Peru’s next administration has plans to revamp ProInversion, a public agency backed by the economy and finance ministry MEF, incoming finance minister Alfredo Thorne told LatinFinance.

The new administration will encourage ProInversion to bring more projects to the private sector’s attention, something Thorne said the administration of outgoing President Ollanta Humala failed to do. 

“We want to revamp ProInversion, giving it local offices that are going to help states develop projects,” Thorne said. “I think the big mistake [of the Humala administration] was that it tried to do the stimulus only through the public sector.” 

Stimulating the private sector will be an important aspect of the incoming administration, Thorne said, adding that sustainable economic growth can be achieved  through fiscal reform and support from the private sector.

Peruvian conglomerate Grupo Romero has used ProInversion’s services in the past. In March, the company began work to gain approval, through its port operating subsidiary Tramarsa and its Chilean port operator partner SAAM, to structure a concession agreement with ProInversion. The contract is a 30-year concession for the Port of Salaverry in northwestern Peru.

Thorne also said that President-elect Pedro Pablo Kuczynski plans to change the institutional structure, expand the infrastructure budget from one to five years and implement cost-benefit analysis on infrastructure projects. 

ProInversion promotes private investment in the development of public projects. It also assists sub-national public entities and gives information services to potential and existing investors.

“We also want to have full transparency because most of our projects have been assigned to only one bidder,” he said. “We want to replicate the experiences of New Zealand, Australia, Canada and their infrastructure agencies.”

Beyond Lima

One project outside of Lima that is moving forward is the natural gas pipeline concession Gasoductos Sur Peruano. 

Enagas and Grana y Montero (GyM) are expected to name a buyer for some or all of Odebrecht’s stake in the Gasoducto Sur Peruano (GSP) pipeline concession in Peru by the end of June or in early July, sources told LatinFinance.

Two of 10 shortlisted candidates are reportedly vying to buy a share in the natural gas pipeline concession, two sources said. The two possible buyers are “acceptable” to the lenders that are working on financing the project, one of the sources said.

The sources did not reveal the names of the two potential buyers but said they could buy at least a 40% stake in the consortium and take a substantial amount of project risk, the sources said.

Odebrecht Latinvest began taking offers in April for its 55% stake in GSP. Spain’s Enagas holds 25%, and Peru’s GyM has 20%. It is not clear if the buyer will take Odebrecht’s entire stake.

Up to 15 banks are working on a seven-year $4.13bn syndicated loan, which can only reach financial close once Odebrecht sells its controlling stake, sources said. Pricing on the loan is estimated to be around 350bp over Libor.

See more commentary from LatinFinance’s interview with Alfredo Thorne in the upcoming July/August magazine edition, online from July 13