Peruvian President Ollanta Humala wrapped up a three-day visit to Japan Thursday, having secured up to $250 million worth of loans for infrastructure projects.
The cash will be used on projects including better water and sewage systems in Lima and boosting energy-saving measures in public transport, the two sides said in a joint statement.
Peru supplies raw materials including copper, zinc and silver to resource-strapped Japan, which is one of the South American nation's largest trading partners.
Japanese Prime Minister Yoshihiko Noda said Wednesday Tokyo would provide up to 20 billion yen in loans.
Humala said Peru wants to increase cooperation with Japan "in the areas of renewable energy, eco-efficiency and clean technologies, for the purpose of progressively reducing his country's dependence on fossil fuels," Kyodo reported.
A free trade agreement that took effect in March will, over the next decade, see tariffs scrapped on goods that represent more than 99 percent of the value of trade between the two countries.
Peru is also one of a number of countries involved in talks to form a huge Pacific-wide free trade area.