Contacts:
In Lima: Sandra Arzubiaga (511) 615-0660
sarzubiaga@worldbank.org
In Washington: Patricia da Camara (202) 473-4019
pdacamara@worldbank.org WASHINGTON, February 17, 2009 - The World Bank Board of Executive Directors today approved a US$330 loan million to Peru to strengthen the new Ministry of the Environment and improve environmental management in key sectors of the Peruvian economy, including mining, urban transport, fisheries and biodiversity conservation. “The World Bank has decided to support Peru resolutely in the implementation of environmental policies permitting sustainable development,” said Felipe Jaramillo, World Bank Director for Bolivia, Ecuador, Peru and Venezuela. “In the context of the global financial crisis, it is key to identify and adopt an increasing number of policies that could make progress in both the economy and environmental protection,” he added. Urban air pollution is one of the most severe problems in Peruvian cities. It is estimated to cause approximately 4,000 deaths per year, most of them among poor sectors and children under five years old. According to the ‘Environmental Analysis of Peru’, published by the World Bank, the cost of environmental damage amounts to 3.9 percent of the country’s GDP: about US$2.3 billion in losses caused by air and water pollution. The same report indicates that air pollution levels in Lima and Callao, in terms of particulate matter (PM10), exceed those of Mexico City, Sao Paulo and Santiago, all cities with a greater number of cars than Lima and less favorable geographic conditions. The diesel used in Peru is low quality, containing high levels of sulfur (5,000 parts per million), which contributes to the generation of particulate matter. Therefore, the need to introduce clean fuel, including diesel with no more than 50 parts per million of sulfur content, and optimize vehicular performance to help reduce particulate matter in urban areas. “The program aims at improving the quality of fuels, especially diesel, the most commonly used fuel in public transportation. According to the law, by January 1, 2010, the quality of fuels must improve substantially. This means updating vehicles in Lima, where there are currently many old and highly polluting cars, to improve air quality,” said Minister of the Environment Antonio Brack. The World Bank’s programmatic loan is the first in a series of three that will fund institutional reforms and policies in five key areas: Improved environmental management, including supporting the strengthening of the Ministry of the Environment Fuel and transport sector reform to improve air quality Biodiversity conservation (Peru is among the eight countries with the greatest diversity in the world) Sustainable environmental management in the mining sector Sustainable development of the fisheries sector
Regarding the mining sector, Renán Poveda, environmental expert and World Bank project manager, stated that “the program will conduct an inventory of the current negative impacts of former mining and smelting operations, which are called mining environmental liabilities. This study will help identify and prioritize these liabilities to set up strategies for improvement. There is much to be done in this area.” He also added that the program: “will promote citizen involvement in the entire mining cycle, including participatory environmental monitoring. This is an important innovation that could have major implications in reducing social conflict.” Finally, the program will support sustainable development and reduce the overcapacity of the fishing sector. It will additionally strengthen capacities to deal with potential social impacts associated with fleet reductions. Fishing resources in Peru are among the largest in the world but they are threatened by several factors, including overcapacity of the fishing fleet which had led to the overfishing of several marine species, including anchovies. The Peru Programmatic Loan for Environmental Development Policy Loan reflects a strong commitment at the highest level to face environmental challenges and it has the benefit of coordinating the actions of the Ministries of Economy and Finance, of Energy and Mines, of Production, of Transportation and Communications, and the Ministry of Health, through DIGESA, and the recently created Ministry of the Environment, among other agencies. The US$330 million loan includes a LIBOR rate plus a 0.75 percent fixed margin to be repaid in 21.5 years and a grace period of 13.5 years. For more information on this project, please visit this website.
http://web.worldbank.org/external/projects/main?pagePK=64283627&piPK=73230&theSitePK=40941&menuPK=228424&Projectid=P101471 For more information on the World Bank’s work in Peru, please visit:
http://www.worldbank.org/peru
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