The 18-year loan comes with a five-year grace period and 2.4% interest rate. The funds will be managed by the Arequipa regional government, MEF said in a release.
The central government is providing some US$150mn in financing for the project while the Arequipa government is to invest nearly US$58mn.
Consortium Angostura-Siguas has committed to investing over US$200mn in the project. The group, formed of Spanish firm Cobra Instalaciones y Servicios and Peru's Cosapi, was awarded the Majes-Siguas II concession in September last year.
The project aims to irrigate 38,500ha of land in Arequipa, Cuzco, Apurímac, Puno, Moquegua and Tacna regions.