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Argentina Renewable Energy

U.S. clean technology exporters in the bioenergy sector should consider monitoring this unique business opportunity in Argentina.

The government Argentina is planning to launch a new auction for renewable energy generation projects before the end of 2020. It will mainly encompass small-scale – up to 20 MW - wind farms and bioenergy (biogas and biomass) projects. Given the state-of-the-art prowess of U.S. clean technology in the bioenergy segment, U.S. exporters should consider monitoring this unique business opportunity, and seek counsel from U.S. Commercial Service Argentina to learn more, as the tender evolves.

Since 2016, Argentina executed several auctions for wind, solar, small hydro,biogas and biomass projects, in order to comply with Resolution 136/2016, which outlines the legal framework to increase energy generation from renewable sources and reach 20% of the country’s demand by 2025. Thus, 244 projects were awarded, adding more than 6,300 MW of installed capacity of renewable energies through rounds 1, 1.5, 2 and 3 of RenovAr, Resolution 202/2016 and the Renewable Energy Futures Market (MaTER). European and Chinese players, backed by ECAs financing, dominate the market. U.S. companies like AES and GE are also active.

Round 3 of the RenovAr Program incorporated small-scale projects distributed throughout the country, contributing to a more decentralized and federal electric power-generation infrastructure. Referenced projects were mostly installed near consumption areas and were a cornerstone in Argentina’s energy matrix diversification.

Power Purchasing Agreements were issued in U.S. dollars and for a twenty-year duration. At the time, the Argentine government shielded projects from potential economic volatility, through a number of instruments, such as a Government of Argentina trust fund and World Bank insurance. However, due to fiscal deficit reduction targets tied to the Argentine government’s agreement with the International Monetary Fund, and high country-risk associated with economic volatility and political uncertainty, some projects have failed to reach financial closing. Referenced projects are currently under review in order to determine execution feasibility, under the current scenario.

For additional information, including market analysis, trade events, contacts, and the products and services that the U.S. Commercial Service can provide to help you succeed in the Argentine market, please contact industry specialist Marcelo.Amden@trade.gov.

10/29/2020