PERU: Technical support to Proinversion for structuring of competitive selection and contracting of PPPs

Peru is one of the more mature markets regarding the implementation of PPPs for infrastructure financing and development in Latin America. In the past 10 years, Peru has launched 63 tender processes via the PPP model, and it’s expected that this procurement method will continue to be a mainstay in Peru, particularly due to the COVID-19 pandemic and an ever-widening gap in infrastructure needs. This is evidenced within the recently published National Infrastructure Plan for Competitiveness, where many of the identified priority projects are being implemented using PPPs. 
Since its introduction in 2008, Peru’s PPP regulatory framework has improved significantly due primarily to the addition of recent amendments aimed at establishing and strengthening Peru’s various PPP institutions. Notable amendments have included the creation of the National System for Private Investment Promotion (SNPIP), an ecosystem of institutions involved in PPP development. Further pertinent additions have mandated coordination between the Investment Committee and Peru’s Private Promotion and Structuring Agency, ProInversión.
Despite Peru’s extensive experience and continued effort to strengthen its PPP program, the credibility of the program has suffered in the past years due primarily to the longer-than-average period of taking projects to market. Consequently, ProInversión has suggested the need for strengthening project management as well as addressing delays and loss of value-for-money due to poor project preparation and risk allocation.
Previous World Bank engagements reviewed Peru’s PPP program with the aim of outlining an agenda for further improving the results obtained via the PPP model. Outputs of this intervention included a “Road-map to Relaunch PPPs and Infrastructure Financing in Peru.” Owing to the findings of this report, Peru’s Ministry of Economy and Finance requested further support from the World Bank to conduct a high-level assessment of ProInversión and provide support to the agency. 
Accordingly, PPIAF funded and implemented this support by performing a review of ProInversión’s portfolio that allowed for the development of a set of recommendations in the following five categories: upstream framework, bidding evaluation, risk allocation, environment and sustainability principles, and available government resources. PPIAF support also included the improvement of project management processes resulting in the recalibration of timelines within ProInversión’s project pipeline. Additionally, updated terms of reference for use by line ministries and associated project management offices were drafted to better reflect international best practices and private sector feedback. The results of the intervention were recently adopted in amendments to the existing PPP law as well as complementary regulation that will enhance capacity across different ministries to accelerate the ambitious PPP program.
It is expected that the implementation of these results will greatly enhance the management and timely delivery of PPPs throughout their lifecycle, which will be critical in helping Peru meet its ambitious infrastructure plan. This is especially true in the context of one of the most fiscally constrained periods for Peru in the last decades and in the current scenario of expected climate change impacts on infrastructure. The results of this assistance will greatly aid in mobilizing private capital for infrastructure expansion via the acceleration of PPP program development and implementation, thereby increasing the growth and competitiveness of Peru’s economy. 

Approved date2020-06-28
SectorMulti-sector (i.e. for infrastructure in general)
RegionLatin America & Caribbean

Related resources

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PPP Support to Proinversión: Diagnosis and Recommendations Report