The World Bank has approved a $20 million loan to Peru to develop the country’s irrigation systems in its Andean highlands, the Washington D.C.-based organization said in a release.
The financing will be used for the Sierra Irrigation Project, which has the objective to improve crop yields in Peru’s highlands. “By improving irrigation technology, farmers will have enough water to secure traditional harvests and, in time, shift to higher export value crops,” the World Bank said.
The project’s four main components include: improving irrigation technology by funding pre-investment studies, design, implementation and supervision of new systems; modernizing and rehabilitating the existing irrigation systems in the highlands; developing and strengthening the skills of agricultural producers and markets; and formalizing water rights and achieving efficient and accountable use of water.
The project’s total cost is $48.28 million, with Peru’s government contributing $24 million. The maturity of the World Bank loan is 18 years, with a grace period of 17.5 years and a fixed interest rate of 0.25 percent.
Peru’s Agriculture Ministry’s Subsector Irrigation Program (PSI) will coordinate and implement the project with the assistance of the World Bank.
“During the past ten years, the Bank has been effectively engaged in irrigation projects in Peru, specifically along the coast, with the successful water use for agriculture program,” said Felipe Jaramillo, World Bank Director for Bolivia, Chile, Ecuador, Peru and Venezuela. “With the experience gained, the World Bank can play a relevant role in helping the Government of Peru deliver on its pledge to promote sustainable rural development.”
