Interview: Yamila Osorio Delgad

What specific steps are needed to develop geothermal energy in Arequipa?

YAMILA OSORIO DELGAD: It is too early to gauge the prospects of geothermal, however, we have identified areas in Cayoma with potential. Studies are under way to determine the feasibility of producing geothermal energy in Arequipa. The Ministry of Energy and Mines has already awarded concessions, and the firms are at the stage of establishing relationships with the local communities, under the guidance of the Regional Government of Arequipa.

How far would decentralising the investment authorities grow foreign direct investment inflows?

OSORIO: The central government’s private investment promotion agency, ProInversión, has been successful at enhancing synergies with the private sector. However, the number of public-private partnership projects in the pipeline has prompted a call for the decentralisation of ProInversión. The Ministry of Economy and Finance has suggested opening offices in regions across the country. However, this would not be enough to enhance the speed at which projects are awarded and completed. Efforts should go further by decentralising ProInversión’s decision committees and creating a committee for every macroregion – North, South, East, Centre and Lima. This would help the government respond to the needs of each macroregion more efficiently. What is clear is that decentralisation should not solely consist of opening offices in the various regions, but in giving those offices the capacity to determine a pipeline of projects and award those projects without having to go through Lima. Under the current circumstances, each governor should focus on developing projects that can be self-financed.

Which sectors are high priority when it comes to bridging Arequipa’s infrastructure gap?

OSORIO: The pipeline of projects in the Arequipa Region includes 27 projects that will require investments of $2bn. To bridge this gap, the regional government has prioritised infrastructure projects in transport and health followed by projects in education. In fact, it has already invested around PEN200m ($59.3m) to connect interprovincial roads and modernise roads in the city of Arequipa. Furthermore, the regional government has also invested PEN200m ($59.3m) and PEN110m ($32.6m) in health and education infrastructure, respectively.

What are the regional government’s plans to improve connectivity with other regions?

OSORIO: The Ministry of Transport and Communications has approved a project to expand the Rodríguez Ballón International Airport in Arequipa for $200m, which involves adding a runway. This will increase the number of daily flights and airlines that fly to Arequipa. Currently the airport receives more than 20 flights per day. It will also enable the establishment of more interregional lines connecting Arequipa to other parts of the country without the need to fly through Lima. In terms of roads, the country’s south is already well connected thanks to the Costanera highway, which connects Arequipa, Moquegua and Tacna. In addition, the ministry has approved a project to improve this road through a concession.

How far is Arequipa’s economy diversifying, and which sectors hold the most potential?

OSORIO: The region is committed to diversifying its economy, mainly through the agro-industrial sector. The economy of both the country and the region has been highly dependent on mining, to the point that low mining prices have had an impact on public investments, since much of the regional government’s budget comes from royalties paid by mining outfits. In this context, the 38,500 ha Majes-Sigüas irrigation project is expected to enhance agriculture exports to minimise the region’s dependence on mining exports.