The World Bank loaned Peru $500mn to fund public climate adaptation programs, including investments for developing its burgeoning renewable energy sector, distributed generation and electric mobility.
This new funding, requested by Peru's government and approved by the World Bank, aims to build on reforms to strengthen Peru's climate resilience and adaptation. Peru is considered among the countries most vulnerable to disasters driven by climate change, including earthquakes, flash floods, landslides and glacier melting.
The loan will go toward funding energy transitions in key sectors like electricity and transportation, as well as developing sustainable cities and clean technologies, the World Bank said.
It is also expected to strengthen disaster risk management through a national coalition of government agencies tasked with prevention and mitigation of disasters, including climate-related ones. These initiatives could include implementing a geo-referenced information system that helps in early mitigation and decision-making.
Peru has had a sluggish transition in its renewables sector, but last year wind power production grew by 66pc and solar by 32pc over the year prior. In January, overall renewable power production grew by 16pc over the same month last year, with hydroelectricity leading most of that growth. Peru's electricity grid is mostly powered by natural gas — about 51pc thermoelectricity, 38pc hydropower, 7pc wind and 3pc solar electricity.
Peru's congress passed a new electricity law in January, easing the path for renewable energy companies to compete for public electricity contracts and potentially reduce costs. Though the law has not yet been implemented, it faced stiff opposition from Peru's oil and gas industry which argued it gave unfair favoritism to renewable companies.
