WASHINGTON, D.C., January 22, 1999 — The
International Finance Corporation is investing up to US$8 million in a
project to support the development of sustainable agriculture in Peru.
IFC's investment includes a loan of up to $7 million and up to $1 million
in equity in Agroguayabito, S.A., a Peruvian producer/processor and exporter
of asparagus, tomatoes, and sugar cane. The project also received technical
assistance provided by IFC and Italian trust funds.
Total project costs, estimated at $36 million, will develop new farms on
desert land about 200 kilometers north of Lima. The project will
improve irrigation canals to allow for better water flow to the plantations
and install new processing/packing plants to create high-value products
such as tomato paste and packaged asparagus. It will also enable
Agroguayabito to purchase modern equipment, build important social housing
infrastructure, and employ technical expertise to make their operations
Peru is the largest producer and exporter of asparagus in the world, exporting
18,000 tons of fresh and 79,000 tons of processed asparagus last year,
equivalent to 80 percent of its total production. Peruvian production
of tomatoes, too, has been increasing since 1994.
The project will help Agroguayabito meet the steady demand in the international
market and develop export potential. As a result, as many as 650
permanent and 850 seasonal jobs will be created. The company is expected
to export an average of $18 million annually to the United States, Japan,
and the European Union.
This one-of-a-kind horticulture project is consistent with national priorities
in agribusiness and the country's development plans to reduce poverty,
said Tei Mante, Director of IFC's Agribusiness Department. It also
serves as a model for other companies and helps develop the country's horticulture
sector as a whole.
IFC will monitor ongoing compliance with World Bank Group environmental,
health, and safety policies and guidelines.IFC supports competitive local
industries and in particular, the development of small and medium enterprises
such as this project. IFC, part of the World Bank Group, fosters economic
growth in emerging markets by financing private sector investments, mobilizing
capital in the international financial markets, and providing technical
assistance and advice to governments and businesses.