Infrastructure report: Peru: Stop and go

Jan 1, 2014

A number of large infrastructure projects are due to be financed in Peru this year. But they will first have to overcome a number of hurdles. By Karen Schwartz

For examples of sophisticated infrastructure financings in Latin America, look no further than Peru. In recent years the Andean nation has served some of the region’s most impressive transactions.

The Vía Parque Rímac road project is just one example. The 1.4 billion sol ($527 million) deal for a public-private partnership was one of the country’s largest-ever project financings, and was fully subscribed by local accounts. Similarly, the country’s largest hydroelectric plant, Cerro del Águila impressed when it closed a $534 million loan financing in 2012.

Yet despite these successes and Peru’s pressing need for more infrastructure, projects are coming to market at a frustratingly slow pace.

The stakes are rising. AFÍN, a group of concessionaires, estimates Peru needs projects worth some $88 billion between 2014 and 2018 to close an infrastructure deficit. It says around two-thirds of that should be financed privately.

Infrastructure finance bankers...

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