National Program of Hydroelectric Works

On November 11, 2009, Resolution No 762/09 of the Secretariat of Energy (“Resolution 762”) was published in the Official Gazette. This Resolution created the National Program of Hydroelectric Works (the “Program”).

The purpose of the Program is to encourage the construction of hydroelectric power plants within the territory of Argentina through the creation of an appropriate cash flow that guarantees the repayment of the investments performed and the finance provided.

To this end, the Program provides the possibility for Compañía Administradora del Mercado Mayorista Eléctrico Sociedad Anónima (“CAMMESA”) and the power generators of the Mercado Eléctrico Mayorista (“MEM”) to enter into power purchase agreements (“PPA”) linked to the energy generated by the Hydroelectric Works comprised in the Program.  

The PPA will have a maximum term of 15 years, which may be exceptionally extended by the Secretariat of Energy. Once the term has elapsed, each hydroelectric power plant incorporated to the Program will be able to trade its power generation at the price established theretofore by the MEM.

The terms and conditions of the PPA will be determined by the Secretariat of Energy, considering principles of economic rationality, equity and operative benefits for the whole power system, according to which the hydroelectric works executed under the Program will be qualified.