Sept. 10 (Bloomberg) -- Peru will seek to cut its debt to 10 percent of gross domestic product in a bid to qualify for an investment-grade rating, President Alan Garcia said.

Peru, which pre-paid $1.5 billion of its $5.75 billion debt to the Paris Club group of investors in July, plans to pay off more debt in a bid to attract more investment, Garcia said in a Sept. 9 interview at the Asia-Pacific Economic Cooperation forum in Sydney.

``Our goal is to reduce the ratio of debt to GDP,'' Garcia said. ``This will enable us to attain an investment- grade rating faster.'' Peru's external debt-to-GDP level has fallen from 50 percent in 2002 to 29 percent at the end of March 2007, according to Peruvian central bank reports.

Peru, Latin America's seventh-largest economy, this year will grow at a similar rate to its 8 percent expansion posted in 2006 on investment in mining, energy, agriculture and construction projects, Garcia said.

Exports are slated to grow 15 percent this year as Peru seeks markets for its agricultural produce in China, Canada, South Korea and Singapore, Garcia said. Peru, the world's largest asparagus and paprika exporter, is currently enjoying the longest stretch of economic growth in its history as exports have doubled since 2001 on surging prices for metals on international markets.

Garcia said he expects the U.S. Congress to vote for a free-trade agreement with Peru this month. Over the weekend, the Andean nation signed a trade accord with Singapore over the weekend and is seeking similar agreements with China and South Korea.

Free Trade Agreements

``There are many treaties underway,'' Garcia said. ``The protectionist, anti-U.S. model is a thing of the past. Today, nations need these trade instruments to produce more and solve their problems of equality.'

Peru plans to tap its highland rivers to generate 7 million megawatts of electricity and supply Chile, Colombia and Mexico through power lines, Garcia said. The government is holding negotiations with potential investors such as Madrid-based Endesa SA, he said.

Peru, which has 63 million hectares of Amazon jungle, also plans to spur a renewable forestry industry, Garcia said.

``Peru is going to beat all records in terms of private and public investment,'' Garcia. ``Our goal is to ensure we don't depend exclusively on metals prices to be able to grow.''

S&P rates Peru's debt BB+, one level below investment grade and the same level as Brazil, Costa Rica and El Salvador. Moody's on July 16 raised the rating to Ba2 from Ba3 and Fitch rates Peru BB+.

To contact the reporter for this story: Patricia Hidalgo in Hong Kong at phidalgo@bloomberg.net; Alex Emery in Lima at aemery1@bloomberg.net.

Last Updated: September 10, 2007 16:45 EDT