Peru has one of the best performing economies in South America. However, the country faces record urban growth and high vulnerability to climate change. Since 2014, AFD has been assisting it in achieving the social and ecological transition of cities and better meeting people’s needs.
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Peru, Cuzco, main square, city
Peru, Cuzco, main square, city

Promoting sustainable cities

Peru, subway, metro, line 1, Lima

Promoting sustainable cities

For thirty years or so, Peru has been faced with fast-paced urbanization. Cities need to rapidly meet the infrastructure needs of new residents.
AFD operates in three priority sectors: access to drinking water, transport and housing.

Accessible and high-quality water 

Access to water is the priority for the Peruvian Government. This is especially because there are strong territorial inequalities: while the desert coast, and particularly the capital Lima, is faced with a shortage, the high rainfall areas of the Andes and Amazonia do not have the infrastructure required to use rainwater.
AFD is helping the Peruvian authorities achieve their 2021 objective: access to drinking water for all. For example, we are upgrading distribution networks, increasing the efficiency of public services and improving natural disaster management, following the recent floods and mudslides which have badly affected coastal cities.

More environmentally friendly transport 

In the transport sector, AFD focuses on low-carbon mobility, meaning with low CO2 and particulate pollutant emissions.
We are planning to finance the construction of the new metro in Lima. It will provide over 30,000 residents in outlying neighborhoods with daily access to the city center. We also provide technical cooperation with the main cities to support their public policies for sustainable mobility. 

Sustainable housing for all

There is currently a shortage of 1.8 million housing units nationwide, including 900,000 in the capital. Cities see new neighborhoods springing up on their outskirts, which are informally built and often without access to basic services. Some 8 million people live in these neighborhoods.

AFD is supporting Fondo MiVivienda (FMV), a public financial institution which finances social housing. Together, we have developed a new tool called “My Sustainable Housing” (Bono MiVivienda Sostenible), which aims to sell housing with a “green” certification at the same price as traditional housing.

Developing more sustainable and equitable agriculture

Peru, agricultural fields


In 2016, agriculture accounted for 9% of GDP and 10% of exports, a major contribution to Peru’s economy. However, farmers and their families continue to face poverty and inequalities persist between urban and rural populations. In addition, agriculture in the broad sense and changes in land use account for some 60% of the country’s greenhouse gas emissions and are one of the main causes of deforestation.

In partnership with Agrobanco, the Peruvian State’s public bank for the development of the agricultural sector, AFD is financing the investments of small producers and agricultural cooperatives. Our main thrust: promote efficient agriculture combining respect for the environment and social improvement.

Promoting academic research and innovation

Dominican Republic, student


Research is the poor relation in Peru’s education system. The country trains few engineers and researchers due to the lack of appropriate university facilities.

AFD is looking into the possibility of working with Pontificia Universidad Católica del Perú (PUCP), a private non-profit institution, which is building the country’s first science and technology park. It will focus on state-of-the-art technologies and sustainable natural resources management.

Supporting the action of CSOs

Peru, woman, agriculture


French CSOs are very active in Peru and work at grassroots level with inhabitants.

To strengthen their action, AFD is supporting:

  • The International Catholic Childhood Bureau and its “No Kids Behind Bars” program. The objective: promote a legal structure for the reintegration of children in conflict with the law;
  • Agronomes & Vétérinaires sans frontières and its “Agroecological transitions and sustainable food in rural areas and cities” program to strengthen smallholdings and promote agroecology;
  • CCFD-Terre Solidaire, to get rural communities out of poverty in the high Andes of Junin and Huancavelica via agriculture;
  • Médecins du Monde, to improve the prevention and management of unwanted pregnancies;
  • L'Agence Micro Projets, to improve living conditions in a slum in Northern Lima by building a community recreational space (participatory construction of a skating and volleyball area and a garden) in Puente Piedra (La Ensenada);
  • Frères des Hommes, to support 1,000 women faced with domestic violence in the district of San Juan de Lurigancho. With AFD’s support, the CSO teaches them a trade (textiles, baking, engraving, weaving) and subsequently helps them get organized socially and economically.
million euros committed since 2014
farmers with increased incomes
households benefit from a subsidy to buy “green” social housing

Peru is bordered to the West by the Pacific Ocean and is the third largest country in South America. It is characterized by a complex geography divided into three regions: the desert coast, the Amazon forest and the Andes mountains.

Peru has been experiencing remarkable growth for over ten years. Its economy is even one of the best-performing in South America, driven by the exploitation of mineral resources, fishing, tourism and agriculture. However, this dynamism does not benefit all: extreme poverty persists and infrastructure is unevenly developed between the regions. There is, in addition, the threat of climate change, which has already caused 40% of the country’s surface area of glaciers to melt. 

Access to drinking water remains particularly critical in a country where water resources are scarce. Out of the 30 million inhabitants, 3.5 million are deprived of it and 8 million do not benefit from any sanitation system. This problem is exacerbated by the rapid expansion of cities: Peru has an urbanization rate of 80%, one of the highest in the world.

AFD has been a partner of the country since 2014 and has made Peru’s challenges its priorities for action: it works to improve water management and promote sustainable cities and more responsible agriculture. To achieve this, it works closely with public administrations, private actors and civil society, and mobilizes a wide range of tools: grants, loans, guarantees and technical assistance.

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