NEWS

PROINVERSIÓN EXPECTS TO AWARD PROJECTS AMOUNTING TO US$ 2.5 BILLION THIS YEAR

Lima, January 21, 2021.- This year the Private Investment Promotion Agency (PROINVERSIÓN) expects to award around 11 PPP projects and Projects in Assets for an estimated investment amount of US$ 2.5 billion and to obtain the Declaration of Interest of other nine projects under the form of private initiative, which will amount to an investment of approximately US$ 3.7 billion.

This was announced by PROINVERSIÓN’s Executive Director, Rafael Ugaz, during the webinar “Investment Opportunities in PPP and Works for Taxes, and Investment Promotion Mechanisms,” aimed at investment funds, consulting firms, banks, construction companies and operators in Latin America related to the development of infrastructure and energy projects.

The representative of PROINVERSIÓN stated that the government is committed to promoting PPPs, which is key for the economic recovery and the reduction of gaps.

“In Peru, the promotion of PPPs is a State policy. There is not only a strong legal framework, but also a system made up of different entities with specific roles, and a strong mature project portfolio,” stated Ugaz.

He also pointed out that the project portfolio’s status and the feasibility of achieving these milestones have been reviewed in coordination with the different entities participating in the private investment promotion system. In that sense, “we are of the opinion that this year will be the best of the last three years in terms of awarding of contracts, which will boost the economy in the following years,” he emphasized.

In the event, 53 projects amounting to S/ 659 million with a high level of progress were presented, prioritized by public entities for their implementation through Works for Taxes, which seek financing from private companies.

AWARDS FOR 2021

As for the award of contracts this year, during the virtual event it was specified that in the first semester three projects in energy and hydrocarbons for approximately US$ 410 million have been awarded. These are the Natural Gas Massification projects, 500 kV Transmission Line of Piura Nueva-Frontera Substation, Puerto Maldonado-Iberia Transmission Line and Valle Chira Substation.

As for the transportation sector, the award of Huancayo-Huancavelica Railway (US$ 260 million) is expected. The award of Puerto Maldonado Wastewater Treatment Plant (US $ 55 million) in the sanitation sector and Ancón Industrial Park (US $ 750 million) in the productive-logistics sector is expected.

Likewise, for the second semester the award of key projects such as Head Works and Conduction Works for the Drinking Water Supply in Lima (US$ 480 million) is expected: Radio Spectrum Bands (US$ 291 million) and two new Essalud hospitals in Piura and Chimbote (US$ 286 million).

In the current situation, the social infrastructure projects are considered especially urgent. Thus, various private initiatives with investments estimated at US$ 611 million are also expected to be declared of interest so as to conduct educational infrastructure projects in different places of the country in favor of more than 80 thousand students.

Furthermore, the award of Works for Taxes projects, which comprise 417 projects amounting to more than S/ 5.4 billion, has accelerated due to the hard work deployed by public entities at the national level, with decentralized technical advice from PROINVERSIÓN.

In this regard, it is expected that, in 2021, public entities will award 49 projects amounting to S/ 487 million through Works for Taxes.

PROMOTION TOOLS

In turn, PROINVERSIÓN’s Director of Investor Services, Alejandro Prieto, explained the scope and benefits of the entity’s private investment promotion tools, such as the VAT Early Recovery Regime, Tax Reimbursement, and Legal Stability Agreements.

He emphasized that, between 2007 and 2020, 208 projects have been accepted under the VAT Early Recovery Regime, which represents an investment commitment of US$ 49.950 million, mainly in the electricity sector.

Finally, he emphasized that Legal Stability Agreements have been entered into for more than US$ 29 billion, mainly with national investors
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