Finance ministry inks US$150mn CAF loan agreement for Majes-Siguas II

Wednesday, February 9, 2011

Peru's economy and finance ministry MEF has signed a US$150mn loan agreement with Latin American development bank CAF to co-finance Arequipa region's US$425mn Majes-Siguas II irrigation project.

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.

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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.