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 more sustainable.

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.