The Government of Peru has enacted four regulations of the Forest and Wildlife Act (Law No.29763), which implementation will allow the forest sector to emerge as new engine of growth within the National Plan for Productive Diversification, Peru’s Production Ministry announced.
Production Minister Piero Ghezzi indicated that the implementation of this new legal framework will unlock investments for the sector worth over US$10 billion, given the great potential it offers.
He assured the sector, through Cofide, will finance the 30-year forest fund, and announced the creation of the Forest Technological Innovation Center (Cite) in Pucallpa, which will be the largest in the country.
Extraordinary Potential
Peru’s forest potential is extraordinary due to the comparative advantages of the sector. 65% of the country belongs to the Amazon area and more than 80% of this zone is suitable for forestry. The country has more than 78 million hectares of natural forests.
We also have 46 million hectares capable to permanently produce wood based products (furniture, doors and floor) as well as 8,000,000 hectares for reforestation and 2,500 forest species in the Amazon.
“In fact, due to the climate, we have species such as the Bolaina, which reaches its maturity height in only eight years, while its direct competitor, the Chilean Pine, does it in 23 years,” he pointed out.
US$10 billion Investment
Minister Ghezzi said the new legal framework will help reforest 2,000,000 hectares in the following years.
“If we need to invest US$5,000 per hectare on average, that means US$10 billion will be invested only in reforestation, which will be then injected into the economy,” he claimed after commenting the private sector is willing to make such investment.
Ghezzi went on to add that the long-term financing for the sector is not a problem any more.
“In accordance with the granted powers, we approve a Legislative Decree that extends from 9 to 30 years the period of existence of Fondo Mipyme worth S/.600 million (US$185.5 million) aimed at loans and guarantees for Micro, Small, and Medium-sized Enterprises (MSMEs), including those of the forest sector,” he noted.
An initial fund of S/.200 million will be available at Cofide to finance forest-based MSMEs through its second-tier schemes (credit and guarantees).
“This initial effort will serve to promote long-term private funding of greater scope for the forest sector,” he explained.
Another problem resolved involves the promotion of innovation, science and technology.
Mr. Ghezzi announced the construction of the aforementioned CITE in Pucallpa will begin in 2016 with an investment of S/.85 million (about US$26.2 million).
Ambitious Goals
This new scenario provides ambitious and very concrete goals for the Government.
“We aim to raise forest exports from US$150 to US$300 million by 2017 and create 500,000 new direct jobs in forest plantations,” he pointed out.
(FIN) JJN/JJN/RMB/MVB
Published: 9/29/2015