PUBLIC-PRIVATE PARTNERSHIPS BRIEFS Peru: Port Callao Norte Overview The Port of Callao is the third largest port in South America, the largest port on the west coast of South America, and the largest port in Peru. Peru’s Port of Callao is the main port in the country, accounting for approximately 75 percent of its maritime trade, and is esti- mated to have handled approximately 90 percent of the country’s container volumes and approximately 50 percent of non-container tonnage in 2014. The Port includes two terminals: the South Terminal (containers only) under concession to DP World and the North Terminal (multipurpose) under concession to APM Terminals Callao for 30 years. Growing demand of approximately 12.9 percent compound annual growth rate between 2001 and 2011, expected commercial needs, and other strategic factors led the Government of Peru to enter into these concession agreements with both operators to develop the Port of Callao to international standards. This series showcases how the World Bank Group supports the development and implementation of public-private partnerships. This support comes in the form of public sector loans, private sector finance, sector and transaction advice, guarantees, and output-based aid. PUBLIC-PRIVATE PARTNERSHIPS - MAY 2016 Background APM Terminals Callao is 51 percent owned by APM Terminals B.V., 29 percent owned by Terminal The Port of Callao is the third largest port in South Investment Limited, and 20 percent owned by Central America, the largest port on the west coast of South Portuaria S.A.C. APM Terminals is one of the world’s America, and the largest port in Peru. Peru’s Port of leading container terminal operators with a global Callao is the main port in the country, accounting for network of over 55 facilities in 64 countries and five approximately 75 percent of its maritime trade, and is continents. As of 2012, APMT was serving over 60 estimated to have handled approximately 90 percent shipping lines, and was one of the world’s fastest- of the country’s container volumes and approximately growing terminal operating companies with the 50 percent of non-container tonnage in 2014. largest capacity of any terminal operator in the world. The Port includes two terminals: the South Terminal APM Terminals handled 36.3 million TEUs (based (containers only) under concession to DP World and on equity share) during the twelve months ending the North Terminal (multipurpose) under concession September 30, 2012. During the same period, APM to APM Terminals Callao for 30 years. Growing Terminals generated revenues of $4.7 billion and net demand of approximately 12.9 percent compound income of $726 million. As of September 30, 2012, annual growth rate between 2001 and 2011, expected APM Terminals had total invested capital of $5.2 commercial needs, and other strategic factors led the billion. Government of Peru to enter into these concession agreements with both operators to develop the Port of World Bank Group Role Callao to international standards. IFC mobilized all financing required by the project on a long-term basis. IFC provided a total debt of $267 Project Description million, consisting of a $57.5 million and facilitated a IFC supported APM Terminals Callao in the $209.5 million loan from other lenders—DNB Bank, development of Callao’s North Terminal. The ING, KFW, and FMO. IFC also ensured compliance project consists of stages 1 and 2 required under the with environmental and social standards. concession agreement and is designed to: 1. modernize and expand the terminal’s container Outcomes handling facilities to world class standards, almost • Increases the port’s capacity from 800,000 to 1.2 doubling the port’s capacity to 1.2 million twenty- million TEUs. foot equivalent units (TEUs); and • Supports the government’s privatization objectives 2. improve the efficiency of the terminal’s non- in the port sector. container handling facilities. • Supports Peru’s competitiveness and indirectly drives trade growth by increasing container cargo capacity The project also includes demolishing and rebuilding and improving efficiency levels to better serve exports the terminal’s main container and grain handling and imports. berths, constructing a new container berth to establish • Helps improve efficiency and productivity as well as a new 660 meter container quay, installing new increasing competition, benefitting shippers, shipping container handling equipment, and developing the lines and consumers alike. container yard and supporting infrastructure. The • Benefits the national government with royalties and total project cost is $385 million in construction tax payments. works. Formal completion is expected by mid-2016. • Creates new employment opportunities. The investment is part of a larger five-stage expansion program. Photo Credits Front: Jimohagan/Creative Commons license, creativecommons.org/licenses/by/2.0/ worldbank.org/ppp @WBG_PPP scribd.com/wbg_ppp