ProInversión completes PPP roadshow to plug Peru’s infrastructure gap

Transcript

ProInversión is Peru’s private investment promotion agency. It recently completed an international roadshow promoting a portfolio of 50 public private partnership projects, to help plug Peru’s $160bn infrastructure gap. In the first part of our video roadshow, Executive Director Alberto Ñecco Tello explains what makes Peru an attractive and secure destination for international investment, and how ProInversión works with investors and government agencies to make investing in Peru’s PPP projects a simple and efficient process. The roadshow continues at European CEO with a breakdown of ProInversión’s portfolio, and at The New Economy with an exploration of ProInversión’s sustainability.

World Finance: Alberto Ñecco Tello is executive director of ProInversión, Peru’s private investment promotion agency. It recently completed an international roadshow, promoting a portfolio of 50 public private partnership projects, to help plug Peru’s $160bn infrastructure gap.

How do you work with international partners to make investing in Peru a simple and efficient process?

Alberto Ñecco Tello: We work very closely with investors; within the agency we have a whole division that is entirely in charge of investor outreach and investor relations. We are the point of contact – and I would even say the point of entrance for foreign investors that come into the country. We have a very friendly and supportive legal framework for investors to come in, and we have devoted professionals that develop a client relationship role with the investors, and guide investors in their way into the country.

Mostly investors for PPP or infrastructure projects, but also investors in general, who just want to bring capital to Peru.

World Finance: What makes Peru an attractive and secure destination for international investment?

Alberto Ñecco Tello: Peru has very solid foundations for investments; one of our main strengths is our macro-economic foundations. For the last 25 years we have been able to keep high growth numbers at low inflation rates, which is hardly seen around the world. We have been blessed in that way!

And that macro-economic foundation is one of the best in Latin America, in the region. Which should provide you with enough certainty regarding returns.

And in terms of the law – the legislation or the regulatory framework – for this, it is very important to highlight that according to the constitution of Peru, local and foreign investments must be treated equally. So there is no discriminatory treatment between the two.

Also, there are no capital controls or regulation regarding inflow or outflow of capital. So it’s a very friendly environment, and it’s a very open economy for foreign investors.

World Finance: What range of investment horizons are in your portfolio, and – you mentioned returns – what kind of returns can investors expect?

Alberto Ñecco Tello: Well, since our portfolio is mostly PPP projects, our horizons are mostly in the range of 20-30 year contracts. And in terms of return, they are usually market returns. I could not really pin a number, because it will depend on, you know: the industry, how regulated it is, the amount of competition. And financial models are kind of proprietary for each one of the bidders. But I would say they must be pretty decent, because we have increasing competition for each one of our projects!

World Finance: What other questions have you been addressing on your roadshow? What are the top three things that investors want to know?

Alberto Ñecco Tello: Well, investors are usually concerned about political risk. And for somebody that does not know the country, it is a fair concern.

It’s important to highlight that for the last 25 years, regardless of the ruling party, we have maintained a very stable and sound macroeconomic policy and economic policy. An open economy, a liberal economy, market-oriented. And in that sense, I guess it’s just about getting to know the political risk, and getting to know the country.

There are also questions around what kind of portfolio do we bring to the table? And I think that’s very interesting, because Peru has one of the longest and oldest PPP programmes in Latin America – and one of the broadest. I mean, we cover all sectors of the economy. We work in PPPs for transport, education, health, irrigation, and we even do mining concessions. So we have a very wide portfolio of investments to offer, and I guess – that should also be very appealing for investment funds or investors looking for diversification in their portfolio.

And I would lastly say, there is always a question around the capacity of the government to deal with private investors and private counterparties. And as I just said, Peru has a very long-standing PPP tradition, so there are a lot of PPPs already working in Peru. Spanish companies have been present for quite a long time now, and they are active and they are already operating projects in highways infrastructure, water and sanitation, etc.

So although that’s an ongoing concern, and I think the government and the agency are still working on continuously strengthening our capacity to deal with private counterparts; we have the experience, and we have the work done. So we are pretty much prepared to offer a stable and hopefully fruitful relationship.

World Finance: Alberto, thank you very much.

Alberto Ñecco Tello: Thank you.