IEASA Announces Sale of Two Thermal Power Plants for US $1 Billion

Integración Energética Argentina (IEASA), successor to ENARSA, has published the bidding documents and specifications for Ensenada de Barragán and Brigadier López thermal power plants. The sale of these two power plants by the Argentine Government, for which it expects to raise about US $1 billion, began on Tuesday, June 12, following the publication of the bidding documents by IEASA.

IEASA will tender the sale and transfer of the goodwill for both power plants. In addition, this tender opportunity will include the current contracts (including the supply agreement with Cammesa, a wholesale electricity market administrator in Argentina), the debt received for financing the construction of the power plants, and the obligation to complete the works related to closing the fuel cycle, which will increase the current capacity of both power plants by 50%.

Hugo Balboa, head of IEASA, said the bidding documents and specifications for these thermal power plants were drafted following receiving more than 240 comments through a pre-qualification questionnaire (PQQ) during a public consultation period, which attracted the interest of a number of local and foreign investors.

Companies that acquire the bidding documents -which in the case of Brigadier López will cost US $10,000 and US $20,000 in the case of Ensenada de Barragán- will have 90 days to submit their bids. Afterwards, there will be an evaluation period and the final decision will be announced towards the end of September.

The launch of the bidding process -currently under the ownership and operation of IEASA for both power plants in open cycle- will move ahead, although the valuation by the National Appraisal Tribunal (Tribunal de Tasaciones de la Nación) has not been completed yet. Nevertheless, according to Mr. Balboa, this information will be delivered to the interested parties very soon.

Ensenada de Barragán power plant has an installed capacity of 560 MW, while Brigadier López, located in the Sauce Viejo industrial park in the Province of Santa Fe, reaches 280 MW. Companies that are awarded the contract will have the obligation to complete the works related to closing the fuel cycle, which is already in advanced execution stage, and will increase the potential installed capacity of both power plants by 50%, to 840 and 420 MW respectively.

The work to complete the steam turbine equipments (already completed 90% in both cases) must be completed within 24 months after the transfer of operation in the case of Ensenada de Barragán and within14 months in the case of Brigadier López. In this regard, IEASA notes that all the necessary equipments (generator, turbine, condenser, etc.) to complete the project are already placed in the plants.

Currently, some infrastructure works, as well as the supply and assembly of mechanical equipments, both in the power plants and in the water intakes and aqueduct are being finalized. In Barragán, the corresponding environmental permit is also pending.

The tender opportunities for both Ensenada de Barragán and Brigadier López power plants present a great investment potential. If you need further assistance regarding the bidding process, please contact institucionales@berettagodoy.com  at Beretta Godoy.