A TENDER UNDER RENOVAR (THE ARGENTINE RENEWABLE ENERGY PROMOTION PROGRAM) WAS CALLED FOR 600 MW OF WIND POWER, 300 MW OF SOLAR, 65MW OF BIOMASS, 20 MW OF MINI-HYDRO AND 15MW OF BIOGAS PROJECTS.
After a period of public consultation, the Ministry of Energy presented the final specifications of the tender for 600 MW of wind power, 300 MW of solar, 65MW of biomass, 20 MW of mini-hydro and 15MW of biogas.
The bidding documents are available at the website of CAMMESA (Managing Company of Wholesale Electricity Market), and to purchase them, bidders must pay Argentine $ 150,000, which will be reimbursed to non-selected bidders.
More than a hundred consultations from developers and investors (both local and foreign) have been received. Renewable Energy Undersecretary, Sebastian Kind, stated that a greater number of bidders guarantee a transparent tender. Investment in the projects to be awarded is expected to attain figures in the range of USD 1500 to USD 1800 million.
The works may be financed from the Trust Fund for Renewable Energy (FODER), and through international loans and funds from multilateral organizations. Bidders may also access a payment guarantee from the World Bank of up to USD 500 million. Access to external financing and guarantees are key in which the Government hopes for the success of the initiative.
According to government, the new clean energy will have a lower cost than some sources of current conventional energy, as in the last few years technological advances in renewable energy sources have made it more cost-efficient.
Among the changes made to the bid specifications after the consultation phase, tax benefits for projects that integrate at least 30% of national components were included. In case of parity in the tender offers (up to 3% on the price difference) projects will be awarded to those with greater local integration. In this sense, the State will subsidize a point on the cost of the guarantee, for each point of local integration of the projects. However, the alternative of importing goods and equipment at zero rate will remain in force until the end of the year, provided they are not available in the local market.
The bidding documents will be on sale until September 2, and three days later the bid offers will be submitted. On October 12 the award shall be made to the winners, and the contracts will be signed on November 11. From there, the successful tenderers have two years to complete the works.
The tender seeks to comply with the new Renewable Energy Act, passed unanimously by Congress late last year, which aims to ensure that by 2017 8% of the national electricity matrix is comprised of renewable sources, and raise that threshold to 20% in 2025. The legal framework requires large users (over 300 KW) to source their consumption from renewables as from 2018, either through the purchase of that clean energy to the State, suppliers, or generate your own clean provision.
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.