Sustainable growth since 2002 and forecast above 6% annually 2009-11.
Exports tripled in 5 years.
Investment is increasing 20% average annually.
One of the lowest inflation in Latin America and very stable exchange rate (free).
Vast natural resources:
Ores and hydrocarbons.
Available lands with proper climates.
2nd country with larger forests area and 2 500 Km. of coast.
Thousands of lakes and snowcapped mountains.
Economy committed to the commercial integration process:
Preferential access to CAN, MERCOSUR, USA and EU.
32 investment agreements.
Favorable climate for investment:
Country with investment grade.
Attractive framework for Foreign Direct Investment, based on freedom and equality.
Peru is first in the region for government readiness for private investment (WEF)
Peru stands first in the Latin America region in protecting investors (WB)
Variables related to Investment in Peru (variations compared to the foregoing year) Sources: Central Reserve Bank of Peru, Ministry of Economy (MEF) and National Institute of Statistic and Information * Preliminary figures Exports (% var. in US$) 40.9 35.3 36.9 17.5 14.3 Capital goods imports (% var. in US$) 19.6 29.6 35.4 41.9 60.3 Construction GDP (% var.) 4.7 8.4 14.7 16.6 17.0 Tax collection (% var.) 13.6 14.3 27.8 15.3 10.3 2004 2005 2006 2007 2008* GDP (%var) 5.1 6.4 7.6 8.9 9.3 Private Investment (%var) 8.1 12.0 20.1 23.2 24.6 Public Investment (%var) 5.7 12.2 13.0 19.7 44.7 CPI (%var) 3.5 1.5 1.1 3.9 6.7 Jobs in companies with 10 or more workers (%var) 3.6 5.7 8.7 8.9 8.4
Outstanding economic growth Forecasted GDP average growth of 6% for 2009 – 2011 Source: International Monetary Fund, Central Reserve Bank of Peru and Ministry of Economy. (*) Estimated figures by MEF World Peru GDP Growth (Anual growth %) 0% 2% 4% 6% 8% 10% 2001 2002 2003 2004 2005 2006 2007 2008* 2009** 2010** 2011** 5.0% 4.0% 5.1% 6.7% 7.6% 9.0% 9.3% 5.5%
Exports growth at significant rates Accompanied by private investment growth Source: Central Reserve Bank of Peru and Ministry of Economy * Preliminary figures
Increase in the imports of capital goods ( Millions of US$) Rise in the commercial exchange (Millions of US$) Source: Central Reserve Bank of Peru and Ministry of Economy * Preliminary figures
Peru has improved its fiscal position (% of GDP) By increasing its central government tax revenues Source: Central Reserve Bank of Peru and Ministry of Economy * Projections based on August 2008 estimates
... in a framework of macroeconomic stability ... 2008 Average Exchange Rate: 2,9 Inflation Rate 2008: 6.7% Source: Bloomberg Source: Central Reserve Bank of Peru, Chile, Mexico and Argentina.
With increasing Net International Reserves Factors recognized by the market and allow the country risk reduction Source: Central Reserve Bank of Peru
Peru has reached the Investment Grade Source Bloomberg . Investment Grade Latin American Ranking Source: Standard & Poor’s, Fitch Ratings and Moodiy’s Updated: January 2009 Country S&P Fitch Moody´s Chile A+ A A2 Mexico BBB+ BBB Baa1 Peru BBB- BBB- Ba1 Brasil BBB- BBB- Ba1 Colombia BB+ BB+ Ba1 Venezuela BB- B+ B2 Argentina B- RD B3 Bolivia B- B- B3 Ecuador SD RD Ca
Peru offers a favorable legal framework for foreign investment ... Legal Framework: Constitutional provisions, “Law for the Promotion of Foreign Investment”, Legislative Decree N° 662, “Framework Law for Private Investment Growth”, Legislative Decree N° 757, “Law for the Promotion of Private Investment in Infrastructure and Public Service Works”, Approved by Supreme Decree N° 059-96-PCM
Non discriminatory treatment.
Unrestrictive access to most economic sectors.
No performance requirements.
Free transfer of capital.
Guarantee for Private Property
Freedom to purchase stocks from locals.
Freedom to access internal and external credit.
Freedom to pay royalties.
Network of investments agreements and member of ICSID and MIGA
Peru is adherent of the OECD Declaration on International Investment and Multinational Enterprises.
Stability to use freely the most favorable exchange rate available in the market.
Free availability and remittance of foreign currency, dividends and royalties.
Regimes for the promotion of exports.
Income Tax Regime
A Legal system that guarantees basic rules and statutes that will not change Requirement : Minimum investment of US$ 5 MM in any economic sectors. US$ 10 MM for hydrocarbon and mining sectors. Validity : 10 years. Concessions: Term according to the contract’s life (Max. 60 years). Legal Stability Agreements
With a steady tax regime, which main taxes are: Note: Taxable goods: fuels, luxury goods, liquors and cigarettes Legislative Decree No. 973 (12.03.07) standardizes the treatment for all economic activities regarding the advance recovery of the value added tax (VAT). It will come into force and effect the first business day of the month following the 90 calendar days that may take for this Decree’s regulations to be prepared and published. It is established that tax payers who purchase capital assets but do not start operations, within the framework of investment contracts subscribed with the State, will be able to recover the VAT paid in said purchases. Tax Applicable Rate INCOME Corporate profits 30% Agriculture, agribusiness and aquaculture 15% Dividends 4.10% Royalities 30% Interest rate on loans from abroad 4.99% Value Added Tax (VAT) 19% Financial Transactions Tax 0.06% throughout 2009 Temporal to net assets for more than S/. 1 000 000 0.40%
Granting the return of the General Sales Tax during the pre-productive stage of the project.
Applicable to all sectors of economic activity.
It is not necessary for agricultural activity to meet a minimum investment amount.
The project can be divided by stages, phases, or similar levels.
Applicable to projects with pre-productive stages with:
A minimum 2-year term
Minimum investment amount of US$ 5 million.
Special Regime of Advanced Recovery of IGV tax
and a reduced tariff structure and low tariff dispersion… Source: Customs TARIFF LEVELS ADVALOREM + SURCHARGES TARIFF LINES NUMBER PROPORTION (%) 0 3,952 53.7 9 2,616 35.5 17 792 10.8 Total 7,360 100,0 SIMPLE AVERAGE APPLIED TARIFF RATE 5,0 STANDARD DEVIATION 7,7
Mexico: ACE 8 A P E C W T O Singapore European Union EFTA Korea Japan Australia New Zealand Central America CARICOM India Morocco South Africa Russia Russia Existing agreements Signed agreements Negotiations underway Imminent negotiations Planned negotiations China Thailand China Chile: ACE 38 ACE Plus USA Canada MERCOSUR ACE 58 Comunidad Andina Access to multiple markets
According to a World’s Bank survey and World Economic Forum: Peru stands first in the Latin America region in protecting investors Source: Doing Business 2009. Peru is first in the region for government readiness for private investment
Source: World Economic Forum, Benchmarking National Attractiveness for Private Investment in LA Infrastructure. 2007
Recognition of a Favorable Investment Environment Protecting Investor Index Position Country Points 1 Peru 5.8 2 Colombia 5.6 3 Chile 5.5 4 Uruguay 4.8 5 El Salvador 4.6 6 Bolivia 4.5 7 Brazil 4.2 8 Dominic. Rep. 4.2 9 Mexico 4.1 10 Guatemala 4.0 11 Venezuela 3.2 12 Argentina 3.1
Country with an “Investment Grade ” October 19, 2007 DBRS granted to Peru the investment grade (BBB), for his long-term debt in foreign and local currency. April 2, 2008 Peru's foreign-currency debt rating was raised to investment grade by Fitch Ratings, from BB+ to BBB-, with positive perspectives. July 14, 2008 Standard and Poor's granted to Peru the investment grade on having raised the qualification of his debt in foreign currency of long term to "BBB-" from “BB+", and raised the qualification of his debt in local currency of long term to " BBB+ " from "BBB-", both outlooks are stables.
INFRASTRUCTURE Main Investment Opportunities by Sector Agribusiness Fisheries & Aquaculture Mining Textiles Forestry Tourism
1st world exporter of asparagus and 2nd of paprika .
Dry tropical weather and vertical sun radiation enhance crop productivity
Highest world productivity in sugar cane.
Third highest world productivity in asparagus and artichokes.
Specialized in high-value fruits and vegetables.
Access to “seasonal windows” in the most important markets fetches higher prices for products.
5 million hectares of land available for farming under optimum weather.
Promotional regulatory framework including lower income tax rates
Source: PromPex, Adex Data Trade and Custom , FAO / * preliminary figures Productivity of Peruvian Agribusiness in the world Product Ranking by Product World Latin America Sugar Cane 1 1 Asparagus 3 1 Olive 3 1 Artichoke 3 2 Grape 5 2 Mango 13 3
Fisheries & Aquaculture Largest world exporter of fishmeal and fish oil Great hydro-biological wealth: 6 million MT of annual biomass for fishing (mainly anchovy ). Fast growing exports of products for direct human consumption : Frozen, canned and processed fish products. Multiple species not yet entirely developed. A long fishing coastline (3,080 km) and hundreds of lakes and lagoons ideally suited for continental and marine aquaculture. Incentives for the aquaculture industry
Source: PromPex, Adex Data Trade and Custom / preliminary figures
Practically all of the world’s multinational mining majors operate in Peru.
In 2008, total around US$ 18.5 billion .
Announced investments over US$ 23 billion.
Only 10% of the country’s territory with mining potential has been explored.
High potential in non-metallic mining: borates, diatomite, bentonites, phosphoric rock and travertine, among others.
Excellent Competitive Position Mining Exports (In US$ Million) Source: CEPAL, PromPeru, MINEM / * Estimated figures Investment in Mining Exploration (In US$ Million) US$ 475 Mining Exports (In US$ Million) Mineral 2006 2007 January - November 2007 2008 Var. % Copper 5,986 7,241 6,592 7,310 10.9 Gold 4,004 4,113 3,641 5,071 39.3 Zinc 1,991 2,535 2,336 1,387 -40.6 Lead 713 1,033 893 1,063 19.0 Molybdenum 835 982 883 1048 18.7 Silver 480 537 483 561 16.1 Iron 256 285 265 370 39.6 Tin 349 254 449 564 25.6 Others 24 51 45 45 0.0 Total 14,638 17,031 15,589 17,419 11.7 Latin America World Silver 1 1 Tellurium 1 3 Zinc 1 2 Tin 1 3 Lead 1 4 Gold 1 5 Copper 2 2 Bismuth 2 3 Molybdenum 2 4 Production Ranking
Textiles Largest world producer of alpaca and vicuna fiber. High quality of Peruvian Pima cotton . Textile exports worth US$ 2,000 million. Peru is garment supplier for renowned international brands . Recognized quality as “full package” supplier of the best international brands of knitted cotton fabrics.
Forestry 2 nd largest natural forest area in Latin America (Amazon forest). 78.8 million hectares of natural forests and more than 10 million hectares of lands suitable for reforestation (plantations). Great bio-diversity and high-commercial value timber : Developing of tropical hardwoods in the rainforest and softwoods in the Andes. Potential to export annually US$3 billion in timber and wood products. Investment opportunities in lumber industrial compounds.
Source: Operative Plan of the Exporting Sector. Maximize. 2004 Source : ADEX Data Trade / * preliminary figures Forestry Exports (US$ million)
Tourism Machu Picchu among the New World Wonders. An unsurpassed cultural destination featuring Inca and Pre-Inca civilizations’ archaeological sites. Scenic diversity including natural attractions ranging from the Pacific Ocean beaches to the Amazon rainforests, through the snow-caps of the Andean Mountain Range. A great diversity of ecosystems. Peru boasts 84 of the planet’s 114 life zones. Vast flora and fauna , for its 1,730 bird species, 330 species of amphibians, 462 species of mammals, and 25,000 plant species (including 4,000 species of orchids). Rich gastronomy. Lima has been acknowledged as the culinary capital of Latin America .
International Arrivals, 2007 Main origin regions Source : MINCETUR Years:2002-2007 : registred arrivals / Years: 2008- 2012 : Forecast Tourist Arrivals (Thousands of persons) Oceania 25,161 2%
Investment Opportunities ProInversion’ s Investment Portfolio* *Investment figures estimate / February2009 SECTOR ESTIMATED INVESTMENT (US$ MM) Hydrocarbons 1,300 Hydro-energy and Irrigation 1,178 Electricity 960 Real Estate 750 Ports 679 Sanitation 484 Telecommunications 422 Land Transport 320 Airports 157 Tourism 13 Total 6,263
Investment Opportunities In Land Transportation PROJECT ESTIMATED INVESTMENT (US$ MM) CONCESSION AWARD Projects recently awarded New Mocupe – Cayaltí – Oyotún Estimated investment US$ 17.4 MM Nº 4 road network Estimated investment US$ 360 MM Total estimated investment (US$ MM) 377.4 Projects to be concession Lima Urban Train Declared the absence of qualifying bids Sol Highway 170 II Q2009 Huancayo – Huancavelica Train To be defined To be defined Central Amazon Axis 150 To be defined Total estimated investment (US$ MM) 320
Description: Upgrading of the present North Pan-American highway between Trujillo and Sullana, and construction of second sidewalk between Trujillo – Chiclayo and Piura – Sullana. Operation and maintenance of entire road (by the Concession holder). Road length approximately 475 km.
Estimated investment: US$ 170 million
Concession term: 25 años
Competitive factor: Additional kilometers offered by bidder above the minimum fixed by the Peruvian government.
Location: La Libertad, Lambayeque, Piura
Method: comprehensive project bid.
Current process status: The Committee approved the Second Draft of the Contract. The final daft of the contract is under development
Description: The concession will be comprised of the sections shown in the graph. The grantor will upgrade the existing road segments and the concessionaire will build the new ones, including the R. Palma and La Oroya beltways. Operation and maintenance by the concession holder.
Estimated Investment : US$ 150 million .
Concession term: 25 years
Competitive factor: To be determined
Location: Lima, Junín, Pasco, Huánuco, Ucayali
Method: Comprehensive project competitive bid
Current process status: Waiting for the concession design by the MTC .
Award date: to be defined.
IIRSA - Central Amazon Axis
Investment Opportunities in Airports PROJECT ESTIMATED INVESTMENT (US$ MM) CONCESSION AWARD Province Airports – second group Tacna – Juliaca – Arequipa – Puerto Maldonado – Ayacucho and Andahuaylas 157 IV Q 2009 Cusco International Airport To be defined To be defined Total estimated investment (US$ MM) 157
Description: Concession to the private sector for the design, construction, financing, operation, maintenance and exploitation of province airports. The second group comprises 6 airports: Tacna, Juliaca, Arequipa, Puerto Maldonado, Ayacucho and Andahuaylas
Estimated investment : US$ 157 million (Incl. Value Added Tax) for the entire period.
Concession term: 25 years, may be extended at Grantor (MTC) discretion.
Competition factor: Lesser co-funding amount for Operation and Maintenance (PAMO).
Method: State joint finance concession.
Estado actual del proceso:
Current Status: Concession terms approved by ProInversión’s executive board. Process to be call.
Award date: 4 th quarter of 2009.
Province airports – second group
Investment Opportunities in Ports (*) Amount under evaluation. (**) Estimated amount acording to thecnical studies. PROJECT ESTIMATED INVESTMENT (US$ MM) CONCESSION AWARD Paita Port 152.08 I T 2009 San Martin (Pisco) Port 95.6 (*) III T 2009 Salaverry Port 159.4 (**) IV T 2009 Iquitos Port 15.8 Por definir Pucallpa Port 16.7 Por definir Ilo Port 178.5 (**) Por definir Yurimaguas Port 61 (**) Por definir Total estimated investment (US$ MM) 679
Location: Department of Ica, in the province of Pisco, 220 km of the Port of Callao.
Current Process Status: Investment amount is under evaluation (earthquake damage).
Award Date : 2nd quarter of 2009
General San Martín Port Terminal - Pisco
Investment Opportunities in Housing and Construction PROJECT ESTIMATED INVESTMENT AMOUNT (US$ MM) CONCESSION AWARD San Martín former military barracks Public Bid To be defined TerraMar modular city 750 To be defined Estimated total investment (US$ MM) 750
Description: Private investment in a 68,400.00 m2, property located in one of Lima’s most attractive areas, close to the sea and near the city’s best hotels and restaurants and within easy access to the Costa Verde sea resort.
Location: Miraflores district, Lima province and department.
Modality: Public auction
Proposed use: Luxury homes, business center, convention centers, arts and tourist compounds, shopping centers.
Current status Waiting for the approval of the urban parameters from Miraflores Municipality.
Concession award date: to be defined
D E S C R I P T I O N ÁREA TOTAL 68,400.00m 2 EJÉRCITO Calle JORGE POLAR Cale PAUL HARRIS
Description: The bid will select an investor interested in purchasing a 1,599.35 Ha. property to build 100,000 low income homes under the “Techo Propio” housing program. The technical conditions and specifications are described in the competitive tender documents.
Location: Lima, Ancón
Estimated investment : US$ 750 million approximately.
Term: 10 years, extended for an additional maximum 5 years.
Competition factor: (i) Property price. (ii) Selling price for “Techo Propio” homes*.
Modality: Public bid (Sales of assets with attached investment commitment)
Current status: Bid suspended until the Archaeological Evaluation Project is concluded.
Concession award date: to be defined
D E S C R I P T I O N
Investment Opportunities in Energy PROJECT ESTIMATED INVESTMENT AMOUNT (US$ MM) Electricity Natural Gas Thermal Power Plant in Quillabamba - Cusco 60 Energy project of hydro-electric plants 600 Central-Middle North Transmission System Reinforcement in 500 Kv 150 Central-Middle South Transmission System Reinforcement in 500 Kv 150 Total estimated investment (US$ MM) 960 Hydrocarbons South Macro Regional Gas pipeline Gas pipeline Chiquintirca (Ayacucho) - Chimbote 1300 Total estimated investment (US$ MM) 1300
Description: To design, finance, build and operate a natural gas transportation system to supply the cities of Ayacucho, Huancayo, La Oroya, Tarma y Chimbote.
Estimated cost: US$1.300 million approximately .
Concession term: Construction period (36 to 48 months) plus operation of up to 30 years.
Competition factor: Lowest gas transportation service cost.
Location: Central highlands and coast of Peru.
Method: Comprehensive project bid.
Current process status: Terms under elaboration. Definition of the availability of Natural Gas by the producer (Camisea).
Award date: 2nd half of 2009.
System for Natural Gas Transport to Chimbote City
Investment Opportunities in Telecommunications * Estimated Investment figures include State co-financing amount. PROJECT ESTIMATED INVESTMENT (US$ MM) CONCESSION AWARD Satellite broadband 85* I Q 2009 Band C 1900 MHz 150 II Q 2009 Telephone and Internet Wireless Transmission - 2668-2692 Mhz Band 110 II Q 2009 Band 800 MHz Trunking 50 II Q 2009 Rural broadband 22 * II Q 2009 Rural wide Band San Gabán – Pto. Maldonado 5 * II Q 2009 Broadband for VRAE development To be defined II Q 2009 Total estimated investment (US$ MM) 422
Description: The tender will choose the 2,668-2,692 MHz frequency operators for the Lima, Callao and Trujillo provinces and the Lambayeque re gion, and the 2,668-2,690 MHz frequency band op erators for the rest of Peru who will provide public telecommunication services: Internet access and data and voice transmission.
Estimated investment: approximately US$ 110 million
Concession term: 20 years
Competition factor: To be defined
Method: Valuable consideration
Short-listing criteria: Open to Peruvian or foreign companies with experience in providing telecommunication services and proven financial solvency.
Current status: Inquiries on tender documents and contract project suggestions.
Award date: 2nd quarter of 2009
Telephone and Internet Wireless Transmission - Band
Description : To provide Internet, public telephony, subscriber telephony, training and facilities for using information and communication technologies to approximately 2,120 rural localities of the country in the South, Center-South and North of the country.
Services to be provided: Internet, Public and residential telephony.
Maximum Financing : US$ 13 million, approximately.
Current status: FITEL is modifying the concession Terms .
Award date: 2nd quarter of 2009
Investment Opportunities in Irrigation and Hydro-energy * The estimated income generated by the water supply service is US$ 70-100 million US$. PROJECT ESTIMATED INVESTMENT (US$ MM) CONCESSION AWARD Majes- Siguas II: water system consolidation 375 IV Q 2009 Majes- Siguas II: hydropower component 800* IV Q 2009 Majes- Siguas II: optimization of water usage in Majes Pampas 3 I Q 2009 Total estimated investment (US$ MM) 1,178
Description: The main and initial component of the private investment promotion process in the second stage of the Majes – Siguas Project.
It includes the construction, operation and maintenance of the Angostura dam and the Angostura-Colca derivation tunnel, water derivation and distribution works to provide irrigation water to 38,000 hectares of “new” farmland in Siguas Pampas.
Estimated investment: US$ 375 million
Concession award: 20 years
Competition factor: lowest unit compensation per cubic meter of water.
Method: BOOT concession
Current process: Joint financing amount and demand guarantee by the Peruvian State are being decided .
Award date: 4 th quarter, 2009
Majes-Siguas II Project: Consolidation of Water and Irrigation Systems of the Siguas Pampas Project
Investment Opportunities in Tourism PROJECT ESTIMATED INVESTMENT (US$ MM) CONCESSION AWARD Lobitos Beach Public Auction 2009 Chaco La Puntilla – Plot D 2.6 2009 Cable car system for Kuelap Fortress 10.6 2009 Total estimated investment (US$ MM) 13.2
The design, financing, construction, equipment and cable car system operation. Its objective is to provide an easy, fast and modern access to Kuelap. The cable cars would cover a distance of 3,800 m., covering the difference of 965m height between the localities of Tingo and Fortaleza.
Concession Term: 20 Years
Process status: Bidding will be called as soon as the lands are available
US$ 10.6 MM
Award date : 2009
D E S C R I P T I O N
PROINVERSION The Agency for the Promotion of Private Investment is responsible for encouraging both local and foreign private investment , in order to foster competitiveness and sustainable development in Peru to improve the welfare of the Peruvian people. PROINVERSION becomes a strategic partner for the development of foreign and local private investments in Peru.