New renewable PPA tender – RenMDI

Newsletter - March 9, 2023

On February 2, 2023, the Secretariat of Energy launched a national and international tender (“RenMDI”) and approved the bidding terms for the execution of renewable power purchase agreements (“PPAs”) with CAMMESA.
The tender is for new generation capacity through new power plants. It expressly excludes (i) expansions of power plants committed under the RenovAr Program and other special contractual regimes and (ii) projects with dispatch priority granted under the MATER regime (Resolution MEyM 281/2017).
The target capacity to be awarded under the RenMDI is set at 620 MW, divided in two lines:
1. Renewable Generation to replace “Forced Generation” (500 MW) through biomass, solar with and without storage, and wind generation technology with storage; and
2. Renewable Generation to Diversify the Power Matrix (120 MW) through biogas, biogas from sanitary fill, mini hydro projects and biomass.
The main terms of the RenMDI tender are the following:
- The projects may have a maximum capacity of 20 MW and a minimum capacity of 3 MW or 0.5 MW, depending on the type of technology.
- The term of the PPAs shall be 15 years as of the project’s commercial operation date (“COD”).
- Price shall be established in US dollars (payable in Argentine pesos). A seasonal payment is contemplated, to incentivize generation in periods of high demand.
- The PPAs shall have the payment priority currently assigned to the covering of fuel costs for power generation in the Wholesale Electricity Market (“WEM”).
- The new power plants shall not have dispatch priority with respect to other power plants operating in the WEM, except for the specific cases indicated in the bidding terms.
- PPAs shall not have the FODER guarantees granted, for instance, to beneficiaries of RenovAr Regime.
- The price of the bid bond ranges from AR$ 450,000 to 7,200,000.
- Awarded parties shall make a series of payments to CAMMESA until COD is reached:
  - Initial payment for the award: within 10 days as from the award, a payment shall be made to CAMMESA for U$S 5,000 per MW of contracted capacity (discounting payments made as bid guarantee).
  - Quarterly payments for maintenance of the award, which may range from U$S 1,000 to 5,000 depending on particular circumstances set forth in the bidding terms.
The deadline for submitting offers is April 27, 2023.