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IDB approves US$75 million to improve quality of public management and expenditure in Perú

The Inter-American Development Bank today announced the approval of a US$75 million loan to complete and consolidate reforms aimed at improving the quality of public management and expenditure in Peru.

This is the third and last loan in a programmatic series of policy-based operations that began in 2005 to strengthen government capacities on budget by results, public investment cycle and administrative management; and to promote Public-Private Partnerships (PPPs) in public sector investments.

Additionally, this third loan seeks to ensure that the reforms which started in 2005 are fully operational and sustainable over the long term. 

Three important components of this operation include the promotion of private-sector participation in public investments, and the strengthening of public expenditure management both at the national level and in the context of decentralization.

In terms of the first component, the reforms that began in 2005 have sought a sustainable increase in the quantity and quality of investment in infrastructure through greater private sector participation. The specific objective of this third loan is to promote the strengthening and sustainability of the institutional, fiscal and accounting rules for design and implementation of PPPs.

The general objective of the second component is to help strengthen the national government’s capacity to manage, analyze, prioritize, execute, monitor and evaluate public spending.

In regards to strengthening public expenditure management in the context of decentralization, the loan seeks to promote sustainability on execution of transfers to regional and local governments for public investments and promote better regional compensation, begin implementing the criteria for  incentives-based budgetary reform, and continue to build regional government’s investment analysis capacity.

The Executive Director for Perú at the IDB, Jaime Quijandría, praised the program's success and the value added by the Bank's participation during the past three years of these reforms.

The loan will be executed by Perú’s Ministry of Economy and Finance.

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