Peru’s Energy business environment

Economical progress

Perú is considered an upper middle-income country in South America. Its estimated population is 33.7 million people (2023) and it grows at a rate of 1% per year (1). Country´s economical output for year 2023 was 268 billion USD at current prices and counted as Gross Domestic Product (2). Peruvian economy would grow 3% per year on average between the period of 2024-2027 (3). Peru´s investment grade ratings for its long-term debt in foreign currency, as of June 2024 are as follows, S&P : BBB(-) ; Fitch: BBB ; Moody´s: Baaa 1.

“Macroeconomic stability, trade openness, and a favorable international environment allowed the country to become an upper middle-income economy, with per capita income rising from US$ 2040 in 2002 to US$ 7126 in 2022. Peru's economic strategy, characterized by sound prudent macroeconomic policies, has resulted in low public debt, substantial international reserves, and a central bank that is widely regarded as reliable. Moreover, the Peruvian financial system is robust, with sufficient capital to weather potential liquidity crises.“

https://www.worldbank.org/en/country/peru/overview>

Official currency in Perú is the SOL (PEN S/.). There is a free-floating exchange rate regime and the currency exhibits low volatility against US Dollar. Perú has a legal framework to promote foreign investment with specific considerations regarding free market, non-discrimination and equal opportunity, mergers and acquisitions and foregn exchange among others.

Country´s economy is opened to the world and seeks to be competitive in its foreign trade of goods and services. In this regard it has signed an increasing number of free trade and economic integration agreements as well as bilateral investment treaties with significant countries.

It is currently taking necessary steps to become a member of the group of countries that belong to the Organization for Economic Cooperation and Development-OECD.

Energy facts

Perú´s energy mix changed significantly during the last 20 years due to increasing natural gas use from Camisea Gas project development which includes an export LNG producing plant whose owner is Perú LNG company.

The country has several hydrocarbon basins in both on-shore and off-shore areas yet to be explored.

Moreover, there are specific regions within the country where favourable conditions exist to develop wind and solar farm projects.

Energy investments

PERUPETRO is the official agency with the role of promoting, negotiating and contracting hydrocarbon exploration and development activities through call for bids and investment agreements.

The country is also supporting the development of its wind and solar energy sources to diversify its non-fossil options in its energy mix that currently includes Hydroelectric energy.

Sources of Information:

(1)Instituto Nacional de Estadística e Información.

(2) World Economic Outlook for April 2024. International Monetary Fund

(3) Ministerio de Economía y Finanzas