World Bank lends $75m to Peruvian Govt. for sustainable environmental growth

Microfinance Focus, Aug 7, 2010: The World Bank has approved a US$75 million loan for supporting the Peruvian government’s policies for sustainable environmental growth and strengthening institutional environmental capacities in key sectors such as mining, fishing and urban transportation, as well as improving the public sector’s capacities and participation.

The series of three budget support operations contributes to: strengthening the Ministry of the Environment’s capacities; the adoption of measures to manage the environmental legacy of mining; supporting the streamlining of the fishing industry; and supporting the use of cleaner fuels and the control of vehicle emissions, improving air quality and its health effects.

“This loan directly benefits the poorest and more vulnerable population sectors, which are the ones most affected by the bad air quality in cities and by mining liabilities,” said Carlos Felipe Jaramillo, Regional Director for Bolivia, Chile, Ecuador, Peru and Venezuela.

The loan will support controlling and monitoring compliance with the environmental regulations implemented by the Ministry of the Environment’s Office of Environmental Evaluation and Oversight (OEFA).

Public policies will be formulated with the help of this loan to improve the capacity to remedy mining legacies or environmental liabilities (the harmful impact derived from past mining and smelting operations), through the creation of technical directives and indicators.

It will support Government actions to improve fuel quality through reduced usage of sulfur in diesel. This operation will support government investment plans to modernize Petroperu’s refinery in Talara.

The enforcement of an effective vehicle inspection and maintenance system in Lima and three additional cities, with concrete measures to reduce corruption and the execution of a fishing quota system to prevent the overexploitation of anchovies, as well as the retrofitting of fishers that change their production methods are some of the measures that will be taken.

The US$ 75 million loan financed by the World Bank has an 18-year maturity period and includes a 17.5-year grace period.

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