COFINANCED UNSOLICITED PROPOSAL OF THE SANITATION

SECTOR 2019

Julio Kosaka Harima Viceminister of Construction and Sanitation Ministry of Housing, Construction and Sanitation (MVCS)

CONTENTS I. Diagnosis of the sanitation sector

II. New IPC framework 2.1 Characteristics of the projects 2.2 Objective parameters for assessment

I. DIAGNOSIS OF THE SANITATION SECTOR

DIAGNOSIS OF SANITATION SERVICES 1

With a population of more than 31 million inhabitants, Peru is the fourth most populated country in South America. 77.2% lives in urban areas, while

22.8% lives in rural locations.

3.4 million (11%) Peruvians without access to drinking water and 8.3 (27%) million without sewage

Only 62% of wastewater collected

by Sanitation Services Providers (EPS) enter to the WWTP and do not have a proper treatment.

Services are not sustainable.

INVESTMENT GAP IN SANITATION

There is an important infrastructure gap.

To achieve universal water and sanitation coverage by 2021, a total investment of S/ 49.5 billion is required.

Source: 2017-2021National Investment Plan, MVCS.

2.

Investment area Total S/. Percentage

Partial Total

Expansion of coverage 39,717,172,819 80.1%

Drinking water 5,815,631,950 14.6%

Sewage 26,145,111,816 65.8%

TAR 7,756,429,053 19.5%

Rehabilitation and Upgrading 8,004,673,970 16.2%

Drinking water 4,176,609,563 52.2%

Sewage 3,828,064,407 47.8%

Business Strengthening 1,431,655,404 2.9%

Micro measuring 390,326,139 0.8%

Total 49,543,828,332 100%

GOALS AND STRATEGIES FOR CLOSING GAPS 3.

SANITATION GOALS

Indicator LB-2016 Goal-2021

Coverage of Drinking

Water Service (%)

Coverage of Sewage Service (%)

Wastewater Treatment (%)

Urban*: 94.5

Rural*:71.2

Urban: 100

Rural: 84.6

Urban*: 88.3

Rural*: 24.6

Urban: 100

Rural: 70

Urban**: 68

Rural: S.I

Urban: 100

Rural: 40

(*) Basic information: ENAPRES

(**) Basic information: SUNASS

Source: 2017-2021National Sanitation Plan.MVCS.

STRATEGIES FOR CLOSING GAPS

2

1 Public and Private Associations (APP)

Works for Taxes

3

Public Works (Transfers and Refundable and non-refundable international cooperation)

Goal: Provide services to 100% Peruvians in urban areas by 2021 and 100% Peruvians in rural areas by 2030.

4. PUBLIC - PRIVATE PARTNERSHIPS (PPP)

CHILLON I Optimum use of surface and underground water of Chillon River Chillón Plant Term: 27 years Investment: US$ 57.0 million Flow: 2.0 m3/sec Status: Operating

WWTP TABOADA Term: 25 years Investment: US$148 million (without VAT) Flow: 14 m3/sec Beneficiaries: 4.3 million inhabitants Type of treatment: advanced preliminary Status: Operating since December 2013

LA CHIRA Wastewater Treatment Plant and underwater discharge pipeline Term: 25 years Investment: US$ 79,0 million (without VAT) Flow: 6.3 m3/sec Beneficiaries: 2.6 million inhabitants Type of treatment: advanced preliminary Status: Operating since June 2016 Agreement addenda to extend PTAR Flow: 2.41 m3/sec Investment: US$ 55 million

PROVISUR (Sanitation service provider in

the south districts of Lima) Term: 25 years Flow: 0.18 m3/sec wastewater (reuse for green areas) Flow: 0.40 m3/sec drinking water Investment: US$ 100.0 million Beneficiaries: 100 thousand inhabitants Components: PWTP (Desalinator), networks and upgrading of the 2 WWTP of Santa María and building of one WWTP with tertiary treatment. Status: In progress

Lima

1

3

3

4

SIGNED CONCESSION AGREEMENTS

Contribution of PPPs to the closure of sanitation service gaps

20,74 20,65 21,27

51,25

71,71 75,95

79,72

[VALOR]

-

10,00

20,00

30,00

40,00

50,00

60,00

70,00

80,00

90,00

100,00

2010 2011 2012 2013 2014 2015 2016 2017

Wastewater Treatment (%) Sedapal S.A

WWTP Taboada (Starts operation 04/13)

DWTP La Chira (Starts operation 12/16)

WWTP Taboada [PORCENTAJE] WWTP La Chira

[PORCENTAJE]

Other WWTP Sedapal

[PORCENTAJE]

Share of PPPs in Wastewater Treatment

Source: http://www.sedapal.com.pe/tratamiento-de-aguas-residuales, September 2018.

Source: SUNASS (2010-2016) Sedapal, Annual Memory -2017

4. PUBLIC - PRIVATE PARTNERSHIPS (APP)

PPP PORTFOLIO IN PROGRESS

4. PUBLIC - PRIVATE PARTNERSHIPS (PPP)

SUMMARY:

Project N°: 17 APP projects Investment: S/ 9,000 million Concession term: 20 to 30 years Beneficiaries: 8.5 million inhabitants

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06

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11

13

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04 02

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N° Project Department Stage 1 WWTP Titicaca Puno Transaction

2 Head works Lima Structuring 3 WWTP Tambopata Madre de Dios Structuring

4 WWTP Huancayo Junín Preparation

5 WWTP Trujillo La Libertad Preparation

6 WWTP Tarapoto San Martín Preparation

7 WWTP Huaraz Ancash Preparation 8 WWTP Chincha Ica Preparation 9 WWTP Cajamarca Cajamarca Preparation

10 WWTP Chiclayo Lambayeque Preparation

11 WWTP Cusco- San Jerónimo

Cusco Preparation

12 DWTP Cajamarca Cajamarca Preparation

13 WWTP EPS Cañete Lima Preparation

14 North Lima Desalinator

Lima Preparation

15 South Lima Desalinator

Lima Preparation

16 WWTP North Lima Planning and Scheduling

17 WWTP South Lima Planning and Scheduling

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15

16

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II. NEW IPC FRAMEWORK

SUBMISSION OF COFINANCE UNSOLICITED

PROPOSAL (IPC) OF THE SANITATION

SECTOR 2019

The Ministry of Housing, Construction and Sanitation, by means of Supreme Decree 016-2019-VIVIENDA, established the deadline to submit IPCs for investment projects aimed at sanitation services; in order that private sector companies, interested in these new investment opportunities, submit their proposals to conduct the following projects:

DEADLINE TO SUBMIT PROPOSALS:

From August 05 to September 17, 2019.

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3 4 5

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Desalinator of Ilo WWTP Huancavelica and Andahuaylas

WWTP Huaura WWTP Barranca

WWTP Iquitos Sanitation of native communities of Loreto

Estimated investment: S/ 1,000 Million

2.1. CHARACTERISTICS OF THE PROJECTS

IPC ILO DESALINATOR 1

Content Description

Objective

Creation and/or upgrading and/or expansion of drinking water

treatment services in the city of Ilo and supplementary infrastructure

for the treatment of drinking water supply.

Scope of influence Districts of Ilo and Pacocha

Estimated

investment

amount

S/ 120 million (With VAT)

Income sources Payment of investment: 100% with MVCS resources

Payment for O&M: Through fee collection.

Concession term 20 to 30 years

Current services Average continuity 13.6 hours/day (SUNASS, 2017)

Coverage of 99.65% (SUNASS, 2017)

Reference

parameters of

design

Drinking water flow of the infrastructure to be projected (daily max.

flow): 430 l/sec. Point of Delivery: Water storage structure

proposed in the location of Reservoir R-1 (PTAP Cata Catas)

Design period: 20 years

Minimum Operation and Maintenance period: 20 years

1

Desalinator of Ilo

IPC DWTP HUANCAVELICA AND ANDAHUAYLAS 2

2

2

DWTP Huancavelica

DWTP Andahuaylas

Content Description

Objective Creation and/or upgrading and/or extension of drinking water treatment services in the cities of Andahuaylas and Huancavelica, and supplementary infrastructure for the proper treatment of wastewater.

Scope of

influence Andahuaylas: Districts of Andahuaylas, San Jerónimo and Talavera Huancavelica: Huancavelica and Ascensión

Estimated

investment

amount

S/ 140 million (With VAT)

Income

sources Payment of investment: 100% with MVCS resources Payment for O&M: Through fee collection.

Concession

term 20 to 30 years

Current

services Huancavelica and Andahuaylas: 0% wastewater treatment (SUNASS, 2016)

Reference

parameters

of design

DWTP design flow (average flow): • Huancavelica – Huancavelica: 109 L/sec • Ascensión – Huancavelica: 45 L/sec • Andahuaylas – Andahuaylas: 149 L/sec • San Jerónimo – Andahuaylas: 54 L/sec • Talavera – Andahuaylas: 49 L/sec Design period: 20 years Minimum Operation and Maintenance period: 20 years

IPC DWTP BARRANCA 3

CONTENT DESCRIPTION

Objective Creation and/or upgrading and/or expansion of wastewater treatment services in the urban area of the province of Barranca

Scope of influence Districts of Barranca, Supe, Supe Puerto, Paramonga and Pativilca

Estimated investment

amount S/ 95 million (With VAT)

Income sources Payment of investment: 100% with MVCS resources Payment for O&M: Through fee collection.

Concession term 20 to 30 years

Current services 3.83% wastewater treatment (SUNASS, 2016)

Reference

parameters of design

PTAR design flow (average flow): Barranca: 258 L/sec Supe: 75 L/sec Supe Puerto: 51 L/sec Paramonga: 76 L/sec Pativilca: 62 L/sec Design period: 20 years Minimum Operation and Maintenance period: 20 years

3 DWTP Barranca

IPC DWTP HUAURA 4

Content Description

Objective

Creation and/or upgrading and/or expansion of the wastewater treatment service in the urban area of the province of Huaura, and supplementary infrastructure for the proper wastewater treatment.

Scope of influence Districts of Huacho, Carquín, Hualmay, Végueta, Sayán

Modality Cofunded Private Initiative

Estimated

investment amount S/ 100 million (With VAT)

Income sources Payment of investment: 100% with MVCS resources Payment for O&M: Through fee collection.

Concession term 20 to 30 years

Current services % 0 wastewater treatment (SUNASS, 2016)

Reference

parameters of design

DWTP design flow (average flow): Caleta de Carquín: 32 L/sec Huacho: 271 L/sec Hualmay: 116 L/sec Vegueta: 94 L/sec Sayán: 69 L/sec Design period: 20 years Minimum Operation and Maintenance period: 20 years

4 DWTP Huaura

IPC DWTP IQUITOS 5

CONTENT DESCRIPTION

Objective Upgrading and expansion of sanitary sewage and wastewater treatment services in the city of Iquitos.

Scope of influence Districts of Iquitos, Belén, Punchana and San Juan Bautista

Modality Cofunded Private Initiative

Estimated

investment amount S/ 400 million (With VAT)

Income sources Payment of investment: 100% with MVCS resources Payment for O&M: Through fee collection.

Concession term 20 to 30 years

Current services 0% coverage level of wastewater treatment (SUNASS, 2017) Sewage coverage is up to 54.75%.

Reference

parameters of design

DWTP design flow (average flow): 1196 L/sec Number of household connections of sanitary sewage: 117 818. Design period: 20 years Minimum Operation and Maintenance period: 20 years

5

DWTP Iquitos

IPC RURAL SANITATION OF NATIVE COMMUNITIES 6

CONTENT DESCRIPTION

Objective Creation and/or upgrading and/or expansion of rural basic sanitation services of native communities of the department of Loreto

Scope of influence

Districts of Parinari, El Tigre, Manseriche, Puinahua, Emilio San Martin, Saquena, Alto Tapiche, Soplin – Curinga, Santa Cruz, Jeberos, Pampa Hermosa, Sarayacu, Pebas, De Lagunas, Alto Nanay, Napo, Mazan, Las Amazonas, Pastaza, Morona, Andoas.

Modality S/ 150 million (With VAT)

Estimated investment

amount Annual payment: S/ 15.0 million Period: 10 years

Income sources Payment of investment: 100% with MVCS resources Payment for O&M: 100% with MVCS resources

Concession term 10 to 15 years

Current services 81% of housings do not have quality drinking water (*) More than 50% dispose wastewater to the river, irrigation ditch, canal, or

similar outdoor (*)

Reference parameters

of design

• Coverage of Drinking Water Service, in acknowledged communities of the districts of the area: Higher amount of served people.

• Coverage of Sewage Service and sanitary disposal of excreta in acknowledged communities of the districts of the area: Higher amount of served people.

• Operation and maintenance period: 10 years. • Design period of the drinking water and sanitary sewage system: 20

years.

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Native Communities

*CENSUS-INEI 2017.

2.2. OBJECTIVE PARAMETERS FOR ASSESSMENT

N° PARAMETERS DESCRIPTION

1 Co-financed level of investments Proposals demanding a lower amount of investment to be paid out by the State shall be prioritized.

2 Capacity to generate own resources for the funding of operation and maintenance of treatment services

Proposal with less impact in operation and maintenance fees shall be prioritized (To be funded against annual incomes of the Sanitation Service Providers).

3 The scope of intervention, which shall be limited to the indicated area in the Supreme Decree

Interventions in the urban area of the districts mentioned in the Supreme Decree shall be considered.

4

Contribution in coverage and quality of sanitation services, as part of the gap closing in the sanitation sector.

Iquitos Project: Prioritization of interventions proposing higher sewage coverage levels (expressed as

household connections) and higher quality in wastewater treatment. Huaura, Barranca and Huancavelica – Andahuaylas Project: Prioritization of interventions proposing higher coverage and quality levels in

wastewater treatment. Ilo Project: Prioritization of interventions proposing higher coverage and quality level in the

drinking water service.

5 Intervention shall be limited to wastewater treatment, sanitary sewage and drinking water service, as applicable.

Iquitos Project: Sanitary sewage and wastewater treatment service Huaura, Barranca and Huancavelica – Andahuaylas Project: Wastewater treatment service Ilo Project: Drinking water service

ASSESSMENT PARAMETERS FOR URBAN AREA PROJECTS 1

N° PARAMETERS DESCRIPTION

1 Co-financed level of investments Proposals demanding a lower amount of investment to be paid out by the State shall be prioritized.

2 Capacity to generate own resources for the funding of operation and maintenance of treatment services

Proposals that imply a lower infrastructure operation and maintenance amount shall be prioritized.

3 The scope of intervention, which shall be limited to the indicated area in the Supreme Decree

Interventions that benefit the current and projected scope of the Sanitation Service Provider (Community organization), within each rural community, which shall be authorized and registered by the competent municipality of the 21 districts mentioned in the Supreme Decree.

4 Contribution in coverage and quality of sanitation services, as part of the gap closing in the sanitation sector.

Interventions proposing higher coverage levels (expressed as serviced population), and higher quality in drinking water services and proper sanitary disposal of excreta shall be prioritized.

5 Intervention shall be limited to drinking water, sanitary sewage and sanitary disposal of excreta services

Interventions complying with the project standard in rural areas shall be prioritized, pursuant to current regulations.

ASSESSMENT PARAMETERS FOR NATIVE COMMUNITIES PROPOSALS 2

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