Siemens to Run $5.6 Billion in Argentina Infrastructure Projects

  • Company agrees to provide 3.1 billion euros in financing
  • CEO Kaeser says plan is to create 3,000 jobs in the country

Siemens AG, the German industrial giant, will work with Argentina on 5 billion euros ($5.6 billion) worth of infrastructure projects, underscoring the effort by the nation’s president, Mauricio Macri, to win over global business leaders.

Siemens will provide 3.1 billion euros in financing backed by Germany’s export credit agency, Chief Executive Officer Joe Kaeser said Wednesday in Buenos Aires, where Macri is hosting a forum this week to promote the government’s market-friendly policies. The plans over the next four to five years include creating high-efficiency gas power plants and wind-based renewable energy; automating rail transportation systems to improve traffic flow; and working to make Buenos Aires municipal buildings more energy-efficient. Kaeser said the goal is to create 3,000 jobs, including training 700 young people in new skills.

German Vice Chancellor Sigmar Gabriel accompanied Kaeser in a meeting with Macri this week, Kaeser said in an interview. “That should ring a bell about the seriousness of the commitment,” he said. “It’s about two countries coming together.”

The plan from Siemens gives Macri evidence to show voters his reforms, which included a devaluation of the peso and a deal with debtholders, are translating into much-needed investment. Macri’s challenge is to turn promises into results. As of last week, a ticker on the Finance Ministry website had tallied $32.5 billion in investment pledges since December, but central bank data show only $1.3 billion has actually arrived in the first six months of 2016.

“If Argentina gets it right now they can take the lead in Latin America,” Kaeser told attendees at Macri’s event. “Think about it twice before you wait because now is the time to make a difference, and tomorrow it could be too late.”

For Siemens, the projects represent a chance to turn over a new leaf in Argentina. Andres Truppel, former chief financial officer of the company’s Argentine unit, pleaded guilty last year to taking part in a scheme to bribe government officials there to land a $1 billion contract for making national identity cards.

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