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IDB approves $50 million for rural transportation program in Peru

 

The Inter-American Development Bank today approved a $50 million loan for the Decentralized Rural Transportation Program (PTRD for its acronym in Spanish) in Peru.

The objective of the program is to increase rural population accessibility of public, economic, and social services by improving local road systems.

To accomplish this aim, the program will  primarily  improve the decentralized public infrastructure supply and maintenance of rural roads and promote the development of productive infrastructure-related initiatives.

When the loan operation was presented to the IDB Board of Directors, President Luis Alberto Moreno highlighted its importance for Perú and the Bank’s future operations given that “it will have a great impact on people’s living conditions and will generate opportunities for the majority of the population.”

The World Bank will provide $50 million in co-financing for the program, and local counterpart resources will total $50 million .

The process of identifying and selecting the high number of simple, low-cost works will be  performed by local communities and local authorities, using the Participatory Provincial Road Plans. This mechanism will facilitate program execution by promoting a sense of ownership among the authorities and the communities.

This 20-year loan will be executed by Peru’s Ministry of Transportation and Communication through Provías Descentralizado.

The IDB also approved a non-reimbursable technical cooperation for $1.5 million from the Japan Special Fund, within the Poverty Reduction Program, to implement the Local Development Window (VDL for its acronym in Spanish) component. VDL, which was launched as a pilot during the second program of rural roads, identifies productive opportunities and facilitates access to markets in order to exploit existing potential and develop entrepreneurship in rural communities so as to help alleviate rural poverty.

This technical cooperation will expand the geographical area covered by the VDL and will help the Peruvian government and local population capitalize on the opportunities and benefits directed to the large majority of those in the service area of the network of roads rehabilitated and maintained by prior Rural Road Programs  and their successor, the PTRD. This cooperation recognizes that the provision of basic economic infrastructure, in this case rural roads, is a necessary condition to improve the quality of life of less privileged social sectors.

The abovementioned loan will also have the support of the Gender Mainstreaming Trust Fund through a technical cooperation to enhance a  gender perspective in rural roads programs.

Since 1995, IDB provided $140 million in financing to support the rehabilitation and maintenance of rural roads, through two lending operations. The projects resulted in successful demonstrations of the effectiveness of citizens' participation in the planning and execution of projects and the deployment of microenterprises for road construction and maintenance.

The current loan will consolidate the process started in 1995 and will expand it nationwide. The possibility of addressing other types of rural transport infrastructure, such as airfields and piers, as well as incorporating certain aspects of regulation governing services that use this infrastructure, will also be examined.

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