Peru embraces integrated water resources management with help from IDB

July 1, 2009 -- Peru seeks to increase the efficiency, equity and sustainability of water use by implementing a water resources management reform program...

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• IDB loan will support a set of reforms in the water sector

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Peru embraces integrated water resources management with help from IDB. Photo: David Mangurian.
July 1, 2009 -- Peru seeks to increase the efficiency, equity and sustainability of water use by implementing a water resources management reform program with help from a $10 million loan from the Inter-American Development Bank.

Over the past 30 years the growing demand for water to cover the consumption needs of the Peruvian population and production requirements, as well as compliance with environmental standards, has resulted in a diminishing water supply and a use-driven deterioration in its quality.

This loan will finance a program to establish and adopt the necessary policy, institutional, regulatory, and structural reforms that will help to conserve water resources, use them more efficiently and improve their quality and sustainability.

The loan approved today is the second in a programmatic series of three loans, the first of which -- for $200 million -- was approved in June 2007.

The reforms that will be financed with the loan have five components. The first seeks to ensure that the macroeconomic environment is consistent with the program objectives and sector policy guidelines.

The second component consists of implementing a National Water Resources Policy that will produce a consensus-based, multisector perspective on integrated water resources management in line with the program objectives.

An institutional framework component will support the implementation of a multisector, participatory institutional framework, allowing for integrated water resources management, using watersheds as the unit of management.

The objective of the policy framework component is to establish the technical, economic, financial, environmental and social measures needed for efficient integrated water resource management. The program will seek to support reforms for the establishment of water rights, the financing of water resource management and water quality.

Finally, a decentralization component seeks to jump-start reforms intended to create and strengthen water management capacities in watersheds through the transfer of functions and areas of authority to regional governments.

During the IDB's first programmatic loan for this sector, Peru made progress on transferring eight special productive infrastructure projects under the responsibility of the National Development Institute to the regional governments. This second programmatic operation will support a plan for building capacities in water resources management for regional governments. It will also identify two watersheds for the preparation and implementation of water resources management plans.

This 20-year loan, including a five-year grace period, will be executed by Peru's Ministry of Economic Affairs and Finance.

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>> Water Resources Reform Program II
>> World Bank supports sustainable water management in Peru with US$10M loan

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