Renewable Energies: New legal rules approved
On September 23rd, Congress passed a bill amending Law 26.190 (Renewable Energies Regime). Although the enactment of this bill by the Executive Power and its publication in the Official Gazette is still pending, we hereby point out seven out-standing aspects of the reform approved that may have a strong impact on the development of renewable energies in Argentina:
1. The goal for the contribution of renewable sources in electricity consumption is divided in two stages and is expanded
A short-term target is set to reach an 8% by 2017 (first stage), and a long-term goal is established to reach 20% by 2025.
2. A tax incentive regime is introduced
The regime includes the anticipated reimbursement VAT, accelerated amortization of income tax, tax certificates, and exclusion from the application of tax on minimum presumed income.
3. Creation of the Trust Fund for the Development of Renewable Energies (FODER)
A Government trust-fund named FODER is created in which the Ministry of Economy and Finance will act as trustor, the Bank for Investment and Foreign Trade (BICE) will act as trustee and the beneficiaries will be investors in renewable energy projects.
The FODER will be funded by the National Treasury with sums equating to no less than 50% of annual cash savings fossil fuels imports due to the addition of renewable energy generation in the previous year.
The FODER will be entitled to provide funds and grant loans, issue securities, make capital contributions and provide guarantees.
4. An obligation that all power users must contribute to achieve the goals of renewable energy consumption share is imposed
In order to achieve this goal, a gradual scale of contribution is established as follows: 8% at December 31, 2017; 12% at December 31, 2019; 16% at December 31, 2021; 18% at 31 December 2023 and 20% at December 31, 2025.
Large users with power demands greater than 300 kW must meet these targets at the dates specified above, and in order to do so they may auto-generate their consumption or purchase power generated by renewable sources. PPA prices may not exceed an average of U$S 113 per MW/h.
Should large users fail to meet these targets they will liable to pay a fine at a cost equivalent to the variable cost of power production with the use of imported diesel oil.
5. An import regime is introduced
Until December 31, 2017, those companies developing renewable energy projects are exempted from import duty payment for capital goods, special equipment or parts.
6. It is established that access and use of renewable energy sources will not be taxed and will not be liable for royalty payment
This provision is valid until 31 of December, 2025.
7. Dispatch rules
It is established that power from intermittent renewable resources will have a similar treatment to the one received by run-of-the-river hydropower plants.
“Pago Rural Granar Serie I” Financial Trust for AR$ 59,350,273
Legal advisor for the trustee and the placement agents in the issuance and placement in Argentina of trust securities for AR$ 59,350,273 issued under the “Pago Rural Granar Serie I” Financial Trust, in which BACS Banco de Crédito y Securitización acted as arranger and main placement agent, AdCap Securities Argentina S.A., SBS TRADING S.A. (ex SBS Sociedad de Bolsa S.A.) and SBS TRADE S.A. as co-placement agents, Granar S.A.C.yF. as trustor and TMF TRUST Company (Argentina) S.A. acted as financial trustee. (2015)
“BeST Consumer Finance Serie XXXVI” Financial Trust for AR$ 125,800,000
Deal counsel in the issuance and placement in Argentina of trust securities for AR $ 125,800,000 issued under the “BeST Consumer Finance Serie XXXVI” Financial Trust, in which Banco de Servicios y Transacciones S.A acted as arranger, trustor, servicer and custodian, and TMF Trust Company (Argentina) S.A acted as trustee.
“Credimas Serie 24” Financial Trust for AR$ 90 million
Deal counsel in the issuance and placement in Argentina of trust securities for AR $ 90,000,000 issued under the “Credimas Serie 24” Financial Trust, in which Banco Supervielle S.A. acted as arranger and placement agent, TMF Trust Company (Argentina) S.A. acted as financial trustee and Credimas S.A. acted as trustor, servicing and custody agent. (2015)
“Bancor Personales IV” Financial Trust for AR$ 75,000,000
Deal counsel in the issuance and placement in Argentina of trust securities for AR$ 75,000,000 issued under the “Bancor Personales IV” Financial Trust, in which Banco de la Provincia de Córdoba S.A. acted as arranger, trustor, collection, administration and custody agent and placement agent, Deutsche Bank S.A. acted as financial trustee and successor collection, administration and custody agent, and Banco de Servicios y Transacciones S.A. and Puente Hnos. S.A. acted as co-placement agents. (2015)
“RG ALBANESI SERIES I” Trust Securities
Legal Advisors of the trustor Rafael G. Albanesi S.A. in the issuance and placement in Argentina of AR$ 70,000,000 “RG ALBANESI SERIES I” Trust Securities, under the U$S 50,000,000 Global Trust Programme “RG ALBANESI”. TMF Trust Company (Argentina) S.A. acted as trustee, Banco Macro S.A. and SBS Capital S.A. acted as arrengers, while Macro Securities S.A., SBS Trading S.A. and SBS Trade S.A. acted as placement agents.
Santiago Saenz’s AR$ 50,000,000 Series IV Short Term Notes Issuance
Legal counsel to Santiago Saenz S.A, as issuer of its AR$ 50,000,000 Series IV Short Term Notes under the AR$ 200,000,000 Global Notes Programme. BACS Banco de Crédito y Securitización S.A. and Puente Hermanos S.A., acted as arranger and placement agent, alongside Banco Hipotecario S.A. that acted as arranger.
Province of Buenos Aires´ Series III Notes Issuance. for AR$ 812,023,000
Legal counsel to Banco de la Provincia de Buenos Aires, as arranger and lead placement agent, in the issuance of the Province of Buenos Aires’ Series III Notes Issuance. for AR$ 812,023,000.
Banco de la Provincia de Buenos Aires acted as arranger and lead placement agent.
Province of Mendoza´s Series 3 Short-Term Treasury Notes Issuance. Class I AR$ 129,190,000 and Class II AR$ 104,030,000
Deal Counsel
Deal counsel in the issuance of the Province of Mendoza’s Series 3 Short-Term Treasury Notes. Class I AR$ 129,190,000 and Class II AR$ 104,030,000 .
Banco de la Provincia de Buenos Aires acted as lead arranger and lead placement agent while Puente Hnos. S.A. acted as co-arranger and co-placement agent.
Sale of “Parque Ceremonial” Private Cemetery
Legal counsel to Funarg S.A. in the sale to Montes de la Paz S.A. of the real estate and business operations of "Parque Ceremonial” Private Cemetery in the Province of Buenos Aires. (2015)