Call for Expressions of Interest to Manage and Finance Extensions of Transmission Facilities
The Secretary of Energy has launched a call for expressions of interest to manage and finance (in whole or in part, with other interested parties, or with the National Government) extension works of the high-voltage transmission facilities (“EOIT”).
On July 6, 2023, Resolution No. 562/2023 issued by the Secretary of Energy (“Resolution 562”) was published in the Official Gazette. This regulation has initiated the EOIT and sets forth the main rules to be complied by interested parties in submitting non-binding proposals before the Secretary of Energy.
The call seeks proposals to ramp-up investments in the power generation and transmission sectors. The call is aimed to (among others) high-consuming power industries (e.g., mining projects), that may be interested in expanding the existing transmission facilities.
Resolution 562 expressly states that there has been a continuous growth in the power generation sector, yet such increase has not been matched by the necessary transmission works.
Reference is also made to the mining projects located in the north of the Province of San Juan (copper and gold, among others) and in the northwestern provinces (lithium) -many of them in areas that as of the date hereof are off-grid. According to Resolution 562, such projects could improve their feasibility and accelerate FID status if they were able to offtake electricity from the grid.
1. Key aspects of the EOIT
Under the EOIT, interested parties are invited to submit expressions of interest related to:
- the expansion of transmission capacity that would allow new power supply to be supplied to high-demand areas, in which the Government may provide funding up to 50% of the investment; or
- the supply of energy to mining projects that are currently off-grid, in which the funding is to be entirely provided by private investors or assumed by the sponsor.
2. EOIT requirements
EOITs must comply with certain requirements, such as, inter alia: provide details of the company or group of companies submitting the EOIT, describe the works to be undertaken, and the financing structure envisioned.
With respect to works that involve the expansion of the transmission grid, the submitting party will have a right of priority of dispatch over such facility, pursuant to the terms of Resolution 360/2023 (for additional information on this regulation, please click here).
EOITs shall be submitted no later than October 4th, 2023.
For additional information, please contact Nicolás Eliaschev, Javier Constanzó, and/or Rocío Valdez.
Legal Advice in Crédito Directo S.A.’s Class XXIV Notes Issuance
Counsel in the issuance of Crédito Directo S.A.’s 6,00% Class XXIV Notes for $ 550,000,000 issued on June 26, 2023, and due December 26, 2023, under its US$ 24,000,000 Global Notes Program.
Banco de Servicios y Transacciones S.A. acted as arranger and placement agent, and SBS Trading S.A., Banco de la Provincia de Córdoba S.A and Industrial Valores S.A. acted as placement agents.
Approval of the final text of the Contract for the Transportation of Natural Gas – President Néstor Kirchner Gas Pipeline
On June 26, 2023, Resolution No. 532/2023 of the National Energy Secretariat ("Resolution 532") was published in the Official Gazette, approving the final text of the Contract for the Transportation of Natural Gas through the President Néstor Kirchner Gas Pipeline (the "Contract" and "GPNK", respectively) between Energía Argentina S.A. (ENARSA or the "Transporter") and the Wholesale Electricity Market Administrator Company (CAMMESA or the "Shipper").
For background, it should be noted that, on one hand, Emergency Decree No. 76/2022 empowered ENARSA (with the approval of the Ministry of Economy) to freely negotiate contracts regarding transportation capacity with producers and/or shippers for the construction or expansion, in whole or in part, of the GPNK. Notably, the contracted transportation capacity will not be subject to the natural gas transportation rates approved by the National Gas Regulatory Entity (ENARGAS, for its Spanish acronym, Ente Nacional Regulador del Gas), which will apply to the uncommitted transportation capacity.
On the other hand, for background to the Contract, Resolution No. 828/2023 of the Ministry of Economy had approved its execution with the ultimate goal of replacing liquid fuels used in the generation of electricity and other industries, as well as facilitating the eventual export of natural gas.
Main provisions of the Contract:
- Purpose: The Shipper agrees to deliver or have delivered natural gas to the Transporter for transportation, and the Transporter agrees to receive, transport, and deliver natural gas to the Shipper or on behalf of the Shipper to whomever the Shipper designates, in quantities of cubic meters equivalent to 9,300 kcal/m3 between the point(s) of receipt at the entrance of the GPNK near Tratayén, Province of Neuquén, and the point(s) of delivery that will enable the entry of natural gas into the gas pipeline called "NEUBA II" in the TGS system, in the locality of Salliqueló, Province of Buenos Aires, in a first stage, and subsequently to the locality of San Jerónimo, Province of Santa Fe.
- Character of Supply: The transportation service will not be subject to reductions and will be firm and uninterrupted. It may only be reduced and/or interrupted in exceptional operational and/or natural gas supply situations.
- Term: The Contract will come into effect on June 20, 2023, and will remain in force and effect until June 20, 2058. The Contract will be renewed for successive periods of 1 year until either the Transporter or the Shipper expresses its intention to terminate it.
- Contracted Daily Quantity (CDQ): Up to 25,000,000 m3/day, distributed as provided in Article 6 of the Contract.
- Right of Priority: CAMMESA will have the right of priority for contracting with ENARSA for any new capacity suitable for operation, for partial quantities and up to the total additional capacities that the GPNK Project (as defined in the Contract) will contribute, in which ENARSA obtains rights to transport natural gas.
- Price: (i) during the first 15 years, equal to $1.023 USD/m3 per month of daily capacity, and (ii) starting from year 16, equal to $0.023 USD/m3.
- Assignment: The Shipper, with the prior authorization of the Transporter and the Regulatory Authority, may fully and/or partially assign the rights arising from this Agreement to the Generator(s) Agent(s) of the Wholesale Electricity Market (WEM) that it deems appropriate.
- Jurisdiction: The Contract shall be governed by and construed and interpreted in accordance with the laws of the Argentine Republic. Disputes may be referred to the Secretary of Energy at the administrative level, and judicially the Federal Civil and Commercial Courts of the Argentine Republic with jurisdiction in the Autonomous City of Buenos Aires is established.
For additional information, please contact Nicolás Eliaschev, Javier Constanzó, and/or Rocío Valdez.
Legal Advice in the Issuance of Loma Negra Compañía Industrial Argentina S.A.´s Series 2 Notes for US$71,722,774
Counsel to Banco de Galicia y Buenos Aires S.A.U., Banco Santander Argentina S.A., Industrial and Commercial Bank of China (Argentina) S.A.U., Banco Patagonia S.A., Facimex Valores S.A., Buenos Aires Valores S.A., Max Capital S.A., Puente Hnos. S.A., Allaria S.A., and Balanz Capital Valores S.A.U. as placement agents, in the issuance of Loma Negra Compañia Industrial S.A.’s Series 2 Notes for USD 71,722,774, denominated and payable in USD at a 6.50% annual interest rate, due December 21, 2025. The Series 2 Notes were issued under the company´s global notes program for an amount of up to US$500,000,000.
Banco de Galicia y Buenos Aires S.A.U., Banco Santander Argentina S.A., Industrial and Commercial Bank of China (Argentina) S.A.U., Banco Patagonia S.A., Facimex Valores S.A., Buenos Aires Valores S.A., Max Capital S.A., Puente Hnos. S.A., Allaria S.A., and Balanz Capital Valores S.A.U. acted as placement agents of the Series 2 Notes. Banco de Galicia y Buenos Aires S.A.U. also acted as settlement agent for the Series 2 Notes.
Electricity Transmission: Expansion of Existing Capacity. New Network Works and Associated Infrastructure
On June 12, 2023, Resolution No. 507/2023 of the National Energy Secretary (‘Resolution 507’) was published in the Official Gazette. Resolution 507 approved the following plans: (i) the Extra-High Voltage Electric Power Transmission System Expansion Plan (500 kV); (ii) the Existing Extra-High Voltage Electric Power Transmission Stations Revamping Plan (500 kV); (iii) the Existing High and Medium Voltage Transformer Stations Revamping Plan (132 kV); and (iv) the High and Mid Voltage Electric Power Transmission System Expansion Plan.
These plans aim to address the curtailment of some corridors of the transmission system and their respective transformer facilities, without the possibility of connecting potential renewable areas with the major demand nodes.
Furthermore, Resolution 507 requires the Federal Council of Electric Power (CFEE, for its Spanish acronym, Consejo Federal de la Energía Eléctrica), the Committee for the Administration of the Federal Electric Power Transmission Trust Fund (CAF, for its Spanish acronym, Comité de Administración del Fondo Fiduciario para el Transporte Eléctrico Federal), the Wholesale Electricity Market Administrator Company (CAMMESA, for its Spanish acronym, Compañía Administradora del Mercado Mayorista Eléctrico S.A.), the Special Unit for Electric Power Transmission System (UESTEE, for its Spanish acronym, Unidad Especial Sistema de Transmisión de Energía Eléctrica), the Works Commission Resolution No. 1/03, and the Committee for the Administration of the Electric Power Supply Transmission Works Trust (FOTAE, for its Spanish acronym, Fideicomiso de Obras de Transporte para el Abastecimiento Eléctrico) to collaborate with the Energy Secretary in order to carry out the infrastructure projects involved in this resolution.
Resolution 507 does not establish the mechanisms by which these plans will be implemented, which will be subject to complementary regulations.
The following details the network and associated infrastructure covered by each plan:
I. Extra-High Voltage Electric Power Transmission System Expansion Plan
This plan is included in Annex I of Resolution 507, transcribed below:
II. Existing Extra-High Voltage Electric Power Transmission Stations Revamping Plan
This plan is included in Annex II of Resolution 507, transcribed below:
III. Existing High and Medium Voltage Transformer Stations Revamping Plan
This plan is included in Annex III of Resolution 507, specifying the works to be carried out in TRANSBA, TRANSNEA, TRANSNOA, TRANSPA, DISTROCUYO, EPESF, ENERSA, EMSA, SECHEEP, and DPEC.
IV. High and Medium Voltage Electric Power Transmission System Expansion Plan
This plan is included in Annex IV of Resolution 507, specifying the works to be carried out in TRANSNOA, TRANSBA, DISTROCUYO, TRANSNEA, TRANSCOMAHUE, and TRANSPA.
For additional information, please contact Nicolás Eliaschev, Javier Constanzó, and/or Rocío Valdez.
“Total Assets I” Financial Trust for AR$ 700,076,651
Deal counsel in the issuance and placement in Argentina of trust securities for AR$ 700,076,651 issued under the “Total Assets I” 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. and Banco Patagonia S.A. acted as placement agents.
Municipality of Cordoba’s Series XLVIII Treasury Notes Issuance for AR$ 3,000,000,000
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 Hipotecario 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.U., Banco Patagonia S.A. and Dracma S.A., as placement agents, in the issuance of Municipality of Cordoba’s Series XLVIII Treasury Notes (the “Treasury Notes Series XLIVIII”), under the Municipality of Cordoba’s Treasury Notes Issuance Program. The payments due under the Treasury Notes Series XLVIII are secured by certain rights of the Municipality to collect certain contribution charges over the commercial, industrial and services activity. The Treasury Notes Series XLVIII were issued on June 1, 2023, for AR$ 3,000,000,000 at an annual floating interest rate equivalent to Badlar plus 7.49%, due on April 8, 2024.
Legal Advice in Molinos Agro US$250,000,000 Pre-export Financing from IDB Invest
Counsel to Molinos Agro S.A. and Molinos Overseas Commodities S.A. in the financing for up to US$250,000,000 from IDB Invest. The uncommitted financing consists of a direct loan of up to US$50 million, and up to US$200 million of mobilized funds, with Santander and Rabobank as lead arrangers. This funding aims to ensure short and medium-term liquidity for pre-financing the company's exports of products and commodities.
“San Cristóbal Servicios Financieros II” Financial Trust for AR$ 375,500,000
Deal counsel in the issuance and placement in Argentina of trust securities for AR$ 375,500,000 issued under the “San Cristóbal Servicios Financieros II” Financial Trust, in which San Cristóbal Servicios Financieros S.A acted as trustor, TMF Trust Company (Argentina) S.A. acted as trustee, Banco Macro S.A. acted as arranger, First Corporate Finance Advisors S.A. acted as financial advisor and Macro Securities S.A.U. acted as placement agent.
Telecom Argentina becomes a shareholder of Open Pass
Legal counsel to Open Pass S.A. ("Open Pass") and its founding shareholders in the negotiation of a strategic agreement with Telecom Argentina S.A. ("Telecom") to promote Open Pass’ consolidation in the domestic Fintech market, expand its proposal of B2B financial technological solutions, and venture into new markets.
The transaction consisted in Telecom’s indirect acquisition of 50% of Open Pass’ shares through a share subscription and the reorganization of the company in preparation for its upcoming internationalization. In addition, as part of the transaction, Open Pass’ founding shareholders entered into a shareholders’ agreement with Telecom to regulate their rights and obligations. The transaction closed on April 24, 2023.
Open Pass is a technology company that offers Fintech As A Service infrastructure throughout Latin America. In turn, through its participation in Open Pass, Telecom aims to enhance the digital financial services offering of Personal Pay -Telecom's virtual wallet that uses Open Pass’ technology- both for individuals and companies.