Americas > South America > Peru > Latin America facing energy credit crunch

Peru: Latin America facing energy credit crunch

2013/11/10

Latin America's Atlantic nations face a credit vacuum for next energy projects amid rising political and economic uncertainty, according to Peruvian pension fund group Asociación de AFP.

Speaking during the 10th BNamericas Southern Cone Energy Summit in Lima on Thursday, the association's president Luis Valdivieso Montano said lenders had begun to separate the region's key markets.

He cited Colombia, Chile, Peru, Panama and Mexico as nations that are being prioritized by financial institutions.

"The sector is starting to be differentiated," Valdivieso said.

"In general I see a reduction in capital flow towards developing nations. It's a niche market and it's a question of which of those nations will continue to attract financing and which of those won't."

He said Argentina and Venezuela in particular had shunned opportunities for credit increase.

"At the same time as you take away fiscal stimulus like some governments have done, it's difficult for the capital approaching back," he said.

"Some nations are making an effort to increase competitiveness and large investors want that. They don't want to pour money into nations with political interference, instability and great social conflicts.

"I include Brazil in that category. The situation in Venezuela is obviously very difficult and Uruguay is going to have critical problems if it doesn't control inflation. Maybe Trinidad and Tobago is the only country that bucks this trend."

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