Announcement of Fifty-Six Million Dollars Loan for Irrigation Rehabilitation Project in Peru on November 29, 1979

. . FQR. IMMEDIATE . .., RELEASE .w\/orld Bank 1818 H Street, N.W., Washington, O.C. 20433, U.S.A.• Telephone: (202) 477·1234 BANK NEWS RELEASE NO. 80/24 November 29, 1979 $56 MlLLlON LOAN FOR lRRIGATlON REHABlllTATION'PROJECT IN'PERU A World Bank loan of $56 million will help finance an irrigation rehabilitation project in the lower Piura Valley, in northern Peru. The project is expected to.improve agricultural production and productivity and raise the incomes of about 11,800 farm families, mainly small farmers and cooperative members. The Lower Piura Irrigation Rehabilitation Project is the second phase of a plan to improve water availability and rehab11itate the irrigation systems of the Chira and Piura Valleys. Total cost of the project is estimated at $178.8 mi 11 ion. The project consists of the construction of a diversion dam and flood protection dikes on the Piura River; a main irrigation canal; rehabilitation of • existing irrigation facilities; improvement of about 1,400 kilometers of drainage networks; and reclamation of saline soils. Also included are a provision for technical assistance and equipment, and assistance for farm development, including credit. As a result of the project, the area under cultivation is expected to increase from 27,470 hectares ~a) to 34,720 ha, and cropping intensities from 106% to 135%. Projected yields--cotton, grains, and legumes, among them--are expected to rise between 50% to 120%. T~e incomes of the 11,800 project area families will be substantially increased through improved production and the creation of about 3,800 man-years of employment at full development of the project. The project will also contribute significantly to the consolidation of the agrarian reform process by improving the organization of production cooperatives involving some 2,800 farmers and by providing access to agricultural services and incorporating some 8,900 smallholders in the economy. The first phase of the p 1an, prepared by consu 1tan ts pa rt i a 11 y f i nanc;_~9 by the World Bank, was completed in 1978. It included the construction of the Poechos dam, the Chira-Piura diversion canal, and the main and secondary drainage networks of the lower Piura Valley. The $56 million loan to the Republic of Peru has a term of 17 years, including four years of grace, with 7.95% interest per year . • NOTE: Money figures are expressed in U.S. dollar equivalents. FORM NO. 1121 (5-76) T EC HN I CAL DA T A PROJECT: COUNTRY: TOTAL COST: Lower Piura lrr.igation Rehabilftation P.eru $178. 8 mil 1 ion • BANK FINANCING: $56 million for a term of 17 years, includi~g four years or grace, at 7~95% per annum. OTHER FINANCING: Government of Peru, $74.5 million; ENERGOPROJEKT, Yugoslavia, $46.4; and beneficiaries, $1.9 million. IMPLEMENTING ORGANIZATION: Ministerio de Agricultura y Alimentaci6n (MAA) Direcci6n Proyecto Especial Chira-Piura Republica de Chile, 350 Lima, Peru PROJECT DESCRIPTION: It consists of: .(a) irrigatiun works, including (i) construction of a diversion dam on the Piura River; (ii) construction and lining of a main irrigation canal 40 km long; (iii) rehabilitation and lining of about 190 km of secondary and tertiary canals and rehabilitation of • about 1,170 km of lateral and sublateral canals; and (iv) construction of 2,900 m 2 of administrative buildings for the irrigation district; (b) drainage works, including construction of 15 km of main drains, 415 km of collector drains, and about 1,000 km cf field drains; (c) flood protection works, including improvement of existing protec- tion dikes, construction of 54 km of new dikes along both banks of the Piura River, and realignment of some stretches of the river; (d) development credit for land leveling, soil leaching and improvement, irrigation ditches and other on-farm investments; (e) maintenance and office equipment, vehicles for the land reclamation and extension services, and soils and water analysis laboratory; and (f) technical and consultant services. PROCUREMENT: Contracts for construction of secondary and tertiary lined canals and main complementary drains will be Jet through international competitive bidding (ICB) in accordance with Bank guidelines. Maintenance equipment will also be procured under ICB. For bid evaluation, a 15% margin of prefer- ···--·ence ·over the c.Lf. price or the prevailing custom duties, whichever is lower will be allowed for equipment produced in Peru. Contracts for construction of unlined'canals and bui1di'_ngs will be let in accordance with local competitive bidding procedures under Bank guidelines. CONSULTANTS:. The project will include 75 man-mor.ths of individual consultants to assist the executing agency in the imple- mentation of the various project components. It will also require consulting services • for basic and feasibility studies for a third irrigation rehabilitation project • ECONOMIC RATE OF RETURN: 15% ESTIMATED COMPLETION DATE: 1986 - 0 -