Boston, MA -- (SBWIRE) -- 12/03/2014 -- Total power generation in Peru will grow by an annual average of 6.6% between 2014 and 2023 - the fastest growth rate in South America. The energy-intensive mining sector, a sound business environment and an expanding consumer base will continue to drive economic growth in Peru - and by extension power consumption. The expansion in electricity generation will be provided primarily by new thermal (particularly natural gas) and hydropower capacity, but renewables are gradually starting to gain momentum. Delays in project implementation and security concerns remain the biggest threats to our upbeat growth forecast for power generation and consumption.

Despite the headwinds that have affected the Peruvian economic performance of late, we maintain our positive view for the country's power sector. Our Country Risk team now projects real economic expansion of 3.8% in 2014 and 4.0% in 2015, compared with its previous projections of 4.5% and 5.0% for 2014 and 2015 respectively. Nevertheless, we still forecast that electricity generation in Peru will grow by an annual average of 6.6% between 2014 and 2023 and that power consumption will expand by a strong 5.4% over the same period.

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These trends will create significant investment opportunities in new generating capacity and power transmission and distribution (T&D) infrastructure.

The recent economic slowdown is only a limited downside risk to our view because its causes (weak metals exports and more moderate private fixed investment) do not undermine the main drivers of the Peruvian power sector's growth - an expanding and increasingly affluent urban population and the booming energy-intensive mining sector.

Key Trends And Developments

- Peru's private investment promotion agency, ProInversion, announced recently it will tender a portfolio of energy projects worth more than USD3.2bn, which includes: (i)1,200 megawatt (MW) of hydropower plants,...

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