Peru's Kuczynski in US seeking infrastructure investment

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Wednesday, September 21, 2016

Peru's President Pedro-Pablo Kuczynski is wasting little time trying to put his country on the financial map.

Kuczynski, who took office July 28, met with investors, analysts and government leaders during a trip to speak at the UN General Assembly in New York, just days after returning from a tour of China.

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US investment fund BlackRock is interested in financing infrastructure projects in Peru, said Kuczynski, who met with the fund's CEO Larry Fink in addition to other US investors at a Council of the Americas Forum.

Peru, which seeks to join the Organization for Economic Cooperation and Development (OECD) and the Trans-Pacific Partnership (TPP), also aims to take advantage of low interest rates and its investment grade rating to issue sovereign bonds, Kuczynski added.

"We're using this visit to the UN to talk to everybody and say we have these infrastructure projects which will be put up for bids," Kuczynski said in broadcast comments.

Kuczynski was also scheduled to meet with the presidents of Brazil, Mexico, Colombia and Chile at a forum in New York. Peru, Mexico, Colombia and Chile are members of the Pacific Alliance trade bloc.

The government will place an emphasis on investment in potable water and sewerage projects in Peru, where 10mn inhabitants still lack both services at a time when climate change threatens the country's water supply, Kuczynski said at the UN assembly. Peru's government policies mirror the UN's sustainable development goals, he added.

"We will provide significant investment that prioritizes the Amazon and Andean areas," Kuczynski said in a broadcast speech. "The melting glaciers and river surges in southern Peru obligate us to reallocate our modest resources to tackle these challenges."

LIMA METRO

The government, meanwhile, is negotiating with concessionaires to accelerate some of the country's biggest infrastructure projects that have been delayed by bureaucratic obstacles.

The government is prepared to extend Lima Airport Partners' concession for Lima's Jorge Chávez Airport to compensate for delays in a US$1bn expansion project, finance minister Alfredo Thorne told congress.

Talks are also ongoing with the concessionaires for Line 2 of the Lima metro to discuss the possibility of converting part of the subway route to an overground railway in the port of Callao to lower costs, Thorne said. The government is also negotiating work on the southern Peruvian natural gas pipeline with Enagás following Odebrecht's decision to sell its stake, he said.

In other infrastructure news, South Korean investors are looking to bid for Line 3 of the Lima metro, transport and communications minister Martín Vizcarra said. No date has been set yet for the bid round, he added.

"What is projected is for work to start on Line 3 of the metro before Line 2 has been completed, so as to move ahead as quickly as possible with the metro network, which will involve six lines," Vizcarra told reporters in Lima.

CONSTRUCTION

The construction industry, which contracted 7.5% in July, rebounded in August as central and regional governments boosted public spending, according to the national statistics institute (INEI). Electricity and hydrocarbons output grew 8% and 16%, respectively, the agency said, citing preliminary figures.

Public works accelerated 28.6% in August, led by municipal governments, which increased spending on infrastructure by 40% due to the elimination of bureaucratic obstacles, INEI Aníbal Sánchez told state gazette El Peruano.