Peru

Peruvian economic outlook
and investment opportunities
Javier Correa Merchan
Director, Investment Promotion Division
Proinversión
•
•
•
•
•
Our country: Peru
Economic perspectives
Investment environment
Investment perspectives
Infrastructure
•
•
•
•
•
Our country: Peru
Economic perspectives
Investment environment
Investment perspectives
Infrastructure
Peru: Geography
A growing economy connected to the world
 Investment Protection Agreements and Free Trade Agreements with several countries.
 Tax agreements with: Brasil, Chile, Canada, South Corea, México y Switzerland.







Australia
China 1
South Corea 1
Malasya
Singapur 1
Tailand
Japan
 Canada
 US.1
 México 1




 European Union
2
1
Cuba
El Salvador
Costa Rica 1
Panama 1







 European association for
free trade (Islandia,
Liechtenstein,
Switzerland and Norway)
1
Argentina
Bolivia
Chile 1
Colombia
Ecuador
Paraguay
Venezuela
(1) Trade Agreements
(2) Trade Agreements. While Peru has Bilateral Investment Protection Agreement with Germany, Belgium, Luxemburgo, Denmark, Spain, Finland,
Francia, Italy, Portugal, United Kingdom, Chec Republic, Sweden and Switzerland.
Key Indicators
Population
Extension in Latin America
(Km2 Thousand)
(Million)
8,510
Nominal GDP
(US$ Billion)
2,353
202.77
1,283
119.72
2,780
1,970
1,290 1,140
910
760
47.66 41.96
Brazil
Argentina
Mexico
Peru
Colombia
Venezuela
Chile
Panama
Source: IMF
31.42 30.46
70
Extension
(Km2)
8,510,000
2,780,000
1,970,000
1,290,000
1,140,000
910,000
760,000
70,000
540
Brazil
Mexico
Colombia
Argentina
Peru
Venezuela
Chile
Panama
385
17.82
258
206
203
44
3.93
Population （2014）
Nominal GDP (2014）
Millions
202.769
119.715
47.662
41.961
31.424
30.457
17.819
3.928
(USD millions)
2,353,025
1,282,725
540,164
384,901
257,968
205,787
202,948
43,784
Brazil
Mexico
Argentina
Venezuela
Colombia
Chile
Peru
Panamá
Economic Model
Standing out among the biggest Latian American countries (LA6) including Brasil,
Chile, Colombia, Mexico, and Uruguay
LA61: Total Investment 2014
LA61: Total Investment 1990
(% of GDP)
(% of GDP)
30
27,2
25
20,4
20
19,9
18,4
13,9
15
13,5
10
5
0
Investment as % of GDP
Investment as % of GDP
30
26,8
25,0
25
23,1
22,2
21,9
20
17,0
15
10
5
0
Chile
México
Colombia
Brasil
Perú
Uruguay
Perú
Source: IMF
•
Estructural reforms paid off: Market Economy.
•
Private Investment is the main engine of GDP growth.
•
Regional leader in Investments (Total Capital / GDP).
Colombia
Uruguay
Chile
México
Brasil
Growth Performance
In the last 10 years Peruvian Economy has grown considerably
Nominal GDP, 2004-2014
(US$ Billion)
192.7
Real GDP
(Average annual % change)
202.4 202.9
190.3
202.3
6.0
170.6
148.6
4.8
4.0
102.2
87.9
3.6
2.0
1.2
1.4
1985-1994
3.0
1975-1984
66.7
6.1
5.7
5.0
121.6 121.2
75.0
7.0
1.0
Source: IMF, Central Reserve Bank of Peru
2005-2014
1995-2004
1965-1974
1955-1964
2016*
2015*
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
0.0
Inflation and Growth
AL6: Inflation & Growth 2005-2014 1/
(Average)
Tasa de Inflación promedio (%)
8
7
Uruguay
Brasil
6
5
4
Colombia
México
3
Chile
Perú
2
1
0
0
1
2
3
4
5
6
Tasa de crecimiento promedio (var. % anual)
Source: Ministry of Economy, IMF, Consensus Forecast (March 2015)
7
•
•
•
•
•
Our country: Peru
Economic perspectives
Investment environment
Investment perspectives
Infrastructure
Economic Perspectives
“Peru’s A3 sovereign rating reflects
Moody’s: Reform - progress & advances
its long-standing track record of
macroeconomic stability, market-
Chile (Aa3)
Mexico (A3)
friendly policies and prudent fiscal
Peru (A3)
management”
Colombia (Baa2)
Uruguay (Baa2)
Brazil (Baa3)
Paraguay (Ba1)
Positive continue
development
Panama (Baa2)
Stagnation
Costa Rica (Ba1)
Negative
development
Argentina (Caa2)
“Peru’s fiscal strength is ´Very High’
on account of its low and
affordable debt and prudent fiscal
Venezuela (Caa3)
Decline in reforms First generation
Source: Moody’s
Second generation
policy framework”
(Moody’s. August, 2015)
Economic Environment
Our key strengths
Risks we are facing in this
enviroment
•
•
•
Reduction of commodity prices and
•
Fiscal strength.
further troubles in China.
•
Resilent private consumption.
Greater perception of risk in the
•
Mega projects under execution.
región.
•
Capacity for public investments.
Lower growth in the Euro zone, US
•
Greater mining production.
and China.
•
Potential spill over effects from the
recent downgrade of Brazil.
•
El Niño Southern Oscillation.
Perspectives: Leveraging fiscal strength
AL6: Debt & Growth 20161/
70
Prom. AL6
Brasil
Uruguay
II. Mayor crecimiento y
alta deuda pública
Deuda Pública(% del PBI)
60
I. Menor crecimiento y
alta deuda pública
México
50
Prom. AL6
Colombia
40
30
Perú (MMMR)
Chile
20
Perú 2/
10
IV. Menor crecimiento
y baja deuda pública
III. Mayor crecimiento
y baja deuda pública
0
0
1
2
3
Crecimiento del PBI Real (%)
4
5
1/. LA6: se refiere a los seis (6) países latinoamericanos que han adoptado un marco de metas explícitas de inflación y que han desarrollado más sus mercados de capitales. La lista
incluye a: Brasil, Chile, Colombia, México, Perú y Uruguay. También son llamadas economías financieramente integradas. Estos países representan el 73% del PBI de América Latina
y El Caribe. 2/ Para el crecimiento del PBI se considera la media del Consensus Forecasts y para el ratio de deuda pública el dato del Fiscal Monitor Abril 2015.
Fuente: Consensus Forecasts de agosto 2015, Fiscal Monitor Abril 2015 (FMI), MMMR 2016-2018 (MEF).
Economic Perspectives
Despite of the ammendement in the forecasted economic growth rate in
2015, country perspectives are still positive
Peru: Sovereign rating
(LT debt in USD)
IMF: Forecast of GDP Growth rate
(% annual)
Peru
Perú
Colombia
7
Brazil
Brasil
Mexico
Mexico
Chile
Uruguay
A3 29
Moody's
6
Baa1
27
S&P
5
Baa2
25
4
Baa3
23
3
Ba121
Fitch
Investment grade
Grado de inversión
Perspective
Perspectivas
Ba219
2
S&PS&P
Stable
Estable
Estable
Fitch
Stable
Fitch
Moody's Estable
Moody’s
Stable
Ba317
1
B1 15
0
2001
2012
2013
Source: IMF
2014
2015P 2016P 2017P 2018P 2019P
2003
2005
2007
2009
2011
2013
2015
Political Environment: Presidential
Elections Forecast
Keiko Fujimori
Pedro P.
Kuczynski
Alan García
Alejandro
Toledo
IPSOS - julio 2015
33%
15%
11%
8%
DATUM - agosto 2015
34%
17%
6%
3%
GFK – agosto 2015
33%
13%
6%
4%
Las survey results
• Candidates with major options support a liberal economy model with favorable legal
framework for investments.
•
•
•
•
•
Our country: Peru
Economic perspectives
Investment environment
Investment perspectives
Infrastructure
Favorable legal framework
• Non discriminatory treatment of foreign investments
• Guarantees for Private Property
• A Market Economy that promotes free competition
• Legal stability agreements
Easiness for doing business and
competitiveness
“35th in the Doing Business Ranking 2015”
Venezuela
Colombia
182
Guyana
123
34
Ecuador
19
Luxemburgo
2
Singapur
20
Malasya
162
3
United States
21
Austria
4
Germany
22
Australia
5
Finlandia
23
France
6
Japan
24
Arabia Saudí
Bolivia
7
Hong Kong
25
Irleland
157
8
Netherland
26
South Corea
9
United Kingdom
27
Israel
10
Sweden
28
China
11
Norway
12
United Arab Emirates
33
Chile
13
Denmark
57
Brasil
14
Taiwan
61
Mexico
15
Perú
35
Uruguay
Argentina
124
Source: World Bank
País
Switzerland
120
82
País
1
Brasil
41
20142015
Surinam
115
Chile
“65th Global competitiveness report 2014”
Canada
65
Peru
16
Qatar
66
Colombia
17
New Zeland
104
Argentina
18
Belgium
131
Venezuela
Source: WEF
Trade with Asian Economies (1)
Total Trade Peru-Asian Economies
(US$ Billion)
30
27
24
25
19
20
15
15
10
27 26,066
12
6
13
8
5
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
After the rebound in April and June, in the coming
months it is expected that trade flows between Asia
and Peru will keep similar to last years.
Source: AdexDataTrade
Trade with Asian Economies (2)
Peru’s Main Buyers within Asian Economies
(Percentage 2014)
Philippines Others
5%
Taiwan 1%
India
3%
Hong Kong
1%
Peru’s Main Sellers within Asian Economies
(Percentage 2014)
Taiwan Turkey
3%
2%
3%
Others
8%
Thailand
4%
Korea
11%
India
6%
Japan
14%
China
62%
Japan
8%
Korea
9%
China
60%
Total 2014: US$ 11,309 millions
Total 2014: US$ 14,756 millions
Source: AdexDataTrade
•
•
•
•
•
Our country: Peru
Economic perspectives
Investment environment
Investment perspectives
Infrastructure
Investment Perpectives
…”US$ 40bn worth of investment announced for 2015 and 2017”
Announced Private Investment by
Sector 2015-2017
(US$ Million)
2015-2017
(US$ Million)
Mining
14,408
Hydrocarbons
7,224
Electricity
Industrial
Infrastructure
Other Sectors
Total
4,617
2,408
4,057
7,370
40,084
Source: Central Reserve Bank of Peru
Number of Projects
Mining, 34
Hydrocarbon
s, 22
Other
Sectors, 109
Electricity, 34
Infrastructure,
24
Industrial, 14
Mining: Greater Competitiveness
…”Our mines have lower cash costs” …
Total registered and forecasted
Copper Production to 2017
(Thousand TM)
Copper Cash Cost
(US$/lb)
2,5
2 000
2,13
2,0
1,76
1,74
1,57
1 500
1,5
1,11
33%
1,0
1 000
0,5
500
0,0
Australia
Chile
China
EE.UU.
Perú
0
2013
Source: Cochilco, Osinergmin, Morgan Stanley Research.
1/ considers industrial customers or those which consumption is higher than 500
thousand KW per hour
P: Proyectado.
Fuente: MINEM, MEF .
2015P
2017P
Energy: High potencial
… “Competitive pricing and potential for clean energy generation”…
Electricity rates to Industrial customers
Power Energy Production, by source
1/
(US$/kWh)
0.2%
0.4%
47.6%
2.1%
Perú
7,4
Chile
10,4
0.4%
Promedio
Latam
0.5%
0.6%
10,8
Colombia
13,5
50.3%
México
Hydraulic
Wind
Coal
Others
21,7
0
Natural Gas
Solar
Residual & Diesel
5
10
15
20
Energy potential by source
Source
MW
Wind
22,000
Hydropower
69,000
Geothermical
3,000
25
Agribusiness: Booming sector (1)
• Highest standards of quality: Taste, color, aroma and consistency.
• Mangoes, table grapes, avocados, citrus, organic bananas, among others.
• counter-season and throughout the year production
Exports (US$ million)
5,006
5,000
4,525
Traditional
4,117
4,156
Non traditional
4,000
Total
3,178
3,000
2,599
1,794
2,000
1,126
2,462
1,973
1,339
1,000
0
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Agribusiness: Booming sector (2)
Area for modern agriculture
(thousand of hectares)
78%
38
63
180
2013
218
2020
Majes-Siguas II
Chavimochic III
New 100
thousand
of
hectares
Infrastructure
•
28 APP projects worth USD 20 billion in the last 4 years
•
3 Mega projects include: Line 2 of the Lima Metro, South Gas Pipeline, International
Airport of Chinchero Cusco.
APPs awarded by ProInversión 2006-2015
16
14
(Investment amounts in USD millions + Sales Tax)
Amount of awarded Investments (US Millions)
13280
14000
14
Number of process
12
11
10000
11
10
10
8000
9
8
8
8
6
5
2
5672
5331
4359
4
5
4
885
336
1065
1683
12000
6000
4000
2140
2000
828
0
0
2006
2007
Source: ProInversion
2008
2009
2010
2011
2012
2013
2014
2015*
•
•
•
•
•
Our country: Peru
Economic perspectives
Investment environment
Investment perspectives
Infrastructure
Selected Projects 2015
Projects
Estimated
Investment
(USD million)
Estimated Award
Date (2015)
Main Works and Conduction of Drinking Water Supply for Lima
600
Quarter IV
Longitudinal de la Sierra Highway Section 4 / Section 51
340
Quarter IV
Liquid Petroleum Gas Supply System for Lima and Callao
250
Quarter IV
Quillabamba Thermal Power Plant
180
Quarter IV
/1 To be awarded on 2016
Projects 2016
Estimated
Investment
(USD million)
Estimated Award
Date in
2016
Huancayo – Huancavelica Railway
194
Quarter I
Lima Peripheral Ring Road
2,00
Quarter II
San Gaban 3 Hydroelectric Power Plant
437
Quarter II
5,00 (each)
Quarter III
400
2016
-
2016
Projects
Lines 3 and 41 of the Metro Network of Lima and Callao
Three New High Complexity Hospital Centers
Port Terminals
/1 To be awarded on 2017
www.proinversion.gob.pe
[email protected]
MAIN WORKS AND CONDUCTION OF DRINKING
WATER SUPPLY FOR LIMA
TOCALLED
BE ANNOUNCED
represas
DBFO including:
 Re-enlargement of two dams
 10 Km trans-andean tunnel
 New drinking water plant of 5 m3/
 40km pipeline
 Seven reservoirs
 90km interconnection lines
Operation and maintenance of existing facilities:
 Water intake (12 m3/s)
 Drinking water plant (5 m3/s)
 27km pipelines
 4 compensation reservoirs (Storage volume:
23,000 m3 )
Projects 2015
LIQUID PETROLEUM GAS SUPPLY
SYSTEM FOR LIMA AND CALLAO
CALLED
•
Design, construction, operation, financing and
maintenance.
•
LPG transport system of 200 km.
•
Storage and Dispatch.
Projects 2015
QUILLABAMBA THERMAL POWER PLANT
CALLED
•
Design, financing, construction and operation.
•
Length: 129 km approx.
•
200 MW.
•
Beginning of operations: 2017.
•
Energy to be incorporated to The National Electric
Power Grid (SEIN)
•
Type of concession: Self-sustained.
•
Estimated Investment: US$ 180 million.
•
Estimated date of award : Q IV 2015
Projects 2015
HUANCAYO – HUANCAVELICA RAILWAY
CALLED
•
Rehabilitation of 128 km of existing railways
•
Civil Works:
‒ Rolling stock,
‒ Rehabilitation of 15 railway bridges,
‒ Rehabilitation of 38 tunnels.
•
Type of concession: Co- financed.
•
Estimated Investment: US$ 194 million.
•
Estimated date of award : Q I 2016
Junín
Huancavelica
Central Railway
Huancayo – Huancavelica Railway
South Railway
Projects 2016
LIMA PERIPHERAL RING ROAD
UNDER
EVALUATION
• Private Co-financed Initiative
• Construction, operation and maintenance.
• 33 km of urban highway.
• Estimated award date: Quarter II 2016
Peripheral Ring Trace
Projects 2016
SAN GABAN 3 HYDROELECTRIC POWER PLANT
UNDER
EVALUATION
• Self-sustaining Private Initiative.
•
Design, construction, operation, financing and
maintenance.
Puno
•
Capacity: 205.8 MW.
•
Production: 1,256 GWh/year.
•
Estimated award date: Quarter II 2016
Projects 2016
LINES 3 AND 4 OF THE METRO NETWORK OF
LIMA AND CALLAO
Line 3
TO BE CALLED
Line 4
• DFBOT/ Co - financed.
• Two Independent Bidding Processes.
• 3.5 million of passengers (Lines 3 and 4).
Line 3
Line 4
Length
32 Km
30 Km
Award
Quarter III
2016
2017
Lima and Callao
Projects 2016
Line 1: Under Operation
Line 2: Under Construction
THREE NEW HIGH COMPLEXITY HOSPITAL
CENTERS - ESSALUD
TO BE CALLED
•
Piura
Design, construction, equipment, operation
and maintenance of 3 hospitals.
Ancash
•
Provision of complementary services.
•
Estimated Investment: US$ 400 million.
•
Estimated award date: 2016
Lima
Projects 2016
PORT TERMINALS
Under
evaluation
•
Private Self-sustaining Initiatives:
1. Salaverry: Modernizing and developing the
Multipurpose Terminal Salaverry.
Salaverry
2. Chimbote: Design, financing, construction,
operation and maintenance of a port container
terminal.
Chimbote
3. Ilo: Development and operation of the Ilo
Multipurpose Terminal Port.
• Estimated award date: 2016
Ilo
Projects 2016