Anouncement of Thirty Million US Dollars Loan to Peru on September 9, 1970

\) • 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. 70/56 Subject: $30 million loan to Peru September 9, 1970 The World Bank has approved a loan equivalent to $30 million to Peru for a reconstruction project - to improve r(ia'd$ I/ '\\\ leadino _ _// tl\\ and within the Callejon de 11-0 1· h -~,:::;--//:)/ \\ Huaylas, a high Andean valley located in fhe cen~et~\ of the area most heavily ) \\ \;t affected by the recent eartJlquake disaster. The loan will be for a term of JO years, including a 10-year period of grace. I\ It will bear :interest at the Bank's current lending rate of 7\1. per annum., Up to $5 million of the loan will finance capitalized interest and co&nitment charges over a 5-year period • • The Callejon de Huaylas is a well-cultivated valley, producing fruita, barley, maize, wheat and vegetables. It offers possibilities of agricultural expansion to serve markets on the coast provided an efficient transport outlet is available.), Its pleasant climate, beautiful scenery and archaeological moiuments also attract many tourists. The three access routes into the valley were severely damaged by the earthquake. Even before the earthquake, development of,the economic potential of the valley was hampered by ~_he difficulties of transport and the Government,,Jiad , ','<,:::-::_- ,,, \' (,_/ included improvement of two of the access roads in its investment plan for.1971-?5. Improved roads leading to and within the area will help to revitalize the economy of,the valley and thereby improve living conditions of the half million people there who suffered severely from the earthquake. The project being._,s,isted by the Bank loan conaiate of the recQnstruction of , ~( • one or more of the access routes to the Callejon and of t~e road within t~e valley • The selection among the alternatives will be made on the buia of a feasibility \ /more  • Banlc. P~R. 70/S6 - Peru (j - 2 - atudy to be i.Ditiated aoon and to be followed by detailed engi~eering of the selected route er routes. !he project alao includes technical aHiatance to improve malnteaaace of Peru·1• highways •• a whole. A\though Peru hu invea\ted large MIOUDts ill cc,~~~uctlng a highway network, there is a aerious backlog of 0 . maintenance work. The Government is now allocating larger sums for road main- tenance and betterment and the technical assistance t~ovided for under this project should aaaist these efforts • ... The Government will employ conaµltants to und~rtake the feasibilJty study and detailed engineer!ng, to supervise construction and for the technical assist- ance program. Contracts for construction work will tie awarded on the basis of international competitive·:· bidding. Coamitment charges on the undisburaed amount • of the loan for. construction will commence a year after the loan is signed. The General Directorate for Land Transport will be re,sponsible for execution of the project. - 0 - f I' .,,