US Approves $1.5 Billion Project to Modernize Peru’s Key Naval Base near Chancay Port

The United States has approved a major initiative to modernize Peru’s main naval base, located just 80 kilometers from the strategically important Port of Chancay. Valued at up to $1.5 billion, the project aims to strengthen security cooperation between Washington and Lima while enhancing Peru’s naval capabilities.

The proposed deal, which includes the design and construction of new infrastructure, is pending review by the US Congress and may involve detailed negotiations with Peruvian authorities. The final contract value could be lower than the initially approved maximum.

“This proposed sale will support U.S. foreign policy objectives by helping secure an important partner that promotes political stability, peace, and economic growth in South America,” stated the U.S. Defense Security Cooperation Agency (DSCA).

The project is part of ongoing plans, dating back to late 2024, to relocate and upgrade the naval base in Callao, Peru’s primary commercial port city. The relocation allows for the expansion of commercial port operations while maintaining strategic military oversight.

If finalized, up to 20 U.S. personnel or contractors may be deployed to Peru for up to 10 years to supervise construction and ensure project management standards are met.

The initiative comes amid growing scrutiny over Chinese involvement in the region, as COSCO Shipping, a state-owned Chinese company, operates the nearby $1.3 billion Port of Chancay. The U.S. has previously expressed concerns that the port could be used for Chinese military purposes.

Peru continues to balance relations with both the United States and China, its main trading partner. Recent moves by Washington, including designating Peru as a major non-NATO ally and appointing a new ambassador, underscore the strategic importance of this defense partnership.