Title: Chavimochic Irrigation Project - Peru
Region: Latin America and Caribbean
Sectors: Water and Sanitation
Keywords: Contractual Provisions, PPP Project Cycle, Legal Framework, Legal issues, Risk, Sample clauses, Sample wording, Negotiation phase, Key drafting issues, Irrigation
The 25-year, co-financed, build, operate and transfer (BOT) Chavimochic irrigation concession involves improving irrigation in 78,310ha in the northeastern La Libertad region through the capture and distribution of the Santa river's water.
The water resources will also be used to feed run-of-river power plants with installed capacity of 68.1MW and potable water treatment facilities able to produce around 4m3/s.
The Río Santa consortium, comprised of Odebrecht Participacoes e Investimentos, Constructora Norberto Odebrecht and Graña y Montero, has won the tender to carry out Peru's Chavimochic irrigation project.
The consortium's bid included providing US$373mn in financing, while the government will provide the remaining project financing. In turn, the consortium's proposed yearly charge to the government was the lowest submitted, with Río Santa to receive US$33.2mn/y from the Peruvian government for investing, operating and maintaining the project.
Based on the bid, the project's total investment is now estimated to be US$591mn, which will be confirmed after the technical studies for phase I and II are approved.
Phase I and II of the project have already been carried out, with a total investment of US$1.29bn. Phase III includes constructing a 360Mm3 reservoir in Palo Redondo, a third line of the Virú water pipeline and the 113km Moche-Chicama-Urricape water channel.
Water and Sanitation Public Private Partnerships
Updated: October 25, 2021