Peru looks to the UAE for expertise to develop its renewables sector.
Peru minister tells of his country’s energy needs during UAE visit
The International Renewable Energy Agency (Irena), headquartered in Abu Dhabi, will soon have a new member – Peru.
The Latin American country’s minister for energy and mines Jorge Merino was in the UAE capital on Thursday to talk about the possibilities of partnership with the Emirates following the membership. Peru is expected to be officially inducted into Irena within a couple of weeks.
The UAE Energy Minister Suhail Al Mazroui, who met Mr Merino last week, is scheduled to visit Peru in December next year for the United Nations climate change conference being held there.
“One of our main demands is universal energy access, especially for poor people,” Mr Merino said in an interview in Dubai. “The membership will give the opportunity to import technology, and review how to get more generation and application out of renewable energy [resources] to improve [Peru’s energy situation].”
Currently, 5 per cent of the country’s energy needs is met by renewable energy sources such as solar, wind and biomass. But 40 per cent of Peru’s energy needs come from natural gas. It has an estimated 12.7 trillion cubic feet of the resource – the fourth largest reserve in Central and South America.
In 2011, according to the latest data available from US Energy Information Administration, Peru produced 400.83 billion cubic feet of natural gas, and consumed almost half of it. The rest was exported to Spain, South Korea, Japan and North America.
“The UAE can also give added value in gas production and our state companies can facilitate when Dubai companies come to Peru,” Mr Merino said.
With Peru building its hydropower capabilities, investment was needed to be made in that sector as well as in pipelines and gasification sectors, the minister said.
Of the projects under construction in Peru is the US$1.2 billion 406 megawatt Chaglla hydropower plant, being built by a Brazilian subsidiary, and which is expected to come online in 2016. A $600 million 300MW Molloco hydropower project is also under development.
Peru, whose economy is growing at 6 per cent per year, is forecast to see an increase in energy demand of 8 per cent annually.
During his visit Mr Merino met representatives of Abraaj Group, the Dubai-based private equity investor in global growth markets. Abraaj is expected to send experts to Peru next month to scout for investment opportunities.
Under the Peruvian constitution, foreign investors have access to same investment incentives, such as tax exemptions, as domestic investors.
Currently, Abu Dhabi’s sovereign wealth fund International Petroleum Investment Company (Ipic), through its subsidiary Cepsa, has invested around $600 million in three oil wells in Peru and has requested permission to explore two to three more.