RenovAr 2: Second Public Auction Process for “RenovAr Program”

RenovAr 2 bidding terms and conditions, including the PPA, (BT&C) have been published in the Official Gazette and may be downloaded from its website
(https://www.boletinoficial.gob.ar/#!DetalleNorma/anexos/169273/20170817).

RenovAr 2 round will be for a maximum capacity of 1,200 MW divided as follows: (i) wind 550 MW, (ii) solar photovoltaic 450 MW, (iii) biomass 100 MW, (iv) biogas 35 MW, (v) waste landfill biogas 15 MW and (vi) small hydro (i.e. less than 50 MW) 50 MW. Wind and solar photovoltaic will also be distributed between geographical regions.

Maximum prices for each technology are as follows: (i) wind 56.25 USD/MWh, (ii) solar photovoltaic 57.04 USD/MW-h, (iii)  biomass 100 USD/MW-h, (iv) biogas 160 USD/MW-h, (v) waste landfill biogas 130 USD/MWh and (vi) micro hydro 50 USD/MW-h.

The scheduled dates for submitting consultations, presenting offers and awarding PPAs are as follows:

Consultation period: August 17 – October 11;

Offers presentation: October 19;

Adjudication: November 29.

Offerors may apply for the fiscal benefits established by Laws 26,190 and 27,191 and their implementing regulations; including anticipated VAT refunds, accelerated depreciation for income tax purposes, extension to 10 years of the set-off term for tax credits and debits, tax credits and exemption of the minimum presumed income tax and income tax on payments of dividends, among other tax benefits.

As in RenovAr 1 –“RenovAr Program” (Round 1) Public Auction Process Launched– and 1.5 rounds, a guarantee from the World Bank Group is available upon the offerors’ request. The request must be included when the offer is submitted. The total amount of this guarantee is USD 250,000,000 to be distributed among the offerors under each technology.

Individuals or legal entities incorporated in Argentina or abroad are entitled to participate in RenovAr 2 through SPVs (whether offerors are shareholders or have an irrevocable call option).

By the time offers are submitted, the following must have occurred: SPVs must have (i) requested their registration as Wholesale Electricity Market agents, (ii) obtained the environmental impact assessment approval from the relevant provincial authority (biomass and biogas projects may submit this approval on the PPA signing date, but they must provide evidence —at the time their offers are submitted— that they have begun the proceedings to obtain the corresponding environmental authorization) and (iii) provide evidence of successful technical studies with respect of the project’s interconnection to the Argentine National Grid.

Minimum financial and technical requirements are required to participate in the auction.

If an offer is awarded by the Ministry of Energy and Mining, the offeror will enter into a PPA with CAMMESA that will act on behalf of large users and distribution utilities. PPAs will have a duration of 20 years from COD.

Certain risks of the PPAs will be covered by the FODER public trust and through a guarantee to be issued by the World Bank Group (when applicable).