2018-2020 infra pipeline in Peru

The hopes of a nation rested on the support of foreigners. But the pleas of Paulo Guerrero and thousands of protestors on the streets of Peru have fallen on deaf ears. FIFA has upheld its ban, and the captain of the Peruvian football team will not be allowed to play at the first World Cup the country has qualified for since 1982 due to a failed drugs test.

While Guerrero was in Switzerland making his ultimately unsuccessful appeal to FIFA, representatives of the Peruvian government were preparing their own petitions to international institutions.

The land of the Incas has a strong track record for infrastructure but development has slowed over recent years. The reverberation from the Lava Jato scandal have shaken the construction industry, and ultimately led to the fall of President Pedro Pablo Kuczynski earlier this year (2018). None of which has been healthy for investor confidence.

Peru’s Private Investment Promotion Agency (ProInversión) is now conducting roadshows around the world in hope of attracting new investment to the country’s substantial pipeline of projects. Opportunities for investors and contractors are vast.

Familiar story

Peru boasts the award of over 100 PPP contracts over the last decade. The market is well-known for its investor-friendly environment and has experience of procuring a variety of project types.

Yet there is still huge demand for infrastructure investment, which is why ProInversión has a pipeline of 50 projects it is promoting around the world as part of its 2018-2020 portfolio. Transport projects make up 40% of the total, mining 23% and healthcare 10% – with water, energy, education, irrigation, and telecoms making up the rest.

So the government has a good story to tell, although it may seem a familiar one to many of those investors.

Back in January 2017, ProInversión announced a pipeline of 32 projects following a reform of the PPP framework. And many of the projects being promoted then are still in the shop window.

In 2016, then-President Kuczynski set out plans to speed-up the procurement of projects, and attract developers other than usual suspects such as Odebrecht and OAS, which at the time were main suspects in the Lava Jato investigation.    

Less than two years later, allegations of secret payments to Odebrecht officials led to the resignation of a President who had previously seemed well-placed to enact political reform and boost investor confidence.

That job now falls to his successor Martín Vizcarra. He is prioritising economic growth and has already tabled proposals to accelerate infrastructure development.

Over the next month, representatives from the government and ProInversión will have audiences with investors in cities around the world. Given the opportunities on offer, and despite recent setbacks, attendees will be keen to listen to what they have to say.

(Below is a list of the 20 most advanced projects in Peru’s pipeline)

2018 projects

Project Location Type Description Estimated value Stage
Huancayo to Huancavelica Railway Central highlands Co-financed government initiative 30-year DFBOT $235 million Call for bids open until November 2018
Jalaoca mining project Apurimac, central highlands  Government initiative/transfer agreement Developing two mines: a copper-gold porphyry skarn deposit and a copper-molybdenum porphyry deposit Concession term and investment amount to be determined   16 companies have acquired bidding documents, with award due in June 2018
Colca mining project Apurimac, central highlands  Government initiative/transfer agreement  Developing a copper-gold porphyry deposit spread over 14,100 hectares  Concession term and investment amount to be determined   14 companies have acquired bidding documents, with award due in September 2018 
Masificación de Uso de Gas Natural 7 regions of central and southern Peru  Self-financed government initiative  32-year concession to transport compressed gas by trucks to cities and distribute through pipelines  $350 million Bids open, with award in July 2018 
Repowering of Carabayllo–Chimbote–Trujillo transmission line  Northern and central coast  Self-financed government initiative    30-year DFBOM for the repowering of part of the transmission line $90 million Under structuring, estimated award in H2 2018 
Connection, substations and transmission lines for La Niña – Piura  Northern coast  Self-financed government initiative   Concession details to be determined  $132.1 million   Under preparation, estimated award in H2 2018 
Connection, substations and transmission lines for Pariñas – Nueva Tumbes  Northern coast  Self-financed government initiative   Concession details to be determined   $47.3 million   Under preparation, estimated award in H2 2018 
Connection, substations and transmission lines for Tingo María – Aguaytía  Jungle region  Self-financed government initiative   Concession details to be determined   $20.4 million  Under preparation, estimated award in H2 2018  
Wide band telecoms transmission lines  6 regions in the north and south of the country  Asset transfer  25-year concession to expand broadband carrier networks and access networks for rural areas  $359 million Under preparation, with award due in Q4 2018 
Lake Titicaca Basin water treatment system  Highlands  Co-financed private initiative initiated by Tedagua and Acciona  30-year concession to deliver 14 new water treatment plants (10 to be built by private sector)  $309 million  EOI issued in March 2018 with a deadline of June 2018 

2019/2020 projects

Project Location Type Description Estimated value Stage
San Juan de Marcona Port Terminal Southern coast Private initiative by Shougang Mining Company 30-year DFBOM for a new port for iron, copper and mining supplies $582 million Under preparation - call for expressions of interest: H1 2019
Longitudinal de la Sierra – Sección 4 highway Central highlands Co-financed government initiative 25-year DFBOT $464 million Under preparation - estimated award date Q1 2019
Autopista International del Norte highway Northern coast Co-financed private initiative 25-year concession $763 million Under preparation - calls for expressions of interest: H1 2019
Anillo Vial de Lima ring road Lima Co-financed private initiative 30-year concession awarded to Ferrovial and JJ Camet $2 billion Under structuring, delayed by land expropriation issues
Integrated System of Gas Transport – South Zone  3 regions of southern Peru  Co-financed government initiative  Developing pipelines to transport natural gas from Cuzco to regions of Arequipa and Moquegua  Concession term and investment amount to be determined    Estimated award in H2 2020 
Headwater streams to supply drinking water  Lima  Self-financed government initiative  30-year DFBOM concession for dams, diversion works, potable water plant, and pipelines  $600 million  IFC advising, under preparation. Bidding docs due to be released in Q1 2019
Puerto Maldonado water treatment plant Southern jungle  Co-financed government initiative   DFBOM for piping treatment and disposal of wastewater system (concession length to be determined)  $20.08 million Under preparation, estimated award in Q1 2019
Huancayo, El Tambo y Chilca water treatment plant   Central highlands Co-financed private initiative  Concession details to be determined  $90 million Under preparation, estimated award in Q1 2019
Essalud - Piura and Ancash high complexity hospitals  Northern region   Co-financed government initiative   17-year O&M concession for complimentary services at two hospitals  $254 million Under preparation, estimated award in H1 2019 
Children and Adolescents Health Institute  Lima  Co-financed government initiative    20-year (plus 3-year construction) DBOM for complementary services  $170 million Early stages. Documents likely to be ready for bidders by the end of 2019 

Asset SnapshotHuancayo-Huancavelica Railway (128.7KM) Rehabilitation

Est. Value:
USD 263.00m
Full Details

Asset SnapshotLima Potable Water Supply System

Value:
USD 480.00m
Full Details

Asset SnapshotLake Titicaca Wastewater Treatment Plant

Value:
USD 304.00m
Full Details

Asset SnapshotJalaoca Gold & Copper Mine

Value:
N/A
Full Details

Asset SnapshotColca Mine

Value:
N/A
Full Details

Asset SnapshotCarabayllo–Chimbote–Trujillo Transmission Line

Value:
N/A
Full Details

Asset SnapshotLa Nina - Piura Transmission Line (87KM)

Est. Value:
USD 58.50m
Full Details

Asset SnapshotParinas - Nueva Tumbes Transmissino Line (158KM)

Est. Value:
USD 19.30m
Full Details

Asset SnapshotTingo Maria - Aguaytia Transmission Line (73KM)

Est. Value:
USD 12.80m
Full Details

Asset SnapshotNew San Juan de Marcona Port Terminal

Est. Value:
USD 582.00m
Full Details

Asset SnapshotLongitudinal de la Sierra Highway Section 4 (117KM) Rehabilitation

Est. Value:
USD 464.00m
Full Details

Asset SnapshotInternational North Highway

Est. Value:
USD 763.00m
Full Details

Asset SnapshotAnillo Vial de Lima Ring Road (33.2KM)

Est. Value:
USD 1,965.00m
Full Details

Asset SnapshotPuerto Maldonado Wastewater Treatment Plant

Est. Value:
USD 55.00m
Full Details

Asset SnapshotChincha Wastewater Treatment Plant

Est. Value:
USD 73.00m
Full Details

Asset SnapshotPeruvian South Zone Integrated System of Gas Transport

Value:
USD 200.00m
Full Details

Asset SnapshotLima Children and Adolescents Health Institute

Est. Value:
USD 170.00m
Full Details

Transaction SnapshotLima Potable Water Supply System PPP

Value:
$480.00m USD
Concession Period:
30.00 years
PPP:
Yes
Full Details

Transaction SnapshotHuancayo-Huancavelica Railway (128.7KM) Rehabilitation PPP

Value:
$263.00m USD
Concession Period:
30.00 years
PPP:
Yes
Full Details

Transaction SnapshotLongitudinal de la Sierra - Tramo Highway Section 4 (117KM) Rehabilitation PPP

Value:
$464.00m USD
Concession Period:
25.00 years
PPP:
Yes
Full Details

Transaction SnapshotJalaoca Gold & Copper Mine PPP

PPP:
Yes
Full Details

Transaction SnapshotNorthern Peru Natural Gas Distribution Pipeline Network PPP

Value:
$350.00m USD
Concession Period:
32.00 years
PPP:
Yes
Full Details

Transaction SnapshotColca Mine PPP

PPP:
Yes
Full Details

Transaction SnapshotCarabayllo–Chimbote–Trujillo Transmission Line Repowering PPP

Value:
$90.00m USD
Concession Period:
30.00 years
PPP:
Yes
Full Details

Transaction SnapshotLa Nina - Piura Transmission Line (87KM) PPP

Value:
$58.50m USD
Concession Period:
30.00 years
PPP:
Yes
Full Details

Transaction SnapshotParinas - Nueva Tumbes Transmissino Line (158KM) PPP

Value:
$19.30m USD
Concession Period:
30.00 years
PPP:
Yes
Full Details

Transaction SnapshotTingo Maria - Aguaytia Transmission Line (73KM) PPP

Value:
$12.80m USD
Concession Period:
30.00 years
PPP:
Yes
Full Details

Transaction SnapshotPeruvian Wide Band Telecoms Transmission Lines PPP

Value:
$359.00m USD
Concession Period:
25.00 years
PPP:
Yes
Full Details

Transaction SnapshotLake Titicaca Basin Water Treatment System Phase I PPP

Value:
$190.42m USD
Concession Period:
30.00 years
PPP:
Yes
Full Details

Transaction SnapshotNew San Juan de Marcona Port Terminal PPP

Value:
$582.00m USD
Concession Period:
30.00 years
PPP:
Yes
Full Details

Transaction SnapshotInternational North Highway PPP

Value:
$763.00m USD
Concession Period:
25.00 years
PPP:
Yes
Full Details

Transaction SnapshotAnillo Vial de Lima Ring Road (33.2KM) PPP

Value:
$1,965.00m USD
Concession Period:
30.00 years
PPP:
Yes
Full Details

Transaction SnapshotPeruvian South Zone Integrated System of Gas Transport PPP

Value:
$200.00m USD
Concession Period:
32.00 years
PPP:
Yes
Full Details

Transaction SnapshotPuerto Maldonado Wastewater Treatment Plant PPP

Value:
$50.00m USD
Concession Period:
22.50 years
PPP:
Yes
Full Details

Transaction SnapshotHuancayo Wastewater Treatment Plant PPP

Value:
$172.00m USD
PPP:
Yes
Full Details

Transaction SnapshotLima Children and Adolescents Health Institute PPP

Value:
$170.00m USD
PPP:
Yes
Full Details