Lima, Peru, December 15, 2009—IFC,
a member of the World Bank Group, will provide $65 million to help Lima’s
Sedapal build a water treatment plant that will benefit over 2.4 million
low-income residents by improving reliability of their potable water supply.
This is IFC’s first subnational financing in Peru without a sovereign
IFC’s local currency loan to the Lima
water company will provide the required short-term financing for timely
implementation of a $360 million project that also includes building a
water intake on the Rímac
River and connecting the Huachipa treatment plant to the distribution network.
This will expand water supply to underserved communities, as in northern
areas of Lima where only 37 percent of users receive 24-hour service. Low-income
residents in those areas currently pay 10 to 20 times the average Sedapal
tariff for each cubic meter from informal resellers.
“IFC’s swift response shows its commitment
to supporting key projects that benefit Peru’s social and economic development,”
said the President of Sedapal, Guillermo León Suematsu. “This loan
will help us address short-term financing gaps in the Hauchipa project,
and complete a much-needed public utility service.”
The IFC loan to Sedapal is part of a
business line jointly developed by IFC and the World Bank that provides
financing without sovereign guarantees to well-run local governments and
public enterprises for essential infrastructure investments. IFC’s
financing at commercial terms complements long-term sovereign loans, from
the Japan International Cooperation Agency and the Corporación Andina de
Fomento, and internal cash generation.
Enrique Cañas, IFC Regional Manager
for Peru, Colombia, Ecuador, and Venezuela, noted: “IFC’s support
to Sedapal’s Huachipa project is consistent with our strategy to promote
access to basic products and services for people at the base of the economic
pyramid in Peru and the wider region. Through this subnational financing,
we are supporting Sedapal’s plan to diversify its funding sources through
IFC’s financing complements the World
Bank’s support to the Lima Rehabilitation and Management project for the
rehabilitation of the water networks in the northern and southern areas
of Lima, and the expansion of water and sewerage services in the southern
and center areas of the city.
IFC’s strategy in Peru aims to improve
the investment climate and support key players in Peru’s private sector
that can expand services and products to underserved sectors. IFC
also focuses on expanding access to finance for micro, small, and medium
enterprises. IFC supports programs that mobilize local benefits to
regions receiving royalties from extractive industries. Since Peru
became a member of IFC in 1956, IFC has invested $1.8 billion in the country’s
private sector, including $529 million in syndications. For more information
about IFC in Latin America and the Caribbean, visit: www.ifc.org/lac.
IFC, a member of the World Bank Group, creates opportunity for people to
escape poverty and improve their lives. We foster sustainable economic
growth in developing countries by supporting private sector development,
mobilizing private capital, and providing advisory and risk mitigation
services to businesses and governments. Our new investments totaled $14.5
billion in fiscal 2009, helping channel capital into developing countries
during the financial crisis. For more information, visit www.ifc.org.
Sedapal is the water and wastewater
utility for the metropolitan area of Lima and Callao in Peru, serving a
total population of over 8.5 million. It is a state-owned enterprise
incorporated under commercial law, with a single shareholder, FONAFE, a
central government holding company. It is registered with the Lima
Stock Exchange. For more information, visit http://www.sedapal.com.pe/.