Argentina’s National Strategy for the Use of Carbon Markets
On November 14, 2023 the National Ministry of Environment and Sustainable Development published Resolution 385/2023 that approved the “National Strategy for the Use of Carbon Markets” (“ENUMeC” for its Spanish acronym, Estrategia Nacional para el Uso de los Mercados de Carbono).
ENUMeC aims to promote the implementation of carbon markets as one of the carbon pricing mechanisms to contribute to the adaptation and mitigation of climate change in the national territory.
As of today, Argentina does not have a national legal framework to implement the use of carbon markets. In line with this, the ENUMeC establishes 9 key points and 63 actions necessary for the implementation of carbon markets and establishing a framework that encourages and promotes the development of these markets.
The ENUMeC reaches subnational, national and international carbon markets, new and existing carbon markets, as well as regulated and voluntary carbon markets and covers all sectors and greenhouse gases of the National Inventory.
The implementation of ENUMeC is based on the following key points, from which the specific actions are derived:
- Climate financing;
- Participation in regulated carbon markets under Article 6 of the Paris Agreement;
- Promote participation of the private sector in voluntary markets;
- Generate Non-Commercial Approaches under the scheme of Article 6.8 of the Paris Agreement;
- Assist subnational governments in the implementation of market schemes for their climate change mitigation plans;
- Contribute to strengthen and finance climate change;
- Develop national and sub-national abilities for the implementation of carbon markets;
- Promote environmental integrity in the implementation of carbon markets; and
- Guarantee national and regional interests within international negotiations.
ENUMeC is considered a road map for the effective and coordinated implementation of carbon markets in Argentina. Its implementation will require consensus and agreements among national, provincial, public and private actors.
For additional information, please contact Nicolás Eliaschev, Daiana Perrone, Rocío Valdez and/or Victoria Barrueco.
Argentina launches call for expressions of interest for energy storage proposals
The Secretary of Energy has launched a call for expressions of interest for battery energy storage systems (“BESS” and the “BESS EOI”).
The announcement was made by Resolution 906/2023, published on November 8, 2023.
The BESS EOI is framed within the energy transition plans to 2030-2050 recently approved by the Government (for remarks on these documents, click here), which, among other targets, aims to continue developing the renewable power share and promote the installation of new BESS facilities.
With Argentina being a major source of lithium carbonate for lithium-ion batteries, and one of the largest global lithium supplier, BESS EOIs which propose ways to integrate a national supply chain into project delivery will be “valued”.
BESS EOIs shall be submitted no later than 120 days following the enactment of Resolution 906/2023 (i.e., March 7, 2024), and interested parties are being invited to propose projects encompassing the financing, construction and management of BESS facilities in the wholesale electricity market. The projects could be for optimizing generation dispatch, providing power reserve services or other mechanisms proposed.
Moreover, the BESS EOI sets forth that the Secretary of Energy will approve specific regulation addressing pricing of energy and availability, as well as charge and discharge cost hedging, and other ancillary services included in each BESS.
For additional information, please contact Nicolás Eliaschev, Javier Constanzó and/or Rocío Valdez.
New option to offset penalties imposed by CAMMESA under PPAs through investments in new renewable power generation projects
On November 1st, 2023, the Secretary of Energy enacted Resolution 883/2023 (“Resolution 883”) which establishes the possibility of offsetting penalties imposed by the Compañía Administradora del Mercado Mayorista Eléctrico Sociedad Anónima (“CAMMESA") through investments in new power generation projects from renewable energy sources.
The measure is intended for renewable energy generation projects that entered into Power Purchase Agreements with CAMMESA, including those under the RenovAr Program (Rounds 1, 1.5, 2 and 3), Resolution 202/2016 of the ex- Ministry of Energy and Mining, and Resolution 36/2023 of the Secretary of Energy that implemented the "RenMDI" call for proposals (the "Projects").
Eligible penalties to be offset are related to non-compliance with: (i) Scheduled Commercial Operation Date; (ii) Contracted Energy Supply; and/or (iii) Declared National Component (CND), as well as other penalties that may be reported by CAMMESA to the Secretary of Energy and that could be offset under the scheme approved by Resolution 883.
Projects that have already been notified of penalties will have time until November 30 to adhere to this regime.
Commercial operation date of the new renewable power generation projects shall be accomplished within a 36-month term from the execution of an agreement with CAMMESA, period under which penalties will be suspended.
The price of the energy supplied by the new installed capacity will be established in twenty U.S. dollars per megawatt hour (US$ 20 MWh) and will be remunerated by CAMMESA according to the regime chosen by each Project owner, among the following alternatives: (i) one hundred percent (100%) of the generated energy for a period of sixty (60) months; or (ii) twenty percent (20%) of the generated energy for: (a) a period of one hundred and twenty (120) months, or (b) one hundred and eighty (180) months, having the possibility to use the eighty percent (80%) left for self-consumption or purchases under the Spot market.
If the Project’s owner does not comply with the proposed investment once the established term has expired, an additional interest of ten percent (10%) will be applied on the remaining amount of the penalty accrued at the time the request was issued.
For additional information please contact Nicolás Eliaschev, Daiana Perrone, Rocío Valdez and/or Victoria Barrueco.
Albanesi Group´s US$ 72,574,793 Notes Offering
Counsel to Generación Mediterránea S.A. and Central Térmica Roca S.A. in the co-issuance of 9.5% class XXV notes for US$ 4,505,191 due April 18, 2026, 6.5% class XXVI notes for US$ 35,886,341 due April 12, 2026; and 5% class XXVII notes for 31,820,983 UVAs due April 12, 2027, issued under the Global Notes Program for an amount up to US$ 1,000,000,000.
Banco de Servicios y Transacciones S.A., SBS Trading S.A., Balanz Capital Valores S.A.U., Facimex Valores S.A., Banco de la Provincia de Buenos Aires, Nación Bursátil S.A., Banco Supervielle S.A., Bull Market Brokers S.A., Banco Santander Argentina S.A., Buenos Aires Valores S.A., S&C Inversiones S.A., Macro Securities S.A.U., Invertir en Bolsa S.A., Adcap Securities Argentina S.A., Don Capital S.A., Global Valores S.A., GMA Capital S.A., Becerra Bursátil S.A., Banco Hipotecario S.A., BACS Banco de Crédito y Securitización S.A., and Allaria S.A. acted as placement agents of all three classes, while TPCG Valores S.A.U., and Latin Securities S.A. acted as placement agents of class XXVI and class XXVII notes.
Investment mutual fund “Fondo Común de Inversión Cerrado Inmobiliario Puerto Nizuc” and issuance of shares for AR$ 10,000,000,000
Counsels in the issuance and placement of a single class of shares for AR$ 10,000,000,000 (the “Shares”) for the investment mutual fund “Fondo Común de Inversión Cerrado Inmobiliario Puerto Nizuc” (the “Fund”). The Shares were issued on October 19, 2023.
The Fund’s was created for funding the real estate development of certain units located within one of the parcels of land within the urban development project named “Puerto Nizuc” in the Province of Buenos Aires.
IEB S.A. acted as the manager and arranger of the issuance; Banco de Valores S.A. served as the custodian, placement agent and arranger of the placement and issuance; Invertir en Bolsa S.A. acted as a placement agent and Nueva Marinas de Hudson Inversora S.A. acted as developer.
US$100,000,000 trust securities under “Global ARSA I” Financial Trust
Deal counsel in the issuance of “Global ARSA I” 3.00% trust securities for US$100,000,000, due October 15, 2026, issued under the Financial Trust Global Program “Global ARSA” for an amount of up to US$300,000,000.
The trust assets are future collection rights arising from the online sales of domestic and international flight tickets sold in Argentina by Aerolíneas Argentinas and paid with VISA credit and debit cards.
The proceeds from the issuance of the trust securities will be used by Aerolíneas Argentinas to finance mid-life maintenance of its 16 engines’ EMBRAER 190 fleet.
Aerolíneas Argentinas S.A. acted as trustor; BICE Fideicomisos S.A. acted as trustee, collection agent and custody agent; Puente Hnos. S.A. acted as arranger and placement agent; and Nación Bursátil S.A. and AdcapSecurities Argentina S.A. acted as placement agents.
Legal Counsel to MSU Green Energy in the pre-sale agreement of renewable energy signed with Dow for the supply of solar energy to its production plant in Bahía Blanca
Energias Renovables Las Lomas S.A.U. ("MSU Green Energy"), renewable energies generation arm within the MSU Energy S.A. group and a generating agent in the wholesale electricity market (WEM), has entered into a power supply agreement with Dow for the advance sale of renewable energy within the framework of the Mercado a Término de Energías Renovables, for an approximate amount of US$ 50,000,000.
MSU Green Energy is currently in the process of constructing its Las Lomas and Pampa del Infierno Photovoltaic Solar Parks, which will have capacities of 37 MW and 130 MW, respectively, located in the Provinces of La Rioja and Chaco.
With over 280,000 solar panels, this agreement marks the initial step in MSU Green Energy's broader project to install renewable energy generation parks in the NOA and NEA regions of Argentina.
On the other hand, Dow is one of Argentina's leading chemical and petrochemical companies, with presence in the country for over 60 years and a global track record exceeding 120 years. According to a recent statement from Dow, this agreement will allow them to achieve a 74% share of renewable sources in the energy needs of their production plant in Bahía Blanca by 2025, thereby establishing their position among the top 20 global companies utilizing clean energy.
Counsels to MSU Green Energy
We advised MSU Green Energy, through the team led by our partners Nicolás Eliaschev and Francisco Molina Portela, and associates Daiana Perrone and Eduardo N. Cano.
MSU Green Energy was also advised by Ezequiel Abal, its in-house lead counsel.
Counsels to Dow
PAGBAM advised Dow, through its team led by partner Francisco Romano, off counsel Tomás Fernandez Madero and associate Nahuel Pérez de Villarreal.
Dow was also advised by Josefina Tobías and Paloma Berdichevsky, its in-house counsels.
Albanesi Energía S.A.’s issuance of Series X Notes for US$ 36,842,713 and Series XI Notes for US$ 6,734,405
Counsel to Banco de Servicios y Transacciones S.A. and SBS Capital S.A. as arrangers of the offer, and to SBS Trading S.A., Banco de Servicios y Transacciones S.A., Balanz Capital Valores S.A.U., Facimex Valores S.A., Banco Hipotecario S.A., Nación Búrsatil S.A., Banco de la Provincia de Buenos Aires, Bull Market Brokers S.A., Banco Supervielle S.A., Invertironline S.A.U., BACS Banco de Crédito y Securitización S.A., Becerra Bursátil S.A., Petrini Valores S.A., Allaria S.A., Invertir En Bolsa S.A., Don Capital S.A., S&C Inversiones S.A., TPCG Valores S.A.U., ADCAP Securities Argentina S.A., Cocos Capital S.A., GMA Capital S.A., Global Valores S.A., Macro Securities S.A.U. and Latin Securities S.A., as placement agents in the issuance of Albanesi Energía S.A.’s 5% Series X Notes for US$ 36,842,713, due September 21, 2025; and 9.50% Series XI Notes for US$ 6,734,405 due March 21, 2026, both of them issued under the Global Notes Program for an amount of up to US$ 250,000,000.
Argentine Government releases Hydrogen Guideline
The Argentine Government has released the National Strategy for the Development of the Hydrogen Economy (the “H2 Strategy”). The Strategy was released pursuant to the Energy Transition Plans to 2030 and 2050 (see our remarks on these documents, here), and bills of law currently being analysed in the Congress (see our remarks on these documents, here (available in Spanish)).
The H2 Strategy provides greater detail on the Government planning framework for H2 development and related activities. The key takeaways of the H2 Strategy are:
- Investment in H2 and associated industries of ≈US$ 90 billion.
- Deployment of electrolysis facilities aggregating 30 GW and 55 GW of new renewable power generation plants.
- Total hydrogen production around 5 MT per year, which will be destined to exports (≈3.75 MT) and for domestic use (≈1.25 MT).
- Creation of 5 new production hubs and construction of new ports.
- Levelized cost of green H2 ≈1.4 USD/kg.
Further, the H2 Strategy includes measures aiming at positioning Argentina as a global exporter of H2, embedded in a global and regional cooperation agenda, with the end-goal of supplying H2 to markets like Japan and Germany.
In turn, the H2 Strategy proposes actions to foster the local demand for H2, aiming for 100,000 tons per year by 2035, 500,000 tons per year by 2045 and 1 MT by 2050.
Finally, the H2 Strategy considers H2 in relation not only for exports and local use, but also for transport, industrial use, gas networks, electricity systems, and cross-cutting issues such as safety, skills, and environmental impacts.
For additional information, please contact Nicolás Eliaschev, Javier Constanzó, Luciana Tapia Rattaro, Rocío Valdez and/or Victoria Barrueco.
Municipality of Cordoba’s Series XLIX Treasury Notes Issuance for AR$ 5,000,000,000
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 Santander Argentina S.A., Banco Hipotecario S.A., Facimex Valores 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., Petrini Valores S.A., Macro Securities S.A., Banco Patagonia S.A., Dracma S.A. and S & C Inversiones S.A. as placement agents, in the issuance of Municipality of Cordoba’s Series XLIX Treasury Notes (the “Treasury Notes Series XLIX”), under the Municipality of Cordoba’s Treasury Notes Issuance Program. The payments due under the Treasury Notes Series XLIX are secured by certain rights of the Municipality to collect certain contribution charges over the commercial, industrial and services activity. The Treasury Notes Series XLIX were issued on September 21, 2023, for AR$ 5,000,000,000 at an annual floating interest rate equivalent to Badlar plus 7.25%, due on July 17, 2024.