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IDB approves $120 million for reconstruction from damage caused by El Niño phenomenon in Peru

The Inter-American Development Bank today announced the approval of a $120 million loan to Peru to assist the reconstruction of physical infrastructure and the resumption of services affected by the El Niño climate phenomenon, which produced disastrous flooding during 1997 and 1998.

The resources will be applied to the transportation, sanitation, education and health sectors, and the investments are expected to directly benefit the population living in poverty in the program´s service areas, according to the country´s poverty map.

The loan brings the total IDB financing to Peru to combat the El Niño disaster to $270 million. In 1997 the Bank approved a $150 million loan to Peru for disaster recovery, reconstruction, and prevention. The new loan reflects a higher level of damage from flooding resulting from El Niño phenomenon than originally anticipated.

The program will be carried out by the Ministry of Economy and Finance,* through the Office of Public Investment.

The total cost of the project is $171 million. The IDB loan is for a 25-year term, with a four-year grace period, at the variable annual interest rate, now 6.84 percent. Local counterpart funds total $51 million.

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