IDB Approves $307.8m to Expand Wastewater, Drainage Services in Juliaca

The initiative aligns with Conexión Sur, a regional development program aimed at improving connectivity, competitiveness, and sustainability across South America.

The Board of Executive Directors of the Inter-American Development Bank (IDB) has approved a loan of $307.8 million to finance a major urban infrastructure project aimed at improving and expanding access to wastewater treatment and stormwater drainage services in Juliaca, a fast-growing city in Peru’s Puno region.

The project seeks to address long-standing environmental, public health, and climate resilience challenges by significantly upgrading wastewater treatment capacity and strengthening stormwater drainage systems. In parallel, it will enhance the operational, technical, and financial management of key local institutions, including the Water and Sanitation Service Provider SEDAJuliaca and the Provincial Municipality of San Román, which is responsible for stormwater drainage services. Strengthening these institutions is expected to improve service quality, efficiency, and long-term sustainability.

This operation represents the second phase under a Conditional Credit Line for Investment Projects (CCLIP), approved by the IDB Board in December 2023. The CCLIP framework supports a multi-year investment program to expand and modernize water supply, sanitation, and stormwater drainage services in Juliaca, allowing for a phased and results-oriented approach to infrastructure development.

The project’s direct benefits are substantial. Around 48,000 households will gain access to improved wastewater treatment services, contributing to better public health outcomes and reduced environmental pollution, particularly in nearby water bodies. In addition, approximately 13,400 households will see their physical vulnerability to flooding reduced through the construction and rehabilitation of stormwater drainage infrastructure. More than 140,000 households are expected to benefit indirectly from the improved wastewater treatment system, as cleaner surroundings and healthier ecosystems enhance overall urban livability.

Beyond infrastructure, the project includes measures to strengthen governance, planning, and financial sustainability within SEDAJuliaca and the municipal authorities. These efforts are designed to improve cost recovery, asset management, and service delivery, while ensuring that investments are maintained over the long term. The program also supports climate adaptation by improving the city’s capacity to manage intense rainfall events, which are becoming more frequent due to climate change.

The initiative aligns with Conexión Sur, a regional development program aimed at improving connectivity, competitiveness, and sustainability across South America. By enhancing essential urban services in Juliaca, the project contributes to more inclusive and resilient urban growth, supporting economic development in southern Peru.

The $307.8 million IDB loan has a repayment term of 17 years, including a grace period of 6.5 years, and carries an interest rate based on the Secured Overnight Financing Rate (SOFR). The project also includes a local counterpart contribution of $68.2 million, reflecting national and local commitment to improving water, sanitation, and drainage services in the city.