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ELECTION WATCH: Peru presidential candidates' energy proposals

Bnamericas Published: Tuesday, February 02, 2016
ELECTION WATCH: Peru presidential candidates' energy proposals

"In our country there does not exist a long-term diversification and sustainable development policy on energy resources. Our principal weakness is not decisively promoting the use of natural gas as a cheaper, and more environmentally friendly, fuel, as well as not taking advantage of the country's hydroelectric resources."

That's according to the government plan of Peruvian center-right party Peruanos Por el Kambio (PPK) whose candidate Pedro-Pablo Kuczynski is a contender in April's presidential election.

Kuczynski, along with César Acuña of center-left party Alianza para el Progreso, trails Keiko Fujimori of center-right party Fuerza Popular who is currently the leading candidate.

The PPK hopeful, a former energy and mines and economy and finance minister, came in third in the country's last general election, held in 2011, after Ollanta Humala and Keiko Fujimori.

As part of a series looking at the front-running presidential candidates' government programs, BNamericas provides a snapshot of Pedro-Pablo Kuczynski, of center-right party Peruanos Por el Kambio.

HYDROCARBONS

- Promote private investment in the development of new natural gas production fields and infrastructure;

- Reevaluate the competitive level of E&P investment compared with that of other countries, the possibility of extending work periods and the possibility of transferring investment obligations between blocks held by the same contractor, following the example of Colombia;

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- Develop an efficient use scheme for natural gas components by allowing the state to decide how it assigns rights of products, such as ethane, propane and butane, in new blocks with NGLs;

- Advance more aggressive strengthening efforts for state oil company Petroperú and hydrocarbons licensing authority Perupetro;

- Promote development of the petrochemicals industry based on methane and ethane, reevaluate feasibility studies for fertilizer plants and begin feasibility studies for ethylene and polyethylene plants.

POWER

- On the distribution front, approve a new framework to promote public-private partnerships and implement a new corporate governance scheme for state distributors to improve their performance;

- Establish an enhanced mechanism so that, in terms of competition, natural gas and hydropower generation have the same baseline, with each having its own incentive program.

- Ensure that new and old investments are subject to the same regulatory measures or minimize any existing differences.

- Move toward establishing a regulatory framework for the interconnection of the country's grid with those of its neighbors;

- Continue with the promotion of renewable energies and related auctions;

- Execute a more aggressive program to supply electricity to remote areas as well as underserved outer urban and low-income zones.

The document highlights Peru's "sufficient or even excess" installed power generation capacity situation, but that this is a short and medium term, according to the political party.

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In other energy sector-related areas, Kuczynski's administration would reform private investment promotion agency ProInversión, improving the state entity's prioritization of projects and participants.

A PPK government also would continue with prior consultation and establish a national social conflict prevention and peaceful solution system.

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