English - Service - Host Country Information

You are in the following part of the website:

Schrift:

November 2008

Country Profile Peru

Peru Flag The biggest of the Andean countries, Peru stretches across hot and dry coastal desert, sub-tropical lowlands and highlands and mountain climates among the peaks of the Andes. The Andean republic faces a series of economic, environmental and cultural challenges brought about by climate change: Melting glaciers and the rise in the frequency of severe El Niño events have prompted the Peruvian government to adopt an ambitious renewable energy policy.
With economic growth rising above eight percent in 2007, Peru reflects the good economic macro-climate in the LAC (Latin America and Caribbean) region. Its strong and sustained economic growth for the past seven years implies that large additions to electricity capacity will be needed. The present administration is giving a major push to renewable energies in the country, and a new law has recently been passed for the promotion of investment in renewable energy for electricity generation. Private-sector interest in renewables (other than hydropower, which is a traditional source of energy in the country) is growing. Studies are underway for 27 wind energy facilities which would jointly amount to about 4,500 MW. The large deforested areas in the Amazon and the Andean regions also provide opportunities for afforestation, reforestation and REDD projects. Finally, the institutional setting for managing the CDM in the country is well organised and supportive of project proposals.

There are fears, however, that the present political support for renewables could change. During the Fujimori regime in the 1990s, support was oriented towards natural gas exploitation and hydro development was barred. This experience may make investors cautious since there is the possibility that political whims could quickly change again.

Relations between Peru and the EU have been intensified through cooperation with the LAC, the Andean Community and the Rio Group.

At the end of 2006, German-Peruvian private-sector cooperation was expanded with the signing of a Memorandum of Understanding (MoU). Peru also has MoUs on the CDM with Austria, Canada, Japan and Spain. Agreements with France, Italy and the Netherlands are in the pipeline.

German development cooperation activities are based on an exemplary institutional framework comprising GTZ, KfW, CIM, DEG, InWent and numerous private and public research foundations.

Peru’s CDM project portfolio is highly diversified: The project pipeline contains 32 projects in the energy and forestry sectors. Over half of these are hydro projects. The remainder relate to landfill gas, fossil fuel switch, energy efficiency and biogas distribution. In total, these projects stand to effect annual reductions of around 4 million tCO2e. There is also interest in wind projects.

19 projects are registered so far, ten of them in the period 2007 and 2008. This shows that the hurdles encountered on the road to project implementation – lack of staff at Consejo Nacional del Ambiente (CONAM), Peru’s National Environment Council, political uncertainty and protests by the local population – are starting to fade into the background. Spain in particular has stepped up its activities as an investor country, with three new hydropower projects in 2008.

More than 80 percent of Peru’s electricity is generated by hydropower and eight of the current twelve projects registered in Peru are hydropower projects. Further reduction potential is seen in the use of landfill gas, bioenergy and wind energy.

Peru’s CDM infrastructure is well established, with the National Environment Council (CONAM), which acts as the national DNA, and the National Environmental Fund (Fondo Nacional del Ambiente, or FONAM).

CONAM aims for efficiency and holds ISO 9001 and 14001 certification.
It is intended to serve as a one-stop shop for project investors and is committed to approving projects within as little as 45 days. There is a technical consultative group, the National Climate Change Commission (NCCC), which is chaired by CONAM and eight of whose members come from distinct ministries; there is additionally one representative each from universities and NGOs.

FONAM helps projects through the CDM project cycle by offering free advice in the initial stages of project development, supporting the process of fundraising and financing with national and international financial entities, and undertaking the international promotion of Peruvian projects to potential buyers and investors

While FONAM has been able to achieve moderate success and provide a model for other Latin countries, CONAM has experienced problems related to high staff turnover due to changes in the government’s administration. This lack of continuity means that each person’s knowledge of projects and their history is weak, limiting Peru’s capacity to contribute effectively at international climate change conferences.

Requirements for host country approval

Projects need to be technologically viable, socially and environmentally responsible and must comply with all national, sectoral, regional and local legal prerequisites. Technological viability can be demonstrated by citing successful similar experience in Peru or elsewhere, or by presenting an approved technical feasibility study. Legal compliance can be shown by presenting all necessary authorisations and licences.

An approved Environmental Impact Assessment is required. There are three categories of projects:

Category I implies an environmental impact declaration. It includes projects that will not entail significant environmental impacts.
Category II, demanding a semi-detailed Environmental Impact Assessment (EIA), includes projects that could generate moderate impacts and whose negative impacts could be avoided or minimised through measures easily taken.
Category III includes projects that could lead to significant negative impacts, requiring an in-depth analysis to review those impacts and propose a management strategy.

A project must be accepted by local communities in the areas it affects and must demonstrate this through agreements with the community, social responsibility reports or records of community decisions. CONAM will additionally visit the project area to assess local acceptance and potential environmental impacts.

The standard approval process of the Peruvian DNA is composed of the following steps:

Receiving proposal
Summary preparation
Request of opinion from relevant sectoral authority and from FONAM
Confirmation of an ad-hoc evaluation committee
Visit to project area (to ensure local consultation and assess environmental impacts) and report
Ad hoc committee meeting for evaluation of all reports
Approval response
Support activities

Further information on the approval process can be found (in Spanish) at:
http://www.fonamperu.org/general/mdl/aprobacion.php