The Peruvian authorities' plan includes investments with neighboring countries Bolivia and Brazil to help them reach Chinese markets through Peruvian ports.
The Peruvian government's push towards public-private partnerships (PPP) will favor infrastructure developments in the Andean country (Baa1 negative).
There are around US$24 billion in new projects to be tendered between 2024 and 2026, aimed at closing the gap in public services, including sewerage, health, transport and agricultural development projects. The success of recent tenders demonstrated the renewed appetite of the private sector for certain investments in the Andean country.
Several strategic initiatives underway in the transport sector support growth. Peru is undertaking some important road infrastructure projects to improve regional connections and increase the country's global competitiveness.
The government's plan includes investments with neighboring countries Bolivia and Brazil to help them reach Chinese markets through Peru's ports and reduce the
maritime transport time through the Panama Canal.
The new transport infrastructure would also help reduce transportation and security costs for mining companies in Peru.
While business confidence remains relatively low compared to
At pre-pandemic levels, utilities and mining continue to generate considerable investment.
Private investments in projects
electricity distribution and water and sewage continue to grow. The mining sector is more protected from political and economic fluctuations in Peru, as investment in the sector depends on international prices and commodity demand.
The history of incidents in PPP projects continues to hinder investment
private. While the Private Investment Promotion Agency (ProInversión) is
working to promote a comprehensive PPP agenda with infrastructure projects
much needed, the government plans to unify 13 executing units into a single ministry
infrastructure to make new projects more efficient.
Access to long-term financing is a major obstacle to unlocking planned investments. While Peru's Constitution provides a favorable investment environment, risk aversion and high interest rates have reduced the potential for
bond issuance volumes.
Pension fund withdrawals in early 2024 reduced assets under management, limiting the availability of local sources of funding.
