Peru - Water and Wastewater Peru - Water Resources
Water scarcity is an urgent threat to national welfare in Peru. Approximately 5 million people do not have access to safe drinking water. An estimated 11 million people lack functioning sewage systems and the resulting quality of life is poor. The disparity between urban and rural areas is sobering, even in Lima and Callao where the majority of the population is concentrated, not all waste water is treated. Only 62% of drainage captured by Peru’s main water operator is recycled in treatment plants.
Current water and sanitation services are clearly unsustainable due to insufficient investment, serious economic problems for water operators, lack of state support and inadequate legal regulations. According to the National Plan of Infrastructure, the potable water and sanitation sectors have an infrastructure gap of USD 12,252 million for the period 2016 - 2025. With regard to projects in the same sector, an approximate investment of USD 5,65 billion is expected during the same period. In order to cover the medium-term infrastructure requirements (2016-2020), an additional investment of USD 1,31 billion is necessary. Furthermore, an investment of USD 5,28 billion is required to cover the infrastructure gap in the long term between 2021 - 2025.
The new administration has implemented decrees to improve, reform, and manage this sector. These decrees include: The Framework Law for the Management and Provision of Sanitation Services, the creation of the Safe Water Investment Fund (FIAS), the promotion of regional and local public investment with private sector participation (mainly through Public-Private Partnerships) and the creation of the National System of Multi-Annual Programming and Investment Management. According to the Peruvian Ministry of Housing, the most urgent priorities to address are reinforcing existing water infrastructure and expanding geographic coverage, including improving access to public water and sanitation services. The Vizcarra administration has identified three strategies to reduce the gap—
- Public-Private Partnerships (PPPs)
- Obras por Impuestos Initiative (Work for Taxes)
- Public Investment
The Peruvian government’s foreign investment entity, ProInversión, has allocated 9% of its estimated USD 10.9 billion budget for 2018 - 2020 on the water and sanitation sector alone. Eight water projects are already under development, with an average value of $50 million, awaiting the establishment of a PPP to execute them. For instance, a project to design a solution for the treatment and final disposal of municipal wastewater in the Lake Titicaca basin in Puno was awarded to Mexican firm Fypasa in April 2019. The project is worth USD 254.8 million according to ProInversión and has a concession period of 30 years. It will benefit approximately 1.2 million people living in the ten communities surrounding the lake including Puno, Juliaca, Lampa, and Azángaro.
ProInversión also reports tenders for wastewater treatment projects in Huancayo, Chilca, Tambo, and Puerto Maldonado that were launched in 2018 and 2019, respectively. Desalination projects are also underway in Peru in order to meet the gap for potable water. There are nineteen desalination projects ongoing in coastal Peru. These types of projects invite private-sector foreign investment in the areas of design, engineering, construction, concession for the next 20 – 30 years (depending on the project), and advisory services for the supervision of the entire project. The Peruvian government seeks to award the projects only to a single company or consortium who has the ability to complete the entire project from start to finish. Because of the nature of the projects, opportunities for U.S. firms with expertise in wastewater treatment are abundant. The Peruvian government is amenable to PPPs, seeing them as a way to distribute risk and resources between private and public entities and efficiently develop and maintain infrastructure projects. The participation of the private sector will reduce the infrastructure gap by providing necessary capacities, expertise, and technology transfer in the water sector.
Ministry of Housing, Construction and Sanitation
Av. Paseo de la Republica 3661, San Isidro
Lima – 27, Peru
Tel.: (511) 211-7930
National Water Authority - ANA
Los Petirrojos 355, San Isidro
Lima – 27, Perú
Tel.: (511) 225 8640
National Superintendence of Sanitation – SUNASS
Av. Bernardo Monteagudo 210, Magdalena del Mar
Asociación Para el Fomento de la Infraestructura Nacional - AFIN
Av. Jorge Basadre Nro. 310 Oficina 601-D, San Isidro, Lima 27, Perú
Tel. (511) 441 1000