On July 27, 2023, the Argentine government launched a bidding process to hire the purchase of up to 3,000 MW of new or revamped thermal power facilities.

The bidding process aims at increasing thermal generation capacity in the Argentine Interconnection System, modernize the country’s power generation offer, and adjust the reserve levels to support demand growth.

Offers may be for any type of thermal power generation or cogeneration, and the projects may include associated transmission and/or fuel infrastructure works. Power facilities must be new or have less than 15,000 fired hours.

Bids may be submitted (individually or collectively) by legal entities incorporated in Argentina or abroad. Sole purpose vehicles, trusts, joint venture and consortiums are also permitted.

Selected bidders will enter into long-term US Dollar-denominated Power Purchase Agreements (“PPA”) with CAMMESA (the Argentine wholesale electricity manager)

Bids are to be submitted no later than August 31, 2023. Clarifying questions are permitted until August 29, 2023. The award is scheduled for October 10, 2023, and the PPAs must be entered into starting on October 15, 2023.

The basic terms of the bidding process are:

       1. Projects included:

Line 1 “Thermal Generation for reliability and supply of the AIS” (“Line 1”): includes:

1.0. Repowering – repowering existing combined cycles;

1.1. Improvement of the supply reliability in critical areas;

1.2. Improvement of efficiency and regional reserve; and

1.3. Improvement of reliability of the wholesale electricity market. Line 1 seeks offers aggregating 3000 MW with a minimum goal of 2250 MW.

Line 2 “Thermal Generation to replace, modernize and improve efficiency of the Tierra del Fuego power system” (“Line 2”): Line 2 seeks offers aggregating 70 MW with a minimum goal of 30 MW.

       2. Award

The award will be made by determining a Comparison Value which, for each offer, will be based on the offered price, the committed consumption, the oldness of the offered availability, and its location.

      3. Main aspects of the PPA

Selected bidders shall enter into a PPA, that, among other aspects, sets forth the following:

• Target date for COD:The target date to achieve Commercial Operation Date (“COD”) is: Line 1.0, 1/1/2025; Line 1.1 and Line 2, 10/1/2025; and Line 1.2 and 1.3, 4/1/2026.
• COD Long-Stop Date:The COD long-stop date: Line 1.0, 06/30/2027; Line 1.1 and 2, 03/31/2028; and Line 1.2 and 1.3, 09/30/2028.
• PPA Commencement Date:The PPA must commence upon the later to occur among (a) the COD effective date or (b) six (6) months before the COD target date.
• PPA Expiration Date:The PPA expiration dates are as follows: (a) for Line 1.0, 12/31/2034; (b) for Lines 1.1 and 2, 9/30/2040; and (c) for Lines 1.2 and 1.3, 3/31/2041.
• Term:The term of the PPA is for Line 1.0, 10 years, and for the other lines, 15 years.
• Partial COD:Partial COD is allowed, with a reduced compensation until COD is obtained for the total committed capacity.

The complete bidding terms and conditions and its Exhibits (in Spanish) can be consulted free of charge at https://cammesaweb.cammesa.com/terconf/

***

Please contact us at sonoda@berettagodoy.com and sbarra@berettagodoy.com should you need further information on this bidding process.