Argentina to tender $800M project for AMBA power grid, users to fund via tariffs

Argentina's government is preparing to tender a crucial project aimed at bolstering the electrical transmission network in the Metropolitan Area of Buenos Aires (AMBA). This initiative is considered vital for reducing power outages and alleviating system bottlenecks, a persistent issue for residents and businesses.

The project, valued between $700 and $800 million, will operate under a public works concession model with private financing. A significant aspect of the plan is that the awarded company can begin recovering its investment incrementally as construction advances. This recovery will be funded through tariffs paid by users, linked to partial construction milestones, rather than waiting for the entire project's completion.

The Inter-American Development Bank (IDB) will provide partial backing, offering a $200 million guarantee to the winning bidder. The tender is expected to be published within the next week or two. The scope of the project includes constructing over 500 kilometers of high-voltage lines and new transformer stations to strengthen electricity supply in the country's primary consumption hub.

This approach marks a shift from earlier proposals by the current administration, which had considered a fixed charge on electricity bills to fund transmission works. That idea faced internal objections, reportedly influenced by presidential advisor Santiago Caputo. The current plan aims to incentivize private investment in critical infrastructure that has seen minimal expansion over the past decade, despite increased electricity generation.

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The expansion of the transport system is considered one of the main urgencies of the energy sector.