All phases of the project, located 780km north of Lima, could require a total investment of up to US$700M. The project would generate 2400GWh a year in its initial phase and would help irrigate 60,000ha of farmland. The central government and the regional government of Lambayeque, where the project is located, will co-finance US$77M of the project.

Meanwhile, Peru’s state investment agency Proinversion intends to reopen the bidding for the sale of the operating concession for the 134MW Yuncan hydroelectric project in Pasco department by the end of July. Yuncan, located 320km north of Lima, is due to be finished by the end of 2004.

The agreement sees the state retain control of the plant, and a concessionaire to operate it for 30 years. The Japan Bank for International Cooperation (JBIC) is providing 75% of the estimated US$262M construction costs, with Peru’s national government to pay the remaining 25%.