Announcement of Twenty-Five Million Dollars for an Irrigation Rehabilitation Project in Peru on April 14, 1977

-World Bank 1818 H Street, N. W., Washington, D.C. 20433, U.S.A. • Telephone: (202) 393-6360 BANK NEWS RELEASE NO. 77 /86 Apr i l 14, 19 77 $25 MILLION FOR AN IRRIGATION REHABILITATION PROJECT IN PERU The World Bank will provide $25 million to help finance an irrigation project in Peru designed to rehabilitate once fertile lands in six valleys of its central and southern coast. The first Irrigation Rehabilitation Project supported by the World Bank in Peru wi 11 have ao estimated cost of $40.9 million. The Bank loan will cover $14.6 million of the foreign exchange costs and $10.4 million of local costs. The Netherlands' Government will provide the equivalent of $1 million of tech- nical assistance ($0.7 million for the remaining foreign exchange costs and $0.3 mi 11 ion for local costs) • • The project wi 11 be the first stage of the long-term rehabi 1 i tat ion program and will increase agricultJral production in the valleys of Mala, CaRete and Pisco, in the central zone, and of Camana, Majes and Tambo, in the southern part. This project is expected to increase earnings and improve living conditions for some 17,200 families, including 11,500 that presently have incomes of less than $200 per capita (the poverty income level for 1975). An incremental production of crops (mainly cotton, basic grains, fruit and vegetables) of about $13 .. 2 million annually and a net gain of $11.3 million --=:t·i.iually in the balance of payments is expected at f~ll development of the pro]ert. The project will consist of: reclamation of about 19,000 ha of s~lt7affected land; rehabi lltation and/or construction of main and secondary irrigation and drainage systems for about 33,000 ha; improvement of the operation and maintenance services in the whole area (about 68,300 ha); improvement of agricultural supporting services; and preparation of feasibility studies for similar projects in other valleys. The project will also provide support, and help consolidate, the process of agrarian reform in the area. The loan to the Republic of Peru will have a term of 17 years, including 3 1/2 years of grace, with interest at 8.5 percent per annum • • Note: Money figures are expressed in US dollar equivalents. FORM NO. 1121 • (5-76) T EC HN I CAL DAT A PROJECT: Irrigation Rehabilitation COUNTRY: Peru TOTAL COST: $40.9 BANK FI NANC I NG : $25 million for a term of 17 years, including 3 1/2 years of grace, and 8.5 percent interest per annum. OTHER FINANCING: Kingdom of the Netherlands: $1 million Peruvian Government: $14.9 IMPLEMENTING ORGANIZATION: Ministerio de Agricultura, Direcci~n General de Aguas, Washington 1894, Lima, Peru. PROJECT DESCRIPTION: The Irrigation Rehabilitation Project will be executed in six coastal valleys, including Mala, Canete and Pisco, in the central zone, and Camana, Majes and Tambo, in the southern part of the cpuntry. The project consists of: a) reclamation of about 19,000 ha of land, nCJt.J • seriously affected by salinity, in the six valleys; b) rehabilitation and/or construction of main and secondary irrigation and drainage systems for about 33,000 ha; c) improvement of the operation and maintenance services in the wh0le irrigated area (about 68,300 ha); d) improvement of agricultural supporting services; and e) preparation of feasibility studies for similar projects in other coastal valleys. ?ROCU.REMENT: Civil works and equipment will be procured under international competitive bidding, except for buildings for service cr··.lters, contracts for drainage pipe or tile or minor items of technical and offir.e equipment which cannot be grouped in packages of over $50,000 worth. local manufacturers will enjoy a margin of preference of 15% or custom duties, whichever is less. CONSULTANTS: Consultants to assist with investigations, design and construction of drainage systems will be pro- vided under a technical cooperation agreement with the Kingdom of the Netherlands. In addition about 7 man-years of consultant services to assist in operation and maintenance land reclamation, groundwater investigation and extension organization and training will be provided under the project. • ECONOMIC RATE OF RETURN: 18% ESTIMATED COMPLETl&N DATE: 1983. - 0 -