Peru: Investment Opportunities Infrastructure and public services 2017-2018 Carlos Ganoza Chief of Advisors Ministry of Economy and Finance April 19th 1
PERU S STRONG MACROECONOMIC CREDENTIALS ALLOW FOR A GROWTH STRATEGY BASED ON INFRASTRUCTURE INVESTMENT Average GDP - 2000-2016 (Average change in constant prices in dollars) Real GDP Forecasts for Latin America 2017 (Annual Average Variation %) 3.8 4.0 5.1 Peru Argentina Colombia 2.7 2.7 3,8 2.4 2.5 2.5 Mexico Chile 2.3 2.0 Brazil 0.5 Venezuela -4.5 Argentina Mexico Brazil Chile Colombia Peru CPI Latin America 2006-2016* (Annual Average Variation %) 5.8 Public Debt Latin America 2017* (% of GDP) 82.4 2.9 3.2 3.8 4.0 47.0 50.7 56.1 23.3 24,5 28.2 Peru Chile Mexico Colombia Brazil Chile Peru Venezuela Colombia Argentina Mexico Brazil Source: Central Reserve Bank of Peru (BCRP), International Monetary Fund (IMF) Forecast 2017 Estimated figures of BCRP (Inflation report as of March 2017), IMF (World Economic Outlook Database October 2016) 2
ENHANCING THE LEGAL AND INSTITUTIONAL FRAMEWORK FOR PPP s Legislative Decree No. 1251 and its regulation: Board with three independent (i.e., non public officials) members, to avoid political pressure on project selection or project design. Clearer definition of roles between Ministry of Economy and Finance and ProInversión. Restrictions to the renegotiation of PPP contracts in the three first years. Better contract design, with more detailed studies. Measures to counter aggressive bids. Anticorruption clause in every concession contract. National Infrastructure Plan. 3
STRENGHTENING PROINVERSION s GOVERNANCE AND PERFORMANCE Organizational reforms within ProInversión: Board tasks limited to essential issues. More long-term focused. Clearer definition of roles between Project Managers and Investment Committee. Checks and balances, no duplication or roles. Independent review and quality control for Investment Committee. Renovation of human capital. Efficiency and quality of PPP process. Design and adjudication on 18-24 months (from 36-48 currently). Anti-corruption and transparency Unit. 4
.0 00.0 00.0 00.00 0.00 0.00 0.00 0 0 25 20 15 10 5 0 The PPP Portfolio 2017-2018 is the biggest in the last 15 years: USD14.6BN PPP projects awarded by year Montos Estimated de investment inversión en in USD USD millones millions (sin (w/o IGV) sales tax) Número Number de of procesos PPP Proyects APP 4.910 10.295 10.350 20 15* 16 16 7.183 185 1 5 1.342 4 744 4 282 9 895 8 10 1.415 1.624 7 1.391 5 701 9 3.218 10 3 100 1.661 1 4.060 4.288 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 * Does not include the ammount of Gas Pipeline 5
Sectors to invest 36 Projects USD 14.6 Billion (estimated) Transportation 09 9 638 M Mining 03 2 016 M Energy & Hydrocarbons 10 1 140 M Water & Sanitation 03 606 M Real Estate 02 511 M Health 04 459 M Telecommunications 05 220 M 6
Transportation Project Estimated Investment (USD MM) 2017 2018 Longitudinal de la Sierra Road section 4 464 Amazon Waterway 95 Huancayo Huancavelica Railroad 204 Modernization and Development of the Multipurpose Salaverry Port Terminal (PT) 215 Lima-Callao Metro Line 3 6,600 South Pan-American Highway road: Ica- Dv. Quilca Stretch To be defined Sierra Road Concession To be defined Peripheral Ring Road 2,047 Management of the in-flight radio navigation aids system 13 2019: North Highway Tumbes-Piura, Lima Callao Metro Line 4 and Tarma Highway 7
Mining Project Estimated Investment (USD MM) Michiquillay Mining Project 2,016 2017 2018 Jalaoca Mining Project To be defined Colca Mining Project To be defined 8
Energy & Hydrocarbons Project Estimated Investment (USD MM) 138 Kv Aguaytía-Pucallpa Transmission Line 37 220 kv Tintaya Azangaro Transmission Line 59 500 kv Mantaro - Nueva Yanango -Carapongo Connection and associated sub stations and "500 kv Nueva Yanango - Nueva Huanuco connection and associated sub stations" Repowering up to 1000 MVA of LT 500 kv Carabayllo- Chimbote-Trujillo and Variable Reactive Compensator +400/-150 MVAR in 500 kv Northern Trujillo Structural System 568 65 Arequipa city public lighting modernization 26 New 220 kv Carhuaquero Power Substation 10 2017 2018 New power substation: La Planicie 500/200 kv To be defined Variable Reactive Compensator +400/-100 MVAR in La Planicie Structural System 25 Mass use of Natural Gas for Center and Southern Peru 350 South Gas Pipeline To be defined 9
Water and Sanitation Project Estimated Investment (USD MM) 2017 2018 Wastewater treatment system of the Lake Titicaca Basin Improvement and extension of the Sewerage and Wastewater Treatment System at the Locations of Huancayo, el Tambo and Chilca 304 90 Wastewater treatment system for San Bartolo 212 2019: Headworks and Conduction for the Drinking Water Supply in Lima 10
Real Estate Project Auction of properties owned by Fondo Consolidado de Reservas Previsionales - FCR Estimated Investment (USD MM) 10.5 2017 2018 Ancón Industrial Park 500 2019: Lima Convention Center 11
Health Project Estimated Investment (USD MM) 2017 2018 Three new High-Complexity Hospital Centers (ESSALUD) 424 Management of solid waste from Lima city health facilities 35 2019: Five hospitals in Lima and provinces 12
Telecommunications Project Estimated Investment (USD MM) Broadband Installation for Amazonas, Ica and Lima 142 2017 2018 Broadband Installation for Junin and Puno 78 2019: Operation and Maintenance of the Centre South Network and the North Network 13
Peru: Investment Opportunities Infrastructure and public services 2017-2018 Carlos Ganoza Chief of Advisors Ministry of Economy and Finance April 19th 14