Andean Group - June 2015 (ISSN 1741-4466)

FDI down: According to the annual FDI report published by the United Nations Economic Commission for Latin America & the Caribbean (Eclac), FDI inflows to Bolivia fell by 63% in 2014 to US$648m, after two years of very large inflows. The report notes that much of the investment remains destined for the oil and gas sector. In 2014, for example, Venezuela’s state oil firm Petróleos de Venezuela (PDVSA) said it would invest US$200m in a number of exploration and production projects. Outside the natural resources sector, Peru’s Holding Cementero acquired full control of Bolivia’s largest cement maker, Soboce, by purchasing the remaining 51% stake in the company for an estimated US$300m in December 2014. The Eclac report notes that several nationalisations and divestments have taken place in Bolivia in recent years, which “are considered to be negative inflows of FDI, thus leading to a reduction in FDI.” Brazil’s Petrobras and France’s Total divested their stake in the major gas pipeline Transierra for US$ 133m. The buyer, the Bolivian state-owned energy company, Yacimientos Petrolíferos Fiscales Bolivianos (YPFB), now controls a majority of the gas pipeline. The Malku Khota mine was nationalized in 2012 and its former owner (TriMetals Mining of Canada) is seeking US$386m in compensation in an international arbitration court. India’s Jindal Steel and Power was awarded US$22.5m by an international court for its share in the El Mutún project and it is seeking a further US$100m in damages.

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