:quality(75)/cloudfront-us-east-1.images.arcpublishing.com/bloomberglinea/WK5KHY3D5ZBH3P7EHMXOUCZKDQ.jpg "The Cerros Colorados hydroelectric plant, operated by Orazul Energy.")
Buenos Aires — In an ongoing saga that has had its ups and downs, the Argentine government has now proposed the nationalization of a group of hydroelectric dams once their concessions have expired, and seven of which expire between 2023 and 2024.
:quality(75)/cloudfront-us-east-1.images.arcpublishing.com/bloomberglinea/E7A2AAXJEFGWJIBFQOPPTWL5V4.jpg "Latin America Business Development Veteran Leaves Glencore’s Oil Desk")
The proposal will be put forward for discussion in Congress within the framework of the presentation of the 2024 budget.
If approved, the nationalization would only become effective once the concessions of the hydroelectric plants have expired. Four of them, which expired this year, had already been extended for 60 days, with the possibility of extending them for a further 120 days.
In this way, the government will not interrupt the current concession of the private companies, but is proposing a position for those assets should the Unión por la Patria coalition win the October 22 presidential elections.
However, the private sector imagines a different - or opposite - scenario in the event that either the ‘La Libertad Avanza’ or the ‘Juntos por el Cambio’ coalition win.
According to the proposal by Economy Minister Sergio Massa, and who is also the ruling coalition’s presidential candidate, once the concessions end, “the administration, operation and exploitation of each one of the hydroelectric assets duly granted in concession will be assumed by Energías Hidroeléctricas, which is part of [state-owned energy company] Enarsa”.
The article adds that the Energías Hidroeléctricas company “will have full legal capacity to acquire rights and contract obligations, and exercise all acts that are not prohibited by law”.
:quality(75)/cloudfront-us-east-1.images.arcpublishing.com/bloomberglinea/MHMCBUMJ4VDBTOFPV63MDS5A4M.jpg "Record Heat? Climate-Focused Funds Have $33 Billion to Invest in 2023")
The government’s proposal does not include the participation of the provinces, which are the owners of the water resources, despite the meetings that Massa has held on this issue with the incoming governors of Río Negro and Neuquén, Alberto Weretilneck and Rolando Figueroa respectively.
This is a point that has already been questioned by the provincial governors when the economy ministry named Enarsa as the operator of the hydroelectric dams.
A total of 13 concessions to operate hydro plants in Argentina have been agreed for a minimum of 30 years, of which four expire this year, three in 2024, two in 2025, two in 2026, one in 2029 and one in 2044.
:quality(75)/cloudfront-us-east-1.images.arcpublishing.com/bloomberglinea/IP2XE5CWFRDH7IAQGJCNX6BBLQ.jpg "Argentina's Economy Minister and ruling coalition presidential candidate Sergio Massa (center) during a meeting with provincial governors.")
The reaction
Omar Gutiérrez, outgoing governor of Neuquén province, said in recent months that, with this decision, “the safety of the dams, of the water management - which is a scarce resource due to the drought - and of the populations is at stake”.
Martín Genesio, president of AES Argentina, one of the companies that holds a concession, said that they hoped to enter into dialogue with the government with the objective “to continue to operate the power plant, offering our experience and operational excellence, demonstrated during all these years. We are a positive actor in this matter”.
The 5 plants for which concessions expire in 2023
- Alícura (Río Negro - Neuquén), with an average annual power generation of 2,360 GWh, operated by AES Argentina until August 11
- El Chocón (Neuquén), with an average annual generation of 3,350 GWh, operated by Enel until August 11
- Arroyito (Neuquén), with an average annual generation of 720 GWh, operated by Enel until August 11
- Cerros Colorados (Neuquén), with an annual average generation of 1,510 GWh, operated by Orazul Energy until August 11
- Piedra del Águila, with an average annual generation of 5,500 GWh, operated by Central Puerto until December 29, 2023
:quality(75)/cloudfront-us-east-1.images.arcpublishing.com/bloomberglinea/PNIXQMFN55GMHIMEIOMZPWO2XY.jpg "How Argentina’s Drought Could Impact the Central Bank’s Reserves")
