March 30, 2012
Mr. Makoto Nakao, Chief Representative, JICA Peru Office and Mr. Luis Miguel Castilla Rubio, Minister of Economy and Finance shook hands after signing loan agreements.
1. Today, the Japan International Cooperation Agency (JICA) signed Japanese ODA loan agreements with the Government of the Republic of Peru in Lima, Capital of Peru, to provide loans of up to 3.21 billion yen for the Rural Amazonia Water Supply and Sanitation Project and up to 4.406 billion yen for the Sierra Small and Medium Irrigation Project .
2. The government of Peru, while maintaining macroeconomic policies which have achived high growth, positions "Social Inclusion" which places a focus on the poor in its development policy in order to resolve serious income disparities between urban and rural regions and between the Coastal region and the Amazon and the Sierra region (mountainous regions). The Government also sets forth a policy to give priority to support for the Amazon and the Sierra region.
3. The Japanese ODA loans provided by the agreements are described below.
(1) Rural Amazonia Water Supply and Sanitation Project
The project aims to improve coverage and quality of water supply and sanitation services by constructing, rehabilitating and expanding water supply and sanitation facilities, thereby contributing to the improvement of the health and life quality of the rural populations in the three departments, Loreto, Amazonas and San Martín, located in Amazonian region.
(2) Sierra Small and Medium Irrigation Project
The project aims to increase farming production by improving irrigation facilities and enhancing institutional capacity for water management, thereby contributing to the improvement of the standard of living of local residents in the nine departments, Piura, Amazonas, Cajamarca, La Libertad, Ancash, Huanuco, Junin, Huancavelica and Ayacucho, located in the Sierra region
4. JICA has positioned "poverty reduction and redressing disparities" as one of the priority issues of the ODA for Peru and has been contributing to the improvement of production activities and the livelihood of residents in the Sierra region with high poverty rate, through projects under Japanese ODA loans for poverty alleviation and environment conservation in the Sierra region (total amount of 18.524 billion yen) as well as a technical cooperation project for improving livelihood of small-scale farmers in Cajamarca.
As the international community aims to "reduce by half the proportion of people without access to safe drinking water and basic sanitation by 2015" in the Millennium Development Goals (MDG), access to water supply and sanitation facilities is one of the crucial issues to be addressed. JICA plans to continue its support to Peru in resolving these development issues that the country faces.
|Project title||Amount (million yen)||Annual interest rate (%)||Repayment (years)||Grace Period (years)||Procurement|
|Rural Amazonia Water Supply and Sanitation Project||3,210||1.7||0.01||25||7||General untied|
|Sierra Small and Medium Scale Irrigation Project||4,406||1.7||0.01||25||7||General untied|
Background and Necessity
The Amazonian region, covering around 58 percent of Peru's national land, belongs to a tropical climate with much rainfall and abundant water resources. In the rural areas of the region, the coverage rate of water supply and sanitation facilities is significantly low, which remains around 10 percent. Under such circumstances, the poor sanitary condition, caused by the use of unsanitary water and inadequate treatment of discharged water, has produced the local residents serious health concerns such as diarrhea, skin infections, malnutrition and parasites. Hence, securing access to water supply and sanitation facilities is an urgent and crucial task to improve living condition of the local residents
Objective and Summary
The current administration of Ollanta Humala, under the slogan of "Social Inclusion", has given the priority to the improvement and expansion of water supply and sewer services. In their policy statement conducted at the end of August 2011, the current administration aims to increase the following coverage rates in the rural area of Peru, by the end of 2016.
To achieve such goals, it is crucial to improve the water supply and sanitation condition in the rural areas of Amazonian region, where the coverage rates of these facilities remain around 10 percent. Through this project, it is expected that approximately 45,000 households are going to be newly connected to water supply facilities and approximately 39,000 households are going to newly connected to sewerage and sanitation facilities.
The loan will be utilized for constructing and rehabilitating water supply and sanitation facilities, community empowerment activities and consulting services.
Programa Nacional de Saneamiento Rural (National Program for Rural Sanitation)
Address: Paseo de la República No.3361, San Isidro, Lima, Peru
Planed Implementation Schedule
Background and Necessity
Peru has achieved annual economic growth on the order of nearly 8 percent on average for the past five years excluding 2009 after Global Financial Crisis. On the other hand, the poverty rate of the national average remains high at 31 percent. Especially, in the Sierra region in Peru, the poverty rate reaches as high as 49 percent, highly exceeding the national average. In the region, one of the important industries is agriculture and livestock where about 80 percent of the working population is engaged in. However, the agricultural productivity of this region remains at about 40 percent compared with that of the Coastal region because many farmers engage in rain-fed agriculture in steep-sided small farm land in dry climate. Improving income of rural areas of the mountainous regions is an urgent issue to resolve the poverty problem in Peru.
Under such circumstances, in order to resolve the poverty problem in the Sierra region, it is necessary to improve the utilization ratio of limited farmland and agricultural productivity by improving irrigation facilities in the mountainous regions, thereby contributing to the improvement of their living standard. In addition, inappropriate development of natural resources and the deforestation by farmer's land seeking cause soil erosion, and reduce agricultural productivity and water holding capacity, therefore, it is necessary to control water resources through watershed preservation activities
Objective and Summary
This project aims to improve the utilization efficiency of water resources and the increase of sustainable agricultural production by supporting the formation of irrigation associations which conduct management, maintenance and the control of irrigation facilities and technical instructions, and watershed preservation activities as well as the development of irrigation facilities in the Sierra region with the highest poverty rate in the country. It is expected to develop 17,000-hectare irrigation areas and benefit about 10,500 farm households through the implementation of this project.
The loan will be utilized for the construction and repairing of irrigation facilities, formation and the organization of irrigation associations, and watershed preservation activities as well as to consulting services in the nine departments located in the Sierra region.
Programa de Desarrollo Productivo Agrario Rural-AGRORURAL
Address: Av. Alameda del Corregidor, 155-A, La Molina, Lima, Peru
Phone/fax: +51-1- 631-3333
Planed Implementation Schedule