PPP News – Stage I Safe Roads Network and LED Luminaires

  1. Highways – Final Documents and Contracting Schedule Publication

    On January 29, 2018, Resolution No. 147/2018 issued by the National Highway Administration (hereinafter, “DNV”, for its Spanish Acronym), was published in the official gazette, which: (i) initiated the national and international procedure applicable to “Highways and Safe Roads Network – Stage 1” (the “Project”), (ii) approved the final documents for the Project, and (iii) sets forth April 3, 2018, as deadline for bid submission.

    As previously indicated in the newsletter “Public-Private Partnership Agreements. Preliminary Bidding Terms of the National and International Tender: Highways and Safe Roads Network- Stage 1”, dated as of December 21, 2017, the Project is the first procedure under the PPP regime, an innovative modality in Argentina, creating a high expectative and interest in its development.

    In addition, final documents are also available in the Undersecretariat of Public-Private Partnership’s (the “UPPP”) website.
     

  2. LED Luminaries Program

    Additionally, on January 22, 2018, a preliminary document in connection to the Public Lighting Energy Efficiency Program (hereinafter, the “Program”) was published on the web site of the UPPP. This Program is the second project under the PPP regime, and its main aspects are described below:

    1. Object of the Program

      The Program seeks to develop the energy efficiency and illumination quality of the public lighting, by means of the replacement of existing luminaries, for brand new LED technology luminaries. Therefore, the energy saved by using this new technology will have a positive impact in the maintenance costs of the public lighting network, whereas these will be ultimately reduced. This saving allows to afford the new LED luminaries installation and maintenance, as the cash flow related to such energy saving will be destined -either partially or totally- to the Program.

    2. Scope of the services

      The services to be provided by those awardees comprises:

      • Design of the LED luminaries, in accordance to high-quality standards.
      • Provision of the LED luminaries.
      • Installation and commissioning of such luminaries.
      • Waste disposal.
      • Training of municipal employees.
      • Public lighting service provision during the whole term of the PPP Contract.
    3. Contractual scheme
      • The Ministry of Energy and Mining is set forth as the entity in charge of the Program.
      • The Ministry of Energy will also act as contracting party thereof, by means of the Secretariat of Strategic Planning. Different agreements will be entered by and between the respective Governmental spheres involved in the execution of the Program.
      • The PPP Contractors will be those selected bidders.
    4. Program Stages and PPP Contractor’s works and services

      Upon selection as winner in this Program, the PPP Contractors will enter into a PPP Contract, for a total term of ten (10) years from its execution thereof. This PPP Contract will comprise two different stages: (i) Main Works construction and, (ii) Main Services provision.

      During the Main Works stage, the PPP Contractor will undertake all necessary works for the construction and commercial operation of the LED Luminaries. During the Main Works construction stage, the PPP Contractor shall conduct all the necessary works and tasks to put the luminaries into operation. The term for this stage is for a term of one (1) year, following the PPP Agreement execution.

      After the Main Works stage is completed, the Main Services provision stage will take place, for a term of nine (9) years. During the Main Services provision stage, the PPP Contractor is bound to comply with the following services: (i) LED luminaries’ maintenance; (ii) municipalities and citizens queries and claims, and (iii) elaboration of daily reports.

      In addition of these Main Works and Main Services, the Program also foresees the execution of: (i) Mandatory Additional Works –in light of public interest reasons-, and (ii) Voluntary Additional Works -proposed by the PPP Contractor-. Terms and conditions in regards to the payment of these additional works and services will be subject of regulation in the final bid documents.

    5. PPP Contractor’s income

      The PPP Contractor’s income comprises the Public Contribution (Spanish: Contraprestación Pública), which includes: (i) Availabilty contribution (Spanish: Contraprestación por Disponibilidad), linked to the Main Services during the Main Services Stage (OPEX); and (ii) Investment Contribution (Spanish: Contraprestación por Inversión), linked to the Main Works during the Main Works Stage (CAPEX).

      In regards to the Availability Contribution, Payment Availabilty Titles (“TPD”, for its Spanish acronym), will be issued in favor of the PPP Contractor, on a monthly-basis, whereas with respect to the Investment Contribution, Payment Investment Titles (“TPI”, for its Spanish acronym), will be issued in favor of the PPP Contractor. This TPI will represent the actual works executed during the respective investment period.

    6. Risk mitigation

      The PPP sets forth a risk-mitigation matrix, where the different risks that comprise the Program are assigned to each contracting party. As the PPP will be executed in EDENOR’s and EDESUR’s concession areas, these companies will act as collectors of the municipal taxes that will be affected to the Program, as a way to reduce the PPP Contractors’ payment risk. Therefore, the Program foresee that such distribution companies will collect the municipal taxes in favor of the Program, and these amounts will be then allocated to the Program.

      Additionally, for those cases where the exceeding cash flow results insufficient for the payment of the respective amount, the trustee will require the Province to allocate amounts resulting from the federal co-participation quota.

    7. Expected investment

      The Program contemplates the installation of around a hundred thousand (100,000) luminaries per year, with an expected initial investment of approximately US Dollars fifty millions (US$ 50,000,000) and annual operative costs (operation and maintenance) of approximately US Dollars two millions (US$ 2,000,000).

    8. PPP Trust

      As in the Highways Project, Stage 1, a separate PPP Trust will be created in order to administrate the necessary flows to perform the corresponding payments by the emission of the TPIs and TPDs. The trust will be funded with: (i) local municipal taxes, and (ii) contingent public contribution. The PPP Trust parties are not detailed, but it may be assumed that the National Estate – through the Ministry of Energy and Mining – will act as trustor; a financial entity as trustee; and every PPP Contractor as beneficiary.

    9. Other relevant matters
      • A risk matrix where the risk distribution between the contracting parties is available, in accordance to Section 9, subsection b) and c) of Law No. 27,328.
      • With regards to dispute resolution mechanism, a first technical instance is prescribed, following which arbitration will take place.

From TRS&M, we are following this process with much attention and we are available to expand any point developed above.

by trsym

Renewable Energy - Corporate PPA´s: New Regulation

On January 10th, Disposition No. 1-E/2018 (hereinafter, the “Regulation”) issued by the Renewable Energy Sub-Secretariat (“SSER”, for its Spanish acronym) was published in the Official Gazette. The Regulation sets guidelines regarding the registration of the renewable energy generation projects (the “Projects”) before the National Renewable Energies Project´s Registry (“RENPER” for its Spanish acronym) and priority dispatch.

The Main aspects of the Regulation are summarized below:

  1. Priority Dispatch

    • If priority dispatch requests exceed the available capacity, the tiebreak shall be done according to the energy generation factor and requested tax benefits
    • If the owner of the Project is awarded priority dispatch and fails to submit the guarantee, priority dispatch for the same Project cannot be requested for at least four (4) quarters
    • Priority dispatch can be requested for a part of the total capacity of the Project
    • The expansion of transmission capacity which provoked the congestion will extinguish priority dispatch
    • Priority dispatch for future expansions of transmission capacity is regulated
    • Priority dispatch for expansions of transmission capacity on behalf of the Owner of the Project is regulated
  2. Investment Reference Values (in USD/MW)
    Wind Energy 1.250.000
    Photovoltaic Solar Energy 850.000
    Biomass (combustion and gasification) 3.000.000
    Biogas 5.500.000
    Sanitary Landfill Biogas 2.500.000
    Small Hydro 3.000.000
  3. Maximum Amount of Tax Benefits (in USD/MW)
    Wind Energy 625.000
    Photovoltaic Solar Energy 425.000
    Biomass (combustion and gasification) 1.500.000
    Biogas 2.750.000
    Sanitary Landfill Biogas 1.250.000
    Small Hydro 1.500.000
  4. RENPER

    • The registration before the RENPER shall be done by a formal presentation before the Renewable Energy Sub-Secretariat, that will be replaced, in the future, by Distance Procedure Platform (“TAD”, for its Spanish acronym)
    • Projects who have qualified under Program RenovAr are exempted to submit the technical information and are entitled to request the Inclusion Certificate for the tax benefits approved by the pertaining RenovAr Round up to the maximum available value
    • Registration procedure, requests and compliance deadlines are regulated
    • The RENPER will be made public at the Ministry of Energy and Mining´s website

Do not hesitate to contact us for further information.

by trsym

Electric Energy: “Critical Project” status and Tax Benefit procedure

On January 2 the Ministry of Energy and Mining (hereinafter, the “MEyM”) and the Ministry of Production (hereinafter, the “MP” for its Spanish acronym), issued Joint Resolution No. 4-E/2017 (hereinafter, the “Resolution”), which introduced the applicable procedure so as to obtain a “Critical Project” status, in the terms of Section 34 of Law No. 26.422 (hereinafter, the “Law”).

Section 34 of the Law foresees an exemption from import duties, statistic rates and tax-checking duties with regards to new imported goods, which are destinated to infrastructure works related to: (i) generation, transportation and distribution of electric energy, (ii) oil and gas up-stream and down-stream; (iii) construction of oil processing plants and expansion of those already in use; and (iv) oil and gas transportation, storage and/or distribution.

The Resolution is applicable to owners of wind farm projects, which have been awarded with a PPA under RenovAr 1, 1.5, and Resolutions No. 202/2016 and 168/2017 issued by the MEyM.

Main aspects of the Resolution are summarized below:

  1. Beneficiaries

    As indicated above, the Resolution shall only apply to owners of wind farm projects that have executed a PPA within RenovAr 1, 1.5 and Resolutions 202/16 and 168 /2017. Thus, the application of the benefits contained therein is not applicable to those projects under RenovAr 2.

  2. Comprised Goods

    The benefits are only applicable in regards to wind turbine generators (equal or greater than 700 kW), with tariff code 8502.31.00, as per indicated in the respective inclusion certificate. In the event that these wind turbine generators –and is tariff code- was not contained in the inclusion certificate, the applicants may request the Sub-Secretariat of Renewable Energy its insertion thereto.

  3. Application of the tax benefit

    The beneficiaries will benefit of this tax benefit to the extent that the exempted goods are solely allocated to the wind farm projects mentioned above.

  4. Time frame

    The “Critical Project” status may be requested until January 31, of current 2018, whereby the importation of the wind turbines must be complied on or before December 31, 2019.

  5. Applicable procedure

    The procedure establishes, inter alia, the following steps that must be complied so as to obtain the “Critical Project” status: (i) a benefit request application must be submitted before the MEyM; (ii) the “Company Information” form must be attached to such request; (iii) legal representative’s faculties must be accredited, (iv) project individualization; (v) affidavit that the applicants are not included in any of the Subsections a) and d) of Section 12 of Law No. 26.360; (vi) incorporation of the applicable goods to the Inclusion Certificate request, if applicable; and (vii) compliance of Hazardous Waste Law No. 24.051 and Chemicals Components Law No. 24.040 affidavit.

    Once the requirements have been fulfilled, a first stage of analysis by CAMMESA is carried out, jointly with the Direction of Renewable Energies. If documentation and/or information is uncompleted or insufficient, these organisms may, an additional 10 day term is contained so as to comply with such requirements.

    The procedure concludes with a Resolution to be issued by Sub-Secretariat of Renewable Energy, which shall be notified to the applicant and informed to the MP and AFIP.

At TRS&M, as a leading Law Firm in the electricity sector, we are following these developments with great detail and are available to discuss any query regarding the above.

by trsym

Renewable Energy: Distributed Generation

On December the 27th, Law No. 27,424 regarding “Renewable Energy Distributed Generation Promotion Program” was published on the Official Gazette (hereinafter, the “Law”).

The Law declares distributed generation as national interest and establishes the legal and contractual conditions for the generation of renewable energy for users of the distribution grid for self-consumption and eventual delivery of surplus electricity to the network (the “Projects”).

Main aspects:

  1. Targeted Users
    • Users connected to the distribution grid are allowed to install the necessary equipment to generate distributed energy for a power capacity equivalent to the one contracted with the distribution company.
    • An authorization from the distribution company is requested.
    • Projects regarding the construction of national public buildings must include distributed generation systems from renewable resources.
    • An efficient energy system will be proposed for the existing public buildings.
  2. Connection Authorization
    • It shall be required to the distribution company.
    • Term for issuance: the same as established by the local regulation for the electricity meters.
    • It cannot be denied when the equipment has been certified.
    • The distribution company will technically asses the safety of the Project.
    • Once the Project is technically approved, the user-generator and the distribution company will execute an agreement.
    • Installation costs cannot exceed the costs for changing or installing electricity meters.
    • Penalties are established for distribution companies who do not comply with the terms established by the Law.
  3. Billing

    Every distribution company will compensate the generated electricity with the consumed electricity for each user, according to the following guidelines:

    • The user-generator shall be entitled to a special rate for the electricity delivered to the grid, according to the seasonal price.
    • The billing shall reflect the volume of required energy and the amount of the electricity delivered to the grid. The user shall pay the net result of those values.
    • Shall there be a surplus in favor of the user-generator, it will constitute a credit for future billings. If the credit is not cancelled, the user-generator can request such credit to the distribution company. The credits can be assigned between users interconnected to the same distribution company.
  4. Enforcement Authority

    The Law´s enforcement authority will be empowered to:

    • Issue technical and regulatory rules for the approval of the Project.
    • Issue technical rules and guidelines for interconnection authorizations to the grid.
    • Act as a trustor.
    • Fix the rate for the electricity delivered to the grid.
    • Settle the general guidelines for the agreements.
  5. FODIS

    The Law established the Renewable Energy Distributed Generation Fund (“FODIS” for its Spanish acronym).

    • Purpose: the use of the trust assets for the granting of loans, incentives, warranties, capital contributions and acquisitions of other financial instruments for the development of the Projects.
    • Parties: the enforcement authority will act as trustor and a public financial entity as the trustee. The owners of the Projects shall be the beneficiaries of the fund.
    • Trust Assets: (i) resources of the national budget that cannot be lower than the fifty per cent (50%) of the effective saving in fossil fuels due to the electricity generated by the Projects; (ii) principal and interest recovery of the granted financing; (iii) resources granted by multilateral agencies; and (iv) incomes earned from the issuance of fiduciary values.
    • Instruments: (i) provide funds and grant loans; (ii) partially credit or subsidize interest rate of granted loans; (iii) grant incentives; and (iv) finance the diffusion, investigation and development of activities related to the application of these technologies.
    • Exemption: The FODIS and the trustee will be exempted to pay national taxes for transactions related to the FODIS.
  6. Promotional Benefits
    • FODIS will established, for twelve (12) years, extendable for the same term, bonuses for the acquisition of the equipment as a promotional benefit.
    • The enforcement authority can establish a tax certificate for national taxes as a promotional benefit.
    • The enforcement authority will give priority for promotional benefits for national equipment.
    • A maximum cap for Tax Benefits of pesos two hundred million ($ 200,000,000) is expected for 2017 in order to be used as promotional benefits.
  7. FANSIGED
    • Finally, the Law established the “Promotion Regime for the National Manufacture of Systems, Equipment and Inputs related to Distributed Generation” (“FANSIFED” for its Spanish acronym) for a ten-year term, extendable for the same term.
    • The activities benefit from the Promotional Regimen are the investigation, design, investment in capital goods, production, certification and install services for distributed generation.
    • The incentives are: (i) tax certificates; (ii) income tax accelerated amortization; (iii) VAT anticipated reimbursement; (iv) access to finance with preferential rates; and (v) access to the Supplier Development Program.
    • Only micro, small and medium-sized enterprises can request promotional benefits.
    • A budget cap of pesos two hundred million ($ 200,000,000) to be assigned to promotional benefits for the current fiscal year is established.

At TRS&M, we are following these projects with great interest and are available to discuss any query regarding the above.

by trsym

Electricity in Argentina: Sale of generation and transmission assets and other relevant changes

On November 1st, Decree No. 882/2017 was published in the Official Gazette (hereinafter, the “Decree”), introducing major change in Argentina’s Electricity Market.

The Decree provides for the spin-off and sale to the private sector of transmission and generation assets, including power plants totaling 840 MW of capacity, a power plant of 810 MW under construction, minority shareholding stakes in other power plants and the sale of 50% of the shares of CITELEC S.A., holding company of TRANSENER -main electricity transmission company in Argentina-.

This step is the first sale of State-owned infrastructure assets in more than 18 years.

In addition, a new State-owned company is created, from the merger of two existing entities, who will retain certain assets and is in charge of public works under State supervision, including gas pipelines, hydroelectric and thermal power plants.

Main aspects of the Decree

1) Asset sale: future competitive procedures

The Decree instructs the Ministry of Energy and Mining (“MEYM”, for its Spanish acronym) to proceed to the sale, assignment and transference, by means of a public and competitive process, of the following assets:

  • Thermal Power Plants “Ensenada de Barragán” and “Brigadier López”, under the condition precedent of executing the works to operate as a Combined Cycle Power Plant.
  • “Manuel Belgrano II” Thermal Power Plant
  • The shares in the following companies:
    • “Compañía Inversora de Transmisión Eléctrica CITELEC S.A.”
    • “Central Dique S.A.”
    • “Central Térmica Güemes S.A.”
    • “Central Puerto S.A.”
    • “Centrales Térmicas Patagónicas S.A.”
    • “Empresa de Transporte de Energía Eléctrica por Distribución Troncal de la Patagonia S.A. (TRANSPA)”

  • State rights related to:
    • Thermoelectric Power Plant Manuel Belgrano
    • Thermoelectric Power Plant José de San Martín (Central Timbúes)
    • Thermoelectric Power Plant Vuelta de Obligado
    • Thermoelectric Power Plant Guillermo Brown

The Decree enables the interested parties to submit certain titles issued by CAMMESA in the past (“Liquidaciones de Venta con Fecha de Vencimiento a Definir”) as a way of payment for the assets.

2) Absorption Merger of ENARSA and EBISA: IEASA

The Decree instructs the MEYM to proceed to the absorption merger of Energía Argentina S.A. (“ENARSA”, for its Spanish acronym) and Emprendimientos Energéticos Binacionales S.A. (“EBISA”, for its Spanish acronym), becoming ENARSA the absorbing entity, whose business name will be Integración Energética Argentina S.A. (“IEASA”).

3) Public works transfer and concession agreements awarding

The Decree sets the transfer of certain public works under the direction of MEYM to IEASA, who shall act as principal in the following works:

  • “Central Térmica Río Turbio”
  • “Hydroelectrical Poryects over the Santa Cruz river “Cóndor Cliff” and “La Barrancosa”
  • “Extension of Natural Gas´ Distribution and Transmission System” Project that includes the following works: (i) Regional Centro II gas pipeline – Esperanza/Rafaela/Sunchales; (ii) Cordillerano/Patagónico System; (iii) Cordillerano gas pipeline and (iv) “La Costa” gas pipeline
  • Additionally, IEASA is awarded with concession agreements to generate electricity from hydroelectric power plants Cóndor Cliff and La Barrancosa

At TRS&M, as a leading Law Firm in the electricity sector, we are following these developments with great detail and are available to discuss any query regarding the above.

by trsym

Renewable Energy: Draft Regulation for Corporate PPA´s

The National Ministry of Energy and Mining has published on its website a draft regulation (hereinafter, the “Draft Regulation”) for corporate power purchase agreements from renewable resources (hereinafter, “PPA”).

The Draft Regulation will be subject to public consultation for 15 days starting on June 9th, 2017.

The Draft Regulation sets out several relevant rules, including, not only the ones referred to PPAs, but also, pertaining to issues such as curtailment and how dispatch will be assigned in such cases. Furthermore, it sets guidelines for Targeted Large Users (please, see below) who must comply with renewable portfolio targets.

The main aspects of the Draft Regulation are summarized below. Please do not hesitate to contact us for further information.

Main aspects of the Draft Regulation

1) Specific Fees

These provisions enable Targeted Large Users to assess the costs of Wholesale Electric Market Management Company´s (hereinafter, “CAMMESA” for its Spanish acronym) joint purchase mechanism in comparison with other available alternatives.

  • The Draft Regulation provides for a Trading Fee and an Administration Fee referred by Decree No. 531/2016 (the “Decree”), regulatory of Law No. 27.191 (the “Law”). Electricity consumers whose average electricity demand in the previous calendar year exceeds 300 kW (“Targeted Large Users”) and opt to comply with their consumption obligation through the joint purchase mechanism must pay the Administration and Commercialization Fee.
  • The Commercialization and Administration Fees are stipulated in U$S/MWh and will vary according to their consumption obligation and electricity demand. The Commercialization Fee will be allocated to the Stabilization Fund of the Wholesale Electricity Market (“MEM” for its Spanish acronym) and its value is set to increase through the years (starting in U$S 4/MWh up to U$S 20/MWh). The Administration Fee will be a fixed charge, destined to fund administrative expenses of the joint purchase mechanism.

2) Curtailment

The Draft Regulation seeks to establish a priority dispatch in cases of curtailment.

  • A priority order is established until transmission risks are overcome.
  • The priority order is as follows:
    1. Run of the river hydroelectric power plants and renewable energy power plants that have achieved commercial operation (“COD”) before January 1st, 2017.
    2. Power plants awarded with a PPA under “Program RenovAr, Rounds 1 and 1.5”.
    3. Power plants that will be awarded with PPAs in future Rounds of Program RenovAr.
    4. Power plants that operate under the corporate market and have been granted priority after future Rounds of Program RenovAr are published. If priority has been obtained before such publication, these power plants will have priority over the ones mentioned in (iii).
    5. Between the power plants that operate under the corporate market, the one who has obtained priority earlier, will have priority dispatch. If they had the same order, dispatch will be done at pro rata basis.

3) Registries

  • The Draft Regulation provides the creation of a Priority Dispatch Assignation Registry (“RAPID” for its Spanish acronym) under CAMMESA.
  • The creation of a National Renewable Energies Project´s Registry (“RENPER” for its Spanish acronym) under the Renewable Energy Sub-secretary where generation, cogeneration and self-generation projects connected to the Argentinian Interconnection System (“SADI” for its Spanish acronym) must be registered.

4) Main aspects of the corporate market

  • For purposes of complying with the consumption target, power generated from authorized projects will be considered. Authorized projects will be generation, self-generation or cogeneration projects that:
    1. Achieve COD after January the 1st, 2017;
    2. Are registered at the RENPER.
    3. Are not committed under other contractual arrangements or are expansions of projects committed under another contractual regime; the latter, only for the expanded power capacity and must have an independent commercial measuring system for the expanded capacity.

  • Tax benefits will apply and will be ruled by Resolution MEyM No. 72/16.
  • The terms of the PPA will be freely negotiated between the parties.
  • Up to 10% of the project´s energy generation can be sold to CAMMESA or in the spot market under Resolution SEE No. 19/2016, or its amendments.
  • Priority dispatch order: a specific procedure is prescribed, which will depend on proposed COD and tax benefits. Generators that assume the costs for transmission capacity expansions will have priority.
  • Capacity back-up: will not be required.

5) Authorized Large Users (“ALU”)

  • CAMMESA will publish a list of ALU obliged to individually comply with the consumption obligation.
  • After the list is published, the ALU will have twelve (12) months to opt out from CAMMESA´s joint purchase. Such exclusion, since communicated, will last for five (5) years.
  • Within the twelve-period term, the opt out can be made two (2) times per year, according to seasonal programming of the MEM.
  • The Draft Regulation provides the effects of the exclusion of the joint purchase mechanism and the obligation to inform and register the PPA or the self-generation or cogeneration project.
  • The audit of consumption target is annually and year past due.
  • The procedure for the fines is regulated. A 10% tolerance is prescribed that can be compensated the following year. The standards to establish sanctions is stipulated.
  • Authorized Large Users can choose to assign their energy consumption to base energy or energy plus program.

The Draft Regulation provides answers to the strong expectations that have been in place regarding the Argentine energy market around the possibility to start a corporate market.

Public consultation favors the opportunity for business players to state their opinions and proposals regarding the Draft Regulation.

This is good news for all the interested parties in the development of the renewable energy market in Argentina.

by trsym

Argentina: New Thermal Power Tender

On May 11th, Resolution No. 287/17 (the “Resolution”) of the Secretariat of Electric Energy (the “SEE”) was published, initiating the first round of tenders (“Stage I”) arising from the “Expressions of Interest” procedure called by Resolution SEE No. 420/16.

The Resolution approved the Tender´s Terms and Conditions (the “Bid Document”), including a draft of the Power Purchase Agreement (“PPA”) to be executed between bidders awarded in the Tender and the Wholesale Electric Market Management Company (“CAMMESA” or the “Off-taker”).

Projects included in Stage I:

  1. Close cycle gas turbine projects that: (i) currently operate or will be shortly in operation in simple cycle; (ii) have low specific consumption; (iii) are likely to improve its efficiency with the close cycle; (iv) do not affect transmission capacity; (v) have the necessary infrastructure to enable the permanent operation of the combined cycle and (vi) have a maximum term of construction of thirty (30) months.
  2. Co-generation projects that: (i) are efficient; (ii) do not affect transmission capacity; (iii) have available supply of the main and alternative fuel and (iii) have a maximum term of construction of thirty (30) months.

The main features of the projects allowed to participate in Stage I are outlined in Section II, Title I of the Bid Document.

New combined-cycle power plants and transmission and fuel supply projects will be contracted through future tenders.

Main aspects of the Bid Document:

  • Bid Bond: Among the formalities bidders should comply with, a bid bond equal to UDS 5.000 x the net power capacity (MW) offered should be submitted.

  • PPA´s term: 15 years.

  • Price: Seller will be entitled to collect a fixed price for the power availability established in US dollars per MW/month and a variable price for the energy produced established in US dollars per MW/hour. Such price will be paid in Argentine Pesos at the rate established in the PPA.

  • Fuel: If bidders offer alternative fuel, Buyer will monthly pay for such fuel calculated in accordance with the “The Procedures for Programming the Operation, the Dispatch and calculation of prices” and the reference prices detailed in Section II, Chapter 9 of the Bid Document.

  • Penalties: The PPA establishes daily penalties for not reaching Commercial Operation Date (“COD”) up to sixty (60) days from the estimated date included in the Offer. If COD is not reached within one hundred and eighty (180) days from the estimated date, the PPA shall be terminated. The penalty regime is equal to the one established under Resolution SEE No. 21/16.

  • Interconnection point: Section II, Chapter 7 of the Bid Document details the possible interconnection points to the Argentine Interconnection System, its maximum power capacity and loss factors.

  • Special Fund: An innovation compared to the PPAs under Resolution SEE No. 21/16 is given by the future incorporation of a special fund to secure six (6) month payments under the PPA. The features of this fund are to be stipulated in the following months.

Stage I schedule is as follows:

  • Q&A period: up to July 7th, 2017.

  • Bid submission and opening of envelope 1: July 19th, 2017 at 13.00.
  • Opening of envelope 2: August 9th, 2017.
  • CAMMESA´s prequalification: August 30th, 2017.
  • Execution of the PPA: no later than November 1st, 2017.

The Bid Document may be amended by the SEE through additional communications (“Circulares”).

For further information, please do not hesitate to contact us.

by trsym