The Proposal

This year, Peru returns to the Investment Forum with an updated investment in two of the 2023 investment cases: highland avocado and native potato. Two new investment areas are also planned: Andean cereals (quinoa and tarwi), which are of great national importance, and camelid textiles, in recognition of the International Year of Camelids.

The investment cases are focused on improving and building infrastructure to generate added value, including the technical assistance needed to ensure higher quality, processing capacity, and efficiency in the production system. They also aim to obtain certifications and incorporate traceability processes, which are essential to adapt to new international trade regulations. A core element of the investments’ strategy combines agricultural traditions with innovative technologies and practices, strengthening the resiliency of target value chains to climate change. Finally, the plans also aim to facilitate access to finance for small producers.

Peru's investment cases will cost an approximate total of USD 238.5 million, with an average internal rate of return (IRR) of 24.5%. Investments are expected to benefit 24,853 small-scale producers, and indirectly benefit 92,845 people across the different value chains targeted. Across the board, these opportunities will help increase beneficiary incomes by an average of USD 2,859 per year, promoting a sustainable and inclusive rural transformation, and the improvement of livelihoods among some of Peru's most vulnerable populations. Following implementation, the interventions will lead to a reduction in CO2 emissions by 467,402 tons per year.

Peru Typologies

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Government of Peru: Investment cases in the Peru

Peru Investment Cases and Interventions

Native potatoes

Native potatoes are a critical element of Peru's agricultural heritage and have large-scale industrial applications and demand for consumption in domestic and foreign markets. The investment case for potatoes will target several key departments across five economic corridors spanning much of the country's Andean region. 

For this investment case, irrigation infrastructure will be implemented to mitigate the effects of climate change and increase productivity. Productivity will be supported by the delivery of certified seeds and mechanized production equipment to producers, as well as the implementation of microfinancing and technical assistance units to promote sustainable management practices. Processing centres will be delivered to improve storage, processing, and packaging capabilities across the target areas. Lastly, agro-industrial transformation centres will be implemented, expanding the production of value-added products such as flour and pre-cooked or frozen potatoes. 

Diversifying the range of potato-based products has potential to significantly augment average beneficiary incomes, by USD 2,585 annually.  In addition, this year's investment note introduces barley as a rotation crop to improve soil fertility and generate additional income by linking farmers to local markets with year-round demand is permanent. This investment case directly targets 11,000 smallholders and will indirectly benefit 30,000 people.

As a critical national priority, this investment totals around USD 89.9 million, with an IRR of 23.3% and a NPV of approximately USD 53.5. Following a pledge of USD 18.7 million to finance water capture and storage systems by Peru’s government, the remaining financing gap amounts to approximately USD 71.2 million, for which external investment is sought. Finally, this project will contribute to a reduction in CO2 emissions by 80,490 tons per year.

Andean grains

In the case of Andean grains, the investment note focuses on two superfoods (tarwi and quinoa), targeting producers spread across three economic corridors in the central and southern Andean region. Along with mechanized irrigation systems and improved storage infrastructure, this investment note plans to deliver sustainable farm mechanization equipment to improve production efficiency. It also proposes storage, primary processing, and value-added transformation facilities, technical assistance and improved access to finance for smallholder farmers. The goal of this investment note is to diversify the development of products derived from Andean grains, such as flakes, powder and oil, to meet growing market demand and to raise beneficiary incomes by USD 2,270 yearly. It's expected that these interventions will directly support the livelihoods of 6,240 smallholders, and a further 25,680 people indirectly.

These investments cost upwards of USD 42 million, having an IRR of 23.1% and a NPV of approximately USD 27 million. Peru’s Government will provide USD 13.2 million to fund the construction of water capture and storage systems, leaving a remaining financing gap of approximately USD 28.8 million, for which external investment is sought. Finally, this project will contribute to a reduction in CO2 emissions by 58,802 tons per year.

Camelids 53.5 Million USD 17,598 Beneficiaries

Camelids

An addition to Peru's set of investment cases for this year, the aim of the camelids’ investment note is to improve the productivity and commercialization capacity of camelid fibers, increasing producer incomes by USD 616 per year. This investment case focuses interventions on the southern Andean corridor, spanning the departments of Cusco, Arequipa, and Puno. Primary processing centers will be established to add value to fibers by employing machinery for shearing and tracing processed fibers. Animal nutrition and health will also be improved through technical assistance, ensuring process standardization to achieve regular production and improved productivity. This includes the creation of new pastures and shelters, supported by technical assistance and the installation of sustainable irrigation technology to recycle rainwater. As Peru is South America's leading producer of camelids, concentrating 80% of the world's population, this investment note is expected to directly benefit 2,933 smallholders and indirectly support up to 14,665 people's livelihoods.

In total, this investment note will cost approximately USD 53.5 million, with an IRR of 27.8% and a NPV of 16.2 million. As in the other investment cases, public investments valued at USD 24.6 million will fund the implementation of water capture and storage infrastructure. This commitment leaves a financing gap of approximately USD 28.9 million, for which external investments are sought. Finally, this project will contribute to a reduction in CO2 emissions by 224,630 tons per year.

Avocado 53.1 Million USD 27,000 Beneficiaries

Highland avocado

The avocado investment case is aimed at four fundamental elements of the value chain: (i) improving water collection and storage, and implementing mechanized irrigation systems, (ii) providing technical assistance to enable smallholders to implement improved agricultural management practices, including cooperative commercialization, and product certification for export (iii) establishing primary processing and packaging centers across the targeted areas, and (iv) providing value-added transformation facilities to reduce waste and diversify the range of production. Three economic corridors will be targeted in the project's scope, spanning the southern departments of Huancavelica, Apurimac, and Ayacucho. Processing and packaging the product close to the production areas, in the highlands, is essential to avoid spoilage and to strengthen exports.

These interventions are expected to directly benefit a base of 4,500 smallholders and another 22,500 people indirectly, potentially increasing per capita incomes by as much as USD 5,964 per year. The expected total cost for this investment is USD 53.1 million, with an IRR of 23.7% and a net present value (NPV) of approximately USD 19.7 million. The Peruvian Government has pledged USD 18.4 million to fund water capture and storage infrastructure, meaning that the overall financing gap for which external investment is sought, is approximately USD 34.7 million. Finally, this project is expected to contribute to a reduction in CO2 emissions by 103,480 tons per year.

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