Announcement of World Bank Lends Seven Million Five Hundred Thousand Dollars to Peru to Determine Viability of Bayovar Phosphate Project on June 30, 1980

. ..... ' FOR IMMEDIATE RELEASE .World Bank 1818 H Street, N.W., Washington. D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE N0.80/136 June 30, 1980 WORLD BANK LENDS $7.5 MILLION TO PERU TO DETERMINE VIABILITY OF BAYOVAR PHOSPHATE PROJECT The World Bank has extended a $7.5 million loan to Peru to help finance an engineering and technical assistance project thryt could result in the establishment of a major new phosphate fertilizer industry. The project will determine the technical and economic vi0bil ity of developing the 600 million- ton Sechura Desert phosphate deposits in northern Peru. The Bay6var Phosphate Engineering and Technical Assistance Project has a total cost estimated at $9.5 million. It will help assure that the estimated $700-800 million Bay6var project, one of the most important that Peru ts currently planning to undertake in the next five years, is properly prepared and executed. • The Sechura phosphate deposits are located at Bay6var, on the northern Peruvian coast. With estimated reserves of about 600 mill ion tons of phosphate rock and potential resources of up to 10 billion tons (about 15% of the world's potential resources), the deposits could eventually make Peru an important world supplier of phosphate. The project includes studies to determine the level of phosphate reserves and optimum mining methods. It also includes studies to determine plant site location, water supply~ and other Infrastructure requirements. Preparation of a market analysis and marketing strategy for the export of phosphate rock, phosphoric acid and phosphate fertilizers Is also included in the project. The project will provide a study to determine whether uranium can be economically recovered from Bay6var phosphoric acid and to determine the technical requirements for a uranium recovery unit. Another study will be carried out to determine the precise level of existing potash reserves near Bay6var, currently estimated at 8.3 million tons of potassium chloride. If a feasibility report based on the studies confirms the viabll fty of the Bay6var project, the technical assistance loan will finance the preparatlon of basic engineering and contract documents, other pre-contracting activities, and a study of project organization. If developed, the Bay6var project is expected to stimulate regional growth, help satisfy the growing world demand for phosphate fertilizers, and make a substantial contribution to Peru's balance of payments • • The $7.5 million World Bank loan to the Republic of Peru is for a term of 10 years, including 2 years of grace, at 8.25% per annum. NOTE: All money figures are expressed tn U.S. dollar equivalents.