Washington, January 16, 2026 – The United States has given preliminary approval for a potential Foreign Military Sale (FMS) to Peru valued at an estimated $1.5 billion, aimed at supporting the design, construction, and related logistics for upgrading and relocating the Peruvian Navy's primary base at Callao. The Defense Security Cooperation Agency (DSCA), under the U.S. Department of Defense, notified Congress on Thursday of the State Department's determination, paving the way for negotiations and final agreements between the two governments.
According to the DSCA announcement, the proposed sale encompasses a comprehensive package of services rather than major combat equipment. Peru has requested lifecycle design, engineering studies, project management, technical support, infrastructure assessments, construction management, and long-term program oversight. The package also includes U.S. government and contractor engineering, technical, and logistical assistance to ensure the project meets modern standards for naval operations.
The initiative aligns with Peru's strategic plan to relocate the Callao Naval Base, located on the coast just west of the capital Lima, a few kilometers away from its current site. This move is intended to separate military facilities from the bustling commercial port activities, reducing civilian-military interactions, enhancing operational efficiency, and providing a safer, more capable platform for current and future naval and logistical missions. The upgrade will improve Peru's port infrastructure to better support naval operations while facilitating the expansion of the adjacent commercial port of Callao.
The DSCA emphasized that the proposed sale advances U.S. foreign policy goals by bolstering the security of a key partner in South America. "This proposed sale will contribute to the foreign policy objectives of the United States by helping to improve the security of an important partner which is a force for political stability, peace, and economic progress in South America," the agency stated. It further noted that the transaction "will not alter the regional military balance," underscoring its focus on infrastructure and support rather than offensive capabilities.
Under the potential agreement, up to 20 U.S. government or contractor representatives could be assigned to Peru for up to 10 years to provide on-site construction management, oversight, and technical guidance. The principal contractors will be selected later through a competitive process from approved vendors.
The Callao Naval Base serves as the headquarters of the Peruvian Navy and is integral to maritime security, patrol operations, and regional cooperation in areas such as counter-narcotics and disaster response. The current facilities, integrated within Peru's busiest commercial port, face logistical constraints due to shared space with civilian shipping. By relocating and modernizing the base, Peru aims to address these challenges while enhancing its naval readiness in the Pacific.
This development occurs against the backdrop of intense competition in Peru's Pacific port sector. The commercial port of Callao, Peru's main gateway for international trade, has been expanding rapidly, with new direct shipping routes from China and South Korea introduced in November 2025. Analysts note that Callao is positioning itself to compete for Asian cargo with the nearby Chancay mega-port, a $3.5 billion facility inaugurated by Chinese President Xi Jinping in November 2024 and operated by COSCO Shipping Ports. Located about 80 kilometers (50 miles) north of Lima, Chancay offers deepwater capabilities for large vessels, direct Asia-South America routes, and reduced transit times of up to 10-20 days compared to traditional paths via North American ports.
The Chancay project, part of China's Belt and Road Initiative, has generated significant economic benefits for Peru—projected to create thousands of jobs and boost trade—but has also raised concerns about strategic influence. The U.S.-backed Callao upgrade is seen by some observers as a counterbalancing effort to strengthen allied infrastructure amid China's growing footprint in Latin America.
The announcement aligns with the Trump administration's increasingly assertive posture in South America. Recent actions, including the January 3, 2026, military operation that captured Venezuelan President Nicolás Maduro and transported him to the U.S. for trial on narco-terrorism charges, have signaled a renewed focus on countering perceived threats from adversarial regimes and external powers. Secretary of State Marco Rubio has highlighted concerns over Chinese and Russian influence in the region, including surveillance facilities in Cuba and economic dependencies in countries like Peru.
While the Peru deal is framed as cooperative security assistance, analysts point to broader implications. The U.S. has signaled potential pressure on neighboring Colombia (which borders Peru), Cuba, and Mexico, with threats of action against leaders accused of drug trafficking or supporting destabilizing activities. The Callao project reinforces U.S. commitment to partners like Peru, which maintains strong defense ties with Washington, including ongoing discussions on military interoperability and joint exercises.
Peru's Defense Ministry has not yet issued an immediate response, as the notification falls outside regular business hours in Lima. The FMS process requires congressional review, after which negotiations can proceed toward a formal contract. The estimated $1.5 billion represents the maximum projected value, with the final amount subject to adjustments based on requirements and agreements.
This potential sale reflects deepening U.S.-Peru defense cooperation at a time of evolving geopolitical dynamics in Latin America, where infrastructure development intersects with strategic competition between major powers. As Peru advances its naval modernization, the project could enhance maritime security along the Pacific coast while contributing to regional stability.
