Universidad Peruana de Ciencias Aplicadas, S.A.

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Universidad Peruana de Ciencias Aplicadas, S.A.C is a successful private university offering undergraduate and postgraduate courses in the sciences, business, engineering, architecture and law. UPC was founded in 1994 as a private, non-profit academic association in the wake of increasing liberalization by the Peruvian government which included initiatives to improve the quality of education. In June 1999, it became the first educational establishment in Peru to be privately owned and run on a for-profit basis as a Sociedad Anonima, a possibility rarely found in Latin America. UPC has shown impressive 50% p.a. enrollment growth since its inception and today ranks as one of the top five private universities in Lima. UPC''s consolidated revenues amounted to approximately US$18 million in 1999.In order to accommodate its growing enrollment and enhance its profile and competitive position in the Peruvian higher education market, UPC has embarked on a new investment program to expand, rationalize and modernize its facilities. IFC’s participation will play a critical role in the UPC project in the following areas:Support for a viable private university: IFC would support a financially viable private university during a critical period of development, given its rapid enrollment growth, its recent merger with Cibertec, and the new dynamics in the higher education market in Peru following regulatory changes which permit private universities to operate on a for-profit basis. With its evolving portfolio of education investments in Latin America, IFC is well placed to support UPC during this period of transition. Provide long-term financing: UPC’s management attempted to raise financing in local markets in 1998-1999. However, beyond the financial market distress which characterized 1999 and led to a retrenching of commercial banks from term lending, education remains a sector with which financial institutions are poorly acquainted and reluctant to invest. Two domestic commercial banks contacted, while interested in supporting UPC, eventually declined to provide any long-term funding at any price due to the external crisis and lack of liquidity in Peru. While UPC funded most of its early growth gradually through internal cash, the funding demands upon UPC have accelerated due to its rapid growth. IFC’s involvement will allow UPC to implement its imminently needed capital investment program in a timely way with financing on appropriate terms.IFC’s support of UPC would have a development impact in three areas. First, the project will contribute to enhance the quality and efficiency of the education sector in Peru. Secondly, the project will have an important demonstration effect. Finally, UPC''s individual impact will be leveraged by its place within the World Bank’s strategy which seeks a systematic reform of Peru’s educational system, making the UPC project particularly timely.