Peru: Investment Opportunities

Infrastructure andpublic services

2017- 2018

Real GDP, 2004-2018*(%Variation)

Source: Central Reserve Bank of Peru (BCRP), International Monetary Fund (IMF)

• Estimated figures of BCRP (Inflation report as of March 2017), IMF (World Economic Outlook Database – April 2017)

PERU’S STRONG MACROECONOMIC CREDENTIALS

Real GDP – Forecasts for Latin America 2017(Annual Average Variation %)

Average GDP - 2000 - 2016(Average change in constant prices in dollars)

2.4 2.5 2.5

3.84.0

5.1

Argentina Mexico Brazil Chile Colombia Peru

2

-3.8

0.5

1.4

1.8

2.4

3.0

3.5

Venezuela

Brazil

Mexico

Chile

Colombia

Argentina

Peru

Public Debt– Latin America 2017*(% of GDP)

PERU’S STRONG MACROECONOMIC CREDENTIALS

CPI – Latin America 2006- 2016*(Annual Average Variation %)

3Source: Central Reserve Bank of Peru (BCRP), International Monetary Fund (IMF)

• Estimated figures of BCRP (Inflation report as of March 2017), IMF (World Economic Outlook Database – April 2017)

▪ Non discriminatory treatment: Foreign investors receive the same treatment as localinvestors.

▪ Unrestrictive access.

▪ Free movement of capital.

▪ Anti-trust framework and promotion of competition.

▪ Guarantees to Private Property.

▪ No restrictions to acquire equity from locals.

▪ Freedom to access internal and external credit.

▪ Access to international disputes settlement mechanism

▪ Peru participates in the Investment Committee of the Organization for Economic Co-operation and Development (OECD) – It promotes the implementation of theGuidelines for Multinational Enterprises.

STRONG FRAMEWORK FOR FOREIGN INVESTMENT

4

in the regional ranking of ease of doing business in Latin America

Continuous effort to facilitate

the establishment and

operation of business

Position Country

1 Mexico

2 Colombia

3 Peru

4 Chile

5 Panama

3rd

Source: World Bank Doing Business 2017

STRONG FRAMEWORK FOR FOREIGN INVESTMENT

5

Peru earned investment grade by practicing a responsible economic policy

Source: Standard & Poor`s, Fitch Ratings and Moody´s.

Updated as of February, 2017

Investment gradeLatin America benchmarking

Countries Moody's S&P Fitch

Chile Aa3 AA- A+

Peru A3 BBB+ BBB+Mexico A3 BBB+ BBB+

Colombia Baa2 BBB BBB

Uruguay Baa2 BBB BBB-

Paraguay Ba1 BB BB

Brazil Ba2 BB BB

Bolivia Ba3 BB BB-

Ecuador B3 B B

Argentina B3 B- B

Venezuela Caa3 CCC CCC

OPEN TRADE AND MARKET ACCESS POLICY

An open trade policy sustained over time

Evolution of nominal and effective tariff; and tariff dispersion 1993 – 2016 (*)

(*) AS of September 2016

Source:MEF

Notes:

1) Affective Tariff= (Amount of total revenue Ad valoren CIF / Total Amount of CIF Imports)*100.

2)Tariff Dispersion= Standard Deviation 6

Agreements in

force

Cuba

Canada

Chile Thailand

Venezuela

Costa Rica

European Union

Mexico

USA

Andrean Community

Panama

Singapore

Chin

a

South Korea

Japan

Honduras

Guatemala

Pacific Alliance

Chile

Brunei

New Zealand

Australi

a

Mexico

Vietnam

Canada

Malasya

SingaporeUSA

Japan

PeruEl

Salvador

TurkeyBrazil

India

Indonesia

Agreements

under

negotiationFeasibility

It is

expected to

have 27 free

trade

agreements

in force

involving 72

partners in

2025

Agreements to enter into

force

TP

P

Source: www.acuerdoscomerciales.gob.pe

OPEN TRADE AND MARKET ACCESS POLICY

Working to become a globalized economy,with preferential access to the world’s largest markets

7

38 projects

Estimated investment: near USD 20 billion

PROINVERSION PPP PORTFOLIO 2017-2018

38

Energy

Transport

Health

Telecom

Water

Mining

Real Estate

10

9

5

4

4

3

3

8

Lima-Callao Metro Line 3

Line 1 : in operation

Line 2 : under construction

Línea 3

Lima and Callao

▪ Purpose: Purpose: Line 3 (North- South axis)will be an approximately 38km length. Theproject shall consist in the concession ofdesign, financing, construction, provision ofelectromechanical equipment, acquisition ofrolling stock, operation, and maintenance.

▪ Competent Government Authority: Ministryof Transport and Communication

▪ Modality: Co-financed State Initiative

▪ Investment amount (w/o VAT): USD 5 600million

▪ Term: 30 years

▪ Areas of influence : Lima and Callao

▪ Estimated award date: 2018-2019

TO BE CALLED

9

Line of road ring

Lima and Callao

Peripheral Ring Road

▪ Purpose: To implement a highway of 33.2km in length, from Óvalo 200 millas toCircunvalación avenue.

▪ Competent Government Authority:Ministry of Transport and Construction

▪ Modality: Co-financed unsolicited proposal.

▪ Investment Amount (w/o VAT): USD 2047million.

▪ Term: 30 years

▪ Area of influence: Lima and Callao

▪ Estimated award date: 2018

UNDER EVALUATION

10

Southern Peru pipeline

▪ Purpose: The Project consists on the design,financing, construction, operation and maintenanceof the Southern Peru pipeline works.

▪ Competent Government Authority: Ministry ofEnergy and Mines

▪ Modality: Co-financed State Initiative.

▪ Investment Amount (w/o VAT): To be defined

▪ Term: To be defined

▪ Area of influence: Apurimac, Puno, Arequipa, Cusco,Moquegua and Tacna.

▪ Estimated award date: To be defined.

TO BE INCORPORATED

Malvinas

Chiquint

irca

Camisea

CUSCO

PUNO

AREQUI

PA

Mollendo MOQUE

GUA

TACNAIlo

Quillaba

mba

11

Mass use of Natural Gas for Center and Southern Peru

▪ Purpose: The Project consists on the design,financing, construction, operation, maintenance pfnatural gas distribution systems by pipe network inseven (7) center-southern regions of the country,and transference of these systems to the PeruvianGovernment after the concession period.

▪ Competent Government Authority: Ministry ofEnergy and Mines

▪ Modality: Self-financed State Initiative.

▪ Investment Amount (w/o VAT): USD 350 million

▪ Term: 32 years

▪ Area of influence: Ucayali, Junín, HuancavelicaAyacucho, Apurímac, Cusco and Puno

▪ Estimated award date: First half of 2018

CALLED

12

Main Works and Conduction of Drinking Water Supply for Lima

▪ Objective: Concession for the design, financing,construction, operation and maintenance of:Pomacocha and / or Huallacocha Bajo Dam Heightening(from 36.1 MMC to 90 MMC), two channels on thebanks of the Yauli River (Approx. 10 km), Huachipa IIWater Treatment Plant (5 m3 / s), two treated waterreservoirs (137 000 m), South Branch conductor pipes(Approx. 40.7 km), seven compensation reservoirs ( 49000 m3), and primary interconnection lines (Approx. 90Km).

▪ Competent Entity: Ministry of Housing, Constructionand Sanitation

▪ Modality: Self-financed State Initiative

▪ Investment Amount (w/o VAT): US $ 600 million

▪ Term : 30 years

▪ Areas of influence: Junín and Lima.

▪ Estimated award date : 2018 -2019

CALLED

13

Michiquillay Mining Project

▪ Purpose: Michiquillay is a copper andmolybdenum porphyritic deposit. Theestimated Resources exceed the 1 000millions of TM, with 0.63% of Cu and0.014% of Mo, for a production of 80Thousand TPD of ore.

▪ Competent Government Authority:Ministry of Energy and Mines.

▪ Modality: Self-financed State initiative

▪ Investment amount (w/o VAT): USD 1.950million.

▪ Area of influence: Cajamarca, District of LaEncañada, at 3 950 masl.

▪ Estimated award date: Second half of 2017

TO BE INCORPORATED

14