The Japan Bank for International Cooperation (JBIC) has signed a 5,972M yen loan agreement with the Republic of Peru to finance an Irrigation Sub Sector project. This is the first ODA loan that JBIC will provide for Peru for six years.

The project, which is aimed at increasing agricultural production, will involve rehabilitating irrigation infrastructure, installing water measuring and control facilities, introducing technical irrigation, and strengthening water users’ organisations in the agricultural sector of the Pacific coastal region.

Over half of the total population in Peru lives in the region facing the South Pacific Ocean. Irrigation facilities have been developed since the 1960s in this region, and the irrigated area now accounts for about half of the total irrigation area nationwide. As a result, despite its dry weather, this coastal region is a significant producer of farm products. In recent years, however, water resources have not been effectively utilised because of aging irrigation facilities, flood damages caused by El Nino, and inadequate operation and maintenance attributable to insufficient funds and capacity of water users associations. Given the increasing demand for urban water every year, boosting the efficiency in use of water resources is urgently called for.

The project is expected to cover some 180,000ha of land, equivalent to around 10% of the total irrigation area in Peru, benefiting approximately 50,000 farming households. Consulting services provided under the project will strengthen the institutional capacity of water users’ associations, thereby ensuring that irrigation facilities developed under the project are managed in an appropriate manner. The project will thus help improve the efficient use of water resources, and expand agricultural production. In addition, through the implementation of this project, it is expected that new employment opportunities will be created and living/income standards are to be upgraded in this region where many poor residents live.