Peru - Sierra Natural Resources Management and Poverty Alleviation Project

Document of THE WORLD BANK FOR OFFICIAL USE ONLY Report No. P-6952-PE MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK OF RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN IN THE AMOUNT OF US$51 MILLION TO THE REPUBLIC OF PERU FOR THE SIERRA NATURAL RESOURCES MANAGEMENT AND POVERTY ALLEVIATION PROJECT December 12, 1996 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its content may not otherwise be disclosed without World Bank Authorization. CURRENCY EQUIVALENTS CURRENCY UNIT Soles US$1.0 = 2.35 Soles FISCAL YEAR OF THE BORROWER January 1 - December 31 WEIGHTS AND MEASURES The metric system is used throughout the report LIST OF ABBREVIATIONS AND ACRONYMS FAO/CP - Food and Agriculture Organization/Cooperative Program FONCODES - National Fund for Social Compensation and Development (Fondo Nacional de Compensaci6n y Desarrollo) PRONAMACHCS - National Project for the Management of Watershed Basins and Soil Conservation (Proyecto Nacionalpara elManejo de las Cuencas Hidrograficas y la Conservaci6n de Suelos) Acting Vice President: Mr. Gobind Nankani Director Mr. Paul Isenman Acting Division Chief Mr. Jonathan Parker Task Manager Mr. Pierre Werbrouck FOR OFFICIAL USE ONLY REPUBLIC OF PERU SIERRA NATURAL RESOURCES MANAGEMENT AND POVERTY ALLEVIATION PROJECT LOAN AND PROJECT SUMMARY Borrower: The Republic of Peru. Implementing Agency: PRONAMACHCS (National Watershed Management and Soil Conservation Project under the Ministry of Agriculture). Beneficiaries: PRONAMACHCS and Rural Communities in the Sierra. Poverty: Program of Targeted Interventions. Amount: US$51 million. Terms: LIBOR-based floating rate single currency loan in US dollars, payable in 17 years, including a four year grace period, at the standard variable interest rate. The loan will be amortized in annuity payments of principal. Commitment Fee: 0.75 percent on undisbursed loan balances, beginning 60 days after signing, less any waiver. Financing Plan: See Schedule A. Environmental Classification: B. Financial Rate of Return: 8 percent. Economic Rate of Return: 12 percent. Staff Appraisal Report: 15719-PE Map: IBRD 26572R. Project Identification Number: PE-PA-42442. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed iLhout World Bank authorization.  MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE IBRD TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE GOVERNMENT OF PERU FOR THE SIERRA - NATURAL RESOURCES MANAGEMENT AND POVERTY ALLEVIATION PROJECT 1. I submit for your approval the following memorandum and recommendation on a proposed loan to the Government of Peru for US$51 million equivalent to help finance a Sierra - Natural Resources Management and Poverty Alleviation Project. The terms of this proposal are a LIBOR-based floating rate single currency loan in US dollars, payable in 17 years, including a four year grace period, at the standard variable interest rate. The loan will be amortized in annuity payments of principal. 2. Country and Sector Background. Since 1991, the Government of Peru has carried out far-reaching economy-wide reforms, oriented towards macroeconomic stability, trade liberalization, privatization and deregulation. The main thrust of the Government's strategy towards agriculture has been to: (i) eliminate major distortions in agricultural markets by liberalizing trade and prices; (ii) improve land tenure security; (iii) virtually eliminate direct subsidies and interventions in input markets; and (iv) help the disadvantaged amongst the rural population by controlling violence and implementing poverty targeted programs. As a result, agricultural growth is recovering and security in rural areas has greatly improved. Nevertheless, poverty remains widespread, private sector investment in agriculture remains low, and agricultural technology is below overall Latin American standards. The Government is accelerating the implementation of land and water rights legislation, focusing increasingly on poverty alleviation programs targeted towards the poorest regions, and continuing to redefine the role of the State so as to promote enhanced private sector development. 3. Good natural resources management is a pre-requisite for land productivity increases and poverty alleviation in the Sierra. Loss of erosion-prone fertile top soils can only be prevented by investments in agroforestry, terrace structures, erosion barriers and appropriate agronomic practices. Adequate water management also increases the efficiency of irrigation, crop yields and improves sanitary conditions. In addition, good natural resources management in the Sierra decreases sediment build-up in the coastal irrigation schemes. The recent civil war has disrupted the maintenance of existing soil conservation and water management structures which need urgent rehabilitation. The project builds upon the Government's past experience of supporting soil conservation in the Sierra but would involve the beneficiaries in the design and implementation of the investments and strengthen their organizations. 4. Project Objectives. The general project objective is to help alleviate the poverty of the rural Sierra people by promoting a productive and sustainable use of their natural resources in a participatory manner. Specific project objectives are to assist about 75,000 poor families in 125 micro-catchments of the Sierra to: (i) manage their natural resources sustainably through soil conservation and reforestation; (ii) increase rural -2- productivity through irrigation and improved agricultural practices; and (iii) strengthen their rural organizations so that they can become autonomous and sustainable entities. 5. Project Description. The target population would be 1,250 of the poorest communities in seven administrative departments of the Sierra, living within micro-catchments with potential for production improvement through soil conservation and rural productive infrastructure. The project would finance: (i) demand-driven productive rural investments in the Sierra (US$77.4 million) on a grant basis matched by community labor; (ii) the participatory process by which rural investments are identified and formulated (US$0.5 million); (iii) institutional strengthening of rural communities (US$3.6 million); and (iv) goods, consulting services and training for PRONAMACHCS assisting the communities to carry out the above (US$11.7 million). The project would be implemented over a period of six years. 6. The geographical unit for project activities is the micro-catchment, with an average size of 10,000 ha. The micro-catchment allows for an integrated natural resources management. The Ministry of Agriculture would study the micro-catchments' productive potential. In micro-catchments with productive potential, the community would identify rural investments through participative planning. Later on, participative planning would also take place for the whole micro-catchment. Participative planning would involve communities, municipalities and other representative organizations. The type of rural investments financed in a particular micro-catchment would be based on technical, economic and environmental criteria. Investments would include: (i) soil conservation activities (construction of terraces, water infiltration furrows, live barriers); (ii) small-scale irrigation; (iii) reforestation and agroforestry; (iv) improvement of soil conserving agronomic practices; and (v) construction of community seed warehouses. 7. The rural community strengthening component would finance community training in participatory planning and management of community investment accounts and agricultural input stocks. It would also finance a program to support small-scale economic activities of women to increase their revenues. Women play an important role in the economy of the Sierra, as many men have to leave the area in the off-season to look for work in the cities. PRONAMACHCS would help communities prepare and implement the rural investments, and finance the investment costs (contractors, materials, inputs) as a grant to communities. The communities would implement the rural investments with their own labor, which would not be financed. The grant element is justified because of the project's poverty alleviation objective and positive environmental externalities, and would be a least-cost solution to financing such rural investments. 8. Project Financing. The overall project cost is estimated at US$93.2 million in a period of six years. The project would be financed by a Bank loan of US$51 million (55 percent), US$14.3 million (15 percent) by Government, and US$27.9 million (30 percent) by project beneficiaries (in the form of labor). 9. Project Implementation. PRONAMACHCS, the agency within the Ministry of Agriculture which has been for 15 years in charge of natural resources -3- management activities, would implement the project. As much as possible, PRONAMACHCS would involve NGOs and the private sector. PRONAMACHCS and FONCODES have signed a cooperation agreement to complement each other's activities and apply a consistent approach. An internal management information system and monitoring and evaluation unit would be established under the project. 10. Project Sustainability. The sustainability of the rural investments financed under the project would be guaranteed by community involvement in investment design and implementation and the (average) 30 percent contribution in unpaid community labor. This would provide community ownership and ensure that investments are properly maintained and operated as part of the agricultural work calendar. Moreover, the project would train the communities to manage their investment accounts and community stocks of inputs and tools. Overall, the project would support the strengthening of an existing successful institution (PRONAMACHCS). Additionally, extension services would enhance community capacity to manage natural resources on an ongoing basis. 11. Lessons from Experience. Natural resource management experience in Peru shows the importance of: (i) improved agronomic practices to enhance profitability of soil conservation; (ii) beneficiary participation in sub-project design and implementation; and (iii) the negative effect of salary payments to community labor creating disincentives for project maintenance. The FONCODES experience in demand-driven projects shows the importance of: (i) transparent and well-defined sub-project eligibility and evaluation criteria to speed up implementation; (ii) targeting mechanisms to reach the poor; (iii) promotional activities to stimulate a demand-driven approach among the poorer communities; and (iv) the degree of community participation, including women and indigenous groups, and decentralized project implementation. These lessons have been incorporated into the project design by expanding PRONAMACHCS' participative decision-making approach, using a detailed poverty map, introducing a project operational manual and strengthening the decentralized local offices and the extension services of PRONAMACHCS. 12. Rationale for Bank Involvement. The Bank's Country Assistance Strategy for Peru discussed by the Board on November 22, 1994, states that poverty reduction is the central objective of the Bank's involvement in this country. This would be achieved through both private sector-led and environmentally sustainable growth and investments in public goods and services directly benefiting the poor. The proposed project is fully consistent with this country's assistance strategy. It would finance investments in small-scale infrastructure and promote sustainable natural resource management practices in the poorest areas of the country. Direct community implementation is also consistent with the objective of reducing the role of the State in productive activities. Finally, technical assistance and support would enhance institution building capacity. 13. Agreed Actions. During negotiations it has been agreed that the project would be carried out in accordance with the implementation plan including a detailed first year implementation plan, annual revisions of the plan to be submitted to the Bank for -4- review. PRONAMACHCS would recruit one specialist in promotion and organization of rural communities per department and would install a monitoring and evaluation unit. PRONAMACHCS would involve more women into its activities and carry out two hundred fifty specific project activities aimed at decreasing the workload of women, increasing their revenue and improving soil conservation. The Government would carry out a legal assessment of indigenous people's rights. Auditors would audit financial and procurement compliance. Before project effectiveness, PRONAMACHCS would prepare a project operational manual containing, among others, procurement procedures and bidding documents; eligibility criteria and beneficiary contributions of rural investments; monitoring indicators; terms of reference for consultants and auditors; and an environmental checklist all acceptable to the Bank. 14. Environmental Aspects. The project would generally have long-term beneficial environmental effects on water and soils at the micro-catchment level, including soil and water conservation, reduced sedimentation in streams and improvements in water quality. The project would also reduce sedimentation to the coastal river basins, thereby reducing effects of fertilizers, pesticides, and herbicides in downstream areas. Integration of environmental considerations into construction and operation of small irrigation projects and other off-farm activities would mitigate localized negative environmental impact. The environmental category is B. 15. Project Benefits. The project would target areas in which the rural poor can be well defined in terms of geography (above 2,000 m. sea level) and language. About 75,000 families in 125 micro-catchments in seven administrative departments would benefit from the project. Expected benefits of the project would be: (a) increasing the coverage, effectiveness and sustainability of small-scale rural investments in the Sierra; (b) increasing on- and off-farm incomes; and (c) reducing the resource degradation in risk- prone areas, through use of appropriate technologies to intensify land use in sustainable ways. The measured economic internal rate of return is estimated at 12 percent. 16. Participatory Approach. During preparation a beneficiary assessment was carried out in 144 communities. The project would apply a systematic participatory approach involving communities directly in sub-project design and implementation. For design, the community identifies its own promoter working with PRONAMACHCS' technical agents in preparing sub-projects. Many of these agents come from the same beneficiary communities and speak the local language. For implementation, the promoter supervises the sub-project, assisted by PRONAMACHCS. The community is responsible for either contributing their own labor to implement the project, or, if they contract a specialized firm to do the work, supervising the contractor. This participatory approach would be improved through continuous training by non-governmental organizations providing technical assistance to the communities. 17. Poverty Category. The project meets the criteria for a Program of Targeted Interventions. The main objective of the project is to increase rural household incomes and alleviate poverty through sustainable natural resources management, irrigation and forestry. The micro-catchments selected under the project are situated in -5- the very poor higher Sierra areas where possibilities for productive development without outside assistance are rather scarce. Project activities would target these poor communities which have sufficient natural resources to increase their income level through enhanced natural resources management. 18. Program Objective Category. The project falls under three categories: Poverty Alleviation, Environment, and Infrastructure Development. Its primary objective is to reduce poverty in the Sierra. The integrated natural resource management approach would result in environmental benefits in the project area and in the downstream coastal areas. The project would re-orient infrastructure development towards low-income populations. 19. Risks. The first risk is that communities insufficiently participate. This can be caused by PRONAMACHCS staff imposing on communities to carry out non-economic rural investments or by a lack of free labor in the communities. This risk would be mitigated by the requirement to establish participative planning agreements with the communities before disbursement of project proceeds, courses in participative planning and a ceiling to the total investment amount per family. This would reduce incentives to choose non-economic activities and take on more activities than the community can carry out. The monitoring system would provide data on sub-project implementation, including community labor participation. The second risk is that soil conservation works would not be followed by improved agronomic practices. This would reduce the economic return of the project. This risk would be mitigated by providing the communities with extension services and agricultural inputs on a grant basis for the first year. The community would also receive training in managing an input supply revolving system. The third risk would be a lack of counterpart funds. In the past shortages of funds have hampered PRONAMACHCS' investment activities but never its operation. The additional project-related expenditures would be included in the Government's annual budget. This is already the case for the 1997 project-related expenditures. The risk of shortages of counterpart funds would be further mitigated through an on-going dialogue between the Bank and the Ministry of Economy and Finance on the adequate provision of counterpart funds to Bank-financed projects. 20. Recommendation. I am satisfied that the proposed loan of US$51 million would comply with the Articles of Agreement of the Bank and recommend that the Executive Directors approve it. James D. Wolfensohn President by Caio Koch-Weser Attachments - Schedules A-F Washington D.C. December 12, 1996 -6- Schedule A PERU SIERRA - NATURAL RESOURCES MANAGEMENT AND POVERTY ALLEVIATION PROJECT Project Cost Summary (in US$ million) Foreign Total Base Project Components Local Foreign Total Exchange Costs Demand Identification 0.2 0.2 0.4 44 - Rural Investments 52.6 14.6 67.2 22 83 Community Strengthening 2.7 0.4 3.1 14 4 Project Implementation 7.6 2.7 10.3 26 13 Total Baseline Costs 63.1 17.9 81.0 22 100 Physical Contingencies 3.1 0.9 4.0 22 5 Price Contingencies 6.8 1.4 8.2 17 10 Total Project Costs' 73.0 20.2 93.2 22 115 Including duties and taxes of US$7.2 million. Financing Plan (in US$ million) Expenditure Accounts Bank Government Farmers Total Rural investments Goods and works 34.8 4.0 - 38.8 Agricultural inputs 8.4 2.3 - 10.7 Subtotal 43.2 6.3 - 49.5 Goods and Equipment 1.3 0.3 - 1.6 Training and technical assistance 4.7 0.5 - 5.2 Unskilled labor - - 27.9 27.9 Incremental salaries (PRONAMACHCS) - 5.3 5.3 Incremental Operating Costs 1.8 1.9 - 3.7 TOTAL 51.0 14.3 27.9 93.2 -7- Schedule B Page 1 of 2 PERU SIERRA - NATURAL RESOURCES MANAGEMENT AND POVERTY ALLEVIATION PROJECT Key Performance Indicators for Project Monitoring ACTIVITY INDICATORS Years 1996 1997 1998 1999 2000 2001 How Frequency Participatory Identification of Rural Investments Micro-catchment studies completed number 80 50 Progress Bi-annually Participatory diagnostics completed number 300 700 500 Reports Rural Investments al Soil ConservaUon Acifiles Conservation Committees Established number 20 60 45 Progress BI-annually Absorption terraces constructed ha 620 910 910 1100 1100 Reports Slow formation terraces constructed ha 2438 3520 3520 4600 4500 Infiltration furrows constructed km 3514 5360 5350 6890 680 Labor days contributed (000 person-days) number 985 1650 1850 2195 2195 Total expenditures (000 US$) amount 3007 7513 7976 9341 10917 Itgation Works committees established number 20 60 45 Engineering studies approved number 40 80 40 Irrigation channels constructed km 162 212 238 200 120 Water reservoirs constructed m3 100 131 147 122 73 Other works performed unit 15 18 20 17 12 Labor days contributed (000 person-days) number 122 160 180 150 90 Total expenditures (000 US$) amount 4184 5159 6352 4163 3100 Foresty Nurseries number 360 230 230 230 Progress BI-annually Plantings done ha 3100 5400 7200 9600 9600 Reports Plantings maintained ha 900 1000 1100 1100 1100 Labor days contributed (000 person-days) number 165 228 292 383 353 Total expenditures (000 US$) amount 3055 4850 6465 8600 8700 Warehouses consbucted number 50 80 100 100 100 Labor days contributed (000 person-days) number 37 60 75 75 75 Institutional Strengthening of Communities Training programs Participatory planning number 80 60 90 Progress Bi-annually Micro-catchment resource management number 20 20 23 Reports Financial management number 110 180 140 70 Total expenditures (000 US$) amount 117 197 404 508 502 Women's Enterpreneural InIlaives number 100 250 250 250 250 Administration, Monitoring and Evaluation Vehicles procured number 15 5 Progress Bi-annually Motorcycles procured number 100 100 Reports Additional staff recruited number 53 50 Training Programs Courses for professionals events 5 Courses for extension agents events 4 3 2 Workshops events 9 10 10 10 10 Exchanges events 15 20 20 20 20 Study trips number 14 14 14 14 14 a/ Indicators are estimates only Schedule B Page 2 of 2 PERU SIERRA - NATURAL RESOURCES MANAGEMENT AND POVERTY ALLEVIATION PROJECT Key Performance Indicators for Project Evaluation RESULT INDICATORS 1997 1998 1999 2000 2001 How Frequency Participatory Identification of Rural Investments Natural Resources Management Plans number 80 50 Progress Bi-annually Agreements between PRONAMACHCS and Communities number 500 750 Reports Rural Investments Baseline Initial Study Incremental production In 10 representative micro-catchments % 5 10 15 20 25 study Mid-Term Study value Evaluations Average yields of the principal crops (potatoes, maiz, others) kg/ha Ex-post Evaluation Areas rehabilitated under crops % 50 60 70 80 80 Crop areas with agro-forestry protection % 5 10 15 20 25 Percentage of farmers using Improved seeds % 5 10 15 20 25 Beneficiary families (000) number 24 30 37 37 37 Progress BI-annually Women participating % 5 10 15 20 20 reports Institutional Strengthening of Communities Operation of micro-catchment management committees number 10 25 40 50 Progress BI-annually Community enterprise promoters number 100 150 200 400 600 & special Productive Inititatives for women number 100 250 250 250 250 reports Women having undergone training number Revolving stocks with recuperation rate of >70% number 200 400 600 800 1000 Administration, Monitoring and Evaluation Information Management System working scale 1 3 5 5 5 Staff Annually Implementation of training scale 3 4 5 5 5 Surveys Improvement in professional capacitly of staff scale 3 4 5 5 5 Change In staff attitudes towards community participation scale 2 2 3 4 5 Female extension agents % 3 7 12 16 20 Reports BI-annually IMPACT INDICATORS ei Baseline Initial Study Improvement in the diet of the beneficiary families scale study Mid-Term Study increase in number of agricultural products marketed % Evaluations Quantity, quality and type of livestock Ex-post Evaluation Composition of the supplies In the local stores scale Change In the cropping patterns scale Families with more than one harvest season per year % Participation of women in management committees % Ecological patrimonium protected ha Sustainability of the Investments scale Sustainability of the community organizations scale Sustainability of the women enterprise initiatives scale Increase of houses with roofs in eterit of metal % Increase of family storage rooms detached from house % a/ Values and ranges to be determined after baseline study -9- Schedule C Page 1 of 2 PERU SIERRA - NATURAL RESOURCES MANAGEMENT AND POVERTY ALLEVIATION PROJECT Procurement Arrangements (US$ million) ICB NCB Other NBF Total Rural Community Investments Works 8.6(a) 8.6 (7.7) (7.7) Goods and Equipment 4.5 25.7(b) 30.2 (3.8) (23.3) (27.1) Agricultural Inputs 2.3 8.4 a 10.7 (1.9) (6.5) (8.4) Equipment and Goods (PRONAMACHCS) 1.2 0.4(b) 1.6 (1. 1) (0. 3) (1. 4) Consulting Services 1.5 1.5 (1.2) (1.2) Unskilled Labor 27.9 27.9 Training 3.7 3.7 (3.4) (3.4) Incremental Operating Costs Salaries 5.3 5.3 Other 3.7() 3.7 (1-8) (1-8) TOTAL 1.2 6.8 52.0 33.2 93.2 (1.1) (5.7) (44.2) (0.0) (51.0) Note: Figures in parenthesis are the respective amounts financed by the Bank Loan. ( Small civil works under lump sum fixed price contracts. ( Local Shopping; International Shopping for computers. Not subject to procurement. - 10- Schedule C Page 2 of 2 PERU SIERRA - NATURAL RESOURCES MANAGEMENT AND POVERTY ALLEVIATION PROJECT Allocation of Loan Proceeds (in US$ thousands) Category Expenditures Amount Allocated Bank Financed ('000 US$) % 1 Rural Investments 90% (a) Agricultural Inputs 9,000 (b) Goods and Works 32,000 2 Goods and Equipment 1,300 85% (PRONAMACHCS) 3 Consulting Services 1,300 100% 4 Training 3,000 50% 5 Incremental Operating 1,600 60% until December 31, 1999 and Costs 40% thereafter 6 Unallocated 2 Total 51,000 Estimated Disbursements (in US$ million) Bank Fiscal Year 1997 1998 1999 2000 2001 2002 2003 Annual 2.0 10.0 10.0 12.0 10.0 6.0 1.0 Cumulative 2.0 12.0 22.0 34.0 44.0 50.0 51.0 - 11 - Schedule D PERU SIERRA - NATURAL RESOURCES MANAGEMENT AND POVERTY ALLEVIATION PROJECT Timetable of Key Processing Events Time taken to prepare: 8 months. Prepared by: Government of Peru with FAO/CP assistance" First Bank Identification Mission: March 1995. Appraisal Mission: June 1996. Negotiations: October/November 1996. Expected date of Effectiveness: March 1997. List of relevant PPARs and PCRs: - Alto May Rural Development Project PCR Report No 10810 of June 1992 - Chanchamayo-Satipo Rural Development Project PCR Report NO 10809 of June 1992 - Agricultural Research and Extension Project PCR Report No. P5791 of May 1992 - Lower Piura Irrigation Rehabilitation Project PCR Report 8802 of June 1990 - Higher Agricultural Education Project PCR Report 8658 of May 1990 - Sixth Agricultural Credit Project PCR Report No. 8531 of April 1990. I/ This project has been prepared by Mr. P. Werbrouck (Sr. Agricultural Economist - LA3NR), Mr. I. Marzall (Agronomist - FAO/CP), Mrs. M.E. Castro (Social Scientist - LA3HR), Mr. M. Asad (Economist - LA3NR), Mrs. S. Raswant (Financial Analyst - Consultant) and Mr. J. Escurra (Consultant). The project has been appraised by Messrs. P. Werbrouck, I. Marzall and J. Escurra. Ms. G. Sakata and Ms. A. Domenech assisted with the production of the report. Mr. J. Parker is the Acting Division Chief and Mr. P. Isenman is the Department Director. MOP Schedule D Generated: Nuvanber 12, 1996 Status of Bank Group Operations in Peru IBRD Loans and IDA Credits in the Operations Portfolio Di fference OfiginIalI Amou]n t in US0! Millioniis Betweun actual Loan or Fiisca I and expuctLd Project ID Credit No. year Borrower purpose IBKI) IDA Caiicel Iations t1Idi hut sed isburs!ewetits a/ Number of Closed Loans/credits: 65 PE-PA-8047 L35950 1993 GOVERNMENT PRITZA. ADJ. 250.00 0.00 0.00 100.00 100.00 PE-PA-0058 L35400 1993 GOVERNMENT PRIVTZTN T.A. 30.00 0.00 .00 12.01 12.00 PE-PA-:059 1.36100 1993 GOP ENERGY/MINING T.A. I. U0 0.00 0.00 4.G9 1.59 PE-PA- 045 L37170 994 GOVERNMENT TKANSP.IUI 150.00 0.00 0.00 113.'10 44.78- PE-PA-8046 L37010 1994 GOVERNMENT BASIC IIL.TII/NUTRITION 34.00 0.00 0.00 26.13 9.03 PE-PA-8062 L36640 1994 GOVT OF PERU SOC DEV FUND 100.00 0.00 0.00 12.00 -4.25 Z PE-PA-8040 L38100 1995 REPUBLIC OF PERU F.LECTR.PRIVZH ADJ 150.00 0.00 0.00 50.00 50.00 I't PE-PA-8051 L38110 1995 SEDAPAL LIMA WAT.PRIVZN 150.00 0.00 0.00 140.19 66.59 PE-PA-8055 L30260 1995 GOVERNMENT PRIM.EDUC 146.40 0.00 0.00 142.40 56.20 PE-PA-37047 L39620 1996 REPUBLIC OF PERU RURAL RDS. RElHAD & M 90.00 0.00 0.00 81.54 12.44 0 PE-PA-40125 L40680 1997 GOVERNMENT OF PERU FONCODES II 150.00 0.00 0.00 150.00 0.00 PE-PA-8037 L40160 1991 GOVERNMENT OF PERU IRIG. REtAll B15.00 0.00 0.00 65.00 0.00 Total 1,341.20 0.00 0.00 917.81 Active Loans Closed Loans Total Total Disbursed (IBRD and IDA): 429.39 2,201.69 2,631.00 of which has been repaid: 0.00 1,004.59 1,084.59 Total now held by IBRD and IDA: 1,347.20 1,117.10 2,464.30 Anount sold . 0.00 18.31 10.31 Of which repaid : 0.00 18.31 18.31 Total Undisbursed : 917.01 0.00 913.11 a. Intended disbursements to date minus actual disbursements to date as projected at appiisal, b. Rating of 1-4; see OD 13.05. Annex D2. Preparation of Implementation Suanuary (Form 590) . Following the FY94 Annual Review of Portfolio performance (ARPP), a letter based system will be used (IS - highly Satisfactory, S = satisfactury, U - unsatisfactory, 110 - highly unsatisfactory) : see proposed Improvements in Project and Portfolio Performance Rating Methodology (SecM94-901), August 23, 1994. c. Following the FY94 ARPP, "Implementation Progress" will be reported here. - 13 - Schedule E PERU SIERRA - NATURAL RESOURCES MANAGEMENT AND POVERTY ALLEVIATION PROJECT Statement of IFC's Committed and Disbursed Portfolio As of October 31, 1996 (in millions US Dollars) Committed = a Disbursed 4 IFCF ------IFC FY Approval Company Loan Equity Quasi Partic Loan Equity Quasi Partic 1979/83/90/93 Buenaventura 0.00 1.81 0.00 0.00 0.00 1.81 0.00 0.00 1982/92/95 Sogewiese 12.50 1.43 0.00 20.00 12.50 1.43 0.00 20.00 1984 Minera Regina 2.33 0.00 0.00 0.00 2.33 0.00 0.00 0.00 1993 Quellaveco 0.00 5.30 6.22 0.00 0.00 .58 5.89 0.00 1993/94 Yanacocha 15.54 .33 0.00 11.57 15.54 .33 0.00 11.57 1994 Banco Credito 13.50 0.00 0.00 0.00 13.50 0.00 0.00 0.00 1994 Peru Prvtzn Fund 0.00 20.00 0.00 0.00 0.00 13.89 0.00 0.00 1994/96 AFP Horizonte 0.00 1.07 0.00 0.00 0.00 1.07 0.00 0.00 Total Portfolio: 43.87 29.94 6.22 31.57 43.87 19.11 5.89 31.57 Approvals Pending Comnitment Loan Equity Quasi Partic 1996 QUELLAVECO - RI 0.00 5.30 0.00 0.00 1995 YANACOCHA-RIGHTS 0.00 .12 0.00 0.00 Total Pending Commitment: 0.00 5.42 0.00 0.00 Schedule F PERU SIERRA - NATURAL RESOURCES MANAGEMENT AND POVERTY ALLEVIATION PROJECT Peru at a Glance Latin Lower- POVERTY and SOCIAL America middle- Peru a Carib. Income Deveiopment diamond" Populauiwn mid 1995 (mitons; 237 480 1 154 3NP per capita 1995 IUSS) 2320 3 300 1 D00 Life etosctancy 3NP 1995,bil-ons JSi 550 1 584 1 962 Average annual growth. 1990-95 Population 641 1 9 1 8 1 d Grip Gros Laor lorce (.) 30 24 16 per pnmar Most recent estimate I lalest year avallabUe snce 198Q91 capta enrolime Poverty headcount inex % of poputaton 32 Urban popularon (% of lotalpopuiaboriJ 72 7d 56 LifeaOPectancyaIrtli keafrsl 16 66 6' infant mortairr, per I 000 fire boirF. I d' di 3,16 Access To safe haler Chia malnutrition i% of children under 51 16 Access to sate water p of poputsWitoJ 6 61 78 lmderac [. of poplabor. age I5-1 1e Gross primary enrr.lment 1% of scnool-age pooularon 11 1101 104 _ oit".n.cic,nme grop Maie 10X Female 101 KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1976 1985 1994 1995 Economic ratios* GDP ibdiion USSj 164 168 501 r9 Gross domesic rr.esetenIDP 24 7 21 6 220 24 2 r*Denres5 of Economy Export of gooas ana nor-faclor serNices3DP 109 200 1 14 116 Gross domestic sa,ingsrXP 13 6 263 19 1 193 Gross riat.cnal sarings-3DP 12 3 1 7 169 170 Currant account balanceiGDP -97 0 3 .51 72 Interest paimentshGDP 20 1 9 09 0 8 a ngs inuesrme Total deblGDP 37 3 58 A 52 6 522 Total debt servicelexpors 490 280 182 Present value of aeuttGDP 40 0 Present value of debile xports 319 2 indeviCaness 1976-84 1985-95 1994 1995 1996-04 ra.erage annual growitl - Peru GDP 1 3 04 13'1 70( 55 Lwi ,d&-CMg0r GPP per cap.ta .16 11 113 5 3-- - Lower.m.ale-.rcomeroup Eports of gooas and nfs .1 3 19 175 70 8 7 STRUCTURE of the ECONOMY 1975 1985 1994 1995 0% of GOP) Growth rates of output and Investment (%) Agriculture 16.4 9.4 13.5 13.3 30 Industry 31.7 42.5 42.1 42.0 15 Manufacturing 20.0 24.3 224 21 9 Services 51.9 48.1 44.4 44.7 -99s Private consumption 74.1 624 73.6 72.4 .-o General govemment consumption 12.4 11.3 73 &3 GDI GDP Imports of goods and non-factor services 219 15.3 143 165 1975-84 1985-95 1994 1995 (average annual growth) Growth rates of exports and Imports (%) Agriculture (w/o fishing) 07 1 6 14 6 5 4 30 Industry 1.8 -0.7 16.1 6.8 Manufacturing -0.8 -03 15.7 4.5 s Services 1.1 1.0 10.0 7.7 o Private consumption -0.5 1.1 9.6 7.5 -15 91 92 93 94 95 General govemment consumption 1 4 -2.8 9.2 12.8 Gross domestic investment 1.6 2.9 30.0 19.5 -3 Imports of goods and non-factor services -0.6 5.8 26.6 26.0 - Exports Imports Gross national product 0.9 0.8 13.5 7.0 Note: 1995 data are preliminary estimates. The diamonds show four key indicators in the country (in bold) compared with its income-group average. If data are missing, the diamond will be incomplete. -15- Schedule F PERU SIERRA - NATURAL RESOURCES MANAGEMENT AND POVERTY ALLEVIATION PROJECT Peru at a Glance PRICES and GOVERNMENT FINANCE 1975 1985 1994 1996 Domestic prices Inflation (%) (% change) 10.so Consumer prices 236 163.4 237 11 1 Implicit GDP deflator 232 167.7 185 126 5 o Government finance (% of GDP) a0 Current revenue 150 158 16.6 90 91 92 93 94 95 Current budget balance . 03 18 1.7 - GDP def. 0 CPi Overall surplus/deficit -22 20 -1 3 TRADE 1975 1985 1994 1995 (millions US$) Export and Import levels (mIll. US$) Total exports (fob) . 2,978 4,574 5,576 sooo Fuel 645 165 241 Copper 476 824 2,000 s0oo Manufactures 714 1,191 1,291 Total imports (fob) 1,835 5,546 7,687 4.DOO Food 204 523 633 Fuel and energy - 325 594 2.ooo Capital goods 558 1,677 2,363 0 Export price index (1987=100) . 119 145 156 es 9o 91 92 93 94 99 Import pnce index (1987=100) 73 139 146 O Exports D Imports Terms oftrade (1987=100) 163 104 107 BALANCE of PAYMENTS 1975 1985 1994 1995 (millions US$) Current account balance to GDP ratio (%) Exports of goods and non-factor services 1,689 3,792 5,718 6,810 0 Imports of goods and non-factor services 3,038 2,790 7,169 9,702 9 91 92 93 94 99 Resource balance -1,349 1,002 -1,451 -2,892 -2 Netfactorincome -242 -1,044 -1,693 -1,823 Netcurrenttransfers 0 97 606 491 Current account balance, before official transfers -1,591 55 -2,539 -4,223 Financing items (net) 1,073 82 5,577 5,161 Changes in net reserves 517 -137 -3,038 -938 Memo: Reserves including gold (mill. US$) 566 2,481 6,933 7,854 Conversion rate (local/S$) 4 1 E-08 1 2E-05 22 2 3 EXTERNAL DEBT and RESOURCE FLOWS 1975 1985 1994 1995 (millions US$) Composition of total debt, 1995 (mill. US$) Total debt outstanding and disbursed 6,118 12,884 26,347 30,756 IBRD 138 723 1,554 1,729 A C IDA 0 0 0 0 1729 95 Total debt service 845 1,098 1,142 1,169 G lat9 IBRD 18 89 189 204 IDA 0 0 0 0 Composition of net resource flows Official grants 13 90 226 230 E Official creditors 326 178 162 314 10455 Private creditors 907 80 -90 -61 Foreign direct investment 316 1 2,326 600 F Portfolio equity 0 0 977 569 5975 World Bank program Commitments 0 110 334 386 A- IBRD E - Bilateml Disbursements 15 131 171 202 B - IDA D - Other multilaterl F - Pnvete Principal repayments 9 40 80 86 C - IMF G - Short-term Netflows 7 91 91 116 Interest payments 10 49 109 118 Net transfers -3 43 -18 -2 International Economics Department 8/20/96  IBRD 26572R ECUADOR COLOMBIA 2° 2° TUMBE IQUITOS0 Pi R 2 A ncora~ To T an Ayabaoca o Oraruzer - l''r p01 Sltano Chucanos Ionoo ,,IURA anaa rral Quemtdo - Bal rLo ooriv 6°- Tarpota- PAVED ROADS Loyeq OTHER ALL-WEATHER ROADS Pi-t. AJAMARCA J- RAILROADS RI olivaro Pacosoy J1hionro ~ 1'9~poo.... RAILFERRY Chicmo ¯Òtu aab4baAIRPORTS Tocoche - PORTS ooTRUXLo c l RIVERS DEPARTMENT BOUNDARIES - - INTERNATIONAL BOUNDARIES Caraz T, kQo McMa. 0 0 Co;HUARAZ IPS~ z Recuay HUANUCO GoyWärsqui~ B A I PA C F C CERRO DE B R A Z L P0AC l ' ' PASCO H-c :Ld erced 'tuac Saehpo~ -- Tarmao- o C E A N Chaocoy Yo0o' 12' CCollao 4 Cha HN Mouyos HoNca m PUERTO QuilabmbaMALDONAD1 HUANC ElCA Sn Vicente de CoP. Catovieyrr o 0AYACUCl4 Machupcchu à cot Chincho All CuZCO Poucoriob .PisoAdop>R OAAYT4 Sn M.rl IC A c Puquio Y-uri Huancone P ESn JEo A rI - Colorodo 0 50 100 150 200 250 Motare Cruz K OMETERSMOQUEGU4 KILOMETERS quepal Tarea The boundaries colors, denomm -tions and any oher informatio howl,n 0 this m.p d. nt imply, en the p.rt of The World B-nk Group 1 8° nyi udgmnt 0n the legal status of any territory, or ø ny endoremenl e R 1Mc. r cceptonce or sch boundone. oc del R 80° 78' 76' 74' 72° 70 CHILE MAY 1996   S AGI N G eprt N': P- i6952 PE Type: MC,E