Latin America: European firms circle USD 1.1bn in Peru water projects

21 February 2018 - 12:00 am UTC

At least four European firms are finalizing USD 1.1bn in proposals for 15 wastewater treatment projects tabled by the Peruvian government, sources said.

The Ministry of Construction, Housing and Sanitation (MVCS) is evaluating the proposals, and will decide which ones are of interest before the end of March, the sources said. Investment agency ProInversión will run the resulting tenders, launching up to three projects in 2018 and another three in 2019, it is understood.

Sources said the proponents include: 

  • Veolia (France)
  • Ferrovial (Spain)
  • FCC Aqualia (Spain)
  • GS Inima (Spain)

ACS (Spain) has previously submitted proposals but it is unclear whether its proposals are still in the running. Acciona (Spain) has previously submitted proposals, some of which have been rejected.

The firms are presenting their proposals, in some cases offering multiple options for the same project since there is no limit on how many any single firm may put forward.

Once MVCS declares a proposal as being of interest, further firms will have 90 days to offer alternative proposals or express interest in those projects. If none come forward, the project will go to the winning proponent.

These projects are part of the government’s push to improve water infrastructure, which has been heavily damaged by El Niño weather effects in recent years. MVCS secured legislation to support private water initiatives in May 2017, following approval by the Supreme Court. 

Below is a list of the projects.

Project

Department

Province

City

Project Capex (Peruvian Soles)

Project Capex (USDm at exchange rate as of 15.9.17)

Financing Method

Wastewater treatment plant

Cusco

Cusco

Cusco

200,000,000

61.1m

Co-financed Private Initiative(IPC)

Wastewater treatment plant

Cajamarca

Cajamarca

Cajamarca

380,000,000

116.1m

Co-financed Private Initiative(IPC)

Wastewater treatment plant

Ica

Chincha

Chincha Alta

Chinca Baja

170,000,000

51.9m

Co-financed Private Initiative(IPC)

Wastewater treatment plant

Lambayeque

Chiclayo

Chiclayo

200,000,000

61.1m

Co-financed Private Initiative(IPC)

Wastewater treatment plant

Ancash

Huaraz

Huaraz

110,000,000

33.6m

Co-financed Private Initiative(IPC)

Wastewater treatment plant

San Martín

San Martín

Tarapoto

145,000,000

44.3m

Co-financed Private Initiative(IPC)

Wastewater treatment plant

Lima

Huacho

Huacho

80,000,000

24.4m

Co-financed Private Initiative(IPC)

Wastewater treatment plant

Lima

Barranca

Barranca

80,000,000

24.4m

Co-financed Private Initiative(IPC)

Wastewater treatment plant

Lima

Canete

Canete

150,000,000

45.8m

Co-financed Private Initiative(IPC)

Wastewater treatment plant

Amazonas

Bagua

Bagua Chica

70,000,000

21.4m

Co-financed Private Initiative(IPC)

Wastewater treatment plant

La Libertad

Trujillo

Trujillo Metropolitano

600,000,000

183.3m

Co-financed Private Initiative(IPC)

Additional projects

 

 

 

 

 

 

Wastewater treatment plant

Junín

Huancayo

Huancayo

 

86m

Co-financed Private Initiative(IPC)

Wastewater treatment plant

Puno

Puno

Puno

 

57m

 

Wastewater treatment plant

Piura

Sullana

Sullana

 

253.4m

Co-financed governmental initiative

Wastewater treatment plant

Madre de Díos

Tambopata

Puerto Maldonado

 

80m

Co-financed governmental initiative

 

 

 

Total (USD)m

 

1,143m

 

Details on how the projects may be financed are here.

Although MVCS has yet to select any projects, two appeared on ProInversión’s autumn 2017 wish list for 2019-2020: Puerto Maldonado and Sullana.

Last year, officials stated that they would prioritize Huancayo and Puno. 

A source at FCC Aqualia confirmed the firm’s involvement. Veolia and ACS could not be reached for comment. Sources at Ferrovial did not respond to requests for comment. Acciona and GS Inima declined comment. 

Spanish developers active in regional water

Many Spanish groups are well established in the Latin American water sector. GS Inima is the most active, with two assets in Mexico, and six in Brazil including wastewater treatment plants and desalination plants.

Acciona holds two direct investments – one in Mexico and one in Peru. For its part, FCC owns two Mexican aqueducts.

ACS and its subsidiary Tedagua were behind Provisur (Southern Lima Districts Sanitation), a USD 98.2m project involving desalination and drinking water that reached financial close in 2014. 

Tedagua was also behind the USD 310m water treatment plant in Taboada – a district of Lima – which has been in operation since 2013.

Ferrovial meanwhile is a pre-qualified proponent for the USD 600m Lima Water Provision project, (known as Obras de Cabecera).

 

MVCS