Years of stagnation, now construction is set to resume: Chavimochic III will receive around 508 million soles from the Peruvian national budget in 2027. The massive irrigation project in La Libertad is finally set to move forward. The first decisions are expected to be made in 2026: the contract for the third pipeline of the Virú Siphon is to be signed in September, followed by the contract for the completion of the Palo Redondo dam in November.
What is behind Chavimochic?
Chavimochic is one of Peru's most important irrigation projects. The name is derived from the Chao, Virú, Moche, and Chicama valleys. The principle is simple: water from the Santa River is diverted to the arid regions of the northern Peruvian coast. Without this water, large-scale agriculture would hardly be possible on many of these lands.
Today, crops such as avocados, blueberries, asparagus, and grapes grow there. Many of these products are sold abroad. The irrigation system is therefore an important foundation for the agricultural industry in La Libertad and the economic development of Northern Peru.
This dam is crucial
At the heart of the project is Palo Redondo. The approximately 97-meter-high dam is intended to store water and release it in a controlled manner into the irrigation system. However, the structure was never completed, and work has been at a standstill for years.
That is now set to change. According to the Ministry of Agrarian Development and Irrigation, the contract for the completion of Palo Redondo is to be signed in November 2026.
Construction to continue on the Virú Siphon as well
The contract for a third pipeline for the Virú Siphon is expected to follow as early as September. The new pipeline is intended to be approximately 3.5 kilometers long with a diameter of around 2.5 meters. This will allow the system to transport up to 50 cubic meters of water per second in the future.
The additional capacity is important for the further development of the project. The system is designed to reliably deliver more water to the agricultural areas of La Libertad.
508 million soles available
Around 508 million soles have been earmarked for Chavimochic III for 2027. That is a lot of money, but it is not enough for the entire project. Chavimochic III consists of several large construction phases and requires total investments in the billions.
The funds allocated for 2027 are therefore primarily intended to ensure that important work gets back on track and central parts of the long-delayed third project phase are implemented.
Why did it take so long?
That is precisely the big story behind Chavimochic III: the project should have been further along by now. Contractual disputes and legal challenges brought key work to a halt. This was particularly visible at Palo Redondo. Construction of the dam began and then remained unfinished.
As a result, one of Northern Peru's most important infrastructure projects was stuck for years. The announced new contracts are now intended to ensure that work can resume.
Peru brings Canada on board
For Palo Redondo and the third pipeline of the Virú Siphon, Peru is now working with Canada. The cooperation is being conducted via a government-to-government model. Planning, procurement, and construction are to be organized through international contracting procedures.
Peru aims to use this approach to drive the implementation of the two key project components and prevent the problems of recent years from recurring.
A great deal is at stake for Northern Peru
Chavimochic III is not a construction site of interest only to engineers. It is about water, agriculture, jobs, and exports. According to official project data, more than 111,000 hectares of agricultural land are expected to benefit from Chavimochic III.
Further economic development in the area around Trujillo also depends on this. The capital of La Libertad is one of the most important economic and service centers in Northern Peru. Agriculture, trade, industry, and logistics play a major role in the region.
In the long term, more than 150,000 direct and indirect jobs are also expected to be associated with the full development of the project. This is a forecast for the entire project and not a number of jobs already created.
For La Libertad, completion could mean a further boost for the agricultural industry. However, after years of delays, it is not the next big announcement that counts. What is decisive is whether the announced contracts are actually signed in September and November—and whether work then resumes at the construction sites.
Image source: Gestión / Special Project Chavimochic.
