Province of Santa Fe’s Series II and III Treasury Notes Issuance for AR$ 5,000,000,000
Legal counsel to the Province of Santa Fe, as issuer, and to Nuevo Banco de Santa Fe S.A., as arranger and placement, in the issuance of Province of Santa Fe’s Series II Treasury Notes (the “Treasury Notes Series II”) and Series III Treasury Notes (“Treasury Notes Series III” and together with the Treasury Notes Series II the “Treasury Notes”) under the Province of Santa Fe’s Treasury Notes Issuance Programme (the “Programme”). The transaction closed on August 8, 2023 and the payments due under the Treasury Notes are secured by certain rights of the Province over the Federal Tax Sharing Regime. The Treasury Notes Series II were issued for AR$ 2,125,000,000, at an annual floating interest rate equivalent to Badlar plus 5.99%, due on November 6, 2023. The Treasury Notes Series III were issued for AR$ 2,875,000,000, at an annual floating interest rate equivalent to Badlar plus 6.50%, due on December 6, 2023.
Albanesi Group´s US$74,999,000 Senior Notes Offering in the Argentine and International Capital Markets
Counsel to Generación Mediterránea S.A. and Central Térmica Roca S.A. in the co-issuance of 13.25% Class XXII Notes for US$74,999,000 due July 26, 2026, issued under the Notes Program for an amount up to US$1,000,000,000.
The offer was addressed to the Argentine and International capital markets under the exemptions provided in the US Securities Act of 1933, as amended.
The proceeds from the placement were partially used to refinance the 9.625% Notes due July 2023, issued by the issuers for an aggregate principal amount of US$336,000,000.
The Class XXII Notes are secured by an Argentine law-governed collateral trust and first-priority pledges.
The Bank of New York Mellon acted as Class XXII Notes Trustee, Paying Agent, Registrar, Transfer Agent, and Settlement Agent. Balanz Capital Valores S.A.U. acted as local Registrar. TMF Trust Company (Argentina) S.A. acted as Argentine Collateral Agent and Onshore Trustee. SBS Trading S.A., Banco de Servicios y Transacciones S.A. and Balanz Capital Valores S.A.U. acted as Placement Agents.
Roch S.A. consent solicitation
Counsel to Roch S.A. in a consent solicitation process for the (i) deferral of the payment of certain principal installments under the company’s series 1 secured notes, private secured note and financial loans; and the redistribution of their payments, (ii) capitalization, at their respective maturity dates, of the interest accrued and due in respect of two interest installments, and (iii) waiver of certain matters under the collateral trust agreement dated July 27, 2022 (as amended on March 22, 2023) entered into between ROCH, as trustor, Banco de Valores S.A., as trustee, and certain creditors.
The transaction was conducted within the framework of the company’s judicial insolvency proceeding and allowed Roch to obtain the consents from 78.73% of the holders of the series 1 secured notes for US$16,261,578; 100% of the holders of the private secured note for US$3,413,694; and 100% from the lenders under financial loans Banco Itaú Argentina S.A., Banco de la Ciudad de Buenos Aires and Banco de Tierra del Fuego for US$9,149,905.
Federal Mining Secretariat launches the "Federal Program for the Systematic Disclosure of Mining Activities (ProNDSAM)"
On 08/07/23, Resolution 96/2023 (the "Resolution") was published in the Official Gazette, by which the FMS sets -within its authority- the "Federal Program for the Systematic Disclosure of Mining Activities (ProNDSAM)"..
ProNDSAM has five objectives:
1. Prioritize the systematic dissemination processes of mining information.
2. Regulate the operation of the Argentine Mining Information System Open to the Community ("SIACAM"), while ensuring its continuous operation.
3. Promote compliance with international standards for the dissemination of information on the mining sector.
4. Standardize the monthly and weekly publication of reports and the updating of the project portfolio, containing information on exports, employment, international prices, and the development of mining projects.
5. Establish the methodology for the handling and disclosing of information on employment, international trade, and the evolution of mining projects.
According to the Resolution, Section 3, the Transparency and Mining Information Directorate will be in charge of:
(a) Ensuring the continuous updating of SIACAM indicators, reports and open data;
(b) Publishing monthly reports on mining exports, the trade balance of the main mining projects and the provincial origin of mining exports, in accordance with the methodology set out in Annex I to the Resolution;
(c) Publishing monthly reports on mining employment and employment by province in SIACAM, applying the methodology applying the methodology set out in Annex II to the Resolution;
(d) Publishing monthly reports on international prices of the most relevant minerals in SIACAM;
(e) Publishing special reports in SIACAM that deepen the analysis of specific aspects of the mining sector;
f) Publishing the portfolio of mining projects in Argentina produced by the National Directorate for the Promotion and Mining Economy, applying the methodology for determining the state of evolution of mining projects approved by the Federal Mining Council (COFEMIN), applying the methodology of Annex III of the Resolution; and
g) All those functions entrusted to it by the FMS.
Likewise, the Resolution empowers the Transparency and Mining Information Directorate to issue the complementary regulations that are necessary to carry out the corresponding actions for the implementation, execution and control of ProNDSAM.
The Resolution indicates that the expenditure demanded by the measure will be met according to the budgetary availability, for the Fiscal Year 2023, under Program 32 – "Formulation and Execution of the Geological-Mining Policy".
Background information
The Resolution is the result of several measures taken by the FMS in terms of transparency. Particularly, the Resolution contemplates:
(a) Decree 50/2019: established the goals of the FMS, among which is observed to assist the Ministry of Economy in "... the design and implementation of mining policies, in terms of interaction with investors and companies in the sector, and in all actions aimed at promoting the development of mining in the country".
(b) Resolution 47/2020: established the strategic objectives for the "Argentine Mining Development Strategic Plan" for the next 30 years. Among those, it is noted to favor the access to information related to the activity and the National Mining Policy, guaranteeing the transparent management of the sector.
(c) EITI Initiative: Argentina has been part of the EITI since 2019. According to the 2022 Progress Report, issued in April 2023, Argentina received a score of 73/100. Within the EITI Argentina portal, the objective of facilitating access to information and transparency of the extractive sector is observed.
(d) Resolution 89/2022: created SIACAM, which must periodically report on the economic, geological, geographic, social, health and environmental aspects of the mining activity.
(e) Administrative Decision No. 449/2023: delegated to Transparency and Mining Information Directorate the responsibility of assisting the Undersecretariat of Mining Development in the creation, consolidation and administration of the Single National Mining Information System, the Mining Transparency System and the Mining Communication System, referring to environmental, economic, social, legal aspects, geological, cadastral mining projects and their territorial environments.
Prior to the Resolution, the FMS provided reports and studies on mining, without establishing the methodology used for such publications. Previously, the FMS, through its website, published:
(i) Weekly reports: they monitor the latest developments in Argentine mining projects and the evolution of international prices of the main commodities linked to the sector.
(ii) Monthly reports: reports on international prices, mining exports, and other topics.
(iii) Archive of studies: repository of documents made between 2016 - 2018.
(iv) Mining Development Studies Series: reports focused on mining sector research from various angles. The objective of these is to contribute information and perspectives to the debates around mining in Argentina and the world.
(v) Series of studies on mining markets: documents that provide specific analyses linked to the different minerals of interest and the geological potential of Argentina.
(vi) Bilateral mineral trade reports: reports focused on the investigation of mineral trade between Argentina and different countries.
(vii) Catalogues of mining projects: portfolios aimed at investors. They collect information on the projects with the greatest export potential.
(viii) Series of statistical studies: documents and reports on different variables.
(ix) Gender indicators: Reports and studies on indicators on gender equity and existing gaps in the mining sector.
For more information or inquiries on these topics, please contact Marcos Moreno Hueyo and/or Dolores Reyes.
“Total Assets II” Financial Trust for AR$1.000.070.978
Deal counsel in the issuance and placement in Argentina of trust securities for AR$ 1,000,070,978 issued under the “Total Assets II” Financial Trust, in which Crédito Directo S.A acted as trustor, TMF Trust Company (Argentina) S.A. acted as trustee, Banco de Servicios y Transacciones S.A. acted as arranger and placement agent, and Macro Securities S.A.U., Banco Supervielle S.A., Banco Patagonia S.A. and Banco de Valores S.A. acted as placement agents.
Albanesi Group´s US$24,496,862 Notes Offering
Counsel to Generación Mediterránea S.A. and Central Térmica Roca S.A. in the co-issuance of 9.50% Class XXIII Notes for US$9,164,613 due January 20, 2026, and 5.00% Class XXIV Notes for US$15,332,249 due July 20, 2025, issued under the Notes Program for an amount up to US$1,000,000,000.
SBS Trading S.A., Banco de Servicios y Transacciones S.A., Invertironline S.A.U., Balanz Capital Valores S.A.U., Nación Bursátil S.A., Bull Market Brokers S.A., Banco de la Provincia de Buenos Aires, Macro Securities S.A.U., Facimex Valores S.A., Banco Hipotecario S.A., BACS Banco de Crédito y Securitización S.A., Banco Supervielle S.A., GMA Capital S.A., Petrini Valores S.A., Allaria S.A., Becerra Bursátil S.A., Latin Securities S.A., Don Capital S.A., Cocos Capital S.A., Global Valores S.A. and Buenos Aires Valores S.A. acted as placement agents of Class XXIII Notes and Class XXIV Notes. SBS Capital S.A. and Banco de Servicios y Transacciones S.A. acted as arrangers of the issuance, and Banco de Servicios y Transacciones S.A. also acted as settlement agent of the issuance.
Argentine Government seeks bids for 3,000 MW new/revamped thermal facilities
The Argentine Government announced on July 27, 2023, by Resolution No. 621/2023 of the Secretary of Energy (“Resolution 621”), a bid seeking 3,000 MW of new/revamped thermal power facilities. Preferred bidders will enter into long-term US Dollar-denominated Power Purchase Agreements (“PPA”) with CAMMESA (the wholesale electricity manager, for its Spanish initials, Compañía Administradora del Mercado Mayorista Eléctrico S.A.).
The PPA provides for a fixed capacity/availability payment capped at US$ 18,000/MW-month and a variable inflow based on dispatch of the facility.
Offers may be for any type of thermal power generation or cogeneration, and the projects may include associated transmission and/or fuel infrastructure works. Power facilities shall be new or have less than 15,000 fired hours.
Below are the key takeaways of Resolution 621 and the request for proposals:
1. Projects included
- Line 1 “Thermal Generation for reliability and supply of the SADI” (“Line 1”): includes: (a) 1.0. Repowering – repowering existing combined cycles; (b) 1.1. Improvement of the supply reliability in critical areas; (c) 1.2. Improvement of efficiency and regional reserve; and (d) 1.3. Improvement of reliability of the wholesale electricity market. Line 1 seeks offers aggregating 3000 MW with a minimum goal of 2250 MW.
- Line 2 “Thermal Generation to replace, modernize and improve efficiency of the Tierra del Fuego power system” (“Line 2”): Line 2 seeks offers aggregating 70 MW with a minimum goal of 30 MW.
2. Authorized bidders
Bids may be submitted (individually or collectively) by legal entities incorporated in Argentina or abroad. SPVs (sole purpose vehicles), trusts and collective associations are also permitted.
3. Main aspects of the PPA
Selected bidders will enter into a PPA (in the form attached thereto), that, among other aspects, foresees:
- Target date for COD: The target date to achieve Commercial Operation Date (“COD”) is: (a) Line 1.0, 1/1/2025; (b) Line 1.1 and Line 2, 10/1/2025; and (c) Line 1.2 and 1.3, 4/1/2026.
- Long-Stop COD: The long-stop date for COD is: (a) Line 1.0, 06/30/2027; (b) Line 1.1 and 2, 03/31/2028; and (c) Line 1.2 and 1.3, 09/30/2028.
- PPA Term Commencement Date: The PPA shall commence upon the later to occur among (a) the COD effective date or (b) six (6) months prior to the target date for COD.
- PPA Expiration Date: The PPA expiration dates are as follows: (a) for Line 1.0, 12/31/2034; (b) for Lines 1.1 and 2, 9/30/2040; and (c) for Lines 1.2 and 1.3, 3/31/2041.
- Tenor of the PPA: The tenor of the PPA is as follows: (a) for Line 1.0, 10 years, and (b) for the other lines, 15 years.
- Partial COD: Partial COD is allowed, with a reduced remuneration scheme until COD is obtained for the total committed capacity.
4. Deadlines to be considered
Questions are permitted until August 29, 2023, whereas bids shall be submitted no later than August 31, 2023. Award of bids is targeted for October 10, 2023, and the PPAs shall be entered starting on October 15, 2023.
For additional information, please contact Nicolás Eliaschev, Javier Constanzó, Daiana Perrone, María Eugenia Muñoz, Pablo Arrascaeta, Florencia Martínez, Luciana Tapia Rattaro and/or Rocío Valdez.
Relevant aspects of the National Energy Transition Plan to 2030 and the Guidelines and Scenarios for the Energy Transition Plan to 2050 of Argentina
Argentina has issued the National Energy Transition Plan to 2030 (“NETP 2030”) and the Guidelines and Scenarios for the Energy Transition Plan to 2050 (“GSET 2050”). Such documents were made public by Resolution No. 517/2023 and Resolution No. 518/2023 of the Secretary of Energy. These plans aim to change the country’s energy matrix towards cleaner and more sustainable sources, thereby reducing greenhouse gas emissions responsible for global warming.
Below is a summary of the key takeaways of the NETP 2030 AND GSET 2050.
1. NETP 2030
1.1. Scenario and variables considered
The NETP 2030 is based on the following main assumptions:
- Growth of gross domestic product (GDP) of 2% per year.
- Electricity demand growth of 1.5% on a yearly basis, and natural gas demand growth of around 1.1%.
- Fuel demand growth of 2.3% on a yearly basis.
- Growth in natural gas production for local consumption between 2.4% and 3%, and in oil production between 3.4% and 6%.
- Reduction in the share of thermal generation from 59% to 35% (however, it contemplates 3,000 MW of the future tender soon to be called).
1.2. Quantitative targets
The NETP 2030 proposes the following quantitative targets:
- Not to exceed the total aggregate net emissions of 349 million tCO2.
- Reduction through energy efficiency and responsible energy use of at least 8% of energy demand.
- Share of more than 50% of renewables in electricity generation (currently, this percentage is around 14%, therefore this would require approximately 7.5 GW of new installed capacity).
- Electric car penetration of 2% of the vehicle fleet.
- Target of 1,000 MW of renewable distributed generation (currently, there is slightly more than 20 MW of distributed generation capacity installed, on the applicable legislation and additional considerations, see our report here).
- Expansion of the high voltage electricity transmission grid by 5,000 km of new lines (see our reports on the National Grid Expansion Plan here and on the recent call for expressions of interest for transmission works, here).
1.3. Qualitative targets
The NETP 2030 also proposes the following qualitative targets:
- Enabling conditions for the local development of the clean energy technology value chain, including new non-conventional and emerging technologies.
- Creation of new local and sustainable jobs related to the sector.
- Reduction of energy poverty as the needs associated with this concept are established.
- Facilitation of a sustainable energy transition.
1.4. Investments required
To meet the goals outlined in the NETP 2030, the document estimates that significant investment by the private and/or public sector will be required, totaling approximately 86,642 MM US$. It is estimated that around 23,362 MM US$ will be for new electric power; 3,817 MM US$ for transmission and 10,272 MM US$ in electric distribution; 10,000 MM US$ in LNG; 27,777 MM US$ in energy efficiency; 911 MM US$ for distributed generation, and 503 MM US$ in low emission H2.
We understand that given the magnitude of capital needed to comply with the NETP 2030 guidelines, the participation of the private sector and multilateral entities will be essential, alongside appropriate sectorial and macroeconomic base conditions.
1.5. Actions to meet the NETP 2030 objectives
The following actions are envisioned to comply with the targets set forth in the NETP 2030:
- Updating Laws 26,190 and 27,191: The need to update these laws is under study, in line with the technological developments of renewable sources. As this regime ends in 2025, an eventual reform should consider the necessary amendments in terms of fiscal and tax benefits during the additional term.
- Distributed Generation Law: The possibility of revising the regulatory decree of the law, to allow a higher participation and adhesion by the provinces.
- New regulatory frameworks: Such as the energy efficiency, promotion of low-carbon H2 (for additional information on H2 and the bill, see here), LNG, and e-mobility bills.
Among other actions, the PTE 2030 assumes the continuity of RenovAr auctions and the development of MATER, as well as other specific programs.
2. GSET 2050 - scenarios and key figures
The GSET 2050 considers three scenarios, referred as baseline, optimistic and ambitious. The three scenarios share a similar evolution until 2030, after which they diverge. Of these three scenarios, we highlight the following:
2.1. New installed capacity
Under the base scenario, 54 GW of new installed capacity is considered; 58 GW under the optimistic scenario; and 69 GW in the ambitious scenario. Of these overall values, a large share of renewables stands out: 34 GW in the baseline scenario; 38 GW in the optimistic scenario; and 45 GW in the ambitious scenario.
According to the GSET 2050, investments would total 101,536 MM US$ under the base scenario; 107,016 MM US$ under the optimistic scenario; and 113,679 MM US$ under the ambitious scenario.
Likewise, investments in distributed generation of around 2,273 MM US$ are considered in all scenarios.
The high share of electricity from renewable sources in the matrix stands out: 80% in the base scenario; 84% in the optimistic scenario; and 87% in the ambitious scenario.
2.2. Transmission grid expansions
Regarding transmission network expansions, an investment of around 7,594 MM US$ is considered in the base scenario; 8,829 MM US$ in the optimistic scenario; and US$ 10,688 in the ambitious scenario. To date, the GSET 2050 does not establish quantitative targets in terms of new transportation capacity.
2.3. LNG
Regarding LNG, although the GSET 50 does not establish quantitative targets, it assumes investments of around 22,500 MM US$, 30,000 MM US$ and 40,000 MM US$ in each respective scenario.
2.4. H2
Finally, investments in low-emission H2 are considered in extremely significant amounts, namely 9,574 MM US$, 21,440 MM US$ and 31,545 MM US$ in each scenario.
For additional information, please contact Nicolás Eliaschev, Javier Constanzó, and/or Rocío Valdez.
Legal Advice in the Issuance of Series XIII Notes of MSU S.A. for US$ 25,000,000
Counsel to Banco de Galicia y Buenos Aires S.A.U. as arranger, placement agent and settlement agent, and Balanz Capital Valores S.A.U., Banco Supervielle S.A., Banco de Servicios y Transacciones S.A., Facimex Valores S.A., Puente Hnos. S.A., Banco de la Ciudad de Buenos Aires, and Invertir en Bolsa S.A. as placement agents, in the issuance of MSU S.A. 6.50% Series XIII Notes for US$ 25,000,000 issued on July 17, 2023, and due July 17, 2026, under its US$ 150,000,000 Global Notes Program.
Banco de Galicia y Buenos Aires S.A.U. acted as arranger, placement agent and settlement agent, and Balanz Capital Valores S.A.U., Banco Supervielle S.A., Banco de Servicios y Transacciones S.A., Facimex Valores S.A., Puente Hnos. S.A., Banco de la Ciudad de Buenos Aires, and Invertir en Bolsa S.A. acted as placement agents.
Municipality of Río Cuarto’s Series XXXVI Treasury Notes Issuance for AR$850,000,000
Legal counsel to the Municipality of Rio Cuarto, as issuer, Banco de la Provincia de Córdoba S.A., and Puente Hnos. S.A., as arrangers and placement agents and Banco de Galicia y Buenos Aires S.A.U., Adcap Securities Argentina S.A., Balanz Capital Valores S.A.U., y GMA Capital S.A. as placement agents in the issuance of Municipality of Río Cuarto’s Series XXXVI Treasury Notes (the “Treasury Notes”), under the Municipality of Río Cuarto’s Treasury Notes Issuance Programme. The transaction closed on July 7, 2023, and the Treasury Notes are secured by the Municipality's credits for contributions levied on commercial, industrial and service companies' activities, and subsidiarily by the resources derived from the Federal Co-participation Regime. The Treasury Notes were issued for AR$850,000,000 at an annual floating interest rate equivalent to Badlar plus 12%, due on April 7, 2024.