Electricity in Argentina: Sale of generation and transmission assets and other relevant changes
On November 1st, Decree No. 882/2017 was published in the Official Gazette (hereinafter, the “Decree”), introducing major change in Argentina’s Electricity Market.
The Decree provides for the spin-off and sale to the private sector of transmission and generation assets, including power plants totaling 840 MW of capacity, a power plant of 810 MW under construction, minority shareholding stakes in other power plants and the sale of 50% of the shares of CITELEC S.A., holding company of TRANSENER -main electricity transmission company in Argentina-.
This step is the first sale of State-owned infrastructure assets in more than 18 years.
In addition, a new State-owned company is created, from the merger of two existing entities, who will retain certain assets and is in charge of public works under State supervision, including gas pipelines, hydroelectric and thermal power plants.
Main aspects of the Decree
1) Asset sale: future competitive procedures
The Decree instructs the Ministry of Energy and Mining (“MEYM”, for its Spanish acronym) to proceed to the sale, assignment and transference, by means of a public and competitive process, of the following assets:
- Thermal Power Plants “Ensenada de Barragán” and “Brigadier López”, under the condition precedent of executing the works to operate as a Combined Cycle Power Plant.
- “Manuel Belgrano II” Thermal Power Plant
- The shares in the following companies:
- “Compañía Inversora de Transmisión Eléctrica CITELEC S.A.”
- “Central Dique S.A.”
- “Central Térmica Güemes S.A.”
- “Central Puerto S.A.”
- “Centrales Térmicas Patagónicas S.A.”
- “Empresa de Transporte de Energía Eléctrica por Distribución Troncal de la Patagonia S.A. (TRANSPA)”
- State rights related to:
- Thermoelectric Power Plant Manuel Belgrano
- Thermoelectric Power Plant José de San Martín (Central Timbúes)
- Thermoelectric Power Plant Vuelta de Obligado
- Thermoelectric Power Plant Guillermo Brown
The Decree enables the interested parties to submit certain titles issued by CAMMESA in the past (“Liquidaciones de Venta con Fecha de Vencimiento a Definir”) as a way of payment for the assets.
2) Absorption Merger of ENARSA and EBISA: IEASA
The Decree instructs the MEYM to proceed to the absorption merger of Energía Argentina S.A. (“ENARSA”, for its Spanish acronym) and Emprendimientos Energéticos Binacionales S.A. (“EBISA”, for its Spanish acronym), becoming ENARSA the absorbing entity, whose business name will be Integración Energética Argentina S.A. (“IEASA”).
3) Public works transfer and concession agreements awarding
The Decree sets the transfer of certain public works under the direction of MEYM to IEASA, who shall act as principal in the following works:
- “Central Térmica Río Turbio”
- “Hydroelectrical Poryects over the Santa Cruz river “Cóndor Cliff” and “La Barrancosa”
- “Extension of Natural Gas´ Distribution and Transmission System” Project that includes the following works: (i) Regional Centro II gas pipeline – Esperanza/Rafaela/Sunchales; (ii) Cordillerano/Patagónico System; (iii) Cordillerano gas pipeline and (iv) “La Costa” gas pipeline
- Additionally, IEASA is awarded with concession agreements to generate electricity from hydroelectric power plants Cóndor Cliff and La Barrancosa
At TRS&M, as a leading Law Firm in the electricity sector, we are following these developments with great detail and are available to discuss any query regarding the above.
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