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ProInversión: Social sustainability is central to Peru's PPP projects | The New Economy - YouTube
Channel: The New Economy
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The New Economy: Alberto Ñecco Tello from
Peru's private investment promotion agency
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ProInversión has recently completed an international
investment roadshow, seeking to keep Peru
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on its prosperous growth path through PPP
infrastructure projects.
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Peru enjoyed five percent average growth from
2000-2016; what does the country need to sustain
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this development?
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Alberto Ñecco Tello: Firstly I believe we
need to keep doing what we have been doing,
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which is being very constant and committed
to our macroeconomic policies, keeping an
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open market, keeping a friendly environment
for foreign investors.
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And also a very strict and disciplined fiscal
stance.
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Also we need to further develop our infrastructure
in Peru.
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That will help reduce transaction costs and
logistic costs, and therefore increase productivity.
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In that sense we will be able not only to
sustain, but actually even grow at a faster rate.
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The New Economy: Now give me some examples of how you're embedding sustainability into your projects.
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Alberto Ñecco Tello: We're doing that through
two initiatives.
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We are really focused on bringing much more
prepared and complex structures to the market,
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that really serve the market needs.
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We pay really close attention to what the
market is looking for; we keep an open dialogue
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with investors to know exactly what kind of
structures we need to bring to the market
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that will attract investors and bidders.
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All of our projects are worked with a team
of external advisors, and what we found about
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a year ago is that in time we had lost our
capacity to attract the best advisors in the
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market – mostly because we didn't pay much
attention to the rules and the regulations
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around our contracting procedures.
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We have totally changed that; two months ago
I obtained board approval for a new set of
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rules for contracting advisors, and now we
have a much more market-friendly framework
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that will help us attract better advisors,
and therefore also bring best practices to
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our portfolio and our structures.
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And also help train and bring knowledge to
our teams.
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In that sense, better structures should help
us have better sustainability.
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That's on the market side, but on the other
side, we're working very actively with the
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communities on the social side, so that we
have a very clear – or at least, as clear
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as possible – read of what the actual sensitivity
of the population in the communities affected
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by these projects.
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So that we can deal with them properly, or
at least that we can make that information
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available to the bidders, so that they know
what the actual situation is.
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The New Economy: Social and environmental
management as well is core to ProInversión's
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mission, so how does that affect your work,
and the way that you work with your partners?
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Alberto Ñecco Tello: Well, it is central
for us.
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We found that in many projects, most of the
concerns for the investors coming into them
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was social acceptance.
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And, you know: what was the communities...
how were the communities going to be affected
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by the projects?
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So one of the things that we have done recently
is that we have totally changed the way we've
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structured our transaction teams.
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And now every team has one member from our
social team doing the groundwork from the beginning.
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Even before we actually go to the market.
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When we start just doing the preliminary work
on a transaction, we have the social team
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involved with the communities, measuring the
temperature around these projects, so that
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we know what could be the possible problems
with it.
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And that also comes with the environmental,
because usually social and environmental kind
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of go hand in hand.
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Because environmental issues are the ones
that mostly concern the communities.
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So, one of the things that we've found is
that around 95 percent of the issues with
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the communities come from the information
asymmetries.
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So it's not really that the projects per se
will create a negative impact that would create
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social problems.
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But it's mostly the lack of information and
communication that leads to these situations.
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So, having identified the problem, we are
working very intensively on actually bringing
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this information, and having more acceptance,
so projects are more sustainable in time.
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The New Economy: What are investors looking
for when they speak with you, and what are
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you looking for in your investors?
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Alberto Ñecco Tello: Well, investors are
looking for certainty, right?
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I mean they're looking for stable frameworks,
bankable contracts, and structures that will
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allow them to actually deliver the service
and have the returns they are expecting.
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And I believe that's fair – that's what
the market is there for!
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What we expect from investors are a long-term
commitment.
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I mean, PPP projects or asset-based projects
like mining or concession, as I said: they're
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long-term contracts, so they tend to be 20-30
years.
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And we need investors committed on delivering
the services that are required for that period of time.
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Because at the end of the day, the main objective,
the reason why we do this, is to deliver services
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and quality of life to the population.
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The New Economy: Alberto, thank you very much.
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Alberto Ñecco Tello: Thank you.
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We're running our own roadshow with ProInversión:
on World Finance we're discussing the macro
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outlook in Peru and its regulations around
foreign direct investments, while at European
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CEO you can learn more about the projects
in ProInversión’s portfolio.
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Go to proinversion.gob.pe to find out even
more.
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