Private sector agricultural investment Promotion (PRIDA)

PES covers the period 3/83-3/85 and consists of a facesheet attached to a special evaluation (XD-AAS-573-A). Most major project objectives have been achieved except cofinancing. Within the first year of implementation, 11 commercial banks have been on-lending to 92 viable, well-planned and successfully executed projects, many of which involve new entrepreneurs in export-oriented ventures. By the midpoint of the project implementation period, one half of funds available under the loan have been disbursed to properly targeted agricultural activities. All of the 36 targeted Intermediate Credit Institution (ICI) personnel have been trained. Major recommendations of the attached evaluation are that: (1) USAID/P waive the Government of Peru (GOP) obligation to secure a $10 million cofinancing loan from a U.S. institution, as Peruvian economic conditions have made it impractical; the waiver will change the financial contribution of each project participant (A.I.D., the GOP, ICI"s and subborrowers); (2) the implementing agency be required to charge the maximum interest rates legally allowed to reduce decapitalization; though near the maximum now, the new rates should equal commercial rates; (3) negotiations be held with the GOP regarding counterpart and maintenance of value (MOV) contributions which have not been provided; and (4) TA, training, and promotional activities be better planned and accelerated and COFIDE"s financial management procedures be revised. The GOP has agreed to the first three recommendations. Once the GOP makes the expected MOV and counterpart contributions, expected by 12/85, A.I.D. will formally waive the co-financing requirement. COFIDE has initiated a plan to more rapidly implement TA and training and is analyzing various mechanisms for better managing project funds. The attached evaluation required extensive Mission involvement to improve its quality.