Renewable Energy Industry in Argentina
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Investment Opportunities Infrastructure & Energy Current energetic crisis in Argentina has driven a new law which provides incentives to generators willing to invest by setting new target growth in renewable energy production over total energy produced. Significant investments in the industry are expected. % of renewable energy over total energy consumed 20 15 10 5 0 20% 8% 2% 2015 2017 2025 Expected Investment Renewable Energy + 10 Gw > US$ 15 bn Argentina is rich in variety of weather conditions that provides a high potential of renewable energy generation across the entire territory. 0,01 Gw Actual solar installed capacity 1-2 Gw Expected solar development 0,18 Gw Actual wind installed capacity 5-6 Gw Expected wind development Total installed capacity in the country: 33 Gw approx. EY Argentina 1
1 Legal Framework Purpose: Diversify the National energy matrix Expand the installed power capacity Contribute to mitigate the Climate Change 2 + RenovAr The first Renewing Plan tender (RenovAr ) is submitted with the objective of adding significant megawatts of power within two years to the country s energy supply. Renewable Energy Generation Market Timeline 2009 Law 26.190 was officially published. 2016 Ruling decree 531/16 was published. This decree explains further the law and its goals. 2017 First Renewable Energy Target: 8% by Dec. 1 3 5 2 4 6 2015 Law 27.191 was officially published. 2016 TENDER RenovAr (Round 1) Resolution MEyM 71/16 and Resolution MEyM 72/16. 2025 Renewable Energy Target: 20% by Dec. 31, 2025. 2 Renewable Energy Industry
Renewable Energy Generation Market Legal framework Scope Different mechanisms to reach the renewable energy target: Large Users demand >= 300 kw Individual PPAs Self or co-generation Joint purchase mechanism through CAMMESA Tax promotional benefits Developers Income Tax Accelerated Depreciation of applicable assets. Tax Loss statute of limitation extended to 10 years (standard is 5 years) Deemed Minimum Income Tax: Temporary exception of the tax Scope Eligible Projects Projects in new facilities Extensions or re-potentiation of existing facilities Value Added Tax Other taxes Early Refund of VAT Inputs that exceeds VAT outputs Tax credit on locally supplied CAPEX to be applied to the payment of federal taxes Exemption of Import Duties EY Argentina 3
Serving the renewable energy markets Advising companies, governments and investors across the renewable energy market 1 REGULATION Regulation Support companies to work within regulatory frameworks 2 INFRASTRUCTURE Asset finance Primary and secondary financing for energy infrastructure transactions, including strategy, fundraising, acquisitions and disposals Strategy EY Services Capital Assets 3 CORPORATE FINANCE SERVICES Capital raising Optimizing, raising, investing and preserving capital for non-infrastructure energy transactions and investments 4 ENERGY USERS Strategy Supporting the development and implementation of portfolio or energy mix sourcing strategies Acquisitions and disposals Buy-side and sell-side lead advisory for upstream and downstream supply chain transactions Preserving Investing Optimizing We understand how to drive value across the capital agenda Raising Our services span all stages of the asset capital lifecycle Development Construction 4 Renewable Energy Industry
Our services include: Advisory External and internal audits Legal and regulatory compliance Tax compliance and advisory Custom and Central Bank advisory Environmental and Financial advise, due diligence and structuring services Contractual transaction implementation (drafting, negotiation, etc.) Valuations and business modelling Bankability and feasibility studies Risk management advisory EY Argentina 5
Why EY? Key to the value EY Argentina brings is our ability to develop a robust, global and credible financial case for action. Our local team offers a multidisciplinary team of professionals (including, public accountants, economists, lawyers and engineers) in advisory, assurance, tax, transactions and law, who understand the corporate resource and energy agenda, its key challenges and leading solutions. EY can act as the single interface to assess the possible savings from energy efficiency and/ or renewable energy strategies. We oversee the procurement, implementation, financing and performance of the related investment, helping it achieve a permanently competitive cost of electricity, on appropriate terms. In addition, our team is leveraged by our global network specialized in each service line in general and in the renewable energy sector in particular. EY has one the world s largest global corporate finance teams dedicated to the energy sector. We work with developers, investors, utilities and banks to help fund, deliver and structure related infrastructure wherever client facilities or operations are located. Our services addressing the resource and energy agenda are informed by unique insight stemming from our extensive advisory, transaction, tax and legal experience and our ongoing market analysis. Working with centrally managed cross-border teams and with single responsible country contacts, our controlled, efficient services around the world assist your business wherever required. 6 Renewable Energy Industry
Renewable Energy Country Attractiveness Index (RECAI) a leading industry publication Leveraging our market, industry and technology expertise across the globe, the RECAI ranks 40 countries worldwide on the attractiveness of their renewable energy investment and deployment opportunities. It is widely regarded as providing leading market commentary, analysis and outlooks on key global and regional trends across the renewables sector. Produced quarterly since 2003 Distributed to over 10,000 industry specialists and investors Reaches over 750,000 through social media and press coverage Publically available online Further information: Visit www.ey.com/recai or contact our RECAI editor, Klair White (kwhite@ ey.com) EY Argentina 7
Contacts Fabián Gomez Partner Advisory Services Buenos Aires, Argentina Email: fabian.gomez@ar.ey.com Tel:+54 11 4318 1778 Pablo Gabriel Decundo Partner Assurance Services Buenos Aires, Argentina Email: pablo.decundo@ar.ey.com Tel:+54 11 4515 2684 Daniel Dasso Partner Tax Services Buenos Aires, Argentina Email: daniel.dasso@ar.ey.com Tel: +54 114318 1770 Javier Rovira Executive Director Transaction Advisory Services Buenos Aires, Argentina Email: javier.rovira@ar.ey.com Tel: +54 11 4318 1690 Jorge L. Garnier Executive Director Law Services Buenos Aires, Argentina Email: jorge.garnier@ar.ey.com Tel: +54 11 4510 2274
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EY Assurance Tax Transactions Advisory About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com. 2016 Pistrelli, Henry Martin y Asociados S.R.L. All Rights Reserved.