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Peru

Last Verified on Monday 5th August 2019

    General

    • Peru

      Project finance emerged in Peru in the mid-1990s and has grown exponentially since then, due to the high mitigation of the risks the structure provides, being used in the vast majority of infrastructure and energy projects.

      Project financing is commonly used to finance public and private projects, mostly in sectors such as infrastructure, energy, oil, gas, transport, mining and telecommunications sectors. However, as it allows developers to isolate risks for each project they are involve in; and for lenders it is a convenient method to mitigate risks of financing new projects, we have also worked on financing transactions (using project finance structures) on other sectors such as hotels, retail, logistics, etc.

      Answer contributed by Carlos Arata Delgado from Rubio Leguía Normand

      Last verified on Monday 5th August 2019

    • Peru

      As sponsors in the first stages of the project, we have seen local and international project developers, from very diverse countries, such as Brazil, Spain, Mexico, France, China and Korea, among others. On later stages, after commercial operations, we have seen the presence of financial sponsors (such as foreign pension or private equity funds). Besides Brazilian companies, the presence of developers from Latin American countries in Peru has been small, probably because of the size of the projects and the experience required to develop them. Spanish companies have been the more active in Peru, probably because there is no language barrier and the idiosyncrasy is more similar compared with other European or Asian countries.

      Local and international banks, export credit agencies and multilaterals have participated as lenders for this kind of transaction, depending on the size, complexity and social impact.

      As to Chinese companies, they have been very active the past couple of years, whether acquiring companies and projects or filing offers for private and public initiatives. However, unless they are working with non-Chinese partners, it has not been common for them to use project finance structures, turning instead to obtaining secured corporate loans from Chinese banks.

      Answer contributed by Carlos Arata Delgado from Rubio Leguía Normand

      Last verified on Monday 5th August 2019

    • Peru

      Various structures are used depending on the sector. Among the main ones we have the BOT (Build-Operate-Transfer) modality, hiring a company to execute an investment project, committing to build it, operate it for a specific term and transfer it with its benefits. On the other hand, the build-own-operate-transfer (BOOT) modality allows the execution and exploitation of an investment project. However, unlike the previous one, in the present case the special purpose vehicle (SPV) owns the project until the end of the agreed period of exploitation. Public-private partnerships (PPPs) have also often been used, especially in projects for public services. In these cases, projects can be auto-financed or co-financed. In the former, the cash flow coming from the offtakers (public) is enough to repay the investment and the expected return of the developers. In the second case, however, this cash flow does not suffice so the government or grantor steps in and covers the shortfall, so the project is still attractive to private investors. 

      We have worked on hybrid structures when financing co-financed PPP. In these projects, the cash flow of the project does not suffice to return the investments, so the government steps in and finances the gap, through special payments during the term of the concession. These payments are securitised, but working capital needs are financed with credit facilities that do not exactly fit the definition of project financing.

      Answer contributed by Carlos Arata Delgado from Rubio Leguía Normand

      Last verified on Monday 5th August 2019

    • Peru

      Peruvian law does not specifically forbid project companies to be organised under a foreign law. However, it is a regular practice for project companies to be organised under the laws of Peru, as is a common requirement among concession agreements, facilitates the ownership of project assets, opening bank accounts, etc. The typical legal form for a project company is a corporation to limit shareholder liability.

      In addition, Peruvian law does not require the project company’s equity to be held by local companies or investors, although it is common for foreign investors to partner up with a local company.

      Answer contributed by Carlos Arata Delgado from Rubio Leguía Normand

      Last verified on Monday 5th August 2019

  • Foreign Investment

    • Peru

      Peruvian law does not make differences between foreign and national investors. In this way, with the purpose of promoting foreign investments, Peru is part of several integration initiatives that seek to deepening economic, political and commercial integration that offers economic agents a reliable legal framework for the development of investment, and consolidates as a platform to other regions, especially to the Asia-Pacific.

      In this line, Legislative Decree No. 662, establishes that the Legal Stability Agreements guarantee the stability of the tax regime and the regime of free availability of currencies, among others.

      Answer contributed by Carlos Arata Delgado from Rubio Leguía Normand

      Last verified on Monday 5th August 2019

    • Peru

      As a general rule, there are no restrictions on payments abroad, or on repatriation of capital by foreign investors. However, Law No. 30737,which guarantees the immediate payment of civil reparation in favour of the Peruvian government in cases of corruption and related crimes, establishes the suspension of transfers abroad as a measure to guarantee the payment of reparation civil action in favour of the Peruvian government if the concessionaire commits acts of corruption.

      Answer contributed by Carlos Arata Delgado from Rubio Leguía Normand

      Last verified on Monday 5th August 2019

    • Peru

      There are no limitations or restrictions regarding the project company to maintain offshore foreign currency accounts.

      Answer contributed by Carlos Arata Delgado from Rubio Leguía Normand

      Last verified on Monday 5th August 2019

    • Peru

      The legal framework on private investment in Peru has undergone a marked evolution over time, which has led to the participation of the private sector under different modalities. In July 2018, Legislative Decree No. 1362 was approved, the Decree that regulates the promotion of private investment through public-private partnerships and projects in assets, and promotes the financing and execution of projects through the public works tax deduction mechanism. Likewise, its Regulations were approved through Supreme Decree No. 240-2018-EF. This regulation helped Peru to have a clearer, more predictable and legitimate institutional framework and, especially, faster approval procedures.

      Answer contributed by Carlos Arata Delgado from Rubio Leguía Normand

      Last verified on Monday 5th August 2019

  • Project and financing documents

    • Peru

      Loan or project agreements do not need to be registered with any government authority or in the Peruvian Public Registry. However, certain security documents must be registered  to be valid and enforceable, such as mortgages. Other kinds of security documents, such as trust or pledge agreements, are not required to be registered but by doing so they will be opposable against third parties.

      Finally, in most concession agreements, financing documents need to be filed with, and approved by, the relevant grantor of the concession and the supervisor of the relevant sector.

      Answer contributed by Carlos Arata Delgado from Rubio Leguía Normand

      Last verified on Monday 5th August 2019

    • Peru

      Yes. On one hand, promissory notes are easily enforceable through a specific and faster judicial process that limits defence arguments from the borrower and shortens certain steps of the ordinary process. On the other hand, as normally credit agreements are subject to foreign law (New York law usually), it can be argued that before foreclosing local Peruvian securities that require intervention of the judiciary (ie, mortgages), a final decision from the competent foreign court regarding the default is required; having a promissory note will allow the lenders to avoid such discussion as it can be collected independently of the loan agreement.

      Answer contributed by Carlos Arata Delgado from Rubio Leguía Normand

      Last verified on Monday 5th August 2019

    • Peru

      Regarding security documents, if the assets or tangible assets provided are located in Peruvian territory, then the documents must be governed by Peruvian law. Other finance documents, such as loan agreements, can be governed by foreign law if the parties agree.

      Answer contributed by Carlos Arata Delgado from Rubio Leguía Normand

      Last verified on Monday 5th August 2019

  • Collateral security

    • Peru

      Yes, it is possible for a sole collateral agent to act as a secured party for the benefit of a group of lenders.

      Answer contributed by Carlos Arata Delgado from Rubio Leguía Normand

      Last verified on Monday 5th August 2019

    • Peru

      Every asset of the concessionaire can be part of a security interest; however, different security agreements will be executed to grant a lien over the concessionaire’s different assets, as specific formalities and requirements – and different foreclosure procedures – are necessary depending on the kind of asset.

      When the right to be granted as security has been granted specifically to the concessionaire as it complies with specific requirements (ie, the concession right), then the approval of the grantor will be required to grant the security and thereafter, to foreclose the security, as the grantor will have to approve the new holder. 

      Also, a security interest on the equity of the project company holder of the concession and other licences or permits can be granted.

      Answer contributed by Carlos Arata Delgado from Rubio Leguía Normand

      Last verified on Monday 5th August 2019

    • Peru

      As a summary, the following chart indicates the general framework and costs associated with registering collateral securities:

       

       

      Trust

      Pledge

      Mortgage

       

       

      Type of assets

      -  Movable assets (including accounts receivable)

      -  Real estate

       

      -  Movable assets (including accounts receivable)

       

      - Real estate

      Costs

      -    Structuring costs

      -    Ongoing monthly costs.

       

      Ongoing costs may be higher if the assets are more complex for the trustee to administer.

      -  Structuring cost: Only legal attorney fees.

      -  notary and Public Registry fees

       

      Costs are the same regardless of the different types of assets.

       

      -  Structuring cost: Only legal attorney fees.

      -  notary and Public Registry fees.

       

      Costs are the same regardless of the different types of assets.

       

      Inclusion and exclusion of assets

      The trust agreement can provide for a mechanism for including and excluding assets from the trust. Otherwise, amendments to the trust agreement will have to be executed.

      If the pledged assets are fungible (such as inventory), the assets can be included and excluded on a revolving basis. Otherwise (i) an amendment to the pledge agreement will have to be executed to include assets; and, (ii) a pledge release will have to be executed to release assets.

       

      An amendment to the mortgage agreement will have to be executed to include additional real estateand a mortgage release will have to be executed to release real property.

      Insolvency

      Assets will be under the trustee’s administration and patrimony; thus, they will be bankruptcy remote and shall not be affected by the trustor’s insolvency.

       

      In a bankruptcy scenario, Peruvian law states that security may not be foreclosed over a company that is involved in a bankruptcy proceeding.

       

      A creditor with a pledge granted in his or her favour will rank in third order of preference in a bankruptcy scenario.

       

      In a bankruptcy scenario, Peruvian law states that security may not be foreclosed over a company that is involved in a bankruptcy proceeding.

       

      A creditor with a mortgage granted in his or her favour will rank in third order of preference in a bankruptcy scenario.

      Public Registry and public notary fees vary depending on the amount of the encumbrance over the assets. However, Public Registry fee per registrable act can only be as high as the current Tax Unit (Unidad Impositiva Tributaria) established by law (currently, 4,200 sol).

      Answer contributed by Carlos Arata Delgado from Rubio Leguía Normand

      Last verified on Monday 5th August 2019

    • Peru

      Our jurisdiction does not require lenders to stipulate the value of the collateral security in the documents; however, for purposes of its registration in the Public Registry it is required to indicate the amount of the encumbrance, which can be stated in local or foreign currency.

      Likewise, when foreclosing, creditors must prepare a valuation of the asset, as this value will be used to determine the price at which third parties may acquire it.

      Answer contributed by Carlos Arata Delgado from Rubio Leguía Normand

      Last verified on Monday 5th August 2019

    • Peru

      If the type of security allows it, each item of collateral must be identified by means of its model, serial number or public registry record number. In other cases, when it is not possible to individually identify each item, a general description will be sufficient.

      Answer contributed by Carlos Arata Delgado from Rubio Leguía Normand

      Last verified on Monday 5th August 2019

    • Peru

      Security agreements should be recorded for the guarantee to be opposable against third parties. Liens are centrally recorded in the Peruvian Public Registries and can be searched under different criteria. Once the lien is registered in the public registry it will grant the beneficiary a preferred right over the assets (unless there is a prior lien already registered) and this right can be opposed to third parties or even subsequent owners.

      Answer contributed by Carlos Arata Delgado from Rubio Leguía Normand

      Last verified on Monday 5th August 2019

    • Peru

      In the case of mortgages, the foreclosure can only be performed after a judicial process and once obtained the corresponding court order. The judicial process of foreclosing requires that the secured obligations are contained in the same document of the mortgage or in an enforceable right (título ejecutivo, ie, a promissory note).

      The judicial foreclosing process requires the filing of a lawsuit before the competent court. For such a lawsuit the plaintiff must file the valuation of the asset to be foreclosed and the encumbrance certificate of the asset to be foreclose issued by the Public Registry. The defendant can elect to pay or respond the lawsuit. If the defendant elects to respond and such response is declared unfounded by court, then the process continues with the sale by public auction of the asset. If the asset is not sold after three public auctions, the asset can be awarded to the plaintiff at its election. This process could take approximately three years.

      In the case of pledges and trusts, parties can agree the direct sale, private auctions or public auctions, or even the transfer of the asset to the lender. Usually, the lenders have the right under the security agreements to opt between any of those options. If the agreement does not provide for any of those options, then a public auction will be required for the foreclosure, after a judicial process and once the corresponding court order is obtained.

      There is no limitation on the currency of the foreclosure. 

      Answer contributed by Carlos Arata Delgado from Rubio Leguía Normand

      Last verified on Monday 5th August 2019

    • Peru

      In the case of insolvency, secured creditors will rank third after employee payments and alimony payments. However, if the foreclosure occurs outside an insolvency procedure, secured creditors will have preference over secured assets. 

      Finally, assets and rights transferred to a trust are not considered part of the borrower’s assets and therefore, will not be part of the estate for purposes of the bankruptcy or insolvency procedure and can only be used as set forth in the trust agreement (ie, as security for the project lenders only).

      Answer contributed by Carlos Arata Delgado from Rubio Leguía Normand

      Last verified on Monday 5th August 2019

    • Peru

      Lenders will not incur any liability upon foreclosure in relation to the project assets provided that, in the context of PPP agreements, they have followed the applicable regulation to enforce their rights.

      Also, lenders should bear in mind certain legal requirements of the foreclosure (ie, to obtain a valution as to how the proceeds should be applied, etc).

      Answer contributed by Carlos Arata Delgado from Rubio Leguía Normand

      Last verified on Monday 5th August 2019

    • Peru

      Restrictions or obligations will be those set forth in the corresponsding concession agreement (and other project documents if applicable).

      Answer contributed by Carlos Arata Delgado from Rubio Leguía Normand

      Last verified on Monday 5th August 2019

    • Peru

      Yes. Bankruptcy of the project company only affects obligations of the project company; accordingly, obligations of equity holders are still enforceable by the lenders in that scenario.

      Answer contributed by Carlos Arata Delgado from Rubio Leguía Normand

      Last verified on Monday 5th August 2019

  • Dispute resolution

    • Peru

      Except for matters in which local courts have exclusive jurisdiction (such as actions related to real estate located in Peruvian territory or tort claims, when the illegal act or its result where produced in Peru), it is possible for project companies organised under Peruvian law to choose the applicable law and submit to the jurisdiction of a foreign court, which can involve submission before an international arbitration tribunal. Having said that, it is possible to subject credit agreements (or other financing documents, but for security agreements over local assets) to foreign laws and courts.

      Answer contributed by Carlos Arata Delgado from Rubio Leguía Normand

      Last verified on Monday 5th August 2019

    • Peru

      Peruvian project companies may appoint foreign process agents and grant the agent sufficient powers of attorney to act on its behalf, for proceedings followed before foreign courts. In this scenario, service of process will be governed by the foreign laws of the applicable jurisdiction.

      Answer contributed by Carlos Arata Delgado from Rubio Leguía Normand

      Last verified on Monday 5th August 2019

    • Peru

      Yes, foreign judgments and arbitral awards are enforceable provided that they comply with all the formalities and procedures required under the laws of Peru for the enforcement of documents executed outside Peru and governed by foreign laws. In the event that a judgment of any competent court located outside Peru for the payment of money were rendered against the project company in respect of any obligation arising out of or in relation to the foreign project documents, the judgment would be enforced by the courts of Peru against the project company without a further review on the merits; provided that a final judgment issued by the court abroad regarding any obligation related to the foreign project documents, will be considered valid and enforceable in Peru through a legal procedure of exequatur (which in any case supposes the reopening of the legal procedure), provided that:

      • the judgment does not resolve matters where Peruvian courts have exclusive competence (such as matters related to property rights);
      • such court is competent in accordance with its International Private Law regulations and accordance with the International General Principles of Court Competence;
      • that the defendant is called to court in accordance with the law of the place where the process is held; that such defendant has been granted a duly term to appear in court; and that the defendant has been granted the corresponding legal guarantees applicable to courts to properly defend him or herself;
      • that the judgment is considered a res judicata in accordance with the laws of the place where the judgment was issued;
      • that there is not pending trial in Peru between the same parties or matter, started up prior to the filing of the claim that caused the judgment;
      • that such judgment would not be inconsistent with another judgment that contains the requirements for the recognition and enforcement required by the judgment previously issued abroad;
      • that such judgment does not attempt against any Peruvian imperative rules, public order or good morals; and
      • that reciprocity is applicable for recognising judgments.

      Answer contributed by Carlos Arata Delgado from Rubio Leguía Normand

      Last verified on Monday 5th August 2019

  • Miscellaneous

    • Peru

      Under Peruvian law, subordination is an agreement enforceable exclusively between its parties. If the project company goes bankrupt, the provisions of article 42 of the General Law of Bankruptcy System regarding the order of priority will be applied, which will be different from the agreement between the parties.

      Answer contributed by Carlos Arata Delgado from Rubio Leguía Normand

      Last verified on Monday 5th August 2019

    • Peru

      Yes, there are certain sectors and activities in which the payable tariffs are regulated, such as distribution and transmission of electricity and transportation and distribution of natural gas.

      Electricity power market

      The Peruvian regulatory framework recognises in favour of transmission companies the investment costs incurred in developing, operate and maintain transmission projects. In that sense, the mechanism that the Peruvian state uses to recognise that investment involves the determination of a tariff regulated by the Organismo Supervisor de la Inversión en Energía y Minería – OSINERGMIN. To determine the transmission toll that corresponds to a transmission project, it should be take into account the type of transmission system it belongs. According to Peruvian regulatory framework, there are four types of transmission systems: the Principal Transmission System and Secondary Transmission System created by the LCE and the Guaranteed Transmission System and Complementary Transmission System created in 2006 upon the issuance of the Law to Guarantee the Development of Efficient Generation, as the new systems that only transmission lines would belong to.  

      Electricity distribution companies are in charge of transporting electric energy from the transmission system to the end users located within a concession area granted by the state, and this activity is a natural monopoly (local monopoly). When the demand for the concession is above 500kW, the state establishes a tariff for remuneration. In these cases, the Law of Electric Concessions establishes that its remuneration is determined based on the cost studies of each distribution company. Thus, OSINERGMIN calculates (every four years) the tariff according to investment efficiency criteria, the management of a concessionaire operating in the country and compliance with the current legal framework. Thus, each distribution company has its own remuneration depending on the specific composition of its demand, the physical configuration of their network and other specific features.

      Natural gas market

      The natural gas transportation by pipelines is subject to strict state regulations in terms of price, quality and the obligation to give free access of such infrastructure to stakeholders as long as it is technically and financially feasible.

      Regarding the distribution activity, it has been classified by the Peruvian state as a public service pursuant to article 79 of the Organic Hydrocarbons Law. It means that as tnatural gas production is a relevant activity for the growth of society, the state regulates the tariff of the distribution service and its quality.

      In other cases, such as toll roads, tolls are calculated pursuant to the concession agreement and under the supervision of the corresponding governmental supervisor (ie, OSITRAN).

      Answer contributed by Carlos Arata Delgado from Rubio Leguía Normand

      Last verified on Monday 5th August 2019

    • Peru

      No, environmental, tax or other liabilities would not affect the direct or indirect owners of the project or the lenders.

      Answer contributed by Carlos Arata Delgado from Rubio Leguía Normand

      Last verified on Monday 5th August 2019

    • Peru

      There are some materials qualified under the "Chemical Inputs and Controlled Goods - IQBF" whose importation and transportation are regulated by the 65/5000 National Superintendency of Customs and Tax Administration – SUNAT. Some of these goods fall under the explosives, chemical inputs and fuels categories, which must follow the corresponding procedure and authorisations before the SUNAT before they can be transported to the project facilities. It is also important to mention that the list of IQBF is usually modified, hence, to prevent any contingency it is important to review the most up-to-date procedure and IQBF list administrated by SUNAT.

      Answer contributed by Carlos Arata Delgado from Rubio Leguía Normand

      Last verified on Monday 5th August 2019

    • Peru

      One point to take into consideration is that, according with the Peruvian Constitution, foreign entities or persons cannot own or possess, under any type of title, real state property located within 50km of the border with other countries.

      Rights of way and expropriations can be hard to obtain, and take a lot of time due to the procedures, authorisations and social licences needed, and can lead to major delays if the perception of the investment is negative. It must be taken in consideration that social conflicts are common in Peruvian territory and the implementation of a project (eg, pipelines) that crosses many plots of land could be seen with a negative impact and must be treated with special attention.

      Answer contributed by Carlos Arata Delgado from Rubio Leguía Normand

      Last verified on Monday 5th August 2019

  • Public–private partnership (PPP)

    • Peru

      Legislative Decree No. 1362 regulates the institutional framework and processes for the development of investment projects under the modalities of public private partnerships and assets projects. This is applicable to public entities belonging to non-financial public sector in every level (national, regional and local), in accordance with the provisions of Legislative Decree No. 1276, which approves the Fiscal Responsibility and Transparency Framework of the Non-Financial Public Sector. 

      This modality is implemented through long-term agreements, in which the ownership of the investment developed can be maintained, reversed or transferred to the government, depending on the nature and objectives of the project and the provisions of the respective agreement. These modalities can be concession, operation and maintenance, management, as well as any other contractual modality allowed by law.

      PPPs, under this law, can be used in every sector in which this kind of partnership can be useful. So far, different PPPs have been granted on toll roads and train projects, hospitals, ports, water treatment facilities, transmission lines, power plants, electricity distribution, irrigation projects, mining projects, fibre optic networks, among others.

      A PPP can be accessed either by state initiative or by private initiative, and each can be qualified as self-sustaining or co-financed.

      • Co-financed: are those that require the state to provide financial or non-financial guarantees with a high probability of using public resources as the income of the project is not high enough to repay the investment.
      • Self-sustainable: they do not need guarantees from the state, sufficient with private resources or, in any case, their financial guarantees are lower.

      Answer contributed by Carlos Arata Delgado from Rubio Leguía Normand

      Last verified on Monday 5th August 2019

    • Peru

      There are no legal limitations which are proper of PPP transactions or in any particular sector. However, and according to the legal framework, the payment capacity of the corresponding public entity must be evaluated. In that sense, and according to the article 13 of Legislative Decree No. 1362, the commitments assumed are subject to a limit, according to which the accumulated stock of firm and contingent quantifiable commitments, net of income, assumed by the non-financial public sector in the PPP contracts, calculated at present value cannot exceed 12 per cent of the gross domestic product.

      Answer contributed by Carlos Arata Delgado from Rubio Leguía Normand

      Last verified on Monday 5th August 2019

    • Peru

      As a consequence of the business climate generated by the legal framework favourable to private investment, in Peru from July 2011 to February 2017, were awarded projects with investment amounts of more than US$16,000 million. Among the main projects, are:

       

      Project

      Modality

      Investment

      Sector

      1

      Hydroelectric power plants (CH Chaglla)

      Concession /PPP

      US$977.9 million

      Electricity

      2

      Chavimochic Project – Third Stage

      Concession /PPP

      US$573.7 million

      Irrigation

      3

      Longitudinal of the Sierra Road Section 2

      Concession /PPP

      US$552 million

      Transport

      4

      National fibre optic network

      Concession /PPP

      US$323 million

      Telecommunications

      5

      Olmos Irrigation Project

      Concession /PPP

      US$222 million

      Irrigation

      6

      Line 1 of the Lima and Callao Metro – Section I and Section 2

      Concession /PPP

       2,866 million sol

      Transport

      7

      Line 2 of the Lima and Callao Metro

      Concession /PPP

      US$5,075 million

      Transport

      Under the new regulation a project was awarded for the construction and operation of a water treatment plant in lake Titicaca with an expected investment of US$350 million.

      Answer contributed by Carlos Arata Delgado from Rubio Leguía Normand

      Last verified on Monday 5th August 2019

    • Peru

      Yes, the Agencia de Promoción de la Inversión Privada (Proinversion), which is an administrative entity, is the one in charge of private investment promotion processes. Its main function is to execute and propose the national private investment promotion policy.

      Answer contributed by Carlos Arata Delgado from Rubio Leguía Normand

      Last verified on Monday 5th August 2019

    • Peru

      It will depend on the type of PPP. Self-sustained PPPs are normally financed using typical project financing structures. In the case of co-financed PPPs, the structure has normally been the securitisation of the payments coming from the government and a revolving credit facility for working capital needs. Payments from the government have normally been tied to construction milestones, not operational milestones. Accordingly, once a milestone is achieved, it is sold as part of the securitisation, so the project company has certain working capital requirements, specially to achieve the first milestone.

      Answer contributed by Carlos Arata Delgado from Rubio Leguía Normand

      Last verified on Monday 5th August 2019

    • Peru

      The most common procurement processes in our jurisdiction are private initiatives and public tenders.

      Private initiatives are procedures initiated by private companies in which they structure and present a project to the corresponding government entities. After this initial phase, if the project is declared of public interest and receives the approval of the Ministry of Economy, a term is initiated for third parties to show interest in the project. After that, the interested third parties can present their technical and economic proposals to operate or execute the project in a public and open bidding contest.

      Public tender differs from private initiative because the studies, structure and promotion of the project come from the government itself. If no third party shows an interest, then the project is awarded to the proponent of the private initiative.

      Answer contributed by Carlos Arata Delgado from Rubio Leguía Normand

      Last verified on Monday 5th August 2019

    • Peru

      One factor that can affect the development of a PPP is political will. In our experience, political will has been a factor that could delay the operation and development of a PPP. In some cases, the government that promoted a specific PPP in its jurisdiction changes after political elections and the successor team of the next government does not share the same political agenda regarding the development or the priority of certain projects. Therefore, there is a chance that the project could suffer some delay. On the plus side, the most important driver for the development of PPP is the amount of natural resources that the country has, such as water, mineral or gas resources.

      Answer contributed by Carlos Arata Delgado from Rubio Leguía Normand

      Last verified on Monday 5th August 2019

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