Peru Accelerating Sustainable Infrastructure with Cajamarca Wastewater Project
In a decisive move to modernise Peru’s sanitation infrastructure and protect its fragile ecosystems, the Peruvian government has greenlit a significant wastewater treatment initiative in Cajamarca. The ambitious project, spearheaded by ProInversión and the Ministry of Housing, Construction, and Sanitation (MVCS), aims to overhaul the region’s wastewater management system through a long-term public-private partnership (PPP).
With a project finance price tag of US$283 million, the Cajamarca Wastewater Treatment Plant (WWTP) and its associated infrastructure represent one of the country’s largest co-financed sanitation investments to date. It’s a critical step forward for public health, environmental protection, and sustainable urban development in a rapidly growing region of northern Peru.
What the Project Entails
Under this PPP model, the selected concessionaire will take on the entire lifecycle of the infrastructure—from design and financing through to construction, operation, and maintenance. The proposal, originally submitted by Spanish multinational FCC Aqualia, S.A., includes the construction of a state-of-the-art wastewater treatment facility, the new Mashcón collector, and the upgrade of the existing La Victoria collector.
Once completed, the infrastructure will serve 365,000 residents in Cajamarca city and three neighbouring towns in the Baños del Inca district. The system is designed to ensure the efficient and environmentally friendly treatment and disposal of wastewater, in line with both Peruvian standards and international best practices.
The Ministry of Housing will fully co-finance the investment costs, and will also temporarily subsidise part of the operational and maintenance (O&M) expenses. The contract will span 26 years, including an operational phase of around 20 years, with room for extension subject to Peruvian law.
Environmental and Health Benefits
The Mashcón and Cajamarca rivers have long suffered from untreated wastewater discharges, leading to widespread environmental degradation and significant public health concerns. By treating effluent before it enters natural watercourses, the project will substantially reduce pathogens and contaminants in the local environment.
This initiative couldn’t come soon enough. Studies by Peru’s National Water Authority (ANA) have shown that contaminated water is a leading cause of gastrointestinal disease and child mortality in several regions of the country. Improved water quality will directly support better health outcomes and reduce the burden on local health services.
Beyond human health, the project also aims to revitalise the local ecosystem. Cleaner rivers mean healthier aquatic life, more reliable agricultural irrigation, and even improved conditions for ecotourism, which has been gaining traction in the Cajamarca region.
Boosting Local Development
It’s not just about pipes and pumps. The WWTP project is expected to generate a wave of economic benefits for Cajamarca. Improved sanitation and environmental quality will open new opportunities in agriculture, tourism, and real estate.
Additionally, the construction and long-term operation of the plant will create hundreds of direct and indirect jobs, providing a much-needed boost to the local labour market. Procurement policies will favour local contractors and suppliers wherever feasible, ensuring the project delivers benefits beyond the capital works themselves.
A spokesperson from ProInversión commented: “This initiative reflects our commitment to building a greener, more resilient Peru. The PPP model allows us to tap into private sector expertise while ensuring public oversight and long-term service quality.”
Reuse and Circular Economy
An often-overlooked aspect of wastewater treatment is its potential to support circular economy goals. The Cajamarca WWTP is designed with future scalability in mind, making it possible to integrate advanced technologies for water reuse and sludge valorisation.
While these features won’t be implemented from day one, the project lays the groundwork for their adoption. Treated effluent could eventually be used for agricultural irrigation, park maintenance, or even industrial applications. Meanwhile, sludge could be processed into fertiliser or biogas, reducing reliance on chemical inputs and fossil fuels.
The Ministry has signalled its intent to launch pilot schemes around water reuse, with Cajamarca likely to become a flagship region for sustainable water management in Peru.
Timeline and Procurement
Under Peruvian law, other qualified entities have until late September 2025 to express interest in the concession. If no rival proposals are received within that 90-day window, FCC Aqualia could be awarded the project directly.
This legal structure ensures transparency while allowing original proponents to be rewarded for their initiative and technical proposals. Should competitive bidding be triggered, a formal procurement process will follow, with technical and financial criteria applied to ensure the best value and performance.
Regardless of the procurement outcome, construction is expected to begin in 2026, with full commissioning targeted for late 2028.
FCC Aqualia’s Role in Latin America
FCC Aqualia, a global leader in water management, already has an established presence in Latin America. The company is currently involved in several water and wastewater projects across Mexico, Colombia, and Chile. Its portfolio includes both design-build-operate contracts and long-term concessions, giving it the financial clout and technical muscle required for such high-stakes infrastructure.
In Cajamarca, Aqualia has proposed the use of advanced biological treatment processes and smart monitoring technologies to ensure high treatment efficiency and operational resilience. A company executive stated: “We’re excited about the potential of this project to set new benchmarks in water management across the Andean region.”
Global Momentum in Sanitation PPPs
Cajamarca’s WWTP isn’t happening in a vacuum. Across Latin America and the Caribbean, governments are increasingly turning to PPP project finance models to address infrastructure gaps, particularly in water and sanitation. According to the World Bank, private participation in water projects across the region has tripled over the last decade.
From Brazil to Colombia and beyond, PPPs are helping governments close financing gaps, adopt modern technology, and improve service delivery. Peru’s push to scale up its sanitation infrastructure aligns with broader regional efforts to achieve the UN’s Sustainable Development Goal 6: Clean Water and Sanitation for All.
A Clean Future in the Making
The Cajamarca WWTP project is more than just a treatment facility. It’s a vision for cleaner cities, healthier rivers, and a more sustainable future. By blending public oversight with private sector innovation, Peru is setting a powerful example for how developing nations can tackle their most pressing infrastructure challenges.
As the project moves forward, it will be watched closely by stakeholders across the water, construction, and finance sectors. And for the people of Cajamarca, it marks a long-awaited turn toward better living conditions, new economic opportunities, and the promise of rivers running clean once more.
