UNDP with additional PAGE funds and in collaboration with BIOFIN is supporting the mechanism for Public Works for Tax (WxT) Deductions in Peru. PAGE through BIOFIN conducted an initial study that identified 23 companies, out of which 50 per cent wish to use the mechanism to finance natural infrastructure of nearly USD 15 million.
This mechanism holds a great potential for funding green infrastructure and projects related to biodiversity and ecosystem services with private sector funds. The unique investment mechanism was devised by the Peruvian Government in 2008 and allows private firms to “pay” a portion of their income taxes in advance in the form of public works—from public buildings to transport infrastructure and beyond.
PAGE through BIOFIN is also accompanying the implementation of three public investment pilot projects in biodiversity and natural infrastructure through WxT, for approximately USD 10 million: Huascaran National Park, Ecosystem recovery in Machu Picchu and Sustainable management of vicuñas in Colquemarca District.
Since 2021, the Peruvian government in partnership with PAGE continues to coordinate with specific (mainly extractive and tourism) companies interested in mobilizing resources through WxT. Efforts were also made to provide support to public and private entities for the implementation of MoUs, municipal agreements and inter-institutional agreements, as pre-operational actions to the mechanism of WxT.