with Jorge Leon Ballen, Executive Director, Proinversion
Peru has ambitions to become energy self-sufficient and to become a regional exporter of energy within the regional plans to integrate the electric grids of S. American countries. What is Proinversion’s vision for the country within these ambitions?
As a mentioned to you before, we are simply an agent of the ministries that determine the future of the country and how its development will take place. In this sense we have a minimal role in determining Peru’s energy future. Nevertheless, I believe that the country is already energy self-sufficient. Perhaps not in terms of hydrocarbons because oil production is lower than it was in the past, but as regards other sources of energy I think Peru is energy independent today. Our hydroelectric power alone could supply all of Brazil’s energy needs, and in fact this is part of the regional plan of electric integration where Peru will supply energy to Brazil at non-peak hours. Peru is already electrically integrated with a part of Ecuador and the idea is to do the same with all of our neighboring countries.
What services does Proinversion offer to companies that are looking to come to establish their operations in Peru?
We offer services to foreign investors at all stages of their operations. At the planning stage, we assist them in identifying the most suitable business opportunities and we provide them with guidance regarding the legislation and legal processes of Peru. Once they have established themselves in the country, we help them in organizing their agenda and establishing contacts for them, also in finding the right partners and service providers that will be essential to their operations. Even further, we work together with the foreign companies to obtain all the necessary permits and registrations that are required of all companies in Peru. We go as far as aiding them in settling their families, recommending the best schools for children of expatriates.
What have been the greatest milestones and achievements of the agency in the last five years?
In the last 18 years, Proinversion has been the primary channel for the development of the country. Peru is a country that is extremely rich in terms of its natural resources, however we recognized that natural wealth is not enough to attract investors and therefore it is necessary to shape the country to provide the adequate context for investments to be attractive and profitable. Similarly, there are countries in the world that have developed themselves without the natural resources that we dispose of, and this made it obvious to us that we have to do a lot more than simply rely on our natural wealth.
To this end the country has been developing its legal environment, fiscal and monetary policies as well as infrastructure and human capital to ensure that we remain competitive for foreign investments. One of the first steps to accomplish this was to minimize the role of the state in providing products and services, and to allow the private sector to become the main provider with higher quality and efficiency. Our legal framework was also restructured so that foreigners in Peru may have the same rights as nationals in terms of business opportunities. As a means to ensure stability for investors the government grants 10 years of constant tax and human resource regulations to any foreign company. In regards to concessions the terms are extended even longer and can reach up to 60 years. With these measures the government effectively took on the role of partner with investors rather than an imposing authority.
Finally, another achievement of our country is the quality of its people. The people of Peru are very hard workers that have had to build this country sometimes in very extreme environments and conditions. This has made Peruvians very persistent and dedicated people, who nonetheless are cordial and have a great sense of customer service.
What is your vision for Peru’s energy sector in the next 5 to 10 years and what will the country have achieved by then?
I think that everything we have done until now is a good start, because Peru’s potential is truly limitless. I think growth and development is inevitable and it may come in a variety of shapes and forms but it is only up to us Peruvians to define what the future will look like. It is up to us to continue the good things that we have accomplished and to improve those that could have been done better. There is still plenty of work to be done to exploit the country’s full potential, such as continue developing infrastructure, enhancing the legal framework and solidifying economic and fiscal discipline. Nonetheless, Peru is already a stable country politically and economically, and it is a country that welcomes foreigners with open arms. Finally, Peru is a generous country that gives back to those that believe in its potential and its future. This is represented by the fact that 60% of Peru’s foreign investment today is in fact re-investment from companies that bet on the country before. Nothing else could demonstrate better the confidence and satisfaction that our foreign investors have for Peru.