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Latin America and the Caribbean


Peru: Revenue management to maximize development impact of extractive industries


In 2004, Peru enacted Ley del Canon to ensure that extractive industries benefit local communities. The law mandates that the Central Government transfers part of the industry’s royalties to regional and local governments. The royalties received by municipalities represent a great opportunity to lift communities out of poverty. 

 

IFC has seized the opportunity to help local governments manage their new revenue from the extractive and other industries and to work with civil society to promote accountability and good governance with municipalities. Since 2005, IFC has completed seven revenue management projects with municipalities, helping them increase their investments by $108 million.

 

Urban renewal works at the main square in Jesús, Peru

 

This has benefited an estimated 500,000 people with access to new or improved public infrastructure, including roads, schools, sanitary posts, water systems, and more. Between 2006 and 2010, $5 billion in royalties were transferred to municipalities located in key extractive regions.

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