On 10 December 2015, Mauricio Macri was elected president of Argentina, after 12 years of the Kirchner dynasty. He promised extensive positive changes for the country and in particular, committed to reignite Argentina's economy and create a new image to attract foreign investment.

As part of such change and with the intention to work on a long-term policy to overcome the country's energy crisis, the government launched a tender process called RenovAr Programme (Round 1) ("RenovAr"), to supply 1000Mw of electricity generated from renewable sources in the Wholesale Electricity Market. This will be split between 600Mw of wind power, 300Mw of solar, 65Mw of biomass, 20Mw of mini-hydro and 15Mw of biogas.

The Promotion of Renewable Energy Act passed on 2015 (the "Act") set a requirement to obtain 8% of the country's electricity from renewable energy sources by 2017 and increase such percentage to 20% by 2025. This will therefore reassure the supply of 10,000 Mw of renewable energy for the next 10 years. RenovAr aims to contribute to at least 10% of such supply and several other auctions are expected to take place over the next few years in order to achieve the target set by the Act.

Furthermore, RenovAr intends to transform the national energy matrix and protect the environment replacing the importation of fossil fuels by the production of clean energy.

1. Auction process

The terms and conditions of RenovAr were announced on 27 July 2016 and are currently available on the website of CAMMESA 1. The cost of participating is AR$150,000 and bidders can submit their offers until 5 September 2016. Winners will be announced in October 2016 and the non-selected bidders will be entitled to a reimbursement of the participating fees. Eligible projects must be completed in a timeframe of two years.

2. Technical requirements

Every offeror must be established as a special purpose vehicle and must provide evidence of:

  • proprietary rights over the site location;
  • relevant environmental licenses and permits;
  • acceptable and certified assessment of resources report;
  • survey to produce energy in relation to the generator equipment to be utilised in the project;
  • having applied for the process to qualify as an agent of the Wholesale Electricity Market; and
  • static and dynamic survey.

3. Financial requirements

In addition, the offerors must:

  • prove having (individually or in more than one consortium) a minimum capital of US$ 250,000 per Mw of power tendered; and
  • provide acceptable guarantees for (i) maintaining the offer (US$ 35,000 per Mw of power tendered); and (ii) fulfilling the contract (US$250,000 per Mw of power tendered).

4. Financing and guarantees

Appealing features of RenovAr include (i) tax benefits for projects with a 30% of local component; and (ii) a guarantee scheme for financing the projects through the Trust Fund for the Development of Renewable Energy, Treasury Notes issued by the Ministry of Treasury and an optative guarantee provided by the World Bank.

5. Timeline

  • 18 May to 1 July 2016: Announcement of the programme and non-binding consultation process.
  • 27 July 2016: Formal publication of the tender.
  • 27 July to 2 September 2016: Sale of the terms and conditions.
  • 27 July to 22 August 2016: Binding consultation process and clarifications to the terms and conditions
  • 5 September 2016: Submission of technical and financial proposals (envelopes "A" and "B")
  • 3 October 2016: Technical qualification.
  • 7 October 2016: Opening of bidders' financial proposals.
  • 12 October 2016: Declaration of the winning bidders.
  • 11 November 2016. Subscription of contracts.