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.