–GEF/UNDP project on Biotrade in the Andean region. In the participating countries (Colombia, Ecuador, Peru, Venezuela) studies were finalized which identified inadequate barriers and incentives; barriers to entry to international markets; criteria for selecting and evaluating pilot biotrade initiatives; and strategies for quality and marketing, among others.

With respect to the action of the CAF Competitiveness Support Program (PAC), in 2006 the Project to Strengthen Access by Peruvian Citrus Fruit to the United States began along with the Competitive Fund for Innovative Projects from Producer Associations, a public-private partnership working to promote business development.

In the area of Cultural and Community Development, CAF supported projects to build capacities and strengthen social responsibility and capital. The Music Program, in its three sections: orchestral with the start of the first Peruvian youth orchestra; choral and lute. In the Sports Training Program, in alliance with local private enterprise, the first phase of the program targeted at the mainly Afro-Peruvian population in the locality of Chincha ended successfully. In the area of productive community management and management of public services, the most important development was completion of the project for local cooperation and self-management promotion in Huaura province.

Lastly, as part of the Governance Program, the Leadership for the Transformation Program began in alliance with San Martín de Porres University and other institutions, with the objective of training leaders in the areas of vision of country and civic-democratic values. The Governance and Political Management Program continued jointly with the Peruvian Catholic Pontifical University and George Washington University. The Efficient and Transparent Municipalities Program in the subjects of electronic government and the land registry also continued in alliance with the OAS and the Canadian International Development Agency (CIDA).