The Peruvian energy sector won’t slow down
While countless Peruvian homes were damaged by El Niño, companies in the energy sector seem to have avoided what could have been a financial disaster. These companies took precautions –and have for the last two years– and prevented damages that would have delayed their growth. Unlike the public sector, private energy companies were, without a doubt, smart about their future. Among a sea of bad news for the Peruvian economy, this seems to be a beacon of light.
The CEO of “Red Energía del Perú”, Carlos Mario Caro, not only mentioned the importance of the precautionary measures they took before El Niño struck Peru, but he also reaffirmed the prosperous future of the energy sector: “We have a US$610 million portfolio for this year, but we expect that in three years we will reach a portfolio of US$1.2 billion. That will help to regain trust in the country”. Caro also detailed several interesting projects that the company will carry out during the rest of the year.
Gonzalo Tamayo, Minister of Energy and Mines, before Congress talked about the near future of the energy sector. Not only he detailed the portfolio, which adds up to US$47 billion, but also mentioned a significant increase in the demand for electric power across the country. According to Tamayo, copper production will also increase –a 30% by 2021–, as well as rural electrification.
The statements of Tamayo comes at a time of concerns and doubt about demand in the energy market. Since the economy is taking a hit after the “coastal El Niño”, international organizations –such as the International Monetary Fund– are predicting low GDP growth for Peru. The natural consequence of growth slowdown would be a decrease in demand. In fact, Jorge Tudela –Senior Analyst at Credicorp Capital– argued that the energy sector, due to the slowdown, won’t have it that easy: “We will see smaller margins […] the demand for energy will be slower, because it goes in line with GDP […].”
It appears that the Peruvian government is following the advice of national and international analysts who have said that the country, after the disaster, has the opportunity to rebuild its infrastructure and, with it, the economy. Will the energy sector be at the forefront of Peru’s reconstruction?
LatinAmerican Post | Juan Sebastián Torres
