International Bank For Reconstruction And Development

The World Bank announced on March 14, 1963, that it had made a loan equivalent to $13,250,000 to help finance a program to rehabilitate and modernize the two principal railway systems in Peru. The railways were an important element in Peru's transportation system, particularly for the movement of minerals, petroleum, and bulk merchandise, and their efficient operation was essential to the country's economic growth. Under the program, diesel locomotives would be put into use, carrying capacity increased, and tracks improved, thereby enabling the railways to reduce transportation costs and to provide more efficient service. The loan was made to the Peruvian Corporation Limited, a private company which owned and operated the railways, and was guaranteed by the Peruvian government. The total cost of the program, which was scheduled for completion in 1965, was estimated at the equivalent of $21.3 million, of which $19.5 million was in foreign exchange and would be covered in part by the Bank loan. The loan was for a term of sixteen years, and amortization was to begin in December 1967.