Argentina Lacking Investments to Boost Power Capacity

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Researched by Industrial Info Resources (Sugar Land, Texas)--Since 2003, when Argentina began to stabilize its economy, power demand has grown more than supply, mainly because of the lack of investments in the industry. The situation reached a breaking point. Argentina's energetic panorama was aggravated by fuel supply problems, particularly natural gas for thermal plants, the lack of water in the dams and low temperatures.

Although Argentina's GDP grew 36% between 2003 and 2006, its electricity sector has had minimal investment or new industry participants. Current investments have been financed partially through assistance made to the government fund, Foninvemem, by electricity generators. Those projects are based on the Energy Plus Regime, which was recently developed to encourage local investors offering unregulated tariffs for new projects that would boost capacity.

In Cordoba Province, Albanesi Group is investing $100 million in the expansion of the Modesto Maranzana thermal plant; Santa Cruz's government will spend $500 million on the Rio Turbio coal-fired power plant; and Pampa Holding S.A., which belongs to local businessman Marcelo Mindlin, will invest $100 million for the expansion of the Guemes thermal plant in Salta. For more information, view related October 5, 2007, article - Argentina's Generacion Mediterranea Purchases Two Pratt & Whitney Gas Turbines.

Albanesi has joined with Solvay Indupa to build a $135 million combined-cycle plant in Bahia Blanca, Buenos Aires. For more information, view related December 18, 2007, article - Solvay and Albanesi to Invest $135 Million for Argentine Thermal Plant. A trust has been formed to spend approximately $1 billion to build the Timbues and Campana thermal power plants in Rosario and Buenos Aires provinces, respectively, producing 800 megawatts (MW) each. For more information, view related December 14, 2007, article - Argentine Jose de San Martin Thermo Plant To Begin Commercial Operation in May 2008.

Finally, two other projects are being carried out with important fiscal benefits. One of them is the Ingentis project, which is owned by a joint venture formed by Alejandro Ivanisevich, Pampa Holding and Chubut's government. The project consists of a $500 million thermal power plant to produce 600 MW. In Neuquen Province, $150 million will be invested to add 185 MW to the Loma la Lata power plant.

However, Argentinean President Cristina Fernandez de Kirchner will need to find a solution to the energy crisis by calling for more investments.

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