Peru to reduce natural disasters vulnerability, boost response capacity with IDB assistance

$25 million loan to support legal, institutional reforms to maximize prevention, risk reduction and disaster management


Peru, the Latin American country most affected by natural disasters, will reduce its vulnerability and improve its disaster response capacity with a $25 million loan from the Inter-American Development Bank.


The program is the first of a series of three programmatic policy-based loans to support the Peruvian government in the implementation of measures to forecast, reduce, and control disaster risk factors in society and provide an adequate response to emergencies.


Between 1970-2009, a total 105 droughts, floods, mudslides, frosts, earthquakes and volcanic eruptions caused 74,000 deaths and affected 18 million people, more than in any other country in the region. Additionally, in the periods 1982-83 and 1997-98 the El Niño phenomenon caused estimated losses of $6.8 billion, while the Pisco earthquake in 2007 caused damages in excess of $2 billion.


This year, floods and mudslides caused by rains in Cusco, Ayacucho, Puno, Huancavelica and Huánuco left 92 dead and 235,000 people affected, 27,000 houses destroyed or damaged, and 11,700 hectares of ruined crops.


By providing support to the planned Framework Law for Integrated Disaster Risk Management, which would put Peru on the cutting edge of legislation on this issue, the program will strengthen the legislative and institutional structure in the areas of risk identification, reduction, management, and financial handling.


RISK IDENTIFICATION. Modern, efficient information systems will enable prevention and early warning moves through implementation of standards and an information integration platform and adoption of natural disasters and climate change monitoring and analysis systems.


RISK REDUCTION: Safe land use and territorial management, improved coordination among the various government levels, and safety criteria for informal settlements and populations in high-risk areas and in the agricultural sector will be promoted, with particular emphasis on floods risk reduction.


DISASTER MANAGEMENT: Development of emergency plans for earthquakes and tsunamis, particularly for Lima and Callao, will be supported, including simulation and drill activities, preparation of guides, and effective operation of Regional Emergency Operation Centers.


FINANCIAL MANAGEMENT: A National Financial Management Strategy for Disaster Risks comprising emergency reserve funds, contingency credit lines, and risk transfer instruments, including public infrastructure insurance, will be established.


The loan is for a 20-year term, with a five-year grace period and a variable interest rate based on Libor.


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