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Infrastructure pipeline
worth USD $327 billion
until year 2040.

LOCAL INFRASTRUCTURE DEMAND

Although, Peru has exhibited a sustained economic growth rate for the past 17 years and many sectors have been growing at the pace of the economy or even higher thanks in part to the global commodity´s super cycle, there are basic servicessuch aspublic transportation, utilities, education and health,that for years for various reasons, even before the economic rally, were left behind and are actually in need of major improvements and new developments.

With an economy growing at an average of 5% from 2000 to 2017, an economy that is poised to keep its upward growth trend and therefore, a middle class that keeps on growing every year demanding more and better public services,the actual government has piled up a pipeline of billions of dollars of infrastructure projects and according to specialists in the matter, Peru will require approximately US $347 billionof investment in infrastructure until the year 2040. This amounts to around US $14.8 billionper year for the next twenty two years.

Construction is perhaps one of the most important industries in Peru and in most emerging markets, and usually this is one of the major drivers of any economy. The growing middle class which is now spending more and the surge in national tourism is creating a constant need for new services in the construction sector. New shopping malls, hotels and the unsatisfied demand of more than 500,000 homes is generating the development of residential areas within Lima and other cities nationwide. Alongside, as mentioned before, there is underdeveloped infrastructure in many sectors that needs to be improved nationwide, besides government development plans, thus creating a huge investment opportunity for local and foreign investors.

The government infrastructure development plan and the race to be a modern and connected economy accounts for hundreds of large and small projects all over the country involving many sectors such as education (building new schools and improving old ones), health (building and revamping new hospitals), energy (larger capacity hydroelectric plants), improving police stations nationwide, railways, roads, ports, airports, etc.

In October 2017, the Ministry of Transport and Communications (MTC) approved the Multiannual Investment Report for public-private partnerships for the next three years which considers a portfolio of prioritized projects of almost US $ 22.1 billion.For this year alone, the priority of the plan is the overhaul of the train Huancayo-Huancavelica, the fourth section of the Longitudinal de la Sierra highway and seven projects of broadband internet in the regions. These projects alone would require an investment of US $1.3 billion.

In addition, the main projects to be awarded in 2018 require an investment close to US $13.1 billion. These include the implementation of broadband internetacross more regions, the 3rd and 4th line of the metro and the peripheral beltway. Towards 2019, it is expected that the MTC will award the concession of the train that would connect the city of Barranca to the city of Ica, project that was promised by President Pedro Pablo Kuczynski during his presidential campaign.

On another note, the report indicates that as of October of his year, the government counts with 33 private-public partnerships signed and in execution. Sixteen of these projects are highways, four airports, eight ports and waterways, four railways (including the line 1 and 2 of the Lima Metro) and the national fiber optic backbone.

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