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BMI View: Peru has a significant infrastructure deficit spanning across the transport, energy and
residential sectors which will ensure that demand for new projects remains high over the coming years,
indicating potential investment opportunities for a broad range of construction contractors. Headwinds to
growth for the construction sector include a lack of capacity from domestic firms, concerns surrounding the
transparency and timely implementation of public tenders and lack of access to adequate financing, which
all contributed to a construction value contraction in 2015. While we expect to see a small recovery in
2016, challenges to the infrastructure market remain significant, and, based on the current project pipeline,
growth will remain subdued.
? Official construction industry values for 2015 have come in as forecast, with an overall decline in value
of 5.87% over the year. We have made a downwards revision to our forecasts for growth in 2016, to
2.62%, based on delays to key projects, while the outlook for the remainder of the forecast period is more
positive, with overall construction value growth averaging 3.11% between 2017 and 2025.
? The transport sector will prove the outperformer in Peru's construction market in 2016, growing by
7.04%. A number of projects are progressing, including the Red Vial 5 highway project, between Huacho
and Pativilca, which is due to be completed in early 2017 (almost a year later than originally planned).
? The election of Pedro Pablo Kuczynski in June 2016 is a positive indicator for Peru's infrastructure
sector, particularly the much delayed USD7.3bn Southern Peruvian Gas Pipeline project, which now
appears to be regaining traction after embattled Brazilian construction firm Odebrecht exited the project.
The new President has come out in strong support of the pipeline, and will have rapid access to the
required funds - including a USD7.9bn 'rainy day fund' and USD2.5bn in contingency loans from the