Legal Advice in Petrolera Aconcagua Energía’s Class IV and Class V Notes Issuance

Counsel in the issuance of Petrolera Aconcagua Energía S.A.’s 3% Class IV Notes and 4.5% Class V Notes for US$ 36,238,568 issued on April 14, 2023, and due April 14, 2026, and April 14, 2027, respectively, under its US$ 150,000,000 Global Notes Program.

Banco de Servicios y Transacciones S.A. acted as arranger and placement agent, and Banco Mariva S.A., Banco Supervielle S.A., Banco Santander Argentina S.A., Banco de Galicia y Buenos Aires S.A.U., SBS Trading S.A., Consultatio Investments S.A., Allaria Ledesma & Cía. S.A., AdCap Securities Argentina S.A., Portfolio Investment S.A., Facimex Valores S.A., Invertir en Bolsa S.A. and Latin Securities S.A. acted as placement agents.

 

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Municipality of Cordoba’s Series XLVII Treasury Notes Issuance for AR$ 3,000,000,000

Legal counsel to the Municipality of Cordoba, as issuer, Banco de la Provincia de Córdoba S.A., as arranger and placement, and to Banco de Servicios y Transacciones S.A., Puente Hnos. S.A., Adcap Securities Argentina S.A., Banco de la Ciudad de Buenos Aires, Banco Hipotecario S.A., SBS Trading S.A., Banco Comafi S.A., Nación Bursátil S.A., Banco de Galicia y Buenos Aires S.A.U., Becerra Bursátil S.A. and Petrini Valores S.A., as placement agents, in the issuance of Municipality of Cordoba’s Series XLVII Treasury Notes (the “Treasury Notes Series XLIVII”), under the Municipality of Cordoba’s Treasury Notes Issuance Program. The payments due under the Treasury Notes Series XLVII are secured by certain rights of the Municipality to collect certain contribution charges over the commercial, industrial and services activity. The Treasury Notes Series XLVII were issued on April 14, 2023, for AR$ 3,000,000,000 at an annual floating interest rate equivalent to Badlar plus 5.50%, due on February 8, 2024.

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Legal Advice in the Issuance of Series 9 Notes of CT Barragán S.A. for US$ 50,000,000

Counsel to Banco de Galicia y Buenos Aires S.A.U., Banco Santander Argentina S.A., Industrial and Commercial Bank of China (Argentina) S.A.U., Banco de Servicios y Transacciones S.A., Nuevo Banco de Santa Fe S.A., SBS Trading S.A., Banco Mariva S.A., TPCG Valores S.A.U., Invertir en Bolsa S.A., Balanz Capital Valores S.A.U., Cocos Capital S.A., Banco de la Provincia de Buenos Aires, Banco Patagonia S.A., Allaria Ledesma & Cía. S.A., Adcap Securities Argentina S.A., BACS Banco de Crédito y Securitización S.A., Banco Hipotecario S.A., Banco Itaú Argentina S.A., Itaú Valores S.A., and BNP Paribas Sucursal Buenos Aires as placement agents, in the public offering of 0% Series 9 Notes for US$ 50,000,000 due April 3, 2026 of CT Barragán S.A (“Series 9 Notes”). Series 9 Notes were issued on April 3, 2023 under the Global Notes Program for an amount of up to US$400,000,000.

Series 9 Notes are denominated in U.S. Dollars and payable in Argentine Pesos.

Banco de Galicia y Buenos Aires S.A.U., Banco Santander Argentina S.A., Industrial and Commercial Bank of China (Argentina) S.A.U., Banco de Servicios y Transacciones S.A., Nuevo Banco de Santa Fe S.A, SBS Trading S.A., Banco Mariva S.A., TPCG Valores S.A.U., Invertir en Bolsa S.A., Balanz Capital Valores S.A.U., Cocos Capital S.A., Banco de la Provincia de Buenos Aires, Banco Patagonia S.A., Allaria Ledesma & Cía. S.A., Adcap Securities Argentina S.A., BACS Banco de Crédito y Securitización S.A., Banco Hipotecario S.A., Banco Itaú Argentina S.A, Itaú Valores S.A, and BNP Paribas Sucursal Buenos Aires as placement agents of Series 9 Notes. Banco de Galicia y Buenos Aires S.A.U. also acted as Settlement Agent for Series 9 Notes.

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New complementary rules in connection with Distributed Generation in the Province of Buenos Aires

On April 5, 2023, Resolution No. 463/2023 of the Ministry of Infrastructure and Public Services of the Province of Buenos Aires ("Resolution 463") was published in the Official Gazette of the Province of Buenos Aires, supplementing Provincial Law No. 15,325 and Regulatory Decree No. 2371/2022 (for additional information about these rules, please visit the following link), which establishes the technical, legal, economic, contractual and rate conditions that are necessary to allow self-generation of renewable origin in the area under the competence and jurisdiction of the Province of Buenos Aires, by users-generators for their self-consumption, and the eventual injection of surpluses to the distribution grid.

1. Regulatory background

Law No. 27,424, passed by the National Congress on November 30, 2017, approved the federal regime for the promotion of distributed generation of renewable energy (for additional information on Law No. 27,424, please visit the following link). Section 40 of the law invites the provinces and the Autonomous City of Buenos Aires to adhere and, in turn, issue their regulations at a local level.

Within such framework, Law No. 15,325, passed by the Congress of the Province of Buenos Aires on April 21, 2022, adhered to Law No. 27,424. This law declared distributed generation of electric energy from the use of renewable energy sources, for self-consumption and the eventual injection of the surplus to the provincial electric distribution network, as of provincial interest. Additionally, this law adheres to the promotional, tax, fiscal and financing benefits established in Law No. 27,424.

On January 11, 2023, provincial Decree No. 2371/2022 was published, regulating Law No. 15,325. As from its enactment, the users-generators of the Province of Buenos Aires that were authorized to generate energy from renewable sources for self-consumption may register in the Registry of Users-Generators of Renewable Energy of the Province of Buenos Aires (the "RUGER", for its Spanish acronym, Registro de Usuarios-Generadores de Energía Renovable de la provincia de Buenos Aires) with the possibility of accessing the tax advantages related to exemptions in the Stamp Tax and in the Gross Income Tax. The decree designates the Ministry of Infrastructure and Public Services as enforcement authority, entrusted with regulating powers.

2. Relevant aspects of Resolution 463

Resolution 463 includes three annexes, which are described below.

Annex I establish the Connection Regulations for Residential Users-Generators (the "Regulations"). The purpose of the Regulations is to establish the technical, legal, economic, contractual and rate conditions necessary to allow self-generation of power from renewable sources in the provincial grid, in accordance with Provincial Law No. 11,769. In effect, the Regulation establish the procedure for the installation and connection of distributed generation equipment, the technical requirements for its installation, the technical feasibility study to be carried out by the distributor, the connection request to be requested by every user-generator, the rights and obligations of the user-generator and the distributor, and the measurement and billing system.

Annex II sets forth: (i) the pass-through mechanism, which allows passing through a representative value of the average purchase cost in the Wholesale Electricity Market, and the transportation costs; (ii) parameters in connection with the calculation of the rate; and (iii) the initial values of the variables included in the mathematical expressions for calculating the rate parameters.

Finally, Annex III establishes the procedure and requirements for registering in the RUGER. This will contain statistical information on user-generators connected to the distribution network of provincial and municipal distributors. The registry will allow user-generators to obtain the tax benefits established by Provincial Law No. 15,325, special credit lines established in the province, as well as any other benefit that may be foreseen in the future.

 

For additional information, please contact Nicolás Eliaschev, Javier Constanzó, and/or Rocío Valdez.

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Approval of the guide of contents, formats and presentation of the reports related to the Environmental Management System of certain agents of the MEM

On March 29, 2023, Resolution No. 1/2023 of the Public and Environmental Safety Area of the National Electricity Regulatory Entity ("Resolution 1") was published in the Official Gazette with the purpose of approving the guide of contents, formats and presentation of the reports provided for in Resolution No. RESOL-2022-558-APN-ENRE#MEC ("the Guide"). The purpose of the Guide is to establish the criteria for the registration, submission and processing of the documentation that integrates the Environmental Management System ("SGA", for its Spanish acronym, Sistema de Gestión Ambiental) and the environmental plans to be prepared by the agents of the Wholesale Electricity Market ("MEM", for its Spanish acronym, Mercado Eléctrico Mayorista).

I. Background

Resolution No. RESOL-2022-558-APN-ENRE#MEC ("Resolution 558") approved new methodological guidelines and deadlines for the execution of the tasks related to the SGA and the submission of information by certain agents of the MEM.

In this regard, Resolution 558 delegated to the head of the Public and Environmental Safety Area (the "ASPA", for its Spanish acronym, Área de Seguridad Pública y Ambiental) of the National Electricity Regulatory Agency (the "ENRE", for its Spanish acronym, Ente Nacional Regulador de la Electricidad), the necessary powers to provide the measures to comply with the aspects related to communication, procedures for submitting information, approval of minimum contents and design of forms and tables to be included in the reports for their effective implementation.

Based on the experience gathered gained as a consequence of the application of Resolution ASPA No. 1/2010, ASPA considers necessary and convenient to update the formats, contents and procedures used.

II. Information about the Guide

The Guide is made up by the following annexes:

  1. Annex I: Contents and formats for the presentation of the environmental planning;
  2. Annex II: Contents and formats for the presentation of management reports;
  3. Annex III: Registration of the results of the monitoring of environmental parameters in the ENRE's web environmental system and mandatory forms according to the type of agent of the MEM;
  4. Annex IV: Contents and formats of additional reports;
  5. Annex V: Contents and formats of the environmental planning and management reports of the agents reached by the alternative procedure set forth in article 7 of Resolution 558; and
  6. Annex VI: Management reports of the agents reached by the alternative procedure set forth in Article 8 of Resolution 558.

The Guide is mandatory for generating agents, self-generators, co-generators, high voltage electric energy transporters, electric energy transporters by trunk distribution, international interconnection electric energy transporters and electric energy distributors of federal jurisdiction of the MEM.

Likewise, it is mandatory to inform to the ENRE the documentation required in Resolution 1 and its annexes.

Sanctions and penalties set forth in the respective concession contracts or in Article 77 of Law No. 24,065 will apply in case of non-fulfilment of the abovementioned obligations.

 

For additional information, please contact Nicolás Eliaschev, María Eugenia Muñoz, Pablo Arrascaeta and/or Rocío Valdez.

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Creation of the Sustainable Public Buildings Program for National Public Sector Agencies

Resolution No. 107/2023 of the Ministry of Environment and Sustainable Development (the "Resolution 107") was published in the Official Gazette on March 21, 2023. The goals are to create the Sustainable Public Buildings Program for the National Public Sector Agencies (the "Program") and approving the Implementation Guide for Sustainable Public Buildings (the "Guide"). The Program will be executed by the Advisory Cabinet Unit of the Ministry of Environment and Sustainable Development (the "Executing Unit").

I. Background

Decree No. 31/2023 (the "Decree") declared as a priority the sustainable management of the resources used by the agencies of the National Public Sector (the "NPS").

In addition, the Ministry of Environment and Sustainable Development (the "MEySD") was appointed as enforcement authority to approve complementary regulations that may be necessary for the execution of this Decree.

The Decree applies to the entire NPS, pursuant to Section 8, subsections a, b and c of Law No. 24,156 –i.e., the national administration, state-owned companies and corporations, and public entities expressly excluded from the national administration–.

II. Objectives

The Program has the following goals:

  1. Promoting the sustainable management of resources through the incorporation of good sustainable practices of consumption and habitability;
  2. Reducing the environmental impact generated by the activities carried out by the NPS in public buildings;
  3. Providing assistance to NPS agencies in their processes aimed at implementing good sustainable consumption and habitability practices; and
  4. Awarding badges that highlight the commitment of NPS agencies to sustainability in public buildings. Specifically, it is expected that buildings of the NPS agencies will obtain the distinctions of "Public Agency Committed to Sustainability" and "Sustainable Public Agency" within a maximum of two and six years, respectively.

Sustainable practices to be implemented by the NPS include the efficient management of electric energy, water use, natural gas, waste, public procurement, accessibility, sustainable mobility and green surfaces and spaces.

III. Implementation

The implementation of the Program will be undertaken through the following phases:

  1. Preparation of the sustainable environment: survey of relevant information;
  2. Assessment and diagnosis: the entities to complete a self-diagnostic assessment to inform the MEySD of their own sustainability status;
  3. Presentation of an Improvement Action Plan: the agencies to prepare an improvement action plan, taking into account the good sustainable practices listed in the Guide;
  4. Follow-up and monitoring: the MEySD, through the Executing Unit, to follows up and monitors progress in the implementation of good practices.
  5. Awarding and distinction: the MEySD to awards a sustainability badge to the organizations according to the progress in the implementation of good practices.

Furthermore, Resolution 107 requests NPS agencies to appoint a responsible person for sustainability matters in their jurisdiction to act as a liaison with the Executing Unit.

 

For further information, please contact Nicolás Eliaschev, María Eugenia Muñoz, Pablo Arrascaeta and/or Rocío Valdez.

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Resolution No. 165/2023 of the Secretary of Energy: Amendment to Resolution No. 285/2018 of the former Ministry of Energy and Mining

On March 20, 2023, Resolution No. 165/2023 of the Secretary of Energy ("Resolution 165") was published in the Official Gazette. Resolution 165 amends Article 1 of Resolution No. 285/2018 of the former Ministry of Energy and Mining ("Resolution 285") –which in turn had been previously amended by Resolution No. 742/2021 of the Secretariat of Energy ("Resolution 742")–, in connection with the applicable monthly payment cap of penalties foreseen under the power purchase agreements from renewable sources executed under the RenovAr Program Rounds 1, 1. 5, 2 and 3 and Resolution No. 202/2016 (the "PPA").

Initially, Resolution 285 set forth rules to be implemented by Compañía Administradora del Mercado Mayorista Eléctrico S.A. ("CAMMESA") regarding the termination of the PPAs, as well as payment terms for the penalties applicable for non-compliance with commercial operation dates (“COD”) and the supply of the contracted energy.

Accordingly, Article 1 of Resolution 285 established that the amount of the penalties imposed by CAMMESA in connection with the foregoing (the latter is not applicable to projects awarded under the RenovAr Program Round 3), could be offset starting on COD date from monthly payments to be made by CAMMESA to the generator under the PPA for the supplied energy (“Energy Payments”) in: (i) 12 monthly, equal and consecutive installments; or (ii) upon generator's decision, notified to CAMMESA, in up to 48 monthly, equal and consecutive installments, bearing interest at a 1.7% per annum.

Subsequently, Resolution 742 amended Resolution 285, in order to enable the projects that had experienced delays in COD, by adding that monthly payments payable in 48 installments would be limited up to 40% of the monthly gross revenue.

Likewise, if after the installments had been paid, there would be a balance, the same payment terms would be applied until the total payment of the penalties owed under the PPA would be paid. However, under Resolution 742, installments could not exceed the tenor of the PPA.

By means of Resolution 165, generator’s alternative to pay penalties in 12 or 48 installments as foreseen under Resolution 285 is still in force. Nevertheless, Resolution 165 added the following distinction:

  1. The cap for monthly payments of the penalties was reduced to 20% of Energy Payments, and such cap applies until penalties are paid in full. This 20% cap will only be applicable as long as the installments for the payment of the penalties do not exceed the tenor of the PPA.
  2. Provided that the remaining balance exceeds the tenor of the PPA, CAMMESA is authorized to restructure the applicable conditions or to increase the cap from 20% up to40% of the Energy Payments.

 

For additional information, please contact Nicolás Eliaschev, Javier Constanzó, Daiana Perrone and/or Rocío Valdez.

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Legal Advice in the Issuance of Loma Negra Compañía Industrial Argentina S.A.´s Series 1 Notes for $25,636,250,000 (US$133,261,858)

Counsel to Banco de Galicia y Buenos Aires S.A.U., Banco Santander Argentina S.A., Industrial and Commercial Bank of China (Argentina) S.A.U., Banco Patagonia S.A., Allaria Ledesma & Cía S.A., and Balanz Capital Valores S.A.U. as placement agents, in the issuance of Loma Negra Compañia Industrial S.A.’s floating annual interest rate equivalent to BADLAR plus 2% series 1 notes for $25,636,250,000 (equivalent to US$133,261,858), denominated and payable in Pesos, due August 22, 2024. The Series 1 Notes were issued on February 22, 2023 under the company´s global notes program for an amount of up to US$150,000,000.

Banco de Galicia y Buenos Aires S.A.U., Banco Santander Argentina S.A., Industrial and Commercial Bank of China (Argentina) S.A.U., Banco Patagonia S.A., Allaria Ledesma & Cía S.A., and Balanz Capital Valores S.A.U. acted as placement agents of the series 1notes. Banco de Galicia y Buenos Aires S.A.U. also acted as settlement agent for the series 1 notes.

 

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Legal Advice in the Issuance of 360Energy Solar S.A. Series 2 Notes for US$20,000,000 and Series 3 Notes for US$60,000,000 Which Qualify as Green Bonds

Counsel to Banco Itaú Argentina S.A., Itaú Valores S.A., Balanz Capital Valores S.A.U., Invertir en Bolsa S.A., BACS Banco de Crédito y Securitización S.A., Banco Hipotecario S.A., Banco de Servicios y Transacciones S.A. and PP Inversiones S.A. in the issuance of 360Energy Solar S.A. 0.00% Series 2 Notes for US$20,000,000 due March 8, 2025 (the “Series 2 Notes”), and 5.00% Series 3 Notes for US$60,000,000 due March 8, 2032 (the “Series 3 Notes” and together with the Series 2 Notes, the “Notes”), issued under the Global Notes Program for an amount of up to U$S100,000,000 (or its equivalent in other currencies or other unit value). Both Series 2 Notes and Series 3 Notes qualify as Green Bonds.

The proceeds from the placement will be used to finance the construction, installation, commissioning, operation, and maintenance of the 360Energy La Rioja II Photovoltaic Solar Park.

Banco Itaú Argentina S.A., Itaú Valores S.A., Balanz Capital Valores S.A.U., Invertir en Bolsa S.A., BACS Banco de Crédito y Securitización S.A., Banco Hipotecario S.A., Banco de Servicios y Transacciones S.A. and PP Inversiones S.A. acted as placement agents of the Notes. Banco Itaú Argentina S.A. also acted as arranger and settlement agent.

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Roch S.A. consent solicitation

Counsel to Roch S.A. in a consent solicitation process for the release of proceeds for an amount of AR$266,094,000 to be applied under the joint venture agreement Unión Transitoria Río Cullen, Las Violetas, La Angostura (Cuenca Austral - Tierra del Fuego Province)and for increasing the interest rates for the periods between June and December 2023, from 6.5% to 7% per annum for the US Dollar denominated debt and the margin under the Peso denominated debt from 12% to 12,5% per annum.

The transaction was conducted within the framework of the company’s judicial insolvency proceeding and allowed Roch to obtain the consents from 81.07% of the holders of the series 1 secured notes for US$16,261,578; 100% of the holders of the private secured note for US$3,413,694; and 100% from the lenders under financial loans Banco Itaú Argentina S.A., Banco de la Ciudad de Buenos Aires and Banco de Tierra del Fuego for US$9,149,905.

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