JBIC Continues Financial Assistance for Poverty Alleviation in Peru - Signing of ODA Loan Agreement -
1. Japan Bank for International Cooperation (JBIC; Governor: Hiroshi Yasuda) signed today four loan agreements totaling up to 44.872 billion yen with the Republic of Peru, following its decision to extend ODA loans in fiscal 1999. These loans will be used for the Sierra - Natural Resources Management and Poverty Alleviation Project III, the Social Sector Development Project in Sierra Area II (FONCODES III), the Provincial Cities Water Supply and Sewerage System Improvement and Expansion Project (Iquitos, Cusco and Sicuani) and the Lima Marginal Areas Sanitary Improvement Project. The cumulative ODA loan approvals for Peru, including these loans, number thirty-one, for a total of 334.552 yen billion.
2. In Peru, almost half of the country's 24.33 million population live in poverty, with some 3.57 million people in dire poverty, in that they cannot meet the minimum nutritional requirements. The current government is placing top priority to reducing poverty and has earmarked more than 40 percent of the national budget for social spending. JBIC has supported that strategy/policy by providing loans aimed at poverty alleviation project, strengthening the production infrastructure of the rural poor, and a social and economic infrastructure project, whose aim is to improve the living conditions of the rural and urban poor. Since 1996, Peru is the only country in Central and Latin America that is earmarked to receive annual financial support from JBIC.
3. The present loans, prepared in fiscal 1999, are part of on-going financial assistance to Peru. Their overall objective is to support poverty reduction and improve the living conditions of the general population. Specifically, the four projects are designed to develop agricultural production infrastructure, build basic rural infrastructure, including roads, electric power facilities and schools, and improve water supply and sewerage systems in Lima and provincial cities. (See Appendix for details.)