Washington, April 28 2003
—The International Finance Corporation, the private sector arm of the World Bank Group, signed a Memorandum of Understanding with Minera Yanacocha, to mark the launch of the second stage of its joint small and medium enterprise (SME) linkage program. The program will help local businesses benefit from investments in the mining industry in the Cajamarca Department of northern Peru. IFC is contributing up to $1.5 million to the program, which is linked to its investment in the Minera Yanacocha SA gold mine.
The SME linkage program aims to develop a diversified and sustainable economic base beyond the operations of the mine. It targets several key areas, including supply chain development, capacity building, and access to finance. The program has received significant support both from Minera Yanacocha and from the community because of its anticipated developmental impact. Partner organizations such as Swisscontact, TechnoServe, and Aid to Artisans, among others, are responsible for implementing the various elements of the program in their areas of expertise. An IFC program coordinator based in Cajamarca has been hired to provide on-site implementation.
Various technical assistance and training programs have already started. Local SME suppliers of goods and services are participating in a total quality management training program focused on international standards in safety, environmental, and business practices. This will allow the SMEs to improve their chances of winning more of the supplier contracts awarded by Minera Yanacocha. Currently, 16 enterprises out of a targeted 34 are receiving training.
A training program for construction tradesmen started in November 2002, and 24 individuals have already been trained in modern construction technology. These tradesmen will now be prepared to respond to the increased demand of the construction sector, as a result of the economic activity of Minera Yanacocha.
Another training program is providing assistance to local agribusinesses in areas such as quality assurance, manufacturing practices, pricing structures, and technological know-how. Similarly, local artisans in the ceramic and textile sectors are receiving technical training to upgrade their design skills and production capacity as well as to link their products to both domestic and international markets.
The program will also contribute to the development of new financial products and services for the local small business market. It is expected to facilitate the access of those businesses to working and investment capital.
The program is intended to open markets for local producers and subcontractors and reduce the need to source similar goods and services from other parts of Peru. All components of the program are being delivered in close cooperation with the mine to help ensure maximum impact and to complement Minera Yanacocha’s substantial investments in social and environmental programs.
Peter Woicke, Executive Vice President of IFC, notes that “while gold mining plays a central role in the economic growth of the region, this program should help small businesses find ways to contribute to a diversified and sustainable economic base beyond the mining operations of Minera Yanacocha.”
IFC’s mission is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. Since its founding in 1956 through 2002, IFC has committed more than $34 billion of its own funds and arranged $21 billion in syndications for 2,825 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY02 was $15.1 billion for its own account and $6.5 billion held for participants in loan syndications.
