The recent award of a $5.7 billion contract to upgrade capital city Lima’s metro may have raised expectations of what the Peruvian infrastructure market can deliver to unrealistic levels. After all, a deal of this size can only be a very occasional occurrence anywhere in the world – never mind in this unassuming nation of just less than 30 million people.
However, it may have served to draw attention to a very active public-private partnership (PPP) market for less sizeable (but not necessarily any less important) deals. Indeed, ProInversion, Peru’s private investment promotion agency, has identified a pipeline of projects worth $12 billion for 2014 to 2015. The organisation said in November that it would launch 37 projects as PPPs over the period, including nine road and rail projects, eight energy initiatives, as well as projects in the tourism, healthcare, and rehabilitation sectors.
All this comes on the back of considerable confidence in the investment framework that Peru has created. “Peru has the strongest track record in the region in executing infrastructure investments in recent years,” said Fitch, the rating agency, in a study released in April.