heavily polluted Chili River. In this context, the Pillones Dam Project was developed, located at approximately 4,300 meters above sea level in the province of Caylloma, about three hours by road from the city of Arequipa. The dam, with a storage capacity of 80 million cubic meters, forms part of the water system that supplies the Chili River basin and the Charcani hydroelectric power plants. Its implementation marked the beginning of the “Virtuous Water Circle,” a territorial circular economy model that transformed scarcity into resilience through Peru’s first formal water-related Public-Private Partnership. This paper analyzes how high-altitude water regulation infrastructure enabled the multiplication of water availability, energy capacity, and social stability in a strategic mining region. 2. THE GENESIS OF AN INNOVATIVE ALLIANCE 2.1 Technical Problem: Water Scarcity and Waste In the early 2000s, the region of Arequipa faced a critical combination of structural water scarcity, high climate variability, accelerated urban growth, and mining expansion. The average annual flow of the Chili River during the dry season was approximately 9 m³/s, insufficient to simultaneously sustain agriculture, urban supply, hydroelectric generation, and industrial growth. Technical analysis showed that during peak flow periods, significant volumes of water reached the ocean without prior regulation or storage, limiting the system’s capacity to redistribute water during the dry season. The solution was the design of the Pillones Dam (80 million m³), capable of storing surplus flows and releasing an additional 3.5 m³/s during the dry season, increasing water availability by nearly 30%. As a result, total regional storage capacity rose from approximately 260 million m³ to more than 400 million m³ when considering the integrated reservoir system. 2.2 Institutional Challenge: Multisectoral Water Allocation Constraints Simultaneously, structurally divergent sectoral interests coexisted regarding the use of water resources. On the one hand, EGASA sought to increase hydroelectric generation at the Charcani power plants through enhanced flow regulation and storage capacity. On the other hand, Minera Cerro Verde needed to secure new water sources to enable its productive expansion and projected operational growth. At that time, the mining company consumed approximately 40 MW of electrical power and employed around 700 workers; two decades later, its electricity demand has risen to nearly 450 MW, and its workforce exceeds 5,000 employees, reflecting an expansion of more than tenfold in its operational scale. 4
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