UPGRADING LOW-INCOME SETTLEMENTS-- PERU

investors. Loans will be used to finance a minimum level of basic infrastructure and community level facility development in low-income areas (pueblos jovenes) in Lima and other urban centers. Specific outputs will be divided into three categories: affordable packages of water, sewerage, and electrical services; home improvements; and ancillary community facilities. These outputs will vary with each subproject depending upon the preferences and the ability to pay of each community and home improvement borrower. The Sanitary Company of Peru, the Sanitary Company of Arequipa, and the Sanitary Works Department of the Ministry of Housing will all be responsible for civil works construction in water supply and sewerage development. Potable water will be piped into targeted settlements. Housing connections will be linked to main pipe lines. Pumping stations, water meters, deep wells, and extra pipe lines will be provided if needed. Electro Peru, Electro Lima, and the Electric Company of Arequipa will be involved in the electrification process. Specifically, low tension electrical networks linking home outlets to high tension lines and transformers which will be constructed. Low tension public lighting will also be provided. The administration and supervision of home improvements will be delegated by contract to regional savings and loan institutions by the BVP. Financing will cover the interior installation of water, sewerage, and lighting facilities, the repair or replacement of old buildings, housing unit expansion, and carpentry work including floors, ceilings, and roofs. The construction of ancillary facilities will be done by various agencies and will conform to local needs. Community participation will be encouraged by the GOP through the Ministry of Housing and Construction. The participation of the communities served will reduce costs, promote local cohesion, improve their self-image, and strengthen their organizational capabilites. Project will benefit a maximum of 120,000 families. Project Paper Amendment No. 1 of 9/29/83 provides $14 million in supplemental funding to finance the reconstruction of homes ($9 million) and water, sewer, and electricity services ($5 million) in the northern areas of Peru ravaged by the 1983 flood. (PD-AAN-522)