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On July 26, the Ministry of Energy and Mining passed resolution
No. 136/2016, requiring CAMMESA to conduct the First Round
of the National and International Open Call and summoning all
interested parties to submit offers to enter into renewable energy
supply contracts with CAMMESA in the Wholesale Electricity Market
(MEM, in the Spanish acronym), according to the bidding terms and
conditions approved by the resolution. The submission of offers
shall take place on September 5, 2016.
Offerors may be national or foreign persons, who may participate
through specific purpose companies which – if not yet
incorporated – must be registered before the execution date
of the supply contract.
Notwithstanding the federal regulatory electric framework, the
contracts entered into under the RenovAr Program shall be subject
to Argentine private law, thereby allowing arbitration (in
Argentina or abroad) as a mechanism of dispute resolution and the
sale of the projects under specific conditions (including breaches
of CAMMESA, failure to acquire US dollars in the market or
termination of guarantees granted by the National State).
Offerors shall back the performance of all the obligations
assumed in the offer and subsequently in the supply contract
through the establishment of a "bid bond" and a
"performance bond". The value of the "bid bond"
shall be of US$35,000 per MW of the power offered, whereas the
"performance bond" shall be of US$250,000 per MW of the
power hired (which shall be maintained for terms not shorter than
one (1) year and shall be successively renewed upon its
expiration).
On the other hand, the offeror shall prove a minimum net worth
of US$250,000 per MW of the power offered. Should such offeror be
composed of two (2) or more persons, at least one of them shall
comply with this requirement (such person shall be considered the
Financial Strategic Partner of the project).
The first round of the RenovAr Program identifies the different
types of renewable technology used for the generation of electric
energy, thereby establishing: (i) the total required power for each
type of technology, (ii) the maximum power of generation of energy
that each project may have according to the type of technology used
(in turn, each interconnection point (PDI, in the Spanish acronym)
shall have a total maximum power), and (iii) the maximum quota of
tax benefits according to each type of technology used.
Offerors shall identify in the offer the amount of tax benefits
that they will request.
Offerors may decide to take a guaranty of the World Bank to
guarantee the performance of the National State´s obligations
in case the put option of the project is exercised, upon the
occurrence of a breaching event.
The maximum amount of the World Bank guarantee shall be
US$500,000,000 (divided into two equal tranches), which shall be
allocated to each project on the basis of the power hired, for a
sum of up to US$500,000 per MW. The cost of the guaranty shall be
borne by each project on the basis of the power hired, the amount
and the term requested, and shall be paid to the FODER (Renewable
Energies Development Fund).
Supply contracts entered into within the framework of this open
call shall have a payment priority according to MEM's priority
of claims.
The terms of the call includes an Agreement of Accession to the
FODER Trust, in order to guarantee the payment obligations assumed
by CAMMESA in the supply agreements; to accept the obligation of
purchasing and paying the project in case of an early termination
or rescission and to instrument the World Bank's guaranty in
favor of the offerors requesting such guarantee.
The quota of tax benefits for 2016 (transferable to 2017) is
US$1,700,000,000, as set forth by Emergency Decree (DNU) No.
882/2016.
Click on the following links to see the decree and the
resolution:
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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