Peru: World Bank Approves $50 Million for Transport

Contacts:

In Lima: Sandra Arzubiaga (511) 615-0660

Sarzubiaga@worldbank.org

In Washington: Alejandra Viveros (202) 473-4306

Aviveros@worldbank.org   

WASHINGTON, July 12, 2005 – The World Bank’s Board of Directors today approved a $50 million loan for Peru to improve regional transport infrastructure and strengthen its management in the context of the country’s decentralization process.

The Regional Transport Decentralization Project seeks to better align transport investments to local needs, and improve the efficiency and effectiveness of regional transport interventions by enhancing the capacity of the decentralized entities at the regional level --contributing to regional development and poverty reduction in Peru.

“A good transport system is key to economic growth and poverty reduction,” said Marcelo Giugale, World Bank Director for Bolivia, Ecuador, Peru and Venezuela. “As part of the decentralization process in Peru, this loan will help regional governments improve the road network under their jurisdiction, contributing to the competitiveness of the regions and their development.”

The project will support the following activities:

·         Preparation of participatory regional road plans to elaborate a diagnosis of the sector in a particular region and design the investments according to its specific needs and interests in line with the broader regional development plan.

·         Upgrading through rehabilitation and periodic maintenance of some 5,000 km of regional roads –contributing to skilled and unskilled employment generation.

·         Routine maintenance of these regional roads after their upgrading.

·         Institutional capacity building, so that regional governments have better capacity to manage transport projects and promote a greater participation of the private sector.

“Peru has been very active in improving the condition of both rural roads and national highways, but so far the regional roads had often remained the deteriorated links,” said Aurelio Menendez, World Bank co-task manager of the project. “By improving the transport connections within the regions and appropriately maintaining them in good condition, the regional governments will now have the opportunity to enhance the potential of the regional economies,” added Nicolas Peltier-Thiberge, also co-task manager of the operation.

The $50 million, fixed-spread loan is reimbursable in 14 years and includes eight years of grace.