Peru's upcoming major projects: What's what

Peru has been promoting a number of public, private and public-private partnerships in the transport, hydrocarbons, mining and electricity sectors in order to revive the economy, which has slowed due to a political crisis that hit business confidence and affected private sector investment decisions.

According to various analysts, the Peruvian economy will grow 2.5% this year and 3.0% next year.

The political crisis initiated by clashes between the government of President Martín Vizcarra and the opposition majority in congress resulted in the dissolution of the latter and a change of cabinet. The president also called for parliamentary elections to be held in January 2020.

Meanwhile, the Vizcarra government now governs via emergency decrees so that the Peruvian economy does not suffer and can be reactivated in the short term.

BNamericas takes a look at the biggest projects that Peru intends to develop in the remainder of this year and in 2020.

ELECTRIC POWER

1) Transmission lines Tingo María-Aguaytía, La Niña-Piura and Pariñas-Nueva Tumbes

Tingo María-Aguaytía: the 220kV line will be extended by 73km from the future Tingo María substation (Huánuco region) to the Aguaytía substation (Ucayali region).

La Niña-Piura: the 500kV and 87km line will connect the La Niña substation to the future Piura Nueva substation (Piura region).

Pariñas-Nueva Tumbes: the 220kV, 158km line includes the branch of the 220kV L-2280-Nueva Tumbes transmission line, the construction of the Nueva Tumbes substation and the extension of a cell in the Pariñas substation for the line to the Nueva Tumbes substation.

Modey: Self-funded state initiative

Total investment in all three lines: US$144mn

Award date: October 30, 2019

Area of influence: Tumbes, Piura, Huánuco and Ucayali.

2) Piura Nueva-Frontera transmission and substation line

This is part of the integral Peru-Ecuador interconnection initiative that includes the construction of the line that will link the Chorrillos substation in Ecuador and La Niña substation in Peru. It will also have two intermediate substations: Pasaje in Ecuador and Piura Nueva in Peru.

The project itself involves with the installation of a 500kV interconnection line in Peru from the Piura Nueva substation "to the border crossing point" and the expansion of this substation, according to the project portfolio website of the agency ProInversión.

Mode: Self-funded state initiative

Investment: US$112mn

Deadlines: To be defined

Area of influence: Tumbes and Piura

Estimated date of award: first half of 2020

INFRASTRUCTURE

1) Huancayo-Huancavelica railway

This comprehensive railway rehabilitation project includes design, financing, execution of works, acquisition of rolling stock, operation and maintenance.

Mode: Co-financed state initiative

Investment: US$227mn

Term: 30 years

Estimated award date: December 2019

Zone of influence: Junín and Huancavelica regions

2) Periférico ringroad

Project (picture) that aims to build a 34.8km highway in Lima, from Óvalo 200 Millas to Avenida Circunvalación.

Mode: Co-financed private sector initiative

Investment: US$2.05bn

Term: 30 years

Estimated date of award:

- By direct award, if there are no other bidders: first half of 2020

- If there are other bidders: second half of 2020

Zone of influence: Lima and Callao.

3) Sierra Longitudinal Highway, Section 4

It consists of the execution of improvement and rehabilitation works on 117km, initial periodic maintenance on around 500km and maintenance and operation of approximately 970km in Andean towns.

The transportation ministry is in the process of updating the scope of the project and the investment amount.

Mode: Co-financed state initiative.

Investment: US$464mn

Term: 25 years

Estimated date of award: first half of 2020

Areas of influence: Junín, Huancavelica, Ayacucho, Apurímac and Ica.

4) New San Juan de Marcona port terminal

Design, financing, construction, operation and maintenance project for a new port terminal for public use, specialized in providing storage and shipping services for iron and copper concentrates, as well as mining production supplies.

Mode: Self-funded private initiative

Investment: US$540mn

Term: 30 years

Estimated date of award:

- By direct award, if there are no more bidders: first half of 2020

-  If there are other bidders: second half of 2020

Areas of influence: Ica and Ayacucho regions, northern part of Arequipa, Apurímac and Cusco.

MINING

1) El Algarrobo Project

Consists of exploration, production through an underground mine and the benefiting of a mineralized deposit located in the Tambo Grande mining concessions 4, 5, 9 and 10.

It includes the design and execution of water infrastructure projects, applying a management model focused on the integral and sustainable development of mining activities, contributing water supply to communities.

Mode: Private sector initiative

Investment: US$350mn

Estimated Date of Award

- By direct award: first half of 2020

- If there is competition stage: second half of 2020

Area of influence: Piura

OIL AND GAS

1) Massification of natural gas use

The project consists of the design, financing, construction, operation and maintenance of natural gas distribution systems via a pipeline network in seven regions of the center-south of the country, along with the transfer of these systems to the state after the concession period .

Mode: Self-funded state initiative.

Investment: US$200mn

Term: 32 years

Estimated award date: second half of 2019

Area of influence: Ucayali, Junín, Huancavelica, Ayacucho, Apurímac, Cusco and Puno regions.

2) Tender for exploration and exploitation of block 201 (Ucayali)

The auction of block 201 is the first in the upstream area since 2015, when an operator was sought for block 192. According to the president of hydrocarbons licensing authority Perupetro, Seferino Yesquén, the idea of this contract is to move forward with exploration in the Amazon and whoever proposes the most exploratory wells will win the concession.

The investment will go on seismic and development and drilling of exploratory wells. According to Yesquén, the drilling of a single well in block 201 produced about 1,500b/d, but the potential in the entire area of almost 500,000ha is 6mn barrels.

Mode: Concession

Investment: minimum of US$200mn

Estimated award date: January 21, 2020

Area of influence: Ucayali region