Petroperu, the state-run energy company of Peru, plans to gather $2.7 billion to finance an expansion of its refinery, Reuters reported. The government also said that it will be looking to get international investors to provide about half the funds it needs.

The report said Petroperu intends to gather $1.3 billion through bonds and loans in international markets while the remaining $1.4 billion will be obtained from the domestic market. The proceeds will be used to finance the upgrading of Talara , a refinery located in the northern part of the country. The Energy and Mines Ministry said that as soon as the modernization is finished in 2017, Talara is expected to produce 50% more oil.

The total cost of the Talara expansion is $3.5 billion. According to the report Petroperu will be responsible for the $2.7 billion while the rest of the amount will be shouldered by other firms.   

The Talara expansion will cost a total of $3.5 billion. Petroperu will put up $2.7 billion and the rest will come from other firms, the government said. Earlier this month, Peruvian President Ollanta Humala said it would permit up to 49% of Petroperu to be privatized through share sales in the local stock market. According to a Reuters report on December 13, the new law will pave the way for the first injection of private capital to the company since it was established around 40 years ago.

When he signed the reforms into law, Humala said, "This decision is important because it consolidates Peru's energy and industrial policies and carves a sustainable path for a state company's participation in large-scale investments."

The report said Humala wants to transform Petroperu to a larger regional player in the same manner that Petrobras is to Brazil. This way, Peru will become a net energy exporter. So far, the state-backed firm only refines, transports, stores and commercializes oil products, the report said.