Peru - Country Commercial Guide
Selling to the Public Sector

Describes how major projects are secured and financed. Explains activities of the multilateral development banks in and other aid-funded projects.

Last published date: 2021-10-08

When selling to the Peruvian government, interested suppliers must participate in a tender process, in which registration with the National Registry of Suppliers (Registro Nacional de Proveedores, or RNP) is necessary. The RNP includes the following categories:

  • suppliers of goods
  • services
  • goods and services
  • construction firms
  • construction consultants

To register, a company must follow several steps, including a fee of approximately $80 for non-domiciled foreign suppliers of goods and/or services, or approximately $150 for non-domiciled foreign consultants. Companies must appoint local legal representation registered with the Peruvian Public Registry and are required to provide proof of incorporation demonstrating the company’s legal status, duly apostilled. The documents need to be translated into Spanish by an official Peruvian interpreter.

Peruvian law allows an independent distributor to pay commissions or fees to third parties in connection with sales to the government. For example, a company in Peru can purchase products from a company in the United States and then pay a third-party fee to resell them to the Peruvian government. There are no Peruvian restrictions on commissions or mark-ups on sales to the government by either agents or distributors, and the rates vary depending on product, client, and competition.

Government agencies must announce tender notices for all major purchases in their official publications, and at times, in the main local newspapers. Peru is not a signatory to the WTO Agreement on Government Procurement; however, the PTPA includes a chapter on Government Procurement (“Contratacion Pública” in Spanish). In spite of the PTPA’s stipulations, selling to government agencies remains problematic.

A legislative decree issued in September 2018 (DL 1444) modified the public procurement law to allow government agencies to use G2G agreements to facilitate procurement processes. The GOP sees this G2G procurement model as a method for expediting priority infrastructure projects in a manner that is more transparent and less susceptible to corruption. The USG, however, does not have a mechanism to support Peru’s G2G contracts and the U.S. Embassy has raised concerns with the GOP that its use limits U.S. firms’ participation in infrastructure solicitations. Peru expanded the use of G2G agreements in 2020 to include large infrastructure projects including a $1.6 billion general reconstruction initiative (related to damages caused by the El Nino event of 2017) and a $5 billion Lima metro line project. U.S. companies are able to compete as member of another third country’s consortium.

Project Financing

Since the market reforms of the early 1990s, the private sector has implemented nearly all major infrastructure projects, though sometimes in a PPP arrangement with the government. Foreign companies have undertaken large projects with financing obtained in their countries of registration, from multilateral development banks, and/or from local lenders. In recent years, due to the Central Bank limit on the amount that Peruvian pension funds can invest abroad, there has been intense local competition for lending, interest rates have fallen below those in New York and London for creditworthy companies, and local banks have increased their sophistication. The number of projects totally or partly locally financed has grown since 1999. The three major banks involved in this area are Banco de Credito del Peru, Banco BBVA-Continental, and Citibank. Some projects, such as the Camisea natural gas pipeline, have been partly financed by multilateral development banks, including the IDB, World Bank, and Andean Finance Corporation (CAF). Some projects have been structured with simultaneous or subsequent financing from the local capital market (e.g., corporate bonds).

A wide variety of sources of project financing are available in Peru, both from the United States and international organizations. The U.S. International Development Finance Corporation (DFC), Export-Import Bank of the United States (EXIM), and the U.S. Trade and Development Agency (USTDA) have all been involved in private sector projects in Peru. The International Finance Corporation (IFC), the Multi-Lateral Investment Guaranty Agency (MIGA), the World Bank and the Inter-American Development Bank are all active players in project finance in Peru.

U.S. International Development Finance Corporation (DFC)

The DFC is an independent agency of the U.S. Government that provides financing for private development projects. It was created by the Better Utilization of Investments Leading to Development (BUILD) Act of 2018, which consolidated the Overseas Private Investment Corporation (OPIC) and Development Credit Authority (DCA) of the United States Agency for International Development. In addition to OPIC and DCA’s existing capabilities, DFC is equipped with a more than doubled investment cap of $60 billion and new financial tools including medium to long-term financing and political risk insurance. Peru is a member of the Multilateral Investment Guarantee Agency.

Export-Import Bank of the United States - EXIM Bank

The Export-Import Bank of the United States offers loans and loan guarantees to U.S. exporters of goods and services and foreign purchasers. The EXIM Bank also provides credit insurance to U.S. businesses against non-payment by foreign buyers in the case of political or commercial risk, with a focus on short-term risk. This protects against losses due to nonpayment.

Length:              Short term (less than 1 year) and Medium-term (1-7 years)

Amount:            For medium-term, less than $25 million

Coverage:          Short-term (up to 95% for most products and up to 98% for bulk agriculture) Medium-term (up to 85% of contract)

Other Programs

In 1991 the Peruvian Congress ratified the convention establishing the Multilateral Investment Guarantee Agency (MIGA) of the World Bank. Important investments, mainly of the mining and financials sectors, are covered by the MIGA. Peru has concluded agreements for the promotion and protection of investments with more than 20 countries of Europe, Asia, and America. Negotiations to conclude these agreements with 23 more countries are underway. Peru also joined China’s “Belt and Road” in June 2019.

Financing Web Resources

Trade Finance Guide: A Quick Reference for U.S. Exporters, published by the International Trade Administration’s Industry & Analysis team

Export-Import Bank of the United States (Ex-Im Bank)

811 Vermont Avenue, N.W., Washington D.C. 20571

Tel.: Toll Free (800) 565-EXIM (3946), Business Development (202) 565-3900

Email: https://www.exim.gov/contact

Xiomara Creque, Acting Regional Director-Americas

Email: Xiomara.creque@exim.gov

Tel.: (202) 565-3477  

 

U.S. International Development Finance Corporation (DFC)

1100 New York Avenue, NW, Washington, DC 20527

info@dfc.gov

+1 (202) 336-8400

 

For the Western Hemisphere:

Jessica Bedoya Herman: Jessica.BedoyaHermann@dfc.gov,

Sabrina Teichman: Sabrina.Teichman@dfc.gov

SBA’s Office of International Trade

USDA Commodity Credit Corporation

U.S. Agency for International Development

Inter-American Development Bank

The World Bank Group