Dutch development bank FMO will loan $15 million to family-owned Peruvian fruit, vegetable and dairy producer Agricola Pampa Baja to make improvements on its 2,570 hectares of farmland.
Pampa Baja, which recently added 1,370 hectares of land in north Peru to its portfolio in the southern Majes region, will use the loan to install modern irrigation, processing and equipment, including cooling and packaging facilities. The company will be required to comply with an environmental and social action plan as part of the loan.
Its new land in Olmos is part a government project to irrigate the northern desert region.
“FMO is proud to play a part in supporting Pampa Baja’s geographical expansion activities which will allow them to broaden their off-season production window as well as increase food production and economic development in a remote and under-developed region of Peru,” said FMO director of agribusiness Suzanne Gaboury in a statement.
Pampa Baja runs one of the largest dairy farms in the country and provides 1,400 jobs in thes south where it currently operates. The new Olmos operation will create 500 permanent and 1,200 seasonal jobs. It also runs a programme to create contacts between the company and smallholders.
The Peruvian agriculture sector grew 1.5 percent in 2013 and 1.6 percent in 2014, according to the central bank, below Peru’s overall GDP. But while traditional exports like coffee and anchovies have also weakened in recent years, growth has been strong in non-traditional agricultural and fish exports, leading to overall exports in the sector having grown 19 percent between 2013 and 2014.
The €9.3 billion FMO invests in development by targeting financial institutions, energy and agribusiness, food and water businesses around the world.