Peru community action

The principal environmental issues in Peru are water pollution, soil erosion, pollution and deforestation. Although these issues are problematic and equally destructive, the Peruvian Environmental ministry has been developing regulation and laws to decrease the amount of pollution created in major cities and have been making policies in order to decrease the present deforestation rate in Peru.

Emissions

The Economic Commission for Latin America and the Caribbean (ECLAC) estimates that the economic losses related to climate change could reach over 15% of national gross domestic product (GDP) by 2100. In 2010, Peruvian greenhouse gas emissions represented only 0.4% of global emissions. However, emissions are rising nationwide – particularly in the energy and transport sectors. In an effort to combat this, the Government of Peru approved a law to establish a national greenhouse gas inventory system called INFOCARBONO. INFOCARBONO will enable different ministries to include greenhouse gas management in their work.

Deforestation

Deforestation is a growing problem in the world today, especially concerning the Amazonian rainforest. In recent years deforestation has increased and deforestation now causes about 18% of green house emissions. Peru has the fourth largest area of rainforest in the world, which covers nearly 60% of its territory (70 million hectares). The deforestation rate in Peru is 0.35–0.5%, which is approximately 250,000 hectares cut down annually. Deforestation in Peru is largely a result of subsistence farming resulting from migrant farmers exploiting the squatter's law which allows citizens to get public land if they can prove that they have lived there for 5 years. More deforestation though, is caused by both legal and illegal logging, mining, petroleum drilling and road development.

Antonio Brack Egg, the Environmental minister in Peru, has said that deforestation is mostly caused by Andean farmers migrating to the Amazon, by new roads and gold mining, he plays down the contribution to deforestation caused by oil and gas companies.

The Peruvian government has said that 80% of Peru's primary forest can be saved or protected. Mr. Brack has said that his ministry has calculated that Peru needs about $25 million a year for the next 10 years to be able to conserve at least 54 million hectares. That the Peruvian government has committed $5 million a year and is looking for $20 million a year from the international community. He continues that 52 million hectares will be divided into 4 parts, 17 million hectares of national parks which are already in existence, 12 million hectares for 42 indigenous groups, 12 million hectares for sustainable forestry development, and 5 million for ecotourism. Germany has already committed $5 million for the national Parks, Holland is interested in funding for indigenous groups and Brack is hoping for funds from Britain, Japan and Finland. The Environmental minister is also asking for 3,000 environmental police to try and stop deforestation in remote areas.

Peru had a 2018 Forest Landscape Integrity Index mean score of 8.86/10, ranking it 14th globally out of 172 countries.

Peru forest figures

• Total forest area: 68,742,000 ha• percentage of land area: 53.7%• Primary forest cover: 61,065,000 ha• percentage of land area: 47.7%• percentage total forest area: 88.8%

Deforestation Rates, 2000–2005

• Annual change in forest cover:-94,200 ha• Annual deforestation rate:-0.1%• Change in deforestation rate since '90s: 1.3%• Total forest loss since 1990:-1,414,000 ha• Total forest loss since 1990:-2.0%

Primary or "Old-growth" forests

• Annual loss of primary forests:-224600 ha• Annual deforestation rate:-0.4%• Change in deforestation rate since '90s: 214.7%• Primary forest loss since 1990:-1,123,000 ha• Primary forest loss since 1990:-2.9%

Forest Classification

• Public: 83.1%• Private: 15.2%• Other: 1.7%• Use• Production: 36.7%• Protection: 0.5%• Conservation: 26.9%• Social services: n.s.%• Multiple purpose: 26%• None or unknown: 9.9

Forest Area Breakdown

• Total area: 68,742,000 ha• Primary: 61,065,000 ha• Modified natural: 6,923,000 ha• Semi-natural: n/a• Production plantation: 754,000 ha• Production plantation: n/a

Plantations

• Plantations, 2005: 754,000 ha• percentage of total forest cover: 1.1%• Annual change rate (00-05): 7,800,000 ha

• Carbon storage

• Above-ground biomass: n/a M t• Below-ground biomass: n/a M t

Area annually affected by

• Fire: 35,000 ha• Insects: n/a• Diseases: n/a

Number of tree species in IUCN Red List

• Number of native tree species: 2,500• Critically endangered: 33• Endangered: 14• Vulnerable: 54

Wood removal 2005

• Industrial roundwood: 1,891,000 m3 o.b.• Wood fuel: 8,898,000 m3 o.b.

Value of forest products, 2005

• Industrial roundwood: $4,409,000• Wood fuel: n/a• Non-wood forest products (NWFPs): n/a• Total Value: $4,409,000

Air pollution

Air pollution is a big problem in Peru, especially in Lima, the capital city, which is caused by industrial activity and vehicle emissions. In August 2006, air pollution in Lima surpassed the international standard by 122.1% The average concentration of PTS reached 166.57 micrograms per cubic meter, the international standard is 77 micrograms per cubic meter. In 2009, 1.5 tons of lead and 810 tons of sulphur dioxide, were emitted daily, which is four times the maximum allowed under Peruvian legislation.The Peruvian government has created an alert system for high levels of pollution. There are three levels: watch, danger and emergency. During an emergency, children, pregnant women, the elderly and the ailing may be asked to stay indoors. Those who are healthy enough to continue with their lives outside are advised to cover their mouths and noses with scarves or handkerchiefs—but not facemasks, because according to government spokesperson Carlos Rojas "people don't want images that further dramatize the situation." Also Peru is using "super tree" technology, created by Tierra Nuestra to try and fight the air pollution in the major cities. The super tree acts like 1200 real trees, purifying the air. It sucks the outside air, and under thermodynamic pressure it combines the toxic particles in the air with water, and then pumps out clean air. Unfortunately, there are byproduct to the process, which include mud and non potable water. The Super Tree cleans approximately 200,000 cubic meters of air per day, eliminating air pollutions like carbon dioxide.

Water pollution

Water pollution sources in Peru include industrial waste, sewage and oil related waste. Peru has 1746 cu km of renewable water resources and 86% of this water is used for farming and 7% for industrial activity. In urban areas only 87% and in rural areas 62% of the population have access to clean water. In major cities 3.0 million tons of waste per year is created. President Alan García campaigned for a "water for all" strategic program, which proposed investment in 185 water supply and sanitation projects. The objective of this program is to expand potable water services from 76% to 88% of households; Sanitation from 57% to 77%; and sewage from 22% to 100% by 2015.Lake Titicaca is a specific concern to Puno in southeastern Peru because of its spiritual and historical significance. Contamination and pollution of the lake seriously affects the health of those that depend on it because current monitoring and testing of the lake is primitive and underfunded. Because of violence in and around the area the government is only now addressing the problem.According to the Oxfam report, more than half of Peru's rivers are extremely polluted in the North the Chillón, Yauli and Mantaro in the central region; and the Chili River in the South.

Soil erosion

Peru's topography makes it susceptible to soil erosion. The coast of Peru is subject to wind erosion and water erosion is dominant in Sierra. Erosion also occurs in the High Selva when vegetation is cleared and in Low Selva where they get much rain on areas under slash and burn practises. The use of contoured lines, cover crops and mulching can control erosion to some extent depending on the climate and the slope. In addition, traditional methods can be used to prevent erosion like terracing and agroforestry.

References

While Peru accounts for about four per cent of the world's annual renewable water resources, over 98% of its water is available east of the Andes, in the Amazon region. The coastal area of Peru, with most of economic activities and more than half of the population, receives only 1.8% of the national freshwater renewable water resources. Economic and population growth are taking an increasing toll on water resources quantity and quality, especially in the coastal area of Peru.

The government of Peru is currently undertaking a major transformation of its water resources management from a centralized approach focused on irrigation development in the coastal area to a river basin integrated water resources management for the entire country. The 2009 Water Resources Law (Ley de Recursos Hídricos) and the draft National Water Resources Management Strategy of 2004 (Estrategia Nacional para la Gestión de los Recursos Hídricos Continentales del Perú) contain the necessary elements for Integrated Water Resources Management as stated in international good practices namely, integration of sectoral policies, participation of stakeholders, decentralization of management to the river basin level and recognition of water as a social and economic good. Despite the new law, several key challenges remain, including limited institutional capacity, increasing water stress in the coastal region, deteriorating water quality, poor efficiency in the irrigation sector, as well as inadequate access to and poor quality of water supply and sanitation.

The second half of the 20th century witnessed heavy public investments in dams in the Andes and associated irrigation infrastructure in the coastal region. For example, in the 1950s and 1960s, the San Lorenzo dam and Tinajones dam, the largest Peruvian dams, were built in the northern coastal region. Within the government the Ministry of Agriculture was given the responsibility to manage water resources, since irrigation was by far the largest water use. Its lead role was confirmed by the 1969 General Water Law No. 17752 (Ley General de Aguas—LGA) which defined the Ministry of Agriculture as the "National Water Authority". However, other laws—such as the General Hydrocarbon Law (DL 26221), the General Mining Law (DS 014-92-EM), the Law for Electricity Concessions (DL 25844)—also dealt with water resources on a sectorally fragmented basis within a centralized administrative system that gave little or no decision-making power to stakeholders at the local level. There was no legal basis for integrated water resources management at the level of each river basin, and consequently there were no institutions to implement such an integrated management. This began to change in the early 2000s with the approval of a Decentralization Law, a Regional Government Law and a Municipalities Law. In 2003 the government began transferring powers to the newly created regional governments, including for water quality management and the operation and maintenance of major public infrastructure, despite the limited institutional capacity of regional governments. A draft national water resources management strategy prepared in 2004 (Estrategia Nacional para la Gestion de los Recursos Hidricos Continentales del Peru) aimed at promoting integrated water resources management through a new institutional and legal framework. In this spirit a National Water Authority (Autoridad Nacional del Agua – ANA) was established in 2006 and its role was strengthened through the 2009 Water Resources Law (Ley de Recursos Hídricos – LRH). Implementation of the law and the creation of basin-level institutions with meaningful capacities and enforcement powers still remain a challenge. (See Legal and Institutional Framework below for more details)

Peru has a large amount of water resources, with 159 river basins and a per capita availability of 68,321 cubic meters (m³) in 2006. According to FAO the long-run average annual rainfall is 1,738 millimeters (mm). There is significant seasonal variability in river run-offs, two-thirds of which occur between January and April.

The Andes divide Peru into three natural drainage basins: Pacific basin (279,000 km²), Atlantic basin (959,000 km²) and Lake Titicaca basin (47,000 km²). According to the National Water Authority (Autoridad Nacional del Agua—ANA), the Pacific basin has 62 rivers; the Atlantic basin has 84 rivers; and Lake Titicaca basin has 13 rivers. The number of rivers in Peru varies depending on the source of information, because in some cases tributaries are counted as rivers in their own right and in other cases not.

According to ANA, the dry Pacific basin, with 37.4 km³ available per year, accounts for less than 2% of Peru's renewable water resources. Its 62 rivers flowing west from the Andes supply the bulk of the water to the coastal region. Of these rivers, only about 30% are perennial. From 1984 to 2000, the average water availability decreased to 33 km³ per year and from 2003 to 2004 to 20 km³ per year. Agriculture accounts for the withdrawal of 14 km³ per year (or 80% of total water use) and domestic withdrawals account for 2 km³ per year (12% of total water use). The Atlantic basin holds more than 97% of all available water with nearly 2,000 km³ per year. Agriculture also accounts for 80% of water use, while domestic use accounts for 14%. The Lake Titicaca basin receives 10 BCM per year, less than 1% of the total. In this basin, agriculture accounts for 66% of total water use, while domestic use accounts for 30%.

Key characteristics of the drainage basins

Source: INEI (2007)

External resources of water enter Peru though tributaries of the Amazon, in the Atlantic river basin, supplying 125 BCM annually. The main rivers are Napo, Tigre, Pastaza, Santiago, Morona, Cenepa, and Chinchipe.

ANA estimates the total amount of groundwater available on the coast to be between 35 and 40 km³. There is specific data available only for eight valleys on the coast with 9.0 km³ of groundwater available. Around 1.8 km³ of water are actually extracted on the coast. No sufficient information is available regarding groundwater availability and withdrawal in the highland and Amazon regions.

Groundwater withdrawal per sector in Peruvian coast (5)

Source: ANA

In 1980, the former National Institute of Natural Resources (INRENA) established an inventory of Peru's water storage capacity, including lakes and dams. Peru has 12,201 lakes, 3,896 of which are located in the Pacific basin, 7,441 in the Atlantic basin, 841 in the Titicaca basin, and 23 in the closed basin of Warmiqucha. INRENA inventoried 186 lakes in operation with a total capacity of 3,028.07 million cubic metres and 342 studied lakes with a total capacity 3,953.04 million cubic metres. According to the inventory, the largest number of lakes in operation were located in the Pacific basin, with 105 lakes and a total capacity of 1,378.58 million cubic metres, followed by the Atlantic basin with 76 lakes and a capacity of 1604.73 million cubic metres. The Pacific basin also has the largest number of studied lagoons, with a total of 204 lakes and a total capacity of 616.62 million cubic metres, followed by the Atlantic basin with 133 lakes and a capacity of 3,006.42 cubic metres.

Peru also has 23 dams with a total capacity of 1,941.88 million cubic metres, and 238 studied dams with a total capacity of 44,028.04 million cubic metres. The Pacific basin has 21 dams in operation with a total capacity of 1,875.88 million cubic metres; the Atlantic basin has 2 dams with a capacity of 66,000 million cubic metres. The Pacific basin also has the largest number of studied dams, a total of 126 with a capacity of 17,200.60 million cubic metres. The Atlantic basin has 105 with a storage capacity of 26,274.83 million cubic metres.

The largest reservoirs are Poechos with a capacity of 1,000 million cubic metres, Tinajones with 320 million cubic metres, San Lorenzo with 258 million cubic metres, and El Fraile with 200 million cubic metres, all of them in the coastal region.

The gradual decrease in Peru's water quality is due to the release of untreated effluents from mining, industries, municipalities and polluted runoff from agriculture. Of the 53 rivers in the coastal area, 16 are polluted by lead, manganese and iron threatening irrigation and potable water supplies. In particular, the Ministry of Agriculture considers "alarming" the quality of seven rivers: the Mantaro and Tambo rivers in the Central Andes that drain towards the Amazonas; the small Moche River near the northern coastal city Trujillo and the Santa near the northern coastal city Chimbote; the Chillon and Rimac rivers near Lima; and the Chili River near Arequipa which is well known for its rafting. In the Mantaro basin alone 18 mining facilities discharge polluted water into the river.

Mining, which provided more than 60% of Peru's export earnings in 2006, is a major water user and polluter. It is estimated that mining uses about 5% of Peru's water. In addition, it severely affects water quality. It has been estimated that more than half of Peru's peasant communities have been affected by mining activities, leading to the creation of organizations such as the National Committee of Mine Affected Communities (CONACAMI). The government had to declare an environmental state of emergency at several mining sites due to environmental disasters. For example, in July 2008 it declared a state of emergency at a mine near Lima over fears that arsenic, lead and cadmium from its tailings dam could pollute the main water supply for the capital. In July 2010 the government declared another state of environmental emergency in the central mining district of Huancavelica after a wastewater storage dam of the Caudalosa Chica company collapsed and leaked water laden with heavy metals into local rivers. The city La Oroya on the Mantaro River in Central Peru where the company Doe Run operates a big mining complex has been ranked as one of the 10 most contaminated cities in the world in 2007. Furthermore, an estimated 100,000 small-scale informal miners pollute rivers with cyanide and mercury.

Often the exact scope of pollution is a matter of dispute. An example is the Yanacocha mine in the Andes, the largest and most profitable gold mine in Latin America that was created with the support of the International Finance Corporation (IFC). According to a report in 2000 by an organization called "Project Underground" levels of copper were 10 to 20 times higher than WHO standards and the acidity of the water was extremely high with a pH of 3.3 compared to 6.5, the highest acidity considered drinkable. According to local communities, fish and frogs had disappeared from the river, both of which were previously a food supply for the rural communities. Subsequently, an independent report by Stratus, a Colorado consultancy, found that the pollution from the mine "posed no threat to human health or to drinking water". But the mine's rapid expansion has affected farmers: Several irrigation channels have dried up, while extra sediment in rivers has killed trout.

In almost all cases, local communities are overwhelmingly opposed to mining because of its environmental impact on their livelihoods. An example are conflicts witnessed in Piura Province since 1993. A Canadian mining company departed shortly after a local referendum in Tambogrande in which over 93% voted against mining. When another company began exploration in Ayabaca and Huancabamba, this elicited new conflicts and a referendum held in September 2007, in which again over 90% of voters voted against mining. One of the main concerns of local and downstream communities relates to the effects that the mine would have on water quality and quantity. The company and the central government continued to insist, though, that the mine will go ahead.

Ineffective irrigation has generated salinization and drainage problems in 3,000 square kilometres of the coastal valleys (of a total irrigated area of 7,360 km²), jeopardizing land productivity and affecting the quality of Lima's water supply. Drainage problems are also affecting 1,500 km² in the Amazon region. In the highland and Amazon areas, excessive deforestation due to nomadic agriculture practices is causing erosion and soil degradation. In the Sierra 55%–60% of the land is affected, increasing the amount of soil transported downstream.

Domestic consumption accounts for 7% of water withdrawals in Peru. The water and sanitation sector in Peru has made significant advances in the last two decades, including an increase in access to an improved water source from 75% to 82% between 1990 and 2008 and an increase in access to improved sanitation from 54% to 68% during the same period. Progress has also been achieved in the disinfection of drinking water and in wastewater treatment. Despite these advances, water supply and sanitation services in Peru are characterized by low coverage in rural areas (61% for water 36% for sanitation in 2008) and poor quality of service, as well as the precarious financial situation of utilities.

About 80% of all water withdrawal in Peru is used for irrigation, yet much of this water (65%) is lost due to reliance on inefficient irrigation systems

Area with Irrigation Infrastructure and irrigated areas (km²)

Source: Portal Agrario (1994)

In 2006, 72% of Peru's total electricity generation (27.4 TWh) came from hydroelectric plants, with conventional thermal plants only in operation during peak load periods or when hydroelectric output is curtailed by weather events. Hydropower accounts for 48% of total installed capacity. Non-consumptive water withdrawal for hydropower generation accounts for 11,138 million m3 per year. The largest hydroelectric facility in the country is the 900 MW Mantaro Complex in southern Peru, which is operated by state-owned Electroperu. The two hydroelectric plants at the complex generate over one-third of Peru's total electricity supply.

There are 12,201 lakes and lagoons in Peru, 3,896 of which are located in the Pacific basin; 7,441 in the Atlantic basin, 841 in the Titicaca basin, and 23 in the Huarmicocha system. Peru contains approximately 50,000 km² of swamps and 45 km² of mangroves.Peru's wetlands play an important role for rural communities. These wetlands are the source for animal protein and for totora, a plant used in the artisan production of boats and floating devices. Estuaries are also fundamental for the reproduction of several marine species that are basic for the fishing industry. Other uses such as industrial production of algae and bird-watching tourism are not yet fully discovered. In 1996 the Government adopted a National Wetlands Conservation Strategy aimed at increasing the area of mangroves, moors, estuaries, and lagoons considered to be protected areas. Uncertainties about land ownership, industrial pollution, urban sprawl, and deforestation continue to threaten wetland integrity in Peru. The complete Pucchun Lagoon in Arequipa, 50 km², has been dried out for agricultural purposes. The Villa Swamp, located south of Lima, was reduced from its original 50 to 3 km² in 1989 due to urban sprawl.

The newly approved Water Law (Ley de Recursos Hídricos – LRH, published March 31, 2009) has enhanced the National Water Resources System (substituting Decree No. 1081) which now consist of ANA, a National Water Resources Court, River Basin Councils, regional and local governments and water users organizations. However, some institutions foreseen under the law, such as the River Basin Councils, remain to be created. The water law also establishes priority uses of water, re-defines water user rights, understands water as an economic good, defines sanctions, considers river basins as management units and incorporates groundwater management considerations. It is foreseen that subsidiary legislation (reglamentos) will complement the water law by specifying, for instance, the roles of each institution within the National Water Resources System.

The water law has been criticized by the Peruvian Peasant's Association claiming that it allows the privatization of water resources, does not involve local and regional governments in decision-making, promotes private operators in drinking water supply who would control water resources. They also claim that the interests of mining companies, industries and export-oriented agriculture influenced the drafting of the law.

Ley de Recursos Hídricos indeed gives a strong role to the national water authority ANA. Its 14 local branches, called Autoridades Administrativas del Agua, are accountable to the national authority and not to local or regional governments. The River Basin Councils (Consejos de Recursos Hídricos de Cuenca) are to be chaired by the president of the regional government, but they have only limited powers and their financial resources consist merely in a share of expected water abstraction fees that the National Water Agency would grant them.

The institutional framework for water resources management at national and river basin level is fragmented. The newly created National Water Authority (Autoridad Nacional del Agua – ANA) was established in December 2006 replacing the Water Resources Intendancy (Intendencia de Recursos Hídricos – IRH) and is responsible for the design and implementation of sustainable water resources policies and irrigation nationally. The creation of ANA improves the prospects for sound WRM, because it has a clear mandate for integrated, participative, basin-scale WRM, enjoys financial and administrative autonomy, is able to issue sanctions and will have local offices in river basins. Some of the modifications included are (i) ANA is the new water authority, however, it is still under the Ministry of Agriculture, which could hinder the impartiality required for sound WRM; (ii) ANA will have River Basin Authorities (Autoridades Administrativas del Agua—AAA), in each of Peru's 14 hydrographic regions and Local Water Authorities (Autoridades Locales de Agua—ALA) in selected river basins; and (iii) ANA is now also responsible for water quality.

However, a number of ministries have sectoral inputs on water resources management: Agriculture for Irrigation, Housing and Sanitation for domestic water use, Trade and Tourism for hot springs and mineral water, Energy and Mining for hydropower and mining operations, and the Council of Ministries for environmental policy and energy and water tariff and services regulation. In addition, the Ministry of Environment (MINAM) created in 2008 is responsible, among others, for the generation of hydro-meteorological information through its Meteorological and Hydrological National Service (Servicio Nacional de Meteorología e Hidrologia – SENAMHI).

The regional governments are responsible for the operation and maintenance (O&M) of major public hydraulic infrastructure (i.e., headwork such as dams and inter-basin transfers transferred to them as part of the decentralization process) and have some responsibilities for water quality. The regional government responsibilities poses a challenge for IWRM, since the administrative boundaries of the region do not coincide with those of the river basins. An additional challenge is that the regions are young and lack fundamental technical capacity and human resources to undertake IWRM.

Finally, the roles of other actors traditionally involved in WRM at the local level—some of them yet to be defined in the new institutionality—include (i) eight local offices of the Environmental Health General Department (Direccion General de Salud Ambiental—DIGESA), and (ii) Water User Boards (WUBs) responsible for operation and maintenance (O&M) of minor irrigation infrastructure.

In 2004, the Peruvian government proposed a National Water Resources Management Strategy, which is currently being discussed and is pending approval. The main objectives are:

• Institutional renovation and a clear legal framework to include (i) a resolution of current disparities between the Water Law and the Natural Resources Law, and transfer of irrigation system operation and maintenance to River Basin Authorities, promoting public participation in decision-making processes; and (ii) institutional development strategies that formalize water and pollution rights and establish a comprehensive tariff system to cover O&M activities.
• Integrated Management of Water Resources addressing both water supply and demand, taking into consideration environmental, social and economic factors. It includes a plan to modernize Peru's existing irrigation infrastructure with the goal of increasing the overall efficiency of irrigation systems from 35% to 45–50%.
• Increased Quality of Water Resources with a conservation initiative for upstream water resources aimed at decreasing sedimentation; it creates a pollution control authority to monitor agricultural and industrial discharges, promotes water recycling, and improves coastal drainage and salinity problems.
• Disaster Management and Mitigation including consistent weather monitoring, reforestation in strategic upstream areas, water channelling, and improved urban planning preventing settlements in high-risk areas.
• Capacity Building and Water Culture, and education program for preschool to college level students about the economic, social, and environmental value of water resources.
• Water Resources Information System strengthening of networks that monitor water quality and quantity; making accurate information publicly available. (See National Water Resources Management Strategy)

The Amazon Cooperation Treaty, signed in 1978 by Bolivia, Brazil, Colombia, Ecuador, Guyana, Peru, Suriname and Venezuela, aims at promoting sustainable use of natural resources, including water, in the Amazon Basin

On 25 June 2005, after the approval of a US$700,000 grant by the Global Environment Fund the Amazon Cooperation Treaty Organization, the General Secretariat of the Organization of American States and the United Nations Development Program agreed to sign the Integrated and Sustainable Management of Transboundary Water Resources in the Amazon River Basin Considering Climate Variability and Change Project. The project aims to strengthen the institutional framework for planning and executing, in a coordinated and coherent manner, activities for the protection and sustainable management of water resources in the Amazon Basin in the face of impacts caused by human action and ongoing climatic changes being experienced in the Basin.

Water pricing in Peru follows a complex system set out in the water law of 2009, which defines three types of fees and two types of tariffs: (i) fees paid for water abstraction from the environment (Retribuciones economicas por el uso del agua); (ii) fees paid for wastewater discharge to the environment (Retribuciones económicas por vertimiento de uso de agua residual tratada); (iii) tariffs for the use of water infrastructure; (iv) tariffs for water monitoring; and (v) tariffs for sectoral water distribution.

Tariffs for water distribution include irrigation tariffs and drinking water tariffs. These are historically the most important types of tariffs. Drinking water tariffs levied by utilities are approved by the national superintendency for water supply and sanitation, SUNASS. Tariffs are low compared to some neighboring countries, such as Brazil and Chile. Water bills are often not paid. (See water supply and sanitation in Peru). Irrigation tariffs are collected by water user boards. Water is rarely metered and therefore fees are mostly based on area and crop types rather than on volume of water used. Tariffs vary between US$2.2 per ha and US$25.55 per ha, and collection rates vary from 10% in the Amazon and 68% in the Costa region. Farmers contribute in cash through payment of the water tariff and in kind, through labor and materials, following ancestral practices.(See Irrigation in Peru)

All other fees and tariffs have to be approved by the National Water Agency as well as, in the case of abstraction and discharge fees, by the Ministry of Agriculture. The proceeds are to be used for environmental monitoring, prevention, control and remediation; water resources planning; and the operation and maintenance of infrastructure. The level of fees is to be differentiated depending on the type of use, taking into account social, economic and environmental factors. As of 2010, these new fees and tariffs were not yet being collected pending the setting of these fees through subsidiary legislation.

The Peruvian piedmont and coastline are prone to devastating floods and mudslides, mainly due to heavy precipitation on degraded upper basins, whereas the southern part of the country is particularly prone to droughts. Aside from natural causes, such as El Niño Southern Oscillation, the effects of droughts and floods have been exacerbated by manmade interventions including soil erosion stemming from poor cropping and grazing practices, deforestation, and poor land use-practices. El Niño hits Peru approximately once every seven years and consists of heavy winds and rainfall associated with devastating floods and landslides. In 1997–1998 the costs of damages reached US$2 billion. Droughts severely affect the southern coast, producing agricultural losses as well as limitations on human water consumption. Preventive laws and measures (related to zoning, deforestation, and so forth) are not enforced and there is no reliable early warning system. The consequence is increasing negative impacts from droughts and floods on the different regions, with an increasing impact on Peru's economy.

Although a thorough assessment of the net impacts on Peru's water resources is still lacking, some trends are discernible. The effects of climate change in Peru include more extreme weather conditions such as droughts and floods, El Niño Southern Oscillation, increased likelihood of flash fires, changes in the ability of ecosystems to store water, and the retreat of Andean glaciers. The effects of glacier retreat are different at the initial and final stages of glacier retreat—initially more water is available during the dry season, while flow declines below the initial level once the glacier has melted. (See Impacts of Glacier Retreat in the Andes:Documentary). High mountain ecosystems, including páramos (unique wetlands of the Northern Andes) and snowcapped terrains are among the environments most sensitive to climate change. These ecosystems have unique endemic flora and provide numerous valuable environmental goods and services. Data recently made available suggest that climate impacts have already altered the circulation patterns responsible for producing and moving water vapor to the region. These changes have likely contributed to the disappearance of high-altitude water bodies, as well as to the increased occurrence of natural and human-induced mountain fires.

The Program for Strengthening of National Capacities to Manage the Impact of Climate Change and Air Pollution (PROCLIM) together with the Ministry of Environment and the Netherlands Cooperation Agency published a model for adaptation that estimated the impacts of climate change climate for several river basins. For instance, in the Mantaro River Basin one scenario presents a possible increase (greater than 50%) in precipitation along the entire basin, particularly over the west central mountain range and the Chinchaycocha plateau. According to a second scenario, precipitations in the west central range could increase in more than 100% while in the eastern region they could be reduced by 20%. In the Piura River Basin there is a (i) tendency towards increase of the minimum temperature peaks and the average sea level; (ii) greater probability that the intensity of future El Nino Events will increase; (iii) there will be an occurrence of an El Nino Phenomena during the 2009–2015 period similar to the one of 1982–1983; (iv) a deficit in the balance of water is foreseen during the period 2005–2035; and (v) tendency towards lengthier and more frequent drought periods is noticeable. In the Cordillera Blanca, Santa River Basin precipitations will become the main water resource in view of the severe retreat of the area's tropical glaciers. Because of the tendencies towards temperature increase, it is expected that the runoff levels will increase until they reach a peak in the first half of the century, to then exhibit a sustained decline in water resources.

According to a 2008 survey of Radio RPP, only 37% of respondents think that water is scarce in Peru. Only 27% of respondents living in Lima—a city in the middle of a desert—believe water to be scarce in Lima. 72% of respondents throughout the country believe that Peru is affected by climate change. However, only 8% of respondents think that water scarcity is a consequence of Climate Change.

The government is currently looking into seawater desalination as a national priority to adapting to decreasing water availability. Peru's Government in planning a US$1.5 billion investment to build two desalination plants on Lima's coast to supply water to 1.5 million people.

The World Bank is collaborating with the Government of Peru through the National Water Resources Management Modernization Project (US$10 million). This project aims at strengthening the institutional capacity for integrated water resources management at the national level and in three river basins namely, Chancay-Lambayeque, Ica-Alto Pampas and Chili. The World Bank is also contributing US$85 million, out of a total of US$172.4 million, to a Subsectoral Irrigation Project (Programa Subsectorial de Irrigacion). Also, the Agricultural Research and Extension Adaptable Program Loan Phase 2 (US$69 million) aims to promote the adoption of sustainable agricultural practices in glacier-dependent watersheds.

In June 2007, the Global Environmental Facility approved the Regional Adaptation to the Impacts of Rapid Glacier Retreat in the Tropical Andes (Bolivia, Ecuador and Peru) Project. This project aims at implementing adaptation measures to meet the anticipated consequences of glacier retreat induced by climate change.

The Inter-American Development Bank (IDB) contributes US$10 million to a Water Resources Management Modernization Project focused on three pilot river basins namely, Santa, Chira-Piura and Tacna. This project does not include any intervention at the national level. In June 2007, the IDB approved US$200 million for a Water Resources Reform Program (WRRP) that would include hydraulic structures, and institutional and legal reforms. In August 2007, the IDB approved an additional US$5 million to support capacity building efforts contained in the WRRP. The IDB is also implementing a water resources management plan for Peru's Maschón and Chonta watersheds. The objective of this US$1.2 million grant is to define the appropriate measures for improving integrated water resources management.

• Electricity sector in Peru
• Irrigation in Peru
• Water supply and sanitation in Peru
• Water pollution in Peru
• Impacts of Glacier Retreat in the Andes:Documentary

• Autoridad Nacional del Agua (National Water Agency)
• Ministry of Agriculture
• Instituto Nacional de Estadistica e Informatica del Perú (National Statistics Institute)
• Poverty, Agriculture and Water within the Andean Region

Peru has some of the greatest biodiversity in the world.

The water and sanitation sector in Peru has made important advances in the last two decades, including the increase of water coverage from 30% to 85% between 1980 and 2010. Sanitation coverage has also increased from 9% to 37% from 1985 to 2010 in rural areas. Advances have also been achieved concerning the disinfection of drinking water and in sewage treatment. Nevertheless, many challenges remain, such as:

• Insufficient service coverage;
• Poor service quality which puts the population's health at risk;
• Deficient sustainability of built systems;
• Tariffs that do not cover the investment and operational costs, as well as the maintenance of services;
• Institutional and financial weakness; and,
• Excess of human resources, poorly qualified, and high staff turnover.

Access to water and sanitation increased during the last decades. Political efforts to increase access include the program Agua para todos which started in 2006 under President Alan García (see below).

According to the Joint Monitoring Program (JMP) by WHO and UNICEF the coverage of improved drinking water service was 85% and 71% had access to improved sanitation in 2010. Access increased from 75% concerning water and 54% concerning sanitation in 1990. In 2010, urban coverage was 91% for water and 81% for sanitation. In rural areas coverage of drinking water was 65% and sanitation 37%.

According to the Peruvian National Statistics and Informatic Institute (Instituto Nacional de Estadística e Informática - INEI), about 73% of the population had access to drinking water supply in 2009, while about 57% had access to sewerage. In the framework of the development plan Plan Bicentenario it is envisaged to increase water supply coverage to 85% and access to sewerage to 79% by 2021.

Parts of Peru are located in vast deserts, limiting water accessibility. While there has been an emphasis within the country on improving infrastructure to increase water access and restore watersheds, much of Peru still remains under-served, with over 1.5 million people estimated to have no running water in their homes. A 2015 UN Water Global Analysis and Assessment of Sanitation and Drinking Water report stated that Peru has made significant improvements within the last fifteen years to promote sanitation and improve access to water. Water access, however, is still unequal; some Peruvians pay 1.3 sols (.40 USD) for one cubic meter of running water, while poorer citizens who rely on water delivery trucks to bring them their resources pay around 20 sols ($6 USD) for one cubic meter of running water, an over 1500% increase. Water delivered in Peru tends to be unsanitary and non-potable. However, wealthier citizens are more easily able to treat water in their homes, while poorer citizens often lack the resources to properly treat their water.

In a national survey conducted in 2008, 64% of respondents indicated that they were satisfied with the quality of the water they received. Those who were not satisfied complained about turbidity, high levels of chlorine, bad taste and bad smell. This figure apparently does not include the level of satisfaction related to the continuity or pressure of water supply.

Urban areas received water service for an average of 17 hours per day in 2005. Only one Peruvian service company has continuous service, the company EMSAP in the Amazon region.

Back in 1997, the total continuity average was at 12 hours per day, 5 hours less than in 2005. Rural areas averaged 18 hours, while in urban areas, service was provided on average for 12 hours. Service averaged 8 hours on the coast, 18 hours in forested and mountainous regions, and 10 hours in metropolitan Lima.

In 2000, 80% of urban water supply systems used disinfection measures. In urban areas, 43 companies that provided information to the regulator complied with the norms for residual chlorine in the network.

In rural areas, however, in a sample consisting of 1,630 analyzed systems, 59% do not disinfect the water because of lacking the necessary facilities or the lack of chlorine. Considering that locations with less than 2,000 inhabitants have around 11,800 systems, it can be estimated that around 7,000 rural water systems provide water without disinfection.

The share of treated wastewater in 2004 was estimated at 22%. This is to say that more than three fourths of the wastewater generated did not receive any type of treatment prior to its final discharge, which poses a serious threat to the environment. Back in 1997, the coverage of wastewater treatment had only been 13%. In 2005, only two companies treated all of their sewage, one of them being from the Provincia de Marañón.

The great majority of sewage of the Lima-Callao metropolitan area is discharged without treatment into the ocean, resulting in serious contamination of the surrounding beaches. The Japanese Bank of International Cooperation (JBIC) provided a loan for the sanitation of the Lima-Callao area in 1997. However, the project was not implemented.

In 2013 the Taboada wastewater treatment plant was commissioned in Lima. With a capacity of 1,8 million cubic meters/day it is the largest wastewater treatment plant in South America. It was privately financed as a Build-Operate-Transfer (BOT) project by the Spanish firm Técnicas de Desalinización de Aguas (Tedagua). It is envisaged that some of the treated water will be used for the irrigation of urban parks. Financing for another wastewater treatment plant in La Atarjea has been secured in February 2014 through a 48,66 million Euro loan from the German development bank KfW. The treated waster will be reused for irrigation after being discharged into an existing irrigation canal.

On average, surface water in Peru is abundant. Nevertheless, it is unequally distributed in space and time. Especially the coastal area, where thecountry's major cities are located and two thirds of the population live, is very dry. Lima with 8 million people, is the world's second largest city located on a desert (after Cairo).

Peru contains over two-thirds of all tropical glaciers which provide important water sources for the dry western half of the country. These glaciers are rapidly melting as a result of climate change, making the flow of rivers more irregular, leading to more droughts and floods. A report by a team from the World Bank published in June 2007 in the bulletin of the American Geophysical Union (AGU) predicts that many of the lower glaciers in the Andes will be gone in the next decade or so, and that glacial runoff may dry up altogether within 20 years. The last comprehensive satellite survey by Peru's National Environmental Council, carried out in 1997, found that the area covered by glaciers had shrunk by 22% since the early 1960s. Partial surveys by geologists suggest that the rate at which the glaciers are melting has sped up over the past decade. Additionally, as these glaciers rapidly melt, they also expose the water to contaminants in the glaciers, such as lead and cadmium, making it unsafe to consume,

For example, the Quelccaya Ice Cap is the second largest in the Peruvian Andes and has shrunk by 30% in the last 33 years. Streams fed by glaciers and rainwater provide water further downstream.

Parts of Peru are in arid, dry desert-like conditions, which in turn have created a drought-like situation. As global temperatures increase, these areas are at higher risk of not obtaining steady access to water in already limited amounts. This is seen in Peru in the primarily Northern part of the country where there is much more desert-like conditions,

Discussed in Treehugger magazine, there is a sustainability sweet spot, in which a nation has a high level of human development cross-checked with ecologically sustainable use of resources. Peru is one of the very few countries falling into this sweet spot. The sustainability methods of Peru is a relatively modern ideology that has not been thought about in the grand scheme of time. Peru is able to pursue a method of sustainability since it has a large amount of readily available natural resources, as opposed to other countries that rely heavily on imports for mass amounts of natural resources. It is also important to understand how sustainable Peru's future water resources will remain as climate change progresses and rapidly affects the water supply. For example, the Rimac, Chillon, and Lurin River are all central to Peru's water supply, and are not equipped to handle the growing population. As it stands, there are no current plans by the government to deal with this issue.

Sustainability generally refers to the capacity for earth's biosphere and human civilization to coexist. Sustainability is a vital aspect of the WASH sector in development because it conserves the environment, is cost friendly, and promotes healthier development practices. The National Environmental Policy Act of 1969 committed the United States to sustainability, declaring it a national policy "to create and maintain conditions under which humans and nature can exist in productive harmony, that permit fulfilling the social, economic, and other requirements of present and future generations". Institutional sustainability in the WASH sector means that WASH systems, institutions, policies, and procedures at the local level are functional and meet the demand of users of WASH services. The element of environmental sustainability implies placing WASH interventions in the wider context of the natural environment and implementing an approach of integrated and sustainable management of water and waste(-water) flows and resources.

In 2005, an average of 259 liters/person/day of water were produced in urban areas. Actual water consumption is much lower than this level due to distribution losses estimated around 45%. Per capita water production has decreased by 26% since 1997 when production was at 352 liters/person/day. This decrease may be partly due to an increase in the share of metered users from 24% to 47% (1997–2005). According to the National Sanitation Plan, it is inadmissible that with such high levels of production water supply remains intermittent in many cities.

In rural areas, water use is much lower than in urban areas.

According to a 2008 national survey by the radio station RPP and the World Bank's Water and Sanitation Program (WSP), 38% of respondents indicate that they "take great care" of water in the household. 89% of respondents indicated that they treat tap water before drinking it, primarily by boiling it, and 48% store water in their house because of intermittent supply or because they have no access to piped drinking water.

Prior to Spanish colonization, the indigenous people of Peru managed their water using surface catchments and artesian wells, as well as subterranean aqueducts (puquios) and sewer systems. Roughly 1,700 years old, some of these aqueducts are still in use in the Nazca region; as of 2019 they were under consideration as a World Heritage Site.

The arrival of Spanish conquistadors in the mid-1500s left existing systems largely unchanged, as the Spanish themselves made use of the indigenous systems. However, indigenous infrastructure was put under strain as population centers grew along the dry western coast of Peru; additionally, under colonial policy surplus water withdrawals were encouraged to aid gold and silver mining (as opposed to agriculture). This marked the beginning of the mining industry’s heavy water consumption in Peru, which continues to be a point of high contention in the modern nation’s water sector.

Over the course of the following centuries, rural areas preserved a mix of colonial and indigenous water practices while urban centers like Lima continued to develop along the European model. After the establishment of the independent Peruvian state in 1821, conveyance pipes for drinking water began to be installed throughout Peru, slowly displacing the manual water porter and self-dug wells; the first potable water disinfection plant was installed in Lima in 1917. However waste was still collected in open ditches, and the investments in infrastructure were not organized.

The institutional framework for the water and sanitation sector has undergone many successive changes, including some reforms that were never implemented and some that considerably changed the responsibilities in the sector. Two reforms that had a lasting impact were the transfer of the responsibility for water supply and sanitation from municipalities to the national government in the late 1960s and the creation of a national water holding company in 1981 consisting of utilities in the large cities. In 1990, the government gave service responsibility in urban areas back to the municipalities. The new government of Fujimori introduced a policy of promoting the private sector and of commercializing the municipal utilities. In 1994 an autonomous regulatory agency was created at the national level. In the meantime the program to promote the private sector stalled: Only in 2005 the first and so far only water concession in Peru was awarded in the city of Tumbes.

In the beginning of the 1960s, the municipalities had the responsibility of providing water and sanitation services. However, this responsibility was transferred to the Ministry of Housing and Construction in most urban areas towards the end of the decade. In rural areas, investments were realized through the Ministry of Public Health. The systems, once built, were handed over to community-based organizations for operation and maintenance. In the 1970s, the large cities of Lima, Arequipa and Trujillo created their own Water and Sanitation Companies.

In 1981, the government of Fernando Belaúnde Terry merged the three Sanitation Companies of Lima, Arequipa, and Trujillo and the General Directorate for Water and Sanitation of the Ministry of Housing and Construction in a single national state holding company, the National Service of Water and Sewage Supply (SENAPA). SENAPA was composed of 15 constituent companies and 10 operational units. SEDAPAL in Lima was the largest one. 200 cities (20%) were left out of SENAPA and administered their own services.

The Government of Alan García (1985–1990) passed a law that transferred the functions related to rural water and sanitation construction and technical assistance to regional governments. With the change in government in 1990, these changes did not materialize, as the regionalization stalled.

During the 1990s, the water and sanitation sector was decentralized again. In May 1990, the outgoing government of Alan García decided to transfer all SENAPA constituent companies and operational units to the municipalities. SENAPA was to be converted into a company in charge of only giving technical assistance to the municipalities, a decision that was never implemented.

The Government of Alberto Fujimori (1990–2000) initiated another restructuring of the sector with the objectives of commercializing and privatizing the service providers. In 1991, the government enacted the Private Investment Promotion Law for water and sanitation. In 1992, the National Water and Sewage Program (PRONAP) was created. SENAPA and SEDAPAL were placed under the direct authority of the President. In 1994, a new law was passed that created the legal figure of the municipal utility (EPS) as an entity that is legally and financially separate of the municipality. More than ten years later, in 2005, the Water and Sanitation Program of the World Bank called the commercialization of municipal water utilities in the interior of the country a "silent reform in the sector".

The General Law of the National Superintendence of Sanitation Services (SUNASS) was passed in 1994. A tariff restructuring with the objective of achieving financial viability of the EPS was carried out in parallel. Despite the government's expectations, no single public-private partnership in water supply and sanitation was put in place during the Fujimori government and all service providers remained public. Only in October 2005 the first water and sanitation concession contract in Peru was signed in the province of Tumbes. The 30-year concession was awarded after open bidding to a Peruvian-Argentine consortium, Latinaguas-Concyssa. The interventions under the concession were to be financed with the support of a loan and grant from the German development bank KfW.

In La Libertad Region the public company for water supply and sanitation is SEDALIB which is formed by shareholders of municipalities of the Region.

In 2009, a new water law reasserted the state's ownership of national water resources, affirming the government's absolute power in deciding where and by whom water is used. This affirmation resulted in a renewed push for centralized infrastructure via public-private partnerships, with corporations building and operating for an initial period before ownership is re-assumed by the state.

The Ministry of Housing, Construction, and Sanitation is the sector governing entity through the Vice Ministry of Construction and Sanitation (VMCS) and the National Sanitation Board (DNS). The Ministry formulates, approves, executes and supervises the application of the national water and sanitation policies. The Ministry was created on June 11, 2002, through the Organic Law #27779.

Various drafts of a General Water Law for water resources management have been in discussion for two decades. Nevertheless, no law has been approved up to now.

The sector regulating entity is the National Sanitation Services Supervisory (SUNASS), created by law in 1992.Its functions are to regulate and supervise service providers, approve tariffs, establish norms, impose sanctions for violations of the law, and resolve user controversies and complaints. As part of its supervision activities SUNASS has established a benchmarking system to monitor the performance of service providers.

SUNASS is funded through a 2% surcharge on water bills with an annual budget of approximately US$4 million. According to the law, it enjoys administrative and financial autonomy.Its Board consists of five members nominated as follows:

• 2 by the Prime Minister's Office (including the Board's Chairman)
• 1 by the Ministry of Finance
• 1 by the Ministry of Housing, Construction, Water and Sanitation
• 1 by the Office of Fair Competition (Indecopi)

The Peruvian Constitution of 1993 bestows the responsibility of water and sanitation service provision to the city councils. The Ley Orgánica de Municipalidades (Law Nº 27972) states that the function of the provincial municipalities is to directly or by concession administer and regulate the water service, sewage, and drainage. Peru has 194 provincial city councils.

The service providers in the country are:

• Water and Sewer Company (SEDAPAL) in Lima;
• 53 Municipal Service Providers (EPS) in other cities (SEDAPAL and the EPS have 62% of the country's population within their jurisdiction);
• approximately 11,800 Communal Organizations – Sanitation Services Administrative Committees (JASS) – that are responsible for 29% of the population mainly situated in rural areas; and,
• 490 small municipalities that contain 9% of the total population.

When mayors change in Peru this often leads to the removal of the general manager of the municipal service provider (EPS) or of the head of the municipal department in charge of water supply in smaller municipalities that do not have an EPS. In 1999 it was estimated that the EPS changed general managers on the average every 17 months. This happens although the majority of the EPS are made up of several provincial municipalities, which in theory should decrease the influence of city governments and reduce the political interference in the administration of companies.

Nearly all of the country's service providers remain weak in financial and institutional aspects, as well as in human resources, despite attempts to strengthen them.

A key function in the water and sanitation sector that is frequently neglected is the support to communal organizations that provide services, mainly in rural areas. This function can be assigned to municipalities, EPS, or to national entities with departmental filiations.

The WHO observed that in 2000 the municipal participation in assistance to rural services was insufficient to different extents, ranging from its total exclusion to the need for support in the preparation of the technical records and the complete integration in the planning, financing, and construction supervision processes.

The regional governments have technical and financial supporting functions (also see Peru Regulation). The 24 separate Regional Boards of Housing, Construction, and Sanitation – one in each department – support them in this role.

Many interventions in rural areas during the 1990s were made without verifying the community demand and without their contributions to the execution of the projects. This resulted in overly designed systems that the communities did not maintain thus leading to loss of public funds.

Since 2002, the PRONASAR project supports the Administrative Assemblies of Sanitation Services (JASS) directly and through NGOs as well as municipalities.

The Ministry of Health (MINSA) is also participating in the sector through the General Director's Office of Environmental Health (DIGESA) and the Executive Director's Office on Basic Sanitation (DESAB), entities which exert functions in the aspects pertaining to sanitary and water quality for human consumption and the protection of a healthy environment.

Other institutions which act and participate in the sector are the Ministry of Economy and Finances (MEF) that specifically interferes in the aspects of economic sectoral and normative planning related to finances; several NGOs and the private sector, among others.

The National Cooperation Fund for Social Development (FONCODES), created in 1991, channels resources to investing in marginalized rural and urban areas in various sectors including potable water and sanitation. Within the framework of the state decentralization process, since October 2003, FONCODES transfers resources to the district city councils verified for social infrastructure projects, offering technical assistance and contributes to the capacity building for the responsible handling of social investments. The FONCODES depends on the Ministry of Women and Social Development (MIMDES). Since the beginning of PRONASAR, FONCODES has retired from water and sanitation activities in rural areas.

Some 46 service providers have formed the National Peruvian Association of Sanitation Service Providers (ANEPPSA) to "promote the excellence in sanitation services management" through training and exchange of experiences.

In 2006-07 nine small towns (between 5,000 and 25,000 inhabitants) across Peru introduced a new water and sanitation management model, under which the community is being more empowered, including through deciding themselves about a certain level of service quality, such as low-cost technologies, and corresponding tariffs. Subsequently the municipality hires a specialized operator who is being regulated by a Community Supervision Board under a Public-Private-Social Partnership. The specialized operator can be a private or a mixed company. The aim of the new approach was to break with the low-level equilibrium of poor service quality and poor cost recovery that prevails throughout small towns in Peru, under which poor quality water services are provided directly by the municipality. The new approach was supported through the Small Town Pilot Project (STPP) of the Ministry of Housing, with technical support from the World Bank's Water and Sanitation Program (WSP) and financial support of US$6.6 million from the Canadian International Development Agency for limited infrastructure investments and training for both the operator and members of the Community Supervision Boards. After the municipal elections of 2007, 3 new mayors decided to abandon the new approach and to return to the old model of direct municipal management. In the 6 other cities specialized operators continue to operate.

In September 2006, the new President Alan García announced an ambitious investment plan for the water and sanitation sector called Agua para todos (that is, water for everyone), promising water access to all Peruvians – mainly to the poorest – by the end of his mandate. However, as of 2020, there have been no further developments on this proposed plan. Currently, water delivery projects by the Peruvian government involve partnerships with NGOs such as the non-profit also called "Water for Everyone".

Founded in 2013, the NGO EcoSwell works on water and sanitation projects across Peru (amongst other sectors of work); they are based in the northwestern Lobitos district of the Talara region, an arid coastal area that faces water stress. To combat the challenges of derelict infrastructure and environmental degradation, EcoSwell primarily constructs physical WASH projects with the help of local residents and interns, including bio-remediation for wastewater management, dry toilets, grey water reuse, desalination, and groundwater monitoring. Their bottom-up approach to community mobilization focuses on the long-term sustainability of Peru's ecology, with a commitment to a steady-state economy.

It is estimated that 45% of the water produced is not counted due to physical and commercial losses, which is higher than the other 40% average of Water and sanitation in Latin America. This coefficient has not changed a lot during the last 12 years. The highest levels are detected in the provinces of Marañón and Barranca (greater than 70%). Some companies had water levels not accounted for at less than 10%, however, these values do not seem viable given the low level of household metering (50%).

Water tariffs in Peru are somewhat low compared to other Latin American countries and water bills are often not paid. As a result, according to an estimate, 95% of the country's urban service providers can be considered bankrupt. In many urban areas it is common to spend significant sums to water tanker operators, which are prevalent because of intermittent supply and deficient coverage. In rural areas, tariffs are even lower than the already low tariffs in urban areas, making it impossible to properly maintain water systems.

Tariffs In 2004, water tariffs in Peru were on average Sol 1.29/m3 (US$0.38/m3) in urban areas. Average urban tariffs increased slightly from Sol 1.04/m3 in 1997 (US$0.40/m3 with 1997 monetary values) to Sol 1.45/m3 in 2000 (US$0.42/m3), however dropped in real terms thereafter. Each provider has its own tariffs, with significant differences between them, ranging from Sol 0.45/m3 in Valle del Mantaro (US$0.14/m3) to Sol 2.60/m3 in Ilo (US$0.79/m3) in 2005.

Users in urban areas that do not have access to piped water pay much higher prices for water from water tankers.

According to a 2008 national survey by Radio RPP, respondents indicated that, on average, they paid 44 Soles (close to US$15) per month and per household for water. 44% of respondents said that they paid "much or too much" for water.

Cost recovery In 1999, water companies billed only 55% of the produced water and of this value only 50% was actually paid. Payment arrears were equivalent to 140 days of billed revenues.

There are significant differences in levels of cost recovery among service providers. For example, SEDAPAL had an operating margin of 35% in 2000, while the EPS had an average operating margin of only 16%. 6 out of 46 EPS had a negative operating margin.

Only five years later in 2005, according to the World Bank's Water and Sanitation Program, no more than 5% of the EPS and of the municipalities had the financial capacity to carry out their functions. The rest are considered financially bankrupt. In the same year, the government decided to apply a new tariff regulation model. The government contracted studies for the elaboration of this model with the support from the Public-Private Infrastructure Advisory Facility (PPIAF), a World Bank trust fund, and later from the IDB.

In rural areas, the water committees apply fixed monthly tariffs independently of use as the use of water meters is not common in these areas. The tariff is estimated to be the equivalent of US$0.50/month and household. At a consumption of 20 cubic meter per month and household this corresponds to US$0.025 per cubic meter, or about 15 times less than the average tariff in urban areas. Needless to say, the revenues generated are insufficient for the operation and maintenance of the systems.

In 1997, the average the Peruvian household spent 1.8% of their total expenses in water, including water bought from carro-tanques, but without spending in sanitation. In urban areas they spent 1.9% of the expenses for water and only 0.8% in rural areas. The poorest (first decil) spent 2.4% in urban areas and 1.7% in rural areas.

As shown in the bar chart below, investment levels increased substantially during much of the 1990s, from US$39 million in 1990 to a peak of US$422 million in 1997. Since then investments have declined again to US$106 million in 2004 and US$190 million in 2005. Total investment between 1990 and 2005 was at US$43.3 billion, the average being at US$205m p.a. Investments are financed through programs providing subsidies to municipal utilities, as well as to a limited extent by internal cash generation and debt.

Between 1990 and 1998, an annual average of US$228.9 million was invested for water and sanitation infrastructure, equivalent to 0.5% of the GDP. In this period the investments in the sector increased from US$1.1/per capita in 1990 to US$15/per capita in 1998, the latter being an unusually high investment level compared to other Latin American countries.These investments were financed as follows:

• 26% by SEDAPAL, financed by internal cash generation and debt;
• 17% by grants from the central government through the Social Fund FONCODES, destined primarily at rural areas,
• 10% by grants through the Program for the Support of Water Sector Reform (PARSSA), destined primarily at provincial cities;
• 22% by municipal companies, municipalities and NGOs;
• 23% by debt from the National Housing Fund FONAVI; and
• 2% by the Southern Zone Lima Metropolitan Sewer System Improvement Project (MESIAS), a project to improve the sanitary conditions of southern Lima, reducing the coastal contamination from wastewater.

In 2000 total debt contracted by service providers stood at US$1.15 billion, equivalent to the operating margin of all service providers over 9 years. 46% of this debt contributed to reimbursable contributions by the National Housing Fund FONAVI.

The period between 2000 and 2005 witnessed investments of US$833.1 million (US$166.6 million/year) in the sector, carried out by the following entities:

The government's draft National Sanitation Plan considers that investments of US$4,789 million would be needed in 2005-2015 (US$497 million/year) to achieve the Millennium Development Goals in the sector.

However, billions more would be needed to divert water along tunnels beneath the Andes if glacial melting accelerates.

Multilateral financial institutions including the World Bank, the Inter-American Development Bank, and the Andean Development Corporation (CAF) as well as bilateral cooperation agencies (the German KfW and GTZ, the Canadian CIDA, and the Japanese JICA (ex-JBIC), among others) play an important role in investment financing and in technical assistance in the sector.

Assistance to segments of the sector, differentiated by the size of localities, is provided by different donors:

• The World Bank provides support to rural areas as well as to small towns with populations less than 30,000 through the PRONASAR (see above).
• Larger towns and small cities — such as Ayacucho, Cajamarca or Puno — receive support from KfW.
• Larger cities — such as Tumbes, Piura or Cusco — receive support from KfW, IDB and JICA.
• The CAF, the World Bank, and the JICA support SEDAPAL in Lima and Callao.

An example of this support is the agreement signed in September 2009 by the Japan International Cooperation Agency (JICA) to provide a loan for up to $60 million for the North Lima Metropolitan Area Water Supply and Sewerage Optimization Project. The purpose of the project is to improve the quality of water and sanitation services by renovating the water supply network and improving its operation and management. It aims at reducing non-revenue water and increasing the continuity of water supply. The project complements another JICA-supported project to build a water treatment plant, water distribution systems, and sewerage systems in marginal areas of the same place.

• Electricity sector in Peru
• Irrigation in Peru
• Water resources management in Peru
• Water supply and sanitation in Latin America

• Ministry of Housing, Construction, and Sanitation: National Housing and Water Plan 2006-2015
• (in Spanish) Ing. Scott A. Muller: Agua, Energia y el Cambio Climático en Lima Metropolitana, 2010 [1]
• Dr. Julio Calderón Cockburn: Water and Sanitation – The case of rural Peru, 2004
• (in Spanish) The Inter-American Platform of Human Rights, Democracy, and Development (PIDHDD), a Mercosur Initiative, Peru Water 2006
• USAID/Environmental Health Project/WSP/PAHO: Evaluation of Peru's Sanitation Policies, 2004
• (in Spanish) WHO/PAHO: Desigualdades en el acceso, uso y gasto con el agua potable en América Latina y el Caribe, 2001
• (in Spanish) WHO/PAHO/CEPIS 2000: Water and Sanitation Evaluation Peru, 2000 Archived 2009-05-15 at the Wayback Machine

• Dirección Nacional de Saneamiento
• SUNASS
• SEDAPAL
• MINSA DIGESA (Salud Ambiental)
• ANEPSSA
• FONCODES
• PROAGUA Peru
• WSP LAC

While Peru accounts for about four per cent of the world's annual renewable water resources, over 98% of its water is available east of the Andes, in the Amazon region. The coastal area of Peru, with most of economic activities and more than half of the population, receives only 1.8% of the national freshwater renewable water resources. Economic and population growth are taking an increasing toll on water resources quantity and quality, especially in the coastal area of Peru.

The government of Peru is currently undertaking a major transformation of its water resources management from a centralized approach focused on irrigation development in the coastal area to a river basin integrated water resources management for the entire country. The 2009 Water Resources Law (Ley de Recursos Hídricos) and the draft National Water Resources Management Strategy of 2004 (Estrategia Nacional para la Gestión de los Recursos Hídricos Continentales del Perú) contain the necessary elements for Integrated Water Resources Management as stated in international good practices namely, integration of sectoral policies, participation of stakeholders, decentralization of management to the river basin level and recognition of water as a social and economic good. Despite the new law, several key challenges remain, including limited institutional capacity, increasing water stress in the coastal region, deteriorating water quality, poor efficiency in the irrigation sector, as well as inadequate access to and poor quality of water supply and sanitation.

The second half of the 20th century witnessed heavy public investments in dams in the Andes and associated irrigation infrastructure in the coastal region. For example, in the 1950s and 1960s, the San Lorenzo dam and Tinajones dam, the largest Peruvian dams, were built in the northern coastal region. Within the government the Ministry of Agriculture was given the responsibility to manage water resources, since irrigation was by far the largest water use. Its lead role was confirmed by the 1969 General Water Law No. 17752 (Ley General de Aguas—LGA) which defined the Ministry of Agriculture as the "National Water Authority". However, other laws—such as the General Hydrocarbon Law (DL 26221), the General Mining Law (DS 014-92-EM), the Law for Electricity Concessions (DL 25844)—also dealt with water resources on a sectorally fragmented basis within a centralized administrative system that gave little or no decision-making power to stakeholders at the local level. There was no legal basis for integrated water resources management at the level of each river basin, and consequently there were no institutions to implement such an integrated management. This began to change in the early 2000s with the approval of a Decentralization Law, a Regional Government Law and a Municipalities Law. In 2003 the government began transferring powers to the newly created regional governments, including for water quality management and the operation and maintenance of major public infrastructure, despite the limited institutional capacity of regional governments. A draft national water resources management strategy prepared in 2004 (Estrategia Nacional para la Gestion de los Recursos Hidricos Continentales del Peru) aimed at promoting integrated water resources management through a new institutional and legal framework. In this spirit a National Water Authority (Autoridad Nacional del Agua – ANA) was established in 2006 and its role was strengthened through the 2009 Water Resources Law (Ley de Recursos Hídricos – LRH). Implementation of the law and the creation of basin-level institutions with meaningful capacities and enforcement powers still remain a challenge. (See Legal and Institutional Framework below for more details)

Peru has a large amount of water resources, with 159 river basins and a per capita availability of 68,321 cubic meters (m³) in 2006. According to FAO the long-run average annual rainfall is 1,738 millimeters (mm). There is significant seasonal variability in river run-offs, two-thirds of which occur between January and April.

The Andes divide Peru into three natural drainage basins: Pacific basin (279,000 km²), Atlantic basin (959,000 km²) and Lake Titicaca basin (47,000 km²). According to the National Water Authority (Autoridad Nacional del Agua—ANA), the Pacific basin has 62 rivers; the Atlantic basin has 84 rivers; and Lake Titicaca basin has 13 rivers. The number of rivers in Peru varies depending on the source of information, because in some cases tributaries are counted as rivers in their own right and in other cases not.

According to ANA, the dry Pacific basin, with 37.4 km³ available per year, accounts for less than 2% of Peru's renewable water resources. Its 62 rivers flowing west from the Andes supply the bulk of the water to the coastal region. Of these rivers, only about 30% are perennial. From 1984 to 2000, the average water availability decreased to 33 km³ per year and from 2003 to 2004 to 20 km³ per year. Agriculture accounts for the withdrawal of 14 km³ per year (or 80% of total water use) and domestic withdrawals account for 2 km³ per year (12% of total water use). The Atlantic basin holds more than 97% of all available water with nearly 2,000 km³ per year. Agriculture also accounts for 80% of water use, while domestic use accounts for 14%. The Lake Titicaca basin receives 10 BCM per year, less than 1% of the total. In this basin, agriculture accounts for 66% of total water use, while domestic use accounts for 30%.

Key characteristics of the drainage basins

Source: INEI (2007)

External resources of water enter Peru though tributaries of the Amazon, in the Atlantic river basin, supplying 125 BCM annually. The main rivers are Napo, Tigre, Pastaza, Santiago, Morona, Cenepa, and Chinchipe.

ANA estimates the total amount of groundwater available on the coast to be between 35 and 40 km³. There is specific data available only for eight valleys on the coast with 9.0 km³ of groundwater available. Around 1.8 km³ of water are actually extracted on the coast. No sufficient information is available regarding groundwater availability and withdrawal in the highland and Amazon regions.

Groundwater withdrawal per sector in Peruvian coast (5)

Source: ANA

In 1980, the former National Institute of Natural Resources (INRENA) established an inventory of Peru's water storage capacity, including lakes and dams. Peru has 12,201 lakes, 3,896 of which are located in the Pacific basin, 7,441 in the Atlantic basin, 841 in the Titicaca basin, and 23 in the closed basin of Warmiqucha. INRENA inventoried 186 lakes in operation with a total capacity of 3,028.07 million cubic metres and 342 studied lakes with a total capacity 3,953.04 million cubic metres. According to the inventory, the largest number of lakes in operation were located in the Pacific basin, with 105 lakes and a total capacity of 1,378.58 million cubic metres, followed by the Atlantic basin with 76 lakes and a capacity of 1604.73 million cubic metres. The Pacific basin also has the largest number of studied lagoons, with a total of 204 lakes and a total capacity of 616.62 million cubic metres, followed by the Atlantic basin with 133 lakes and a capacity of 3,006.42 cubic metres.

Peru also has 23 dams with a total capacity of 1,941.88 million cubic metres, and 238 studied dams with a total capacity of 44,028.04 million cubic metres. The Pacific basin has 21 dams in operation with a total capacity of 1,875.88 million cubic metres; the Atlantic basin has 2 dams with a capacity of 66,000 million cubic metres. The Pacific basin also has the largest number of studied dams, a total of 126 with a capacity of 17,200.60 million cubic metres. The Atlantic basin has 105 with a storage capacity of 26,274.83 million cubic metres.

The largest reservoirs are Poechos with a capacity of 1,000 million cubic metres, Tinajones with 320 million cubic metres, San Lorenzo with 258 million cubic metres, and El Fraile with 200 million cubic metres, all of them in the coastal region.

The gradual decrease in Peru's water quality is due to the release of untreated effluents from mining, industries, municipalities and polluted runoff from agriculture. Of the 53 rivers in the coastal area, 16 are polluted by lead, manganese and iron threatening irrigation and potable water supplies. In particular, the Ministry of Agriculture considers "alarming" the quality of seven rivers: the Mantaro and Tambo rivers in the Central Andes that drain towards the Amazonas; the small Moche River near the northern coastal city Trujillo and the Santa near the northern coastal city Chimbote; the Chillon and Rimac rivers near Lima; and the Chili River near Arequipa which is well known for its rafting. In the Mantaro basin alone 18 mining facilities discharge polluted water into the river.

Mining, which provided more than 60% of Peru's export earnings in 2006, is a major water user and polluter. It is estimated that mining uses about 5% of Peru's water. In addition, it severely affects water quality. It has been estimated that more than half of Peru's peasant communities have been affected by mining activities, leading to the creation of organizations such as the National Committee of Mine Affected Communities (CONACAMI). The government had to declare an environmental state of emergency at several mining sites due to environmental disasters. For example, in July 2008 it declared a state of emergency at a mine near Lima over fears that arsenic, lead and cadmium from its tailings dam could pollute the main water supply for the capital. In July 2010 the government declared another state of environmental emergency in the central mining district of Huancavelica after a wastewater storage dam of the Caudalosa Chica company collapsed and leaked water laden with heavy metals into local rivers. The city La Oroya on the Mantaro River in Central Peru where the company Doe Run operates a big mining complex has been ranked as one of the 10 most contaminated cities in the world in 2007. Furthermore, an estimated 100,000 small-scale informal miners pollute rivers with cyanide and mercury.

Often the exact scope of pollution is a matter of dispute. An example is the Yanacocha mine in the Andes, the largest and most profitable gold mine in Latin America that was created with the support of the International Finance Corporation (IFC). According to a report in 2000 by an organization called "Project Underground" levels of copper were 10 to 20 times higher than WHO standards and the acidity of the water was extremely high with a pH of 3.3 compared to 6.5, the highest acidity considered drinkable. According to local communities, fish and frogs had disappeared from the river, both of which were previously a food supply for the rural communities. Subsequently, an independent report by Stratus, a Colorado consultancy, found that the pollution from the mine "posed no threat to human health or to drinking water". But the mine's rapid expansion has affected farmers: Several irrigation channels have dried up, while extra sediment in rivers has killed trout.

In almost all cases, local communities are overwhelmingly opposed to mining because of its environmental impact on their livelihoods. An example are conflicts witnessed in Piura Province since 1993. A Canadian mining company departed shortly after a local referendum in Tambogrande in which over 93% voted against mining. When another company began exploration in Ayabaca and Huancabamba, this elicited new conflicts and a referendum held in September 2007, in which again over 90% of voters voted against mining. One of the main concerns of local and downstream communities relates to the effects that the mine would have on water quality and quantity. The company and the central government continued to insist, though, that the mine will go ahead.

Ineffective irrigation has generated salinization and drainage problems in 3,000 square kilometres of the coastal valleys (of a total irrigated area of 7,360 km²), jeopardizing land productivity and affecting the quality of Lima's water supply. Drainage problems are also affecting 1,500 km² in the Amazon region. In the highland and Amazon areas, excessive deforestation due to nomadic agriculture practices is causing erosion and soil degradation. In the Sierra 55%–60% of the land is affected, increasing the amount of soil transported downstream.

Domestic consumption accounts for 7% of water withdrawals in Peru. The water and sanitation sector in Peru has made significant advances in the last two decades, including an increase in access to an improved water source from 75% to 82% between 1990 and 2008 and an increase in access to improved sanitation from 54% to 68% during the same period. Progress has also been achieved in the disinfection of drinking water and in wastewater treatment. Despite these advances, water supply and sanitation services in Peru are characterized by low coverage in rural areas (61% for water 36% for sanitation in 2008) and poor quality of service, as well as the precarious financial situation of utilities.

About 80% of all water withdrawal in Peru is used for irrigation, yet much of this water (65%) is lost due to reliance on inefficient irrigation systems

Area with Irrigation Infrastructure and irrigated areas (km²)

Source: Portal Agrario (1994)

In 2006, 72% of Peru's total electricity generation (27.4 TWh) came from hydroelectric plants, with conventional thermal plants only in operation during peak load periods or when hydroelectric output is curtailed by weather events. Hydropower accounts for 48% of total installed capacity. Non-consumptive water withdrawal for hydropower generation accounts for 11,138 million m3 per year. The largest hydroelectric facility in the country is the 900 MW Mantaro Complex in southern Peru, which is operated by state-owned Electroperu. The two hydroelectric plants at the complex generate over one-third of Peru's total electricity supply.

There are 12,201 lakes and lagoons in Peru, 3,896 of which are located in the Pacific basin; 7,441 in the Atlantic basin, 841 in the Titicaca basin, and 23 in the Huarmicocha system. Peru contains approximately 50,000 km² of swamps and 45 km² of mangroves.Peru's wetlands play an important role for rural communities. These wetlands are the source for animal protein and for totora, a plant used in the artisan production of boats and floating devices. Estuaries are also fundamental for the reproduction of several marine species that are basic for the fishing industry. Other uses such as industrial production of algae and bird-watching tourism are not yet fully discovered. In 1996 the Government adopted a National Wetlands Conservation Strategy aimed at increasing the area of mangroves, moors, estuaries, and lagoons considered to be protected areas. Uncertainties about land ownership, industrial pollution, urban sprawl, and deforestation continue to threaten wetland integrity in Peru. The complete Pucchun Lagoon in Arequipa, 50 km², has been dried out for agricultural purposes. The Villa Swamp, located south of Lima, was reduced from its original 50 to 3 km² in 1989 due to urban sprawl.

The newly approved Water Law (Ley de Recursos Hídricos – LRH, published March 31, 2009) has enhanced the National Water Resources System (substituting Decree No. 1081) which now consist of ANA, a National Water Resources Court, River Basin Councils, regional and local governments and water users organizations. However, some institutions foreseen under the law, such as the River Basin Councils, remain to be created. The water law also establishes priority uses of water, re-defines water user rights, understands water as an economic good, defines sanctions, considers river basins as management units and incorporates groundwater management considerations. It is foreseen that subsidiary legislation (reglamentos) will complement the water law by specifying, for instance, the roles of each institution within the National Water Resources System.

The water law has been criticized by the Peruvian Peasant's Association claiming that it allows the privatization of water resources, does not involve local and regional governments in decision-making, promotes private operators in drinking water supply who would control water resources. They also claim that the interests of mining companies, industries and export-oriented agriculture influenced the drafting of the law.

Ley de Recursos Hídricos indeed gives a strong role to the national water authority ANA. Its 14 local branches, called Autoridades Administrativas del Agua, are accountable to the national authority and not to local or regional governments. The River Basin Councils (Consejos de Recursos Hídricos de Cuenca) are to be chaired by the president of the regional government, but they have only limited powers and their financial resources consist merely in a share of expected water abstraction fees that the National Water Agency would grant them.

The institutional framework for water resources management at national and river basin level is fragmented. The newly created National Water Authority (Autoridad Nacional del Agua – ANA) was established in December 2006 replacing the Water Resources Intendancy (Intendencia de Recursos Hídricos – IRH) and is responsible for the design and implementation of sustainable water resources policies and irrigation nationally. The creation of ANA improves the prospects for sound WRM, because it has a clear mandate for integrated, participative, basin-scale WRM, enjoys financial and administrative autonomy, is able to issue sanctions and will have local offices in river basins. Some of the modifications included are (i) ANA is the new water authority, however, it is still under the Ministry of Agriculture, which could hinder the impartiality required for sound WRM; (ii) ANA will have River Basin Authorities (Autoridades Administrativas del Agua—AAA), in each of Peru's 14 hydrographic regions and Local Water Authorities (Autoridades Locales de Agua—ALA) in selected river basins; and (iii) ANA is now also responsible for water quality.

However, a number of ministries have sectoral inputs on water resources management: Agriculture for Irrigation, Housing and Sanitation for domestic water use, Trade and Tourism for hot springs and mineral water, Energy and Mining for hydropower and mining operations, and the Council of Ministries for environmental policy and energy and water tariff and services regulation. In addition, the Ministry of Environment (MINAM) created in 2008 is responsible, among others, for the generation of hydro-meteorological information through its Meteorological and Hydrological National Service (Servicio Nacional de Meteorología e Hidrologia – SENAMHI).

The regional governments are responsible for the operation and maintenance (O&M) of major public hydraulic infrastructure (i.e., headwork such as dams and inter-basin transfers transferred to them as part of the decentralization process) and have some responsibilities for water quality. The regional government responsibilities poses a challenge for IWRM, since the administrative boundaries of the region do not coincide with those of the river basins. An additional challenge is that the regions are young and lack fundamental technical capacity and human resources to undertake IWRM.

Finally, the roles of other actors traditionally involved in WRM at the local level—some of them yet to be defined in the new institutionality—include (i) eight local offices of the Environmental Health General Department (Direccion General de Salud Ambiental—DIGESA), and (ii) Water User Boards (WUBs) responsible for operation and maintenance (O&M) of minor irrigation infrastructure.

In 2004, the Peruvian government proposed a National Water Resources Management Strategy, which is currently being discussed and is pending approval. The main objectives are:

• Institutional renovation and a clear legal framework to include (i) a resolution of current disparities between the Water Law and the Natural Resources Law, and transfer of irrigation system operation and maintenance to River Basin Authorities, promoting public participation in decision-making processes; and (ii) institutional development strategies that formalize water and pollution rights and establish a comprehensive tariff system to cover O&M activities.
• Integrated Management of Water Resources addressing both water supply and demand, taking into consideration environmental, social and economic factors. It includes a plan to modernize Peru's existing irrigation infrastructure with the goal of increasing the overall efficiency of irrigation systems from 35% to 45–50%.
• Increased Quality of Water Resources with a conservation initiative for upstream water resources aimed at decreasing sedimentation; it creates a pollution control authority to monitor agricultural and industrial discharges, promotes water recycling, and improves coastal drainage and salinity problems.
• Disaster Management and Mitigation including consistent weather monitoring, reforestation in strategic upstream areas, water channelling, and improved urban planning preventing settlements in high-risk areas.
• Capacity Building and Water Culture, and education program for preschool to college level students about the economic, social, and environmental value of water resources.
• Water Resources Information System strengthening of networks that monitor water quality and quantity; making accurate information publicly available. (See National Water Resources Management Strategy)

The Amazon Cooperation Treaty, signed in 1978 by Bolivia, Brazil, Colombia, Ecuador, Guyana, Peru, Suriname and Venezuela, aims at promoting sustainable use of natural resources, including water, in the Amazon Basin

On 25 June 2005, after the approval of a US$700,000 grant by the Global Environment Fund the Amazon Cooperation Treaty Organization, the General Secretariat of the Organization of American States and the United Nations Development Program agreed to sign the Integrated and Sustainable Management of Transboundary Water Resources in the Amazon River Basin Considering Climate Variability and Change Project. The project aims to strengthen the institutional framework for planning and executing, in a coordinated and coherent manner, activities for the protection and sustainable management of water resources in the Amazon Basin in the face of impacts caused by human action and ongoing climatic changes being experienced in the Basin.

Water pricing in Peru follows a complex system set out in the water law of 2009, which defines three types of fees and two types of tariffs: (i) fees paid for water abstraction from the environment (Retribuciones economicas por el uso del agua); (ii) fees paid for wastewater discharge to the environment (Retribuciones económicas por vertimiento de uso de agua residual tratada); (iii) tariffs for the use of water infrastructure; (iv) tariffs for water monitoring; and (v) tariffs for sectoral water distribution.

Tariffs for water distribution include irrigation tariffs and drinking water tariffs. These are historically the most important types of tariffs. Drinking water tariffs levied by utilities are approved by the national superintendency for water supply and sanitation, SUNASS. Tariffs are low compared to some neighboring countries, such as Brazil and Chile. Water bills are often not paid. (See water supply and sanitation in Peru). Irrigation tariffs are collected by water user boards. Water is rarely metered and therefore fees are mostly based on area and crop types rather than on volume of water used. Tariffs vary between US$2.2 per ha and US$25.55 per ha, and collection rates vary from 10% in the Amazon and 68% in the Costa region. Farmers contribute in cash through payment of the water tariff and in kind, through labor and materials, following ancestral practices.(See Irrigation in Peru)

All other fees and tariffs have to be approved by the National Water Agency as well as, in the case of abstraction and discharge fees, by the Ministry of Agriculture. The proceeds are to be used for environmental monitoring, prevention, control and remediation; water resources planning; and the operation and maintenance of infrastructure. The level of fees is to be differentiated depending on the type of use, taking into account social, economic and environmental factors. As of 2010, these new fees and tariffs were not yet being collected pending the setting of these fees through subsidiary legislation.

The Peruvian piedmont and coastline are prone to devastating floods and mudslides, mainly due to heavy precipitation on degraded upper basins, whereas the southern part of the country is particularly prone to droughts. Aside from natural causes, such as El Niño Southern Oscillation, the effects of droughts and floods have been exacerbated by manmade interventions including soil erosion stemming from poor cropping and grazing practices, deforestation, and poor land use-practices. El Niño hits Peru approximately once every seven years and consists of heavy winds and rainfall associated with devastating floods and landslides. In 1997–1998 the costs of damages reached US$2 billion. Droughts severely affect the southern coast, producing agricultural losses as well as limitations on human water consumption. Preventive laws and measures (related to zoning, deforestation, and so forth) are not enforced and there is no reliable early warning system. The consequence is increasing negative impacts from droughts and floods on the different regions, with an increasing impact on Peru's economy.

Although a thorough assessment of the net impacts on Peru's water resources is still lacking, some trends are discernible. The effects of climate change in Peru include more extreme weather conditions such as droughts and floods, El Niño Southern Oscillation, increased likelihood of flash fires, changes in the ability of ecosystems to store water, and the retreat of Andean glaciers. The effects of glacier retreat are different at the initial and final stages of glacier retreat—initially more water is available during the dry season, while flow declines below the initial level once the glacier has melted. (See Impacts of Glacier Retreat in the Andes:Documentary). High mountain ecosystems, including páramos (unique wetlands of the Northern Andes) and snowcapped terrains are among the environments most sensitive to climate change. These ecosystems have unique endemic flora and provide numerous valuable environmental goods and services. Data recently made available suggest that climate impacts have already altered the circulation patterns responsible for producing and moving water vapor to the region. These changes have likely contributed to the disappearance of high-altitude water bodies, as well as to the increased occurrence of natural and human-induced mountain fires.

The Program for Strengthening of National Capacities to Manage the Impact of Climate Change and Air Pollution (PROCLIM) together with the Ministry of Environment and the Netherlands Cooperation Agency published a model for adaptation that estimated the impacts of climate change climate for several river basins. For instance, in the Mantaro River Basin one scenario presents a possible increase (greater than 50%) in precipitation along the entire basin, particularly over the west central mountain range and the Chinchaycocha plateau. According to a second scenario, precipitations in the west central range could increase in more than 100% while in the eastern region they could be reduced by 20%. In the Piura River Basin there is a (i) tendency towards increase of the minimum temperature peaks and the average sea level; (ii) greater probability that the intensity of future El Nino Events will increase; (iii) there will be an occurrence of an El Nino Phenomena during the 2009–2015 period similar to the one of 1982–1983; (iv) a deficit in the balance of water is foreseen during the period 2005–2035; and (v) tendency towards lengthier and more frequent drought periods is noticeable. In the Cordillera Blanca, Santa River Basin precipitations will become the main water resource in view of the severe retreat of the area's tropical glaciers. Because of the tendencies towards temperature increase, it is expected that the runoff levels will increase until they reach a peak in the first half of the century, to then exhibit a sustained decline in water resources.

According to a 2008 survey of Radio RPP, only 37% of respondents think that water is scarce in Peru. Only 27% of respondents living in Lima—a city in the middle of a desert—believe water to be scarce in Lima. 72% of respondents throughout the country believe that Peru is affected by climate change. However, only 8% of respondents think that water scarcity is a consequence of Climate Change.

The government is currently looking into seawater desalination as a national priority to adapting to decreasing water availability. Peru's Government in planning a US$1.5 billion investment to build two desalination plants on Lima's coast to supply water to 1.5 million people.

The World Bank is collaborating with the Government of Peru through the National Water Resources Management Modernization Project (US$10 million). This project aims at strengthening the institutional capacity for integrated water resources management at the national level and in three river basins namely, Chancay-Lambayeque, Ica-Alto Pampas and Chili. The World Bank is also contributing US$85 million, out of a total of US$172.4 million, to a Subsectoral Irrigation Project (Programa Subsectorial de Irrigacion). Also, the Agricultural Research and Extension Adaptable Program Loan Phase 2 (US$69 million) aims to promote the adoption of sustainable agricultural practices in glacier-dependent watersheds.

In June 2007, the Global Environmental Facility approved the Regional Adaptation to the Impacts of Rapid Glacier Retreat in the Tropical Andes (Bolivia, Ecuador and Peru) Project. This project aims at implementing adaptation measures to meet the anticipated consequences of glacier retreat induced by climate change.

The Inter-American Development Bank (IDB) contributes US$10 million to a Water Resources Management Modernization Project focused on three pilot river basins namely, Santa, Chira-Piura and Tacna. This project does not include any intervention at the national level. In June 2007, the IDB approved US$200 million for a Water Resources Reform Program (WRRP) that would include hydraulic structures, and institutional and legal reforms. In August 2007, the IDB approved an additional US$5 million to support capacity building efforts contained in the WRRP. The IDB is also implementing a water resources management plan for Peru's Maschón and Chonta watersheds. The objective of this US$1.2 million grant is to define the appropriate measures for improving integrated water resources management.

• Electricity sector in Peru
• Irrigation in Peru
• Water supply and sanitation in Peru
• Water pollution in Peru
• Impacts of Glacier Retreat in the Andes:Documentary

• Autoridad Nacional del Agua (National Water Agency)
• Ministry of Agriculture
• Instituto Nacional de Estadistica e Informatica del Perú (National Statistics Institute)
• Poverty, Agriculture and Water within the Andean Region

The electricity sector in Peru has experienced large improvements in the past 15 years. Access to electricity has increased from 45% in 1990 to 96.4% in 2018, while service quality and efficiency of service provision improved. These improvements were made possible through privatizations following reforms initiated in 1992. At the same time, electricity tariffs have remained in line with the average for Latin America.

However, several challenges remain. Chief among them are the still very low level of access in rural areas and the untapped potential of some renewable energies, in particular wind and solar energy, due to an inadequate regulatory framework.

The current electricity generation capacity is evenly divided between thermal and hydroelectric sources. A renewed recent dynamism of the electricity sector in the country is based on the shift to natural gas plants, which will be mainly fed from the production of the Camisea gas field in the Amazon Rainforest.

The National Interconnected System (SEIN) serves 85% of the connected population, with several “isolated” systems covering the rest of the country. While investment in generation, transmission and distribution in urban areas is predominantly private, resources for rural electrification come solely from public sources.

Installed generating capacity Peru is evenly divided between thermal and hydroelectric sources. In 2006, the country had 6.7 GW of installed capacity, 52% being thermal and 48% hydroelectric, with a negligible share of other renewable sources. Of the total capacity, 84% (5.63 GW) enters the electricity market, while the remaining 16% (1,03 GW) is generated for self-consumption.

However, electricity generation is not evenly divided between the two dominating sources. In 2006, 72% of Peru's total electricity generation came from hydroelectric plants (total generation was 27.4 TWh), with conventional thermal plants only in operation during peak load periods or when hydroelectric output is curtailed by weather events. This “underuse” of the country's thermal capacity is due to the high variable costs of thermal generation. In 2004, the country's reserve margin was estimated at 45%. However, when those high cost thermal plants were taken out of the equation, margins fell to as low as 15%.

In an attempt to reduce the country's reliance upon hydroelectricity, the Peruvian government has encouraged greater investment in gas-fired power plants. The controversial Camisea Gas Project has opened up natural gas production in Peru, with the first new 140 MW gas-fired power plant in Tumbes to start operations by the end of 2007. The Camisea project is considered strategic for it is expected to contribute to reduce the existing deficit in Peru's hydrocarbons trade balance by substituting imports (mainly of diesel and LPG) and allowing exports (naphta, LPG surpluses).

The dynamic nature of the electricity sector has continued during 2007, with an estimated 9.3% increase in generation, which is expected to reach 30 TWh. This increase is mainly due to the existing positive conditions for thermal generation through the use of natural gas in new plants and also to an increase in hydroelectric generation due to the availability of hydrological resources in the existing hydroelectric facilities.

In 2006, total electricity consumption in Peru was 24 TWh, which corresponds to 872 kWh per capita per year. The consumption share for the different economic sectors is as follows:

• Industrial: 66%
• Residential: 24%
• Commercial: 19%
• Public lighting: 3%

In terms of demand projections, the Ministry of Energy and Mines estimates that electricity demand will increase between 5.6% and 7.4% per year between 2007 and 2015. It is expected that per capita electricity demand will reach 1,632 kWh in 2030.

To meet this increasing demand, Peru will rely on natural gas, which is the most cost competitive option among all other fuel types. As such, it is expected that installed capacity of gas-fired electricity generation increases from 0.3 GW in 2002 to 6.0 GW in 2030. It is expected that, from 2026 onwards, natural gas will acquire the dominant share in the electricity generation mix, reaching 44% in 2030 compared with hydroelectricity's 37% share for the same year.

In 2006, 79% of the population in Peru had access to electricity, a percentage that is below the 94.6 average for the LAC region Peru has one of the lowest rural electrification rates in Latin America. Coverage in the predominantly poor rural areas is about 30%, with more than six million people without access to electricity. In its 2004 National Rural Electrification Plan (PNER), the Government of Peru reiterated its commitment to reduce the electrification gap, aiming to increase rural coverage from 30% to 75% by 2013.

In 2005, the average number of interruptions per subscriber was 14.5, while duration of interruptions per subscriber was 18.3 hours. Both numbers are very close to the weighted averages of 13 interruptions and 14 hours for the LAC region.

Losses in 2006 amounted to 11% of total production. Distribution losses were 6.3%, down from 22% a decade before and below the 13.5% LAC average. Transmission losses for the same year have been estimated at 4.7%.

The National Electricity Office (DGE - Dirección General de la Electricidad), under the Ministry of Energy and Mines (MEM), is in charge of setting electricity policies and regulations and of granting concessions. It is also responsible for elaborating generation and transmission expansion plans and has to approve the relevant procedures for the operation of the electricity system.

The Energy and Mining Investment Supervisory Body (OSINERGMIN - Organismo Supervisor de Inversión en Energía y Miniería), created in 1996 as OSINERG (Mining competences were added recently, in January 2007), is in charge of enforcing compliance with the Electricity Concessions Law (LCE) of 1992 and is also in charge of ensuring the electricity public service. OSINERG is as well the body responsible for enforcing the fiscal obligations of the license holders as established by the law and its regulation. Finally, it is responsible for monitoring compliance of the System Economic Operation Committees (COES) functions and for determining biannually the percentages of market participation by the companies.

In 2000, OSINERG was merged with the Electricity Tariffs Commission (CTE), currently known as Adjunct Office for Tariff Regulation (GART). Together, they are in charge of fixing generation, transmission and distribution tariffs and the tariff adjustment conditions for the end consumers. They also determine the tariffs for transport and distribution of gas by pipeline.

As for rural electrification, the National Rural Electrification Office (DGER) is in charge of the National Rural Electrification Plan (PNER), which is framed under the policy guidelines set by the Ministry of Energy and Mines. DGER is in charge of the execution and coordination of projects in rural areas and regions of extreme poverty.

Finally, the National Institute for Defense of Competition and the Protection of Intellectual Property (INDECOPI) is in charge of monitoring compliance with the Anti-monopoly and Anti-oligopoly Law of 1997.

In 2006, 38 companies generated electricity for the market, while 78 companies produced electricity for their own use. Among the 38 companies supplying energy to the market, four of them accounted for 70% of the total capacity:

• EDEGEL S.A.A.: 1,574MW
• Electroperú S.A. (ELP): 1,032 MW
• KALLPA Generación
• ENERSUR: 725 MW
• EGENOR: 522 MW

ELP dominates hydroelectric production, with 32% of the total, while EDEGEL leads thermal generation also with 32% of the total.

Private companies dominate the generation sector. In terms of participation, state companies hold 31% of generation capacity, with the remaining 69% in private hands. Production percentages are 40% and 60% for the public and private companies respectively.

In Peru, 100% of the transmission activities are in private hands. In 2006, there were 6 purely transmission companies that participated in electricity transmission in Perú: Red de Energía del Perú S.A. (REPSA), with 28% of the transmission lines; and Consorcio Energético Huancavelica (CONENHUA), Consorcio Transmantaro S.A. (S.A. Transmantaro), Eteselva S.R.L, Interconexión Eléctrica ISA Perú (ISAPERU) and Red Eléctrica del Sur.S.A. (REDESUR), with 15% of the lines. Generation and distribution utilities and the companies that generate electricity for their own consumption operate the remaining 57% of the transmission lines.

In 2020, 63% of the electricity was commercialized by 22 distribution companies, while the remaining 37% was commercialized directly by generation companies. The companies that stood out for their sales to end-consumers were:Enel (25%), Luz del Sur (22%), Enersur (8%), Edegel (7%), Electroperú (5%), Hidrandina (4%), Termoselva (4%) and Electroandes (4%).

Public distribution companies supply electricity to 55% of the existing clients, with the remaining 45% in hands of the private utilities. However, in terms of electricity distributed, private companies have the lead with 71% of the total as opposed to 29% for the public ones.

The National Environment Fund (FONAM) was created in 1997 and received the mandate from the Peruvian Congress to identify and promote projects that exploit renewable energy sources, introduce clean technologies, and promote energy efficiency and the substitution of highly polluting fuels. However, the contribution of renewable energy sources other than hydroelectricity is still very limited in Peru.

Hydroelectricity is the only renewable resource exploited in Peru. In 2006, it accounted for 48% of total installed capacity and 72% of electricity generated. The largest hydroelectric facility in the country is the 900 MW Mantaro Complex in southern Peru, which is operated by state-owned Electroperu. The two hydroelectric plants at the complex generate over one-third of Peru's total electricity supply. In February 2006, Egecen S.A. completed construction of the 130-MW, Yuncán hydroelectric plant, located northeast of Lima. The plant will be operated by EnerSur, a subsidiary of Brussels-based Suez Energy International.

Construction on the multi-purpose Olmos Transandino Project has been underway since 2006 and in February 2010, the contract for its hydroelectricity power plant is expected to be issued. The power station in northwest Peru's Cajamarca province will have a 600 MW capacity and produce 4,000 GWh annually. Construction of the 406 MW dam on Huallaga River in Chaglla District started in 2012. The 525 MW Cerro del Águila was inaugurated in 2016. In 2012, the Salcca-Pucara hydroelectric project received the last of several approvals it needed.

Studies from the National Meteorological and Hydrological Service (SENAMHI) have estimated a total windpower potential of 19 GWh/year for Peru, or about 70% of current electricity consumption. The Departments of Talara, Laguna Grande, Marcona and Pta. Atico are the regions with the largest wind potential. However, the absence of a regulatory framework and of a reliable record of wind potential, together with the lack of human, financial, and technical resources, has so far hindered the exploitation of Peru's windpower potential.

The contribution of wind power to the energy matrix in Peru was negligible in the first decade of the 21st century, with just 0.7 MW of installed capacity in 2006. In 2014 three large wind farms were inaugurated: the 32MW Marcona Wind Farm in the Ica region, the 83MW Cupisnique Wind Farm in Pacasmayo and the 30MW Talara Wind Farm in the Piura region.

A new 260 MW wind farm is being built by Engie at Punta Lomitas. It is expected to be online in 2023.

It has been estimated that Peru has favorable conditions for the development of solar energy projects. However, the country's solar potential has not been exploited yet. In the mountain ranges located in the South, solar energy reaches average levels above 6 kWh/m2/day, which are among the highest worldwide.

A study by the Climate and Development Knowledge Network found that despite the high potential for energy cost savings across the private sector, a number of barriers prevent businesses in Peru from identifying and implementing energy efficiency opportunities in their premises and operations.

Energy demand in Peru is expected to continue to increase over the coming decades, largely fuelled by industrial expansion and increasing economic prosperity. The Peruvian Government has, however, recognised the importance of energy efficiency as a key element in climate change mitigation strategy and action, with energy efficiency featuring among the climate change mitigation actions in Peru's Nationally Determined Contribution (NDC) under the Paris Agreement of the United Nations Framework Convention on Climate Change (UNFCCC), and also in Peru's Planning for Climate Change project, known as ‘PlanCC’.

One of the first larger hydroelectric power stations went 1914 in to service in La Oroya to supply the increasing powerdemand of the mining activities of the Cerro de Pasco Copper Corporation. Shortly after a second hydroelectric stsation was established in Pachachaca. In the late 1930s, two more power stations in Upamayo and Mal Paso were constructed and a local system of overhead power lines was built to connect the hydroelectric stations. The mining sector still was the main consumer of the electric power.

Between 1934 and 1938 the Callahuanca hydroelectric power plant was constructed at the Rimac valley for the power supply of Lima. Back then, only local and regional power grids existed.

From its inception, the national Peruvian electricity system started to be developed by private initiative. In 1955, Law No. 12378 regulated the mechanisms of private participation, establishing a system of concessions with commitments to increase generation capacity by 10% annually. The National Tariff Commission and other mechanisms aiming at guaranteeing the profitability of the investments were then created. However, at the beginning of the 1970s, profound changes took place. In 1972, the de facto military government nationalized the electricity industry through Law No.19521, creating ELECTROPERU (Peru Electricity Company). ELECTROPERU became the owner of all the generation, transmission and distribution assets and came to be in charge of service provision and investment planning. Until the beginning of the 1980s there were large investments in hydroelectric and thermal projects. However, this dynamism started to fade during the 1980s mainly due to the debt crisis that started in 1982 and that precluded new financing in the region. By the beginning of the 1990s, the electricity sector in Peru showed an important deterioration due to low investment in infrastructure, the fact that tariffs did not cover production costs, the restricted investment in maintenance and the systematic destruction of infrastructures by terrorist activities. The results of this crisis were severe: in 1990 only 45% of the population had access to electricity, supply only covered 74% of the demand and distribution losses were above 20%.

The structural reform process that started in 1992 under the government of President Alberto Fujimori led to the privatization of the electricity sector in a decade in which most of the countries in the region underwent a similar process. The restructuring process, articulated in the Electricity Concessions Law (LCE) of 1992, unbundled the vertically integrated state monopoly into generation, transmission and distribution and led the basis for the introduction of private operators and competition for generation and commercialization, with transmission and distribution regulated on the basis of free entry and open access. The 1992 Law was modified by Law No. 26876 (Anti-monopoly and Anti-oligopoly Law) in 1997. The process of concessions and transfer of generation assets to private companies was started in 1994 and relaunched in 2002 as it had not been completed yet.

Private companies emerging from the 1992 reforms made substantial investment commitments that were fulfilled in the following years. Investment figures reached their highest levels in the period 1996–1999, declining afterwards once the commitments had been fulfilled. The high level of investment led to annual average increases in installed capacity of 9.2%, a rate that was not matched by the increase in demand, which increased at only 4.7% per year on average. As a result, the level of reserves in the National Interconnected System (SEIN) increased at average rates of 23.2%. Investments in transmission and distribution led to increases in coverage from 53% in 1993 to 76% in 2004.

In September 2000, the Law for the Promotion of Energy Efficiency (Law No. 27345) was approved, declaring support for the efficient use of energy to be in the national interest. The regulation for this Law was approved in October 2007 (by Supreme Decree No. 053-2007-EM). The objectives of the Law are to contribute to energy security, improve the country's competitiveness, generate surplus for exports, reduce environmental impacts, protect consumers and raise awareness about the importance of efficient energy use.

As for rural electrification, there have been several attempts to change the existing institutional and legal framework. In recent years, there have been two laws passed by Congress (the Law for Electrification of Rural and Isolated or Frontier Areas in 2002 and the Law to Regulate the Promotion of Private Investment in Rural Electrification in 2004) but neither of them has been implemented due to conflicts with provisions in other laws.

In 2006, the average residential tariff in Peru was US$0.1046 per kWh, LAC weighted average in 2005 was US$0.115.

In the unregulated market, the average tariff for final customers was US$0.0558 per kWh for the electricity supplied directly from the generators and US$0.0551 per kWh for the electricity supplied by distribution companies.

Law No. 275010 created, in November 2001, the Electricity Social Compensation Fund (FOSE). This Fund established a cross-subsidy system among consumers that benefits users with monthly consumption below 100kWh through fixed and proportional discounts. The fixed discount applies to consumers between 30 and 100 kWh and the proportional discount is targeted to those with consumptions below 30 kWh. The amount of the discounts is financed through a surcharge in the tariff paid by the regulated consumers with monthly consumptions above 100 kWh.

The number of households that benefit from this scheme is over 2.4 million (out of the 3.6 million connected households at the national level). In July 2004, the FOSE was extended to cover up to 50% of the bill in the National Interconnected System (SEIN) and 62.5% in the isolated systems for the users with consumption below 30kWh, including as well a special focus by geographic location (rural-urban).

(See Evaluation of the FOSE for a detailed analysis of the results of the FOSE.)

In 2004, annual investment needs in the electricity sector up to 2016 were estimated at US$200 million, considering a projected annual demand increase of 5%.

Total investment in the electricity sector in 2006 was US$480.2 million, which was 22% higher than the amount for 2005. Investment in generation, transmission and distribution added up to US$446.2 million, while investment by the Executive Office for Projects (DEP) in the Rural Electrification was US$34 million. The table below summarizes the contribution of both the private and the public sector:

Source: Ministerio de Energia y Minas 2007

(See Dirección Ejecutiva de Proyectos Solar PV Rural Electrification Project)

Investment by private companies has taken off after having reached very low numbers by 2003 (US$120 million, matching public investment for that year) after the general decline in investment that happened from 1999 onwards.

To meet expected demand, total investment needs in electricity generation and transmission between 2002 and 2030 are estimated to be US$16.2-20.7 million.

After the power sector reform in the early 1990s, rural electrification in Peru has been limited to direct investment by the central government, without any additional funds from communities, regional governments or service providers. One important issue deterring electricity distribution companies from investing in rural electrification is the fact that they hold concession areas concentrated in small areas around urban centers and are only under the obligation to meet service requests within 100 meters of the existing network.

To expand coverage, the Government of Peru has been spending an average of US$40–50 million per year in the last ten years for electrification. These investments were carried out through social funds (e.g. FONCODES – Cooperation Fund for Social Development) and, to a larger extent, by the Executive Office for Projects (DEP), a division of the Ministry of Energy and Mines (MEM). The DEP, which is currently in the process of being absorbed by the National Rural Electrification Office (DGER), is in charge of planning, designing and constructing the rural electricity systems. Once they are finalized, the rural electricity systems are handed over for operation either to state-owned distribution companies or to a specially created state-owned asset-holding company that manages the systems under operation contracts with state-owned companies, or municipalities.

The structural reform process that started in 1992 unbundled the vertically integrated state monopoly and led to the privatization of the electricity sector. Today, private companies dominate the generation sector with almost 70% of capacity in their hands. Although there are about 40 companies that generate electricity for the market, just 4 of them (EDEGEL S.A.A., Electroperú S.A., Energía del Sur S.A. and EGENOR) account for 70% of the total capacity.

As for transmission, 100% is in the hands of several private companies, while 71% of electricity distributed and 45% of the existing clients were also controlled by private companies.

The National Environment Commission (CONAM), created in 1994, holds the Environmental responsibilities in Peru and promotes sustainable development. CONAM is a decentralized public agency under the Ministry of the Presidency. Its Management Committee consists of 10 members from the national, regional and local governments; economic sector representatives; NGOs; universities and professional associations. The National Environmental Agenda is the instrument that prioritizes environmental issues identified at the national level.

In 2002, CONAM created the National Climate Change Strategy, which was aimed at transmitting the relevance of Peru's vulnerability to climate change. The main objective was to stress the need to incorporate in the country's policies and programs the necessary adaptation measures and to make the population aware of the existing risks and the actions they can undertake to use resources responsibly. The Program to Strengthen the National Capacity to manage Climate Change and Air Pollution (PROCLIM) was created to implement the aforementioned Strategy. PROCLIM aims to contribute to poverty reduction by promoting the integration of climate change and air quality issues in sustainable development policies.

OLADE (Latin American Energy Association) estimated that CO₂ emissions from electricity production in 2003 were 3.32 million tons of CO₂, which corresponds to 13% of total emissions from the energy sector.

Currently (November 2007), there are seven registered CDM projects in the electricity sector in Peru, with overall estimated emission reductions of 800,020 tCO₂e per year.

Source: UNFCCC

The National Environment Fund FONAM is the focal point for CDM projects in Peru.

In November 2022, the Inter-American Development Bank (IDB) announced the approval of a US$125 million loan for a 500-kilovolt power line project connecting the electrical grids of Ecuador and Peru. The European Investment Bank will contribute an additional $125 million to the project. This initiative aims to construct a 544-kilometer line over five years, boosting cross-border transmission capacity to 680 megawatts and promoting a sub-regional electricity market within the Andean Community free trade area. The loan, provided under the IDB’s Flexible Financing Facility, has a 23-year term with a 7.5-year grace period and a Secured Overnight Financing Rate (SOFR)-based interest rate. Ecuador's state-owned power company, Corporación Eléctrica del Ecuador (CELEC EP), will provide US$13.62 million in local counterpart funding.

Previously, the World Bank funded a Rural Electrification project in Peru. It was a 6-year project from 2006 to 2012, totaling US$145 million. The World Bank contributed US$50 million in lending, while the Global Environment Facility (GEF) provided a US$10 million grant. The project aimed to increase access to efficient and sustainable electricity services, as well as to improve the quality of life and income generation opportunities in rural areas.

The World Bank approved a loan of US$70 million in September 2021 to finance priority investments in Peru's electricity sector. These investments aim to improve the availability, reliability, and climate resilience of electricity service, particularly in low-income sectors and regions with inadequate or unreliable electricity services. Additionally, the project will promote the development of a greener electricity supply with reduced greenhouse gases and provide technical assistance to support the Peruvian government's energy sector reform for post-pandemic economic recovery. The total project financing amounts to US$95.10 million, with the World Bank providing US$70 million and the Government of Peru contributing US$25.10 million.

• APEC, 2006. APEC Energy Supply and Demand Outlook 2006.
• Ministerio de Energía y Minas, 2007. Anuario Estadístico Electricidad 2006
• OSINERG, 2005. Reformas Estructurales en el Sector Eléctrico Peruano
• World Bank, 2006: Rural Electrification Project, Project Appraisal Document.

• Peru
• Economy of Peru
• Water supply and sanitation in Peru
• Irrigation in Peru

• Ministry of Energy and Mines – Electricity
• Energy and Mining Investment Supervisory Body (OSINERG)
• National Institute for Defense of Competition and the Protection of Intellectual Property (INDECOPI)
• ELECTROPERU
• National Environment Commission (CONAM)
• National Environment Fund (FONAM)
• Cooperation Fund for Social Development (FONCODES) Archived 2008-06-11 at the Wayback Machine
• Climate Change Peru
• National Meteorological and Hydrological Service (SENAMHI)
• Program to Strengthen the National Capacity to manage Climate Change and Air Pollution (PROCLIM)
• Electricity sector in Latin America
• Solar insolation maps

The principal environmental issues in Peru are water pollution, soil erosion, pollution and deforestation. Although these issues are problematic and equally destructive, the Peruvian Environmental ministry has been developing regulation and laws to decrease the amount of pollution created in major cities and have been making policies in order to decrease the present deforestation rate in Peru.

The water and sanitation sector in Peru has made important advances in the last two decades, including the increase of water coverage from 30% to 85% between 1980 and 2010. Sanitation coverage has also increased from 9% to 37% from 1985 to 2010 in rural areas. Advances have also been achieved concerning the disinfection of drinking water and in sewage treatment. Nevertheless, many challenges remain, such as:

• Insufficient service coverage;
• Poor service quality which puts the population's health at risk;
• Deficient sustainability of built systems;
• Tariffs that do not cover the investment and operational costs, as well as the maintenance of services;
• Institutional and financial weakness; and,
• Excess of human resources, poorly qualified, and high staff turnover.

Access to water and sanitation increased during the last decades. Political efforts to increase access include the program Agua para todos which started in 2006 under President Alan García (see below).

According to the Joint Monitoring Program (JMP) by WHO and UNICEF the coverage of improved drinking water service was 85% and 71% had access to improved sanitation in 2010. Access increased from 75% concerning water and 54% concerning sanitation in 1990. In 2010, urban coverage was 91% for water and 81% for sanitation. In rural areas coverage of drinking water was 65% and sanitation 37%.

According to the Peruvian National Statistics and Informatic Institute (Instituto Nacional de Estadística e Informática - INEI), about 73% of the population had access to drinking water supply in 2009, while about 57% had access to sewerage. In the framework of the development plan Plan Bicentenario it is envisaged to increase water supply coverage to 85% and access to sewerage to 79% by 2021.

Parts of Peru are located in vast deserts, limiting water accessibility. While there has been an emphasis within the country on improving infrastructure to increase water access and restore watersheds, much of Peru still remains under-served, with over 1.5 million people estimated to have no running water in their homes. A 2015 UN Water Global Analysis and Assessment of Sanitation and Drinking Water report stated that Peru has made significant improvements within the last fifteen years to promote sanitation and improve access to water. Water access, however, is still unequal; some Peruvians pay 1.3 sols (.40 USD) for one cubic meter of running water, while poorer citizens who rely on water delivery trucks to bring them their resources pay around 20 sols ($6 USD) for one cubic meter of running water, an over 1500% increase. Water delivered in Peru tends to be unsanitary and non-potable. However, wealthier citizens are more easily able to treat water in their homes, while poorer citizens often lack the resources to properly treat their water.

In a national survey conducted in 2008, 64% of respondents indicated that they were satisfied with the quality of the water they received. Those who were not satisfied complained about turbidity, high levels of chlorine, bad taste and bad smell. This figure apparently does not include the level of satisfaction related to the continuity or pressure of water supply.

Urban areas received water service for an average of 17 hours per day in 2005. Only one Peruvian service company has continuous service, the company EMSAP in the Amazon region.

Back in 1997, the total continuity average was at 12 hours per day, 5 hours less than in 2005. Rural areas averaged 18 hours, while in urban areas, service was provided on average for 12 hours. Service averaged 8 hours on the coast, 18 hours in forested and mountainous regions, and 10 hours in metropolitan Lima.

In 2000, 80% of urban water supply systems used disinfection measures. In urban areas, 43 companies that provided information to the regulator complied with the norms for residual chlorine in the network.

In rural areas, however, in a sample consisting of 1,630 analyzed systems, 59% do not disinfect the water because of lacking the necessary facilities or the lack of chlorine. Considering that locations with less than 2,000 inhabitants have around 11,800 systems, it can be estimated that around 7,000 rural water systems provide water without disinfection.

The share of treated wastewater in 2004 was estimated at 22%. This is to say that more than three fourths of the wastewater generated did not receive any type of treatment prior to its final discharge, which poses a serious threat to the environment. Back in 1997, the coverage of wastewater treatment had only been 13%. In 2005, only two companies treated all of their sewage, one of them being from the Provincia de Marañón.

The great majority of sewage of the Lima-Callao metropolitan area is discharged without treatment into the ocean, resulting in serious contamination of the surrounding beaches. The Japanese Bank of International Cooperation (JBIC) provided a loan for the sanitation of the Lima-Callao area in 1997. However, the project was not implemented.

In 2013 the Taboada wastewater treatment plant was commissioned in Lima. With a capacity of 1,8 million cubic meters/day it is the largest wastewater treatment plant in South America. It was privately financed as a Build-Operate-Transfer (BOT) project by the Spanish firm Técnicas de Desalinización de Aguas (Tedagua). It is envisaged that some of the treated water will be used for the irrigation of urban parks. Financing for another wastewater treatment plant in La Atarjea has been secured in February 2014 through a 48,66 million Euro loan from the German development bank KfW. The treated waster will be reused for irrigation after being discharged into an existing irrigation canal.

On average, surface water in Peru is abundant. Nevertheless, it is unequally distributed in space and time. Especially the coastal area, where thecountry's major cities are located and two thirds of the population live, is very dry. Lima with 8 million people, is the world's second largest city located on a desert (after Cairo).

Peru contains over two-thirds of all tropical glaciers which provide important water sources for the dry western half of the country. These glaciers are rapidly melting as a result of climate change, making the flow of rivers more irregular, leading to more droughts and floods. A report by a team from the World Bank published in June 2007 in the bulletin of the American Geophysical Union (AGU) predicts that many of the lower glaciers in the Andes will be gone in the next decade or so, and that glacial runoff may dry up altogether within 20 years. The last comprehensive satellite survey by Peru's National Environmental Council, carried out in 1997, found that the area covered by glaciers had shrunk by 22% since the early 1960s. Partial surveys by geologists suggest that the rate at which the glaciers are melting has sped up over the past decade. Additionally, as these glaciers rapidly melt, they also expose the water to contaminants in the glaciers, such as lead and cadmium, making it unsafe to consume,

For example, the Quelccaya Ice Cap is the second largest in the Peruvian Andes and has shrunk by 30% in the last 33 years. Streams fed by glaciers and rainwater provide water further downstream.

Parts of Peru are in arid, dry desert-like conditions, which in turn have created a drought-like situation. As global temperatures increase, these areas are at higher risk of not obtaining steady access to water in already limited amounts. This is seen in Peru in the primarily Northern part of the country where there is much more desert-like conditions,

Discussed in Treehugger magazine, there is a sustainability sweet spot, in which a nation has a high level of human development cross-checked with ecologically sustainable use of resources. Peru is one of the very few countries falling into this sweet spot. The sustainability methods of Peru is a relatively modern ideology that has not been thought about in the grand scheme of time. Peru is able to pursue a method of sustainability since it has a large amount of readily available natural resources, as opposed to other countries that rely heavily on imports for mass amounts of natural resources. It is also important to understand how sustainable Peru's future water resources will remain as climate change progresses and rapidly affects the water supply. For example, the Rimac, Chillon, and Lurin River are all central to Peru's water supply, and are not equipped to handle the growing population. As it stands, there are no current plans by the government to deal with this issue.

Sustainability generally refers to the capacity for earth's biosphere and human civilization to coexist. Sustainability is a vital aspect of the WASH sector in development because it conserves the environment, is cost friendly, and promotes healthier development practices. The National Environmental Policy Act of 1969 committed the United States to sustainability, declaring it a national policy "to create and maintain conditions under which humans and nature can exist in productive harmony, that permit fulfilling the social, economic, and other requirements of present and future generations". Institutional sustainability in the WASH sector means that WASH systems, institutions, policies, and procedures at the local level are functional and meet the demand of users of WASH services. The element of environmental sustainability implies placing WASH interventions in the wider context of the natural environment and implementing an approach of integrated and sustainable management of water and waste(-water) flows and resources.

In 2005, an average of 259 liters/person/day of water were produced in urban areas. Actual water consumption is much lower than this level due to distribution losses estimated around 45%. Per capita water production has decreased by 26% since 1997 when production was at 352 liters/person/day. This decrease may be partly due to an increase in the share of metered users from 24% to 47% (1997–2005). According to the National Sanitation Plan, it is inadmissible that with such high levels of production water supply remains intermittent in many cities.

In rural areas, water use is much lower than in urban areas.

According to a 2008 national survey by the radio station RPP and the World Bank's Water and Sanitation Program (WSP), 38% of respondents indicate that they "take great care" of water in the household. 89% of respondents indicated that they treat tap water before drinking it, primarily by boiling it, and 48% store water in their house because of intermittent supply or because they have no access to piped drinking water.

Prior to Spanish colonization, the indigenous people of Peru managed their water using surface catchments and artesian wells, as well as subterranean aqueducts (puquios) and sewer systems. Roughly 1,700 years old, some of these aqueducts are still in use in the Nazca region; as of 2019 they were under consideration as a World Heritage Site.

The arrival of Spanish conquistadors in the mid-1500s left existing systems largely unchanged, as the Spanish themselves made use of the indigenous systems. However, indigenous infrastructure was put under strain as population centers grew along the dry western coast of Peru; additionally, under colonial policy surplus water withdrawals were encouraged to aid gold and silver mining (as opposed to agriculture). This marked the beginning of the mining industry’s heavy water consumption in Peru, which continues to be a point of high contention in the modern nation’s water sector.

Over the course of the following centuries, rural areas preserved a mix of colonial and indigenous water practices while urban centers like Lima continued to develop along the European model. After the establishment of the independent Peruvian state in 1821, conveyance pipes for drinking water began to be installed throughout Peru, slowly displacing the manual water porter and self-dug wells; the first potable water disinfection plant was installed in Lima in 1917. However waste was still collected in open ditches, and the investments in infrastructure were not organized.

The institutional framework for the water and sanitation sector has undergone many successive changes, including some reforms that were never implemented and some that considerably changed the responsibilities in the sector. Two reforms that had a lasting impact were the transfer of the responsibility for water supply and sanitation from municipalities to the national government in the late 1960s and the creation of a national water holding company in 1981 consisting of utilities in the large cities. In 1990, the government gave service responsibility in urban areas back to the municipalities. The new government of Fujimori introduced a policy of promoting the private sector and of commercializing the municipal utilities. In 1994 an autonomous regulatory agency was created at the national level. In the meantime the program to promote the private sector stalled: Only in 2005 the first and so far only water concession in Peru was awarded in the city of Tumbes.

In the beginning of the 1960s, the municipalities had the responsibility of providing water and sanitation services. However, this responsibility was transferred to the Ministry of Housing and Construction in most urban areas towards the end of the decade. In rural areas, investments were realized through the Ministry of Public Health. The systems, once built, were handed over to community-based organizations for operation and maintenance. In the 1970s, the large cities of Lima, Arequipa and Trujillo created their own Water and Sanitation Companies.

In 1981, the government of Fernando Belaúnde Terry merged the three Sanitation Companies of Lima, Arequipa, and Trujillo and the General Directorate for Water and Sanitation of the Ministry of Housing and Construction in a single national state holding company, the National Service of Water and Sewage Supply (SENAPA). SENAPA was composed of 15 constituent companies and 10 operational units. SEDAPAL in Lima was the largest one. 200 cities (20%) were left out of SENAPA and administered their own services.

The Government of Alan García (1985–1990) passed a law that transferred the functions related to rural water and sanitation construction and technical assistance to regional governments. With the change in government in 1990, these changes did not materialize, as the regionalization stalled.

During the 1990s, the water and sanitation sector was decentralized again. In May 1990, the outgoing government of Alan García decided to transfer all SENAPA constituent companies and operational units to the municipalities. SENAPA was to be converted into a company in charge of only giving technical assistance to the municipalities, a decision that was never implemented.

The Government of Alberto Fujimori (1990–2000) initiated another restructuring of the sector with the objectives of commercializing and privatizing the service providers. In 1991, the government enacted the Private Investment Promotion Law for water and sanitation. In 1992, the National Water and Sewage Program (PRONAP) was created. SENAPA and SEDAPAL were placed under the direct authority of the President. In 1994, a new law was passed that created the legal figure of the municipal utility (EPS) as an entity that is legally and financially separate of the municipality. More than ten years later, in 2005, the Water and Sanitation Program of the World Bank called the commercialization of municipal water utilities in the interior of the country a "silent reform in the sector".

The General Law of the National Superintendence of Sanitation Services (SUNASS) was passed in 1994. A tariff restructuring with the objective of achieving financial viability of the EPS was carried out in parallel. Despite the government's expectations, no single public-private partnership in water supply and sanitation was put in place during the Fujimori government and all service providers remained public. Only in October 2005 the first water and sanitation concession contract in Peru was signed in the province of Tumbes. The 30-year concession was awarded after open bidding to a Peruvian-Argentine consortium, Latinaguas-Concyssa. The interventions under the concession were to be financed with the support of a loan and grant from the German development bank KfW.

In La Libertad Region the public company for water supply and sanitation is SEDALIB which is formed by shareholders of municipalities of the Region.

In 2009, a new water law reasserted the state's ownership of national water resources, affirming the government's absolute power in deciding where and by whom water is used. This affirmation resulted in a renewed push for centralized infrastructure via public-private partnerships, with corporations building and operating for an initial period before ownership is re-assumed by the state.

The Ministry of Housing, Construction, and Sanitation is the sector governing entity through the Vice Ministry of Construction and Sanitation (VMCS) and the National Sanitation Board (DNS). The Ministry formulates, approves, executes and supervises the application of the national water and sanitation policies. The Ministry was created on June 11, 2002, through the Organic Law #27779.

Various drafts of a General Water Law for water resources management have been in discussion for two decades. Nevertheless, no law has been approved up to now.

The sector regulating entity is the National Sanitation Services Supervisory (SUNASS), created by law in 1992.Its functions are to regulate and supervise service providers, approve tariffs, establish norms, impose sanctions for violations of the law, and resolve user controversies and complaints. As part of its supervision activities SUNASS has established a benchmarking system to monitor the performance of service providers.

SUNASS is funded through a 2% surcharge on water bills with an annual budget of approximately US$4 million. According to the law, it enjoys administrative and financial autonomy.Its Board consists of five members nominated as follows:

• 2 by the Prime Minister's Office (including the Board's Chairman)
• 1 by the Ministry of Finance
• 1 by the Ministry of Housing, Construction, Water and Sanitation
• 1 by the Office of Fair Competition (Indecopi)

The Peruvian Constitution of 1993 bestows the responsibility of water and sanitation service provision to the city councils. The Ley Orgánica de Municipalidades (Law Nº 27972) states that the function of the provincial municipalities is to directly or by concession administer and regulate the water service, sewage, and drainage. Peru has 194 provincial city councils.

The service providers in the country are:

• Water and Sewer Company (SEDAPAL) in Lima;
• 53 Municipal Service Providers (EPS) in other cities (SEDAPAL and the EPS have 62% of the country's population within their jurisdiction);
• approximately 11,800 Communal Organizations – Sanitation Services Administrative Committees (JASS) – that are responsible for 29% of the population mainly situated in rural areas; and,
• 490 small municipalities that contain 9% of the total population.

When mayors change in Peru this often leads to the removal of the general manager of the municipal service provider (EPS) or of the head of the municipal department in charge of water supply in smaller municipalities that do not have an EPS. In 1999 it was estimated that the EPS changed general managers on the average every 17 months. This happens although the majority of the EPS are made up of several provincial municipalities, which in theory should decrease the influence of city governments and reduce the political interference in the administration of companies.

Nearly all of the country's service providers remain weak in financial and institutional aspects, as well as in human resources, despite attempts to strengthen them.

A key function in the water and sanitation sector that is frequently neglected is the support to communal organizations that provide services, mainly in rural areas. This function can be assigned to municipalities, EPS, or to national entities with departmental filiations.

The WHO observed that in 2000 the municipal participation in assistance to rural services was insufficient to different extents, ranging from its total exclusion to the need for support in the preparation of the technical records and the complete integration in the planning, financing, and construction supervision processes.

The regional governments have technical and financial supporting functions (also see Peru Regulation). The 24 separate Regional Boards of Housing, Construction, and Sanitation – one in each department – support them in this role.

Many interventions in rural areas during the 1990s were made without verifying the community demand and without their contributions to the execution of the projects. This resulted in overly designed systems that the communities did not maintain thus leading to loss of public funds.

Since 2002, the PRONASAR project supports the Administrative Assemblies of Sanitation Services (JASS) directly and through NGOs as well as municipalities.

The Ministry of Health (MINSA) is also participating in the sector through the General Director's Office of Environmental Health (DIGESA) and the Executive Director's Office on Basic Sanitation (DESAB), entities which exert functions in the aspects pertaining to sanitary and water quality for human consumption and the protection of a healthy environment.

Other institutions which act and participate in the sector are the Ministry of Economy and Finances (MEF) that specifically interferes in the aspects of economic sectoral and normative planning related to finances; several NGOs and the private sector, among others.

The National Cooperation Fund for Social Development (FONCODES), created in 1991, channels resources to investing in marginalized rural and urban areas in various sectors including potable water and sanitation. Within the framework of the state decentralization process, since October 2003, FONCODES transfers resources to the district city councils verified for social infrastructure projects, offering technical assistance and contributes to the capacity building for the responsible handling of social investments. The FONCODES depends on the Ministry of Women and Social Development (MIMDES). Since the beginning of PRONASAR, FONCODES has retired from water and sanitation activities in rural areas.

Some 46 service providers have formed the National Peruvian Association of Sanitation Service Providers (ANEPPSA) to "promote the excellence in sanitation services management" through training and exchange of experiences.

In 2006-07 nine small towns (between 5,000 and 25,000 inhabitants) across Peru introduced a new water and sanitation management model, under which the community is being more empowered, including through deciding themselves about a certain level of service quality, such as low-cost technologies, and corresponding tariffs. Subsequently the municipality hires a specialized operator who is being regulated by a Community Supervision Board under a Public-Private-Social Partnership. The specialized operator can be a private or a mixed company. The aim of the new approach was to break with the low-level equilibrium of poor service quality and poor cost recovery that prevails throughout small towns in Peru, under which poor quality water services are provided directly by the municipality. The new approach was supported through the Small Town Pilot Project (STPP) of the Ministry of Housing, with technical support from the World Bank's Water and Sanitation Program (WSP) and financial support of US$6.6 million from the Canadian International Development Agency for limited infrastructure investments and training for both the operator and members of the Community Supervision Boards. After the municipal elections of 2007, 3 new mayors decided to abandon the new approach and to return to the old model of direct municipal management. In the 6 other cities specialized operators continue to operate.

In September 2006, the new President Alan García announced an ambitious investment plan for the water and sanitation sector called Agua para todos (that is, water for everyone), promising water access to all Peruvians – mainly to the poorest – by the end of his mandate. However, as of 2020, there have been no further developments on this proposed plan. Currently, water delivery projects by the Peruvian government involve partnerships with NGOs such as the non-profit also called "Water for Everyone".

Founded in 2013, the NGO EcoSwell works on water and sanitation projects across Peru (amongst other sectors of work); they are based in the northwestern Lobitos district of the Talara region, an arid coastal area that faces water stress. To combat the challenges of derelict infrastructure and environmental degradation, EcoSwell primarily constructs physical WASH projects with the help of local residents and interns, including bio-remediation for wastewater management, dry toilets, grey water reuse, desalination, and groundwater monitoring. Their bottom-up approach to community mobilization focuses on the long-term sustainability of Peru's ecology, with a commitment to a steady-state economy.

It is estimated that 45% of the water produced is not counted due to physical and commercial losses, which is higher than the other 40% average of Water and sanitation in Latin America. This coefficient has not changed a lot during the last 12 years. The highest levels are detected in the provinces of Marañón and Barranca (greater than 70%). Some companies had water levels not accounted for at less than 10%, however, these values do not seem viable given the low level of household metering (50%).

Water tariffs in Peru are somewhat low compared to other Latin American countries and water bills are often not paid. As a result, according to an estimate, 95% of the country's urban service providers can be considered bankrupt. In many urban areas it is common to spend significant sums to water tanker operators, which are prevalent because of intermittent supply and deficient coverage. In rural areas, tariffs are even lower than the already low tariffs in urban areas, making it impossible to properly maintain water systems.

Tariffs In 2004, water tariffs in Peru were on average Sol 1.29/m3 (US$0.38/m3) in urban areas. Average urban tariffs increased slightly from Sol 1.04/m3 in 1997 (US$0.40/m3 with 1997 monetary values) to Sol 1.45/m3 in 2000 (US$0.42/m3), however dropped in real terms thereafter. Each provider has its own tariffs, with significant differences between them, ranging from Sol 0.45/m3 in Valle del Mantaro (US$0.14/m3) to Sol 2.60/m3 in Ilo (US$0.79/m3) in 2005.

Users in urban areas that do not have access to piped water pay much higher prices for water from water tankers.

According to a 2008 national survey by Radio RPP, respondents indicated that, on average, they paid 44 Soles (close to US$15) per month and per household for water. 44% of respondents said that they paid "much or too much" for water.

Cost recovery In 1999, water companies billed only 55% of the produced water and of this value only 50% was actually paid. Payment arrears were equivalent to 140 days of billed revenues.

There are significant differences in levels of cost recovery among service providers. For example, SEDAPAL had an operating margin of 35% in 2000, while the EPS had an average operating margin of only 16%. 6 out of 46 EPS had a negative operating margin.

Only five years later in 2005, according to the World Bank's Water and Sanitation Program, no more than 5% of the EPS and of the municipalities had the financial capacity to carry out their functions. The rest are considered financially bankrupt. In the same year, the government decided to apply a new tariff regulation model. The government contracted studies for the elaboration of this model with the support from the Public-Private Infrastructure Advisory Facility (PPIAF), a World Bank trust fund, and later from the IDB.

In rural areas, the water committees apply fixed monthly tariffs independently of use as the use of water meters is not common in these areas. The tariff is estimated to be the equivalent of US$0.50/month and household. At a consumption of 20 cubic meter per month and household this corresponds to US$0.025 per cubic meter, or about 15 times less than the average tariff in urban areas. Needless to say, the revenues generated are insufficient for the operation and maintenance of the systems.

In 1997, the average the Peruvian household spent 1.8% of their total expenses in water, including water bought from carro-tanques, but without spending in sanitation. In urban areas they spent 1.9% of the expenses for water and only 0.8% in rural areas. The poorest (first decil) spent 2.4% in urban areas and 1.7% in rural areas.

As shown in the bar chart below, investment levels increased substantially during much of the 1990s, from US$39 million in 1990 to a peak of US$422 million in 1997. Since then investments have declined again to US$106 million in 2004 and US$190 million in 2005. Total investment between 1990 and 2005 was at US$43.3 billion, the average being at US$205m p.a. Investments are financed through programs providing subsidies to municipal utilities, as well as to a limited extent by internal cash generation and debt.

Between 1990 and 1998, an annual average of US$228.9 million was invested for water and sanitation infrastructure, equivalent to 0.5% of the GDP. In this period the investments in the sector increased from US$1.1/per capita in 1990 to US$15/per capita in 1998, the latter being an unusually high investment level compared to other Latin American countries.These investments were financed as follows:

• 26% by SEDAPAL, financed by internal cash generation and debt;
• 17% by grants from the central government through the Social Fund FONCODES, destined primarily at rural areas,
• 10% by grants through the Program for the Support of Water Sector Reform (PARSSA), destined primarily at provincial cities;
• 22% by municipal companies, municipalities and NGOs;
• 23% by debt from the National Housing Fund FONAVI; and
• 2% by the Southern Zone Lima Metropolitan Sewer System Improvement Project (MESIAS), a project to improve the sanitary conditions of southern Lima, reducing the coastal contamination from wastewater.

In 2000 total debt contracted by service providers stood at US$1.15 billion, equivalent to the operating margin of all service providers over 9 years. 46% of this debt contributed to reimbursable contributions by the National Housing Fund FONAVI.

The period between 2000 and 2005 witnessed investments of US$833.1 million (US$166.6 million/year) in the sector, carried out by the following entities:

The government's draft National Sanitation Plan considers that investments of US$4,789 million would be needed in 2005-2015 (US$497 million/year) to achieve the Millennium Development Goals in the sector.

However, billions more would be needed to divert water along tunnels beneath the Andes if glacial melting accelerates.

Multilateral financial institutions including the World Bank, the Inter-American Development Bank, and the Andean Development Corporation (CAF) as well as bilateral cooperation agencies (the German KfW and GTZ, the Canadian CIDA, and the Japanese JICA (ex-JBIC), among others) play an important role in investment financing and in technical assistance in the sector.

Assistance to segments of the sector, differentiated by the size of localities, is provided by different donors:

• The World Bank provides support to rural areas as well as to small towns with populations less than 30,000 through the PRONASAR (see above).
• Larger towns and small cities — such as Ayacucho, Cajamarca or Puno — receive support from KfW.
• Larger cities — such as Tumbes, Piura or Cusco — receive support from KfW, IDB and JICA.
• The CAF, the World Bank, and the JICA support SEDAPAL in Lima and Callao.

An example of this support is the agreement signed in September 2009 by the Japan International Cooperation Agency (JICA) to provide a loan for up to $60 million for the North Lima Metropolitan Area Water Supply and Sewerage Optimization Project. The purpose of the project is to improve the quality of water and sanitation services by renovating the water supply network and improving its operation and management. It aims at reducing non-revenue water and increasing the continuity of water supply. The project complements another JICA-supported project to build a water treatment plant, water distribution systems, and sewerage systems in marginal areas of the same place.

• Electricity sector in Peru
• Irrigation in Peru
• Water resources management in Peru
• Water supply and sanitation in Latin America

• Ministry of Housing, Construction, and Sanitation: National Housing and Water Plan 2006-2015
• (in Spanish) Ing. Scott A. Muller: Agua, Energia y el Cambio Climático en Lima Metropolitana, 2010 [1]
• Dr. Julio Calderón Cockburn: Water and Sanitation – The case of rural Peru, 2004
• (in Spanish) The Inter-American Platform of Human Rights, Democracy, and Development (PIDHDD), a Mercosur Initiative, Peru Water 2006
• USAID/Environmental Health Project/WSP/PAHO: Evaluation of Peru's Sanitation Policies, 2004
• (in Spanish) WHO/PAHO: Desigualdades en el acceso, uso y gasto con el agua potable en América Latina y el Caribe, 2001
• (in Spanish) WHO/PAHO/CEPIS 2000: Water and Sanitation Evaluation Peru, 2000 Archived 2009-05-15 at the Wayback Machine

• Dirección Nacional de Saneamiento
• SUNASS
• SEDAPAL
• MINSA DIGESA (Salud Ambiental)
• ANEPSSA
• FONCODES
• PROAGUA Peru
• WSP LAC

Peru, officially the Republic of Peru, is a country in western South America. It is bordered in the north by Ecuador and Colombia, in the east by Brazil, in the southeast by Bolivia, in the south by Chile, and in the south and west by the Pacific Ocean. Peru is a megadiverse country with habitats ranging from the arid plains of the Pacific coastal region in the west to the peaks of the Andes mountains extending from the north to the southeast of the country to the tropical Amazon basin rainforest in the east with the Amazon River. Peru has a population of over 32 million, and its capital and largest city is Lima. At 1,285,216 km² (496,225 sq mi), Peru is the 19th largest country in the world, and the third largest in South America.

Peruvian territory was home to several cultures during the ancient and medieval periods, and has one of the longest histories of civilization of any country, tracing its heritage back to the 10th millennium BCE. Notable pre-colonial cultures and civilizations include the Caral–Supe civilization (the earliest civilization in the Americas and considered one of the cradles of civilization), the Nazca culture, the Wari and Tiwanaku empires, the Kingdom of Cusco, and the Inca Empire, the largest known state in the pre-Columbian Americas. The Spanish Empire conquered the region in the 16th century and Charles V established a viceroyalty with the official name of the Kingdom of Peru that encompassed most of its South American territories, with its capital in Lima. Higher education started in the Americas with the official establishment of the National University of San Marcos in Lima in 1551.