Lima, May 19, 2021.- The Ministry of Economy and Finance (MEF) signed two loan agreements, one with the Inter-American Development Bank (IDB) and the other with the Development Bank of Latin America (CAF), for more than US$ 340 million in total, to finance the Road Infrastructure Program for Regional Competitiveness (Proregión 1), which includes the execution of infrastructure and the improvement of more than 4,200 km of roads in 16 departments of the country, which will generate more than 2,600 direct jobs.
The signing of the contracts was in charge of the Minister of Economy and Finance, Waldo Mendoza, representing the Republic of Peru; the IDB representative in Peru, Tomás Bermúdez; and Manuel Malaret, the CAF representative in Peru. In addition to the participation of Eduardo González, Minister of Transportation and Communications.
“The Proregión 1 Program will improve road infrastructure conditions in departments with export potential, which will result in savings in transportation costs of goods and products, as well as better services for citizens, which will have implications for the economy of these areas, as well as for the country as a whole,” said Waldo Mendoza, Minister of Economy and Finance.
The Road Infrastructure Program for Regional Competitiveness (Proregión 1), under the responsibility of the Ministry of Transportation and Communications (MTC), through the Special Project for Decentralized Transport Infrastructure - Provías Descentralizado, includes the improvement of 4,202 km of roads, through the execution and conservation of 18 feeder road corridors and other complementary actions.
The program covers 198 districts located in 54 provinces of 16 departments: Amazonas, Apurímac, Arequipa, Ayacucho, Cajamarca, Cusco, Huancavelica, Ica, Junín, La Libertad, Madre de Dios, Moquegua, Pasco, Puno, Tacna and Tumbes. The beneficiary population is 1’774,820 inhabitants and it is expected to generate around 2,640 direct jobs.
The loan agreement with the IDB is for US$114.3 million and the loan agreement with CAF is for US$233,315,826. Both agreements, in addition to a contribution from the Peruvian State, will finance the execution of the Proregión 1 Program.
The IDB and CAF loans will be repaid in 15 years, including a six-year grace period. In addition, the contracts signed provide for the currency conversion facility from dollars to soles, both in terms of disbursements and debt balances, thus eliminating the exchange rate risk.
Such loan agreements allow for the execution of public investment projects, in this case in the transportation sector, thus contributing to the generation of jobs and the reactivation of the economy.