Cusco: Haven for Investors Amid Climate Change and Water Stress

Climate change and water stress are shaping up to be two of the greatest challenges humanity will face in the coming decades. Rising temperatures, water scarcity, and the intensification of extreme weather events threaten to reshape the global map, significantly impacting the economy, health, and food security.

In light of this scenario, investors are constantly seeking to anticipate the effects of climate change and water stress. Their aim: to identify investment havens—places that, due to their geographical, climatic, and socioeconomic characteristics, are less vulnerable to these phenomena and offer greater stability and security for their capital.

Latin America, with its diverse landscapes and natural resources, emerges as a region with great investment potential. Within Latin America, the Cusco region and southern Peru stand out as excellent destinations for living and investing in the coming decades. This region boasts unique strengths that make it a refuge for investors facing climate change and water stress.

The Strengths of Cusco and Southern Peru as a refuge for investors

Temperate and Stable Climate

Cusco enjoys a temperate and stable climate throughout the year, with average temperatures ranging between 12°C and 20°C. This makes it an attractive option for those seeking to escape the increasingly frequent climate extremes found in other parts of the world.

Temperate and stable climates show lower vulnerability to climate change and water stress, according to various indicators:

Less impact from heatwaves: In these areas, heatwaves are less intense and prolonged, reducing the risk of heat-related illnesses such as dehydration and heat strokes. Lower risk of droughts: Temperate climates tend to receive more regular and abundant rainfall, decreasing the risk of severe droughts and their negative impacts on agriculture, food security, and access to clean water. Fewer extreme weather events: These areas are less prone to extreme weather events such as hurricanes, typhoons, floods, and landslides, reducing the risk of damage to infrastructure, crops, and homes. Greater water availability: Temperate climates usually have greater availability of freshwater, essential for agriculture, industry, and human consumption, compared to arid or semi-arid regions. Agricultural adaptability: Agriculture in temperate climates is more adaptable to temperature and precipitation variations, allowing farmers to cultivate a variety of crops and adjust to new climate conditions more easily.

Water Abundance

Cusco and the southern region of Peru are endowed with abundant water resources, thanks to the Andes Mountains and its glaciers. This gives them a significant advantage over other regions facing water scarcity. The abundance of water in this area is evident through various factors:

Rich water resources: The region boasts a diversity of water sources, including impressive rivers like the Urubamba, Apurímac, Mantaro, and Vilcanota, along with the largest concentration of tropical glaciers in the world, and numerous lakes and lagoons like Titicaca and Umayo. These resources make it a treasure trove for freshwater supply.

Significant precipitation: Southern Peru experiences an average annual precipitation ranging between 500 and 1,500 mm, while the Cusco region receives around 1,000 mm of rainfall annually. This abundant rainfall, especially during the rainy season, is complemented by the presence of microclimates, which contribute to a more equitable distribution of this resource.

Water use efficiency: The region has adopted efficient agricultural and technological practices to maximize water use. This includes the implementation of modern irrigation systems like drip and spray irrigation, as well as the cultivation of crops adapted to conditions of lower water availability.

Integrated water management: A robust legal and institutional framework, led by entities like the National Water Authority and the Boards of Irrigation and Drinking Water Administration, promotes holistic water resource management. Specific plans and programs, such as the National Water Resources Plan and the National Climate Change Strategy, ensure the availability and quality of water. These measures reflect the region’s commitment to conservation and sustainable water management, establishing it as a role model in addressing water scarcity concerns.

Natural Wealth

Cusco and southern Peru are home to remarkable biodiversity, with a variety of landscapes and ecosystems. This makes it an ideal destination for those seeking to enjoy nature and embrace a more sustainable lifestyle. Moreover, this natural wealth acts as a shield against water stress for the decades to come.

The region harbors a wide diversity of plant and animal species, many of them endemic and unique in the world. From mountain forests to high Andean ecosystems, the region offers a variety of habitats that support a rich biodiversity.

Furthermore, southern Peru is renowned for its significant mineral deposits, such as gold, silver, copper, and zinc. Mining has been a significant economic activity in the region for centuries.

Vibrant cultural scene

The rich culture of southern Peru and Cusco not only enriches the region intrinsically but also offers a host of benefits for investors looking to establish themselves and reside in this area. Beyond economic and climatic considerations, the cultural diversity of this zone provides a unique and enriching experience for those seeking an authentic lifestyle rooted in ancestral traditions.

The region is a melting pot of diverse cultures, ranging from ancient indigenous Quechua and Aymara communities to Spanish colonial influence and the presence of Afro-descendant communities. This cultural blend offers investors the opportunity to immerse themselves in a unique multicultural environment, where they can learn about and appreciate local traditions.

Furthermore, the region’s cuisine is another standout feature that provides an exceptional culinary experience. Those who choose not only to invest but also to live in this region will have the opportunity to enjoy a wide variety of indigenous dishes made with fresh, traditional ingredients that reflect the rich culinary heritage of southern Peru and Cusco.

Affordable cost of living

The cost of living in Cusco and southern Peru is relatively low compared to other cities in Latin America and the world. This makes it an attractive option for those seeking a place to live comfortably without spending too much.

The cost of living is significantly lower than in Europe, the USA, and other regions of Latin America. Overall, the cost of living in southern Peru is approximately 50% lower than in Europe, 60% lower than in the USA, and 30% lower than in other cities in Latin America. This means that investors and expatriates can enjoy a comfortable and affordable lifestyle without sacrificing quality of life.

Guaranteed safety

Living in Cusco is a choice that guarantees a safe and tranquil environment, backed by data and distinctive features that position it as a reliable destination in terms of security.

Low crime rates: Compared to major cities in Europe, North America, and Latin America, crime rates in Cusco and southern Peru are significantly lower. According to data from the INEI (National Institute of Statistics and Informatics of Peru) in 2022, the homicide rate in Cusco was 3.8 per 100,000 inhabitants, significantly lower than cities like Lima, Madrid, New York, and Buenos Aires, where rates exceed 5.6 homicides per 100,000 inhabitants.

Active police presence: The region boasts a strong police presence, especially in tourist and commercial areas, ensuring crime prevention and the safety of residents and visitors. The police conduct constant patrols and crime prevention programs to maintain a safe and secure environment.

Peaceful social climate: Cusco is known for their tranquil and hospitable atmosphere. The hospitality of the local people is a distinctive feature, offering a warm welcome to visitors and contributing to a sense of security and comfort in the region.

Investment Opportunities in Cusco and Southern Peru

The region offers diverse investment opportunities in sectors such as tourism, agriculture, renewable energy, and mining, making it an attractive destination for investors looking to diversify their portfolio and achieve attractive returns.

The outlook for investors betting on Cusco and Southern Peru at this time is highly positive, supported by a series of factors pointing towards sustained economic growth in the region.

In the tourism sector, a complete post-pandemic recovery is anticipated, with emerging destinations like the Sacred Valley and Choquequirao diversifying the offerings and attracting more visitors.

Agriculture also presents considerable potential, with fertile lands and access to water, translating into increased investment and food production.

Moreover, the region’s mineral wealth, including resources like copper, gold, and zinc, coupled with the growing global demand, promotes an encouraging outlook for mining in the area.

Additionally, government investments in infrastructure, such as roads and airports, will enhance connectivity and facilitate access to markets.

Finally, the potential for renewable energies, such as solar, wind, and hydro, promises a sustainable and competitive future for the region, with projected increases in investment in this sector in the coming years.

At F2F CUSCO, we specialize in advising investments for both individuals and companies interested in Cusco and Peru in general. Our team of experts covers various sectors, from the housing market to hospitality and mining, offering a wide range of options for those looking to invest or settle in this region. We are committed to ensuring security in all transactions, providing reliable and transparent service to our clients.

For investors seeking a safe, sustainable, and prosperous place to live and invest, Cusco and Southern Peru are an excellent choice.

Also, you can read:

Prospects for Hotel Investment in Cusco: 2024

Exploring the Best Neighborhoods to Live in Cusco

Enrique L. Gonzalez

+51 951 066 165


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