Dec 11, 2020

NSP Peru Transport: Policy Reform in the Urban Mobility Sector

Copyright: KfW Peru

KfW, the delivery organisation of the financial component, has actively advised the German Federal Ministry for Economic Cooperation and Development (BMZ) in structuring complementary support beyond the lifetime of the NAMA Support Project in Peru. During the intergovernmental negotiations between Germany and Peru in October 2020, the BMZ confirmed that it will provide funding to the Transport NAMA beyond the NSP lifetime.

The NAMA Support Project was structured jointly by KfW/GIZ with Peruvian counterparts to give guidance and elaborate objectives in the sector of urban mobility and to further policy changes initially undertaken or foreseen by Peru.  Assigned are two more phases, each one corresponding to a EUR 40 million concessional loan and accompanied by a grant of EUR 2 million for additional capacity building and technical assistance. Depending on negotiations with the Peruvian Finance Ministry, these following phases will be implemented between 2021 and 2023.

Also commissioned by BMZ and to be implemented by KfW is an additional EUR 20 million project on non-motorized transport in Lima, which is linked to the policy matrix of the NAMA. The Metropolitan municipality of Lima is going to be suppported to enhance the existing cycle paths and improve the interconnection of existing routes.

Both follow-up projects highligh the success of the NSP in supporting reforms and institutional modernisation and that the approach (policy based lending together with technical asstance) could be valuable tool.