BUENOS AIRES, December 22, 2023 – A deal to hand over operations of four major hydroelectric dams to private firms will inject US$707 million into the national treasury in the coming days, officials announced today. The move marks a critically importent shift in how Argentina manages its hydroelectric power, with long-term concessions now in place for the plants that generate roughly 10% of the country’s electricity.
New Operators Take the helm of Key Hydroelectric Dams
- The Alicurá and Cerros Colorados dams will now be managed by Edison Investments, a consortium of Argentinian businessmen.
- BML Inversora, part of MSU Green Energy, secured the concession for the El Chocón plant.
- Central Puerto will continue operating the Piedra del Águila hydroelectric plant.
- The 30-year concessions do not involve a sale of the dams themselves, which will remain public assets.
Among the plants changing hands, Alicurá and El Chocón will transition from multinational operators AES (United States) and Enel (Italy) to local control. Edison Investments won the bid for Alicurá with an offer of US$162 million, while also securing Cerros Colorados (known as Plain Banderita) for US$64.2 million, bringing their total investment to over US$226 million for both facilities.
What is the total installed power capacity of the Comahue dams? The Comahue dams-Alicurá (1050 MW), El Chocón and Arroyito (1417 MW), Piedra del Águila (1440 MW), and Cerros Colorados (472 MW)-have a combined installed power of 4,170 megawatts.
The El Chocón concession was awarded to BML Inversora, belonging to MSU Green Energy, with a proposal of US$235.7 million. Central Puerto will continue to operate the Piedra del Águila hydroelectric plant after offering US$245 million. The concessions, granted for a period of 30 years, involve the transfer of operation, not ownership, ensuring the hydroelectric complexes remain public heritage.
The original expiration of these concessions occurred in mid-2023, but successive extensions were ordered by both the previous and current administrations to allow time for the bidding process to conclude.
Located on the Limay and Neuquén rivers between the provinces of Río Negro and Neuquén, the dams will initially allocate 95% of their energy production to the regulated market, with the remaining 5% available for private sale. This proportion will gradually shift to 100% free market access by the 21st year of the concession.
The provinces of Río Negro and Neuquén are also set to benefit, receiving 12% in royalties on the sale price of energy, plus a 2% provincial fee for water resource usage, split equally between the two jurisdictions.
The contract signing was attended by Secretary of Energy maria Tettamanti, Undersecretary of Electric Energy Damian Sanfilippo, and the governors of Neuquén, Rolando Figueroa, and Río Negro, Alberto Weretilneck, alongside representatives from the winning companies. The Ministry of Energy stated that the formalization of the contracts initiates a transition phase, requiring the new concessionaires to meet investment, maintenance, and modernization commitments.
“This step allows us to move towards a modern management scheme,with guaranteed investments and a regulatory framework that promotes predictability and efficiency. The operational transition will begin promptly, guaranteeing the continuity of the service and strict compliance with the commitments made,” the ministry added.
Worth a look
