WASHINGTON, D.C., February 20, 2001—In a project aimed at supporting the growth of environmentally and socially responsible tourism in Peru, the International Finance Corporation will invest up to US$8 million in Inka Terra Peru S.A.C, a pioneer eco-tourism company in the country.  This initiative demonstrates that environmental and financial sustainability can be combined.

IFC’s support will allow Inka Terra to expand its lodging network to Cuzco and Lake Titicaca in the Andes, while strengthening its current operations, which provide quality eco-tourism and cultural heritage experiences in the Machu Picchu area and in the Peruvian Amazon.  With this investment, the Peruvian group will be able to expand its two existing hotels, refurbish two historic sites, and build two new lodging facilities.  The development of high quality hotel accommodation in these areas will also encourage more tourist visits as well as other economic benefits, including job creation.

Inka Terra, which has been operating in the Amazon rain forest for more than 25 years, has established an admirable track record of balancing sustainable tourism with nature conservation, initially with the Cuzco Amazonico Pueblo Hotel, and more recently with the Machu Picchu Pueblo Hotel.  The group works closely with local communities, providing jobs and creating an inter-dependence between socio-economic well being and conservation of the natural environment.  With the approval of the Peruvian Government, Inka Terra has taken on responsibility for the oversight and protection of 10,000 hectares of rain forest adjacent to its property in the Amazon region.  The group has also established high standards in the development and operation of its properties in the Machu Picchu area in order to minimize any adverse impact on this World Heritage location.

Inka Terra’s lodging facilities are recognized internationally as locations for scientific research, and the group is in the process of offering ecological study programs that provide academic credit for universities in Peru and in the United States.

Mr. Karl Voltaire, Director of IFC’s Latin America and Caribbean Department, said that the Inka Terra group has demonstrated, over a number of years, an ability to balance the provision of high quality tourism services with an exceptional level of ecological and social consciousness.  Such a balance, he added, is critical for Peru to be able to benefit fully from its rich natural and cultural heritage.

The tourism industry in Peru currently accounts for 4.4 percent of GDP and provides an estimated 650,000 jobs.  Revenue from foreign tourism in Peru has risen significantly in recent years, reaching almost $1 billion in 1999 and accounting for over 12 percent of Peru’s export revenue.

The mission of IFC, part of the World Bank Group, is to promote sustainable private sector investment in developing countries as a way to reduce poverty and improve people’s lives.  IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses.