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Monthly Snapshot- May 2019: Latam Edition

Updated: Jul 8, 2019

Rabobank is now in Peru

Rabobank, one of the main Dutch banks, has started operations in Peru. The bank will be oriented towards the development of the agrifood chain with financial services for both rural and corporate clients.

Their main objective is to support the development of the agro-industrial and food industries in Peru and to provide expertise for clients who wish to launch their businesses in these areas.

When looking for synergies, Rabobank aims to utilize its expertise to share knowledge and support mergers and acquisitions in the country.

The Dutch bank highlights that “Peru has advanced tremendously over the last couple of years and the purpose and commitment of Rabobank is to contribute to the sustainable feeding of more than 9 billion inhabitants that, according to the United Nations, will populate the planet in 2050. It therefore operates in countries that are, or will be, transformed into food powers and without a doubt Peru is moving rapidly in that direction."

The financial statements at the end of 2018 revealed that Rabobank's revenue amounted to 12,020 million euros and its net profit grew by 12% to 3,004 million euros. Moreover, the bank's operations in South America represent 12% of its business.

Santiago de Chile; the ‘smartest’ city in Latin America

The Center for Globalization and Strategy of IESE Business School recently published a ranking of the ‘smartest’ cities in the world and in this year's edition, 26 Latin American cities were included with Santiago is listed as Latin America’s “smartest” city. Buenos Aires (Argentina) comes in at a close second followed by Montevideo (Uruguay) in third place.

The top positions in the list are held mainly by European cities. Over the last two years, London has held on to its No. 1 ranking, with New York taking 2nd place.

In the ranking, positions are assigned on the basis of 96 indicators across nine principal dimensions: human capital, social cohesion, economy, governance, environment, mobility and transportation, urban planning, international outreach and technology.

Latin America, with 26 cities, accounted for 11% of all the cities evaluated, although most were ranked below the 100th position.

According to the study, Santiago has evolved in terms of the provision of better infrastructure and performance on urban planning.

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The Argentine boom in renewable energies

In recent years, the use of renewable energies has increased in Latin America, particularly Argentina.

Argentina at present has 135 renewable energy projects, representing 4.776MV of installed power, with an investment of around USD 7.200 million. The main projects involve wind projects located in the territory of Chubut.

Since 2016, the Renovar program has been implemented to promote the use of renewable energies with 1,679 million dollars invested into building 39 new renewable energy plants which in turn supplies energy to over 900,000 thousand homes.

On the other hand, photovoltaic energy has been heavily promoted in the country and various photovoltaic projects worth more than USD 100 million are being developed in the province of San Juan.

These new projects will be mainly financed by international companies and investors, supplemented by regional governments.

Argentina is definitely the place to be for renewable energy companies, especially since legislation dictates that by 2025, 20% of the country’s energy must be derived from renewable energy.

Colombia looks out for a greater Peruvian investment

On the 27th of May, Peru played host to a Colombian delegation, led by President Iván Duque along with a lineup of private companies and public institutions (including the Peruvian Government).

The Colombian President met with executives of the National Confederation of Private Business Institutions (Confiep) and major companies such as Grupo Gloria, Camposol, Ransa, AGP Glass and Grupo Blanco, among others. The purpose of which is to attract Peruvian investments into Colombia, especially in the areas of agricultural projects, retail, industry, investment funds, logistics, metalworking, manufacturing and tourism.

The delegation also hopes that this visit would encourage further transfer of technology, good working practices and the generation of new jobs.

One of the sectors with the greatest potential for Peruvian investors in Colombia is the horticultural sector, since crops can be harvested throughout the year. This includes sectors such as aquaculture, cocoa, avocado, processed foods, dairy products, rubber, meat, cereals, forestry and assembly of processing plants (pulps and jams).

A Word from our Market Analyst, Katie Vause

This is an exciting time for foreign investors looking to grow their businesses in Latin America, particularly in the agro and environmental industries.

In an article published this month by Forbes, it was determined that Latin America’s Economy is now growing at a faster rate than Asia’s, making it a safer bet for emerging market investors. Barclays Capital predict that Colombia’s GDP will rise from 3.5% to 4%, Argentina’s recession to a 2.2% growth, and amazingly Venezuela’s to 6%.

From new financial investment, such as the Dutch bank Robobank, in Peru, Santiago’s recent status as Latin America’s “smartest” city, Argentina’s goal to ensure that 20% of the country’s energy is renewable by 2025, and significant drives within Colombia for Peruvian investment, we can expect interesting things from the Latin American markets in the coming years.

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