Integración Eléctrica Sur Argentina's AR$ 250 million Class IV Short Term Notes issuance
Deal counsel in Integración Eléctrica Sur Argentina S.A.’s issuance of Class IV Short Term Notes for AR$ 250,488,250 under its U$S 50,000,000 Short Term Notes Programme. AdCap Securities Argentina S.A. acted as arranger and placement agent of the transaction. (2016)
Nadim Chaudhry about AIREC: “Nicolas Eliaschev suggested us to organize an event in Argentina”
Interview with Nadim Chaudhry posted yesterday on cleanenergymag.news
-Has Airec met the expectations you had?
-Airec has surpassed our expectations. It first came up in discussions in New York in April 2015, with Nicolas Eliaschev telling us that we had to make an event in Argentina. I wasn’t very positive at the time because to tell you the truth, I’ve been waiting for Argentina to solve out it’s problems for a long time. But he insisted telling me about Macri and the changes to come. I told him that my events are about attracting foreign capital and linking foreign investment and expertise with domestic companies, so there has to be an appetite for people to invest in Argentina for my events and format to work. As it turned out, I was wrong, and Nicolas was right.
Actually, the night Macri won I sent him an email telling him that we should work on this, and the next day my team and I started researching into Argentina, and building up some thoughts about when it would be the right time to make the event. And now it seems to be the right time.
-Tell me about Green Power, and the team you lead.
-We have a great team, we’ve been doing specifically renewable energy events since 2003. There wasn’t a lot happening back then, but as costs started to come down (solar energy has seen an 80% decrease in 8 years, wind is 50% down in a similar time frame), we have arrived to a point at which renewable energies are deeply disruptive to the existing energy system. So it’s been an incredible 13 years in the energy markets, and I think that we are about to enter a period of tremendous change.
The other thing that is happening all over the world is that every country has this challenges, which create opportunities, because in the end it is all about building an energy system that costs less, so we can have cheaper energy. And obviously the huge benefit is that the new systems are going to be emissions-free, both in terms of greenhouse gases and also in the linkage with transports, as we are going to see the flip from oil to electricity and the rise of electric vehicles.
A lot is happening, and there are huge opportunities around. Within that, we can see that the other trend is digitalization, which gives you greater efficiency compared to analog systems. We are talking about digital smart grids, linked to variable renewable energy power generation. Also within that, there’s a tendency to move from centralization to decentralization, which changes business models. We have seen it in other industries: when you have a real disruptive technology change, you have to adapt the business model. Business models have to change, and in the energy market we are entering that period of transition where we have to move from centralized systems to decentralized ones.
-Also, big companies are changing their ways and now aim to become energy providers as well.
-Big companies, in terms of corporates and industrialists, are looking at self-generation as part of the decentralization of the system. There are opportunities for them to have their own energy. Major consumers like Ikea, Google and Apple are big investors in renewable energy, increasingly looking at this table. Lower energy costs are a bonus for a business that’s planning long term and doesn’t want to deal with the fluctuations of having fossil fuels in their supply chain, which makes them become big players in the renewable energy. Again, there’s a linkage with electric vehicles, and you can see huge interest from the lights of Googles and Apples in that space. Whether they’ll be successful is another question. There still probably are gonna be car companies interested in this market. For example, Volkswagen has invested 2 billion dollars in electric vehicles and infrastructure, and they have unprecedented experience in the car sector.
-Tell me about you, how did you get involved in the renewable energy world?
-I spent 9 years working in mobile technology events, from 1994 to 2003, and I saw all the impact of dramatic technology change of mobile phones, but also the invention of the internet, fibre optics, and a whole host of telecommunications technologies that would deploy very quickly and have tremendous impacts. I am always interested in new technology, so around 2002 I started researching and getting interested in renewable energy, and about the potential for the environmental impact. I knew that there would be dramatic technological change, because as humans we are always innovating and creating better platforms, and also I knew that we could evolve and create new technologies which wouldn’t harm the planet, and that we can and have to live within the boundaries of living in one planet. There has to be a way in which you can manage that, but also you have to harness the powerful forces of capitalism. So when I started in 2003 with renewable energy events, renewables were seen very much as a left wing issue, and it was thought that it was only through control and left wing policies that you could protect the environment, whereas I saw the opportunity to harness business and create businesses that were incentivised to create clean products, and clean systems. It’s up to governments to draw the boundaries and create the market, but there’s not a reason why we can’t have markets of clean products and encourage innovation and personal risk in entrepreneurs.
Yes, politicians can construct markets, but they are always under the influence of the electorate, so you have to create the right environment and encourage people to take risks, and allow them to be able to get the rewards from those risks.
-Change comes with an emotion, with a desire to change, and it seems like that’s what you have done.
-Yes. We try to create platforms that encourage change, that accelerate project development, that spread best practices, that help derisk the markets. We understand that we need to get equity investors involved, that they need to meet the developers that are taking the risks, and once you got those two partners then you need to educate the banks. Here in Argentina, right now the next step is to educate the local banks to understand what debt finance is, what energy finance is. Then when you got the risk takers, and they’ve got the money, then they can deploy and buy the services and products that are required to create the projects. It’s about derisking the market, about understanding the details of what it takes for a market to function, and connecting those people so that they’re able to make informed business decisions so that we don’t have bad projects or low quality systems. This projects are designed for 20 years ahead, so it’s important that they work. When a market is starting in a place like Argentina, it is very important that it does well, that it doesn’t get a bad reputation because it is the birth of something new, and reputation is everything.
-Are you planning an event for next year?
Yes, we are very committed with Argentina in the long term, in connecting the market and accelerating the changes. Everything will have its time, but we are very interested in helping Argentina develope the new energy system. We intend this event to become the annual meeting point for Argentina’s energy industry. We are here to help create an event where people can do 3 or 4 month work in a short space of time, meet a huge array of people and make the right connections.
http://cleanenergymag.news/nadim-chaudhry_airec/
Sale of Albares Renovables Argentina S.A.
Legal counsel to Albares Renovables S.L. and Selena Partners S.A. in the sale to Petrobras Argentina S.A. of all of the shares of Albares Renovables Argentina S.A. (a company developing a 100MW electricity generation plant).
“RG Albanesi Serie IV” Financial Trust for AR$ 250 million
Legal Advisors of the trustor Rafael G. Albanesi S.A. in the issuance and placement in Argentina of AR$ 250,000,000 “RG ALBANESI SERIES IV” Trust Securities, under the U$S 50,000,000 Global Trust Programme “RG ALBANESI”. TMF Trust Company (Argentina) S.A. acted as trustee, Banco Macro S.A. and SBS Capital S.A. acted as arrengers, while Macro Securities S.A., Banco Supervielle S.A., SBS Trading S.A. and SBS Trade S.A. acted as placement agents.
Important News on FX Regulations: The Argentine Central Bank continues to simplify the FX Market
The Argentine Central Bank issued Communication “A” 6037, repealing some remaining regulations from the time in which the Argentine FX market was subject to considerable restrictions. Among other aspects, this new regulation has simplified the FX market, reducing bureaucratic requirements and operational costs.
Communication “A” 6037 has abrogated the need to produce documental evidence for undertaking FX transactions. Now it will be enough to execute a sworn statement in which the purpose of the transaction shall be specified (e.g., purchase of freely available currency, foreign trade, etc.), as well as certain basic information to be included. Monthly caps were also repealed and only transactions to be made in-cash continue to be limited, with the purpose of fostering anti-money laundering policies.
With these latest changes, the FX market can again be named as a “only and free FX market”, since now certain “alternative” transactions are no longer necessary, such as the blue-chip swap.
In addition, Communication “A” 4805, which considerably limited the ability of Argentine residents to enter into derivative transactions with foreign counterparties, was repealed.
Generación Frías’ AR$ 160 million Class III Notes Issuance
Issuer counsel in Generación Frías’s issuance of its AR$ 160,000,000 Class III Notes under its $ 50,000,000 Global Notes Programme. Puente Hnos S.A., Banco de Servicios y Transacciones S.A., SBS Trading S.A. and SBS Trade S.A. acted as arrangers and placement agents. (2016)
Generación Mediterránea’s AR$ 200 million Class V Notes Issuance
Issuer counsel in Generación Mediterránea’s issuance of its AR$ 200,000,000 Class V Notes under its $ 100,000,000 Global Notes Programme. Banco Macro S.A. and BACS Banco de Crédito y Securitización S.A. acted as arrangers, while Macro Securities S.A., BACS Banco de Crédito y Securitización S.A. and Banco Hipotecario S.A. acted as placement agents. (2016)
Santiago Saenz’s AR$ 70,108,844 Series VII Short Term Notes Issuance
Deal counsel in Santiago Saenz S.A, issuance of AR$ 70,108,844 Series VII Short Term Notes under the AR$ 200,000,000 Global Notes Programme. Consultatio Investments S.A. and Banco Comafi S.A., acted as arrangers and placement agents, while Balanz Capital Valores S.A., Banco de Servicios y Transacciones S.A. and Industrial Valores S.A, acted as placement agents. (2016)
Argentina: News on Renewable Energy
On July 22nd, Emergency Decree No. 822/16 (the “Decree”) was published, introducing important changes regarding electricity generation from renewable sources. The declared purposed is to provide legal certainty and enable financing for both local and foreign investors.
The Decree introduces changes to Law No. 27,191 and regulates provisions related to the Procedure for the Open Call to supply in the Wholesale Electricity Market (“MEM”, for its acronym in Spanish language) electricity from renewable generation sources denominated the “RenovAr Program (Round 1)” (“RenovAr”).
The main aspects of the Decree are set out below.
- A budget cap of U$S 1,700,000,000 has been established to be assigned to promotional benefits under Law No. 27,191 for the current fiscal year. It is foreseen that the surplus shall be automatically transferred to the upcoming fiscal year.
- A maximum term of 30 years has been prescribed for: i) renewable power purchase agreements (“Renewable PPA”) to be signed with the Wholesale Electric Market Management Company (“CAMMESA”, pursuant to its acronym in Spanish language) and, consequently, ii) agreements signed between the Argentinean State or the Trust Fund for the Development of Renewable Energy (“FODER” for its acronym in Spanish language) and beneficiaries of the tax incentive regime (“Tax Incentive Regime”).
- Additional termination events to enable the owners to exercise a Put Option and transfer the Project, apart from those already foreseen in the Draft PPA, have been included. For instance: i) termination of the State´s or FODER´s Guarantees, ii) total or partial lack of payment of 4 consecutive Sales Liquidation or 6 Sales Liquidation, which is not limited to one year, iii) the possibility to include additional events is foreseen in order to minimize risks and facilitate financing terms.
- The State or FODER is entitled to transfer the Projects, when exercised the right to Purchase or Sell, to third parties, prior call of a Public Tender.
- Arbitration can be convened in Argentina or abroad, both in the Renewable PPA and in the agreement signed with the State or the FODER.
- The Trust Agreement can be structured into different Public Trusts with the sole purpose of: i) granting payment of the Sales Liquidation, ii) funding the financial instruments prescribed in Law No. 27,191, iii) granting the Purchase or Sell Price of the Project and iv) issuing debt securities.
- Debits and/or credits for accounts used by public trust funds under the FODER and trustee´s transactions involving those accounts shall be exempted from the tax imposed by Law No. 25,413.
- Indemnity clauses can be established in favor of the trustee, its directors and/or related companies in the Trust Agreement and/or Contract of Adherence to the FODER. The Ministry of Energy and Mining´s (“MEYM” for its Spanish acronym) budget resources shall be used, not being able to affect trust funds.
- The Ministry of Treasury and Public Finance is entitled to issue Treasury Bills up to U$S 3,000,000,000 as a guarantee of the FODER. Certificates shall be issued to be used as a guarantee of the Purchase Price of the Project. Treasury Bills shall be issued for the total price of the insured Projects.
- The MEYM can issue supplementary regulations.
For further information, please contact us.
Argentina: Important News on Criminal Exchange Proceedings
The Board of Directors of the Argentine Central Bank (the “Central Bank”) announced important news on criminal exchange investigations. In this connection, the Superintendence of Financial and Exchange Institutions (the “Superintendence”) was instructed to apply the legal principle of retroactivity of the “more favorable criminal law”, on the ground of law precedents set forth by the Supreme Court of Justice (in re “Cristalux” and “Docuprint”). According to this principle, subsequent rules which are more favorable to the prosecuted persons or entities apply to cases that were before deemed a criminal offence by the Criminal Exchange Regime.
The Central Bank estimates that about 60,000 persons will be released from current criminal exchange proceedings and shall cease to be prosecuted for transactions made in the past that are now fully permitted, particularly, for minor infractions which, from a legal standpoint, can be deemed not subject to sanctions due to their insignificance.
In this way, proceedings followed for infractions that are no longer in force will cease. This would include, among other situations, the purchase of foreign currency for travels without evidence of the trip, extraction of foreign currency from ATMs abroad in excess of the permitted amounts, excess of remittances of foreign currency for family assistance, etc.
It is expected that this decision will allow the Superintendence to focus its resources and efforts on the investigation of serious exchange infractions, as well as to accelerate these proceedings.