Argentina Seeks Loans to Add 7 Gigawatts of Renewable Powerby
More than 60 percent of Argentina's energy comes from fossils
Country approved law to target 8 percent clean energy use
Argentina is seeking financing for 7 gigawatts of renewable energy projects.
The Argentine Association of Renewable Energy, known as Cader, sent the government a proposal during the United Nations-organized climate talks in Paris to spur the renewable energy market, according to the association’s manager Julio Menendez. The package includes wind, solar, biomass and small hydroelectric projects that are developed and need financing.
"We have many projects that are ready to be built and can be finished from two to four years," Menendez said in a telephone interview from Buenos Aires. "Our objective now is to reach out to potential investors."
More than 60 percent of Argentina’s energy comes from fossil fuels. The congress recently changed regulation to increase renewable energy use. The country has 215 megawatts installed capacity of wind energy and almost no solar and biomass plants, according to Bloomberg New Energy Finance.
Adding 7 gigawatts could meet Argentina’s demand for energy by 2021, Menendez said. "The new regulation is key for the new capacity we are ready to start."
Argentina’s congress approved a law in September requiring industrial consumers to get 8 percent of their power from renewable sources in 2017, a ratio that gradually increases to 20 percent by 2025. The penalty for non-compliance is equivalent to the cost of imported diesel.
The law also creates a fund to finance or buy stakes in renewable-power projects. It enables bilateral power purchase agreements directly between generators and large consumers, instead of restricting those consumers to the state-owned utility Cia Administradora del Mercado Mayorista Electrico SA, known as Cammesa.
"With the law approval, we can sign agreements both with the government and the private sector. We can do a mix," said Vanesa Revelli, spokeswoman for ABO Wind AG.
The company is building a 50-megawatt wind complex in Pampa province. Total investments can reach $120 million. ABO Wind is seeking financing for the first phase of the project, with 30 megawatts, and expects to sign a power purchase agreement in January, Revelli said.
"Now Argentina is opening its market," said Eduardo Tabbush, director at the Argentinian energy developer Eoliasur. "With the law, the renewable energy market will resume growth again."