Paraguay’s culture minister, Mabel Causarano, says her government is looking for investors to finance the transformation of the historic centre of the country’s capital, Asuncion, within the next few years.

Ms Causarano told investors at this year’s Latin American Investment Forum in London on June 15 that the government wants to redevelop a three-square-kilometre site beside the Paraguay River in the city centre, including 600,000 square metres for residential, retail and commercial use.

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The project includes developing the port; building a tram system and a new bus terminal; cleaning up part of the river; and refurbishing historic buildings that have fallen into disuse or that were left abandoned.

“This is an important project for Asuncion,” says Ms Causarano. “Within two or three years, the area will be totally transformed. Investors need to know that Paraguay has an excellent rule of law and that they should get good returns on their investment.”

Strength in services

Ms Causarano represented the government at the conference in London because the project – which involves a public-private partnership (PPP) – has a strong cultural dimension. The regenerated pedestrianised area will include substantial green spaces, tree-lined walkways, restaurants and theatres. The project also includes a $6m investment in a museum of national art.

Paraguay is continuing to attract large sums in FDI, says Ms Causarano. According to the latest figures from the country’s central bank, it attracted $325m in 2013, and the total stock of FDI reached $4.92bn that year. The US is the biggest investor in Paraguay, with accumulated investments of $2.09bn or 40% of the total, followed by the Mercosur countries, with total stock of $1.4bn.

The services sector attracted the most investment, with an overall total of $3.29bn, followed by industrial sectors at $1.3bn and the primary sector at $316m.

“The country wants to become even stronger in the services sector,” says Mr Causarano. “We would also like to become an important centre for manufacturing outsourcing in the region. Our goal is to move higher up the pyramid for manufacturing outsourcing and supply more value-added goods.”

Energy overflow

The Itaipu Dam – opened in 1985 and located on the Parana River on the border between Paraguay and Brazil – is the second largest operating hydroelectric facility in the world. In 2014, it generated 87.8 terabit hours of energy, far exceeding Paraguay’s needs (most of the energy is destined for São Paulo and Rio de Janeiro in Brazil).

“We don’t want to just be an energy exporter,” says Ms Causarano. “Electricity costs are low in Paraguay and we want to develop more energy-intensive industries; we would like to add value through the use of electricity.”

Paraguay aims to invest $1bn in infrastructure during the next few years. It would also like to expand its network of asphalted roads from 5500km to 7500km within the next four years. Under a PPP framework, the government plans to lengthen the 300km highway that connects Asuncion with Ciudad del Este, the country’s second-biggest city. This will require a total investment of more than $400m.

The government also wants to modernise Silvio Pettirossi International Airport in Asuncion. This includes building a new terminal and will require an investment of at least $150m. Paraguay is also expected to put out to tender this year a $425m project to construct a wastewater system for the regions of Lambaré, Luque and Mariano Roque Alonso, which would benefit 2 million people.