Central Puerto and IFC Drive the Development of the First Power Line to Boost Sustainable Mining in Argentina

Rhea-AI Summary

Central Puerto (NYSE: CEPU) and the International Finance (IFC) have signed an agreement to conduct feasibility studies for a pioneering electricity transmission line project in northwestern Argentina. The initiative, with an estimated investment of USD 600 million, aims to supply renewable energy to mining companies in the Argentine Puna region.

The project includes constructing a 140-kilometer high-voltage line from the Puna Transformer Station, with a potential capacity of up to 400 MW. This infrastructure will connect mining projects to the Argentine Interconnection System (SADI), providing reliable renewable energy through private agreements. The project will also benefit nearby isolated communities with consistent power supply.

This initiative aims to boost Argentina's mining sector, which currently represents only 0.7% of the country's GDP, compared to 8-10% in neighboring countries like Chile and Peru.

Positive

• USD 600 million infrastructure project to expand renewable energy distribution
• Potential capacity of 400 MW to serve mining operations
• Project enables new revenue streams through long-term PPA contracts
• Strategic expansion into underserved mining sector with growth potential

Negative

• None.

Buenos Aires, Argentina--(Newsfile Corp. - December 10, 2024) - Central Puerto, (NYSE: CEPU) Argentina's leading electricity generator, and the International Finance Corporation (IFC), a member of the World Bank Group, announce the signing of an agreement to advance feasibility studies for the first electricity transmission line to supply renewable energy to mining companies in northwestern Argentina.

These studies will evaluate the technical, economic and environmental feasibility of the project, which aims to interconnect mining projects in the Argentine Puna sector to the Argentine Interconnection System (SADI), guaranteeing a reliable supply of renewable energy through private agreements.

"Mining in northwestern Argentina is a strategic sector for the economic growth of our country. In the face of an increasingly demanding international market for critical minerals, essential for the energy transition, this project responds to the need of mining companies to improve their competitiveness through reliable, efficient and economical energy solutions," said Fernando Bonnet, CEO of Central Puerto.

"At IFC we seek to accelerate the global energy transition and the private sector in Argentina has the potential to be a leader in the industry. The collaborative work with Central Puerto adds to these efforts by prioritizing renewable energies and supporting the sustainable mining industry with the necessary infrastructure to also reach its full potential," said Alfonso García Mora, IFC's vice president for Europe, Latin America and the Caribbean.

With an estimated total investment of USD 600 million; the Central Puerto initiative contemplates the construction of a high-voltage line (LAT) of approximately 140 kilometers originating in the Puna Transformer Station (ET). The project foresees a potential capacity of up to 400 MW offering mainly competitive energy supply of renewable origin.

The new infrastructure will not only benefit the mining industry but will also supply communities near the areas of influence of the installation of this new transmission line, which are currently isolated. This constant energy supply will contribute to the development of these communities, improving their quality of life and promoting their growth.

In addition to strengthening the competitiveness of the mining industry, this project has the potential to boost both regional and national economic development. Currently, mining represents only 0.7% of Argentina's GDP, well below the 8% to 10% it reaches in countries such as Chile and Peru. This effort not only seeks to close that gap, but also to position Argentina as a leader in the transition to a more sustainable economy.

Continuing the legacy of previous collaborations between Central Puerto and IFC in financing projects under the RenovAR and MATER bidding scheme, this initiative will provide mining companies with access to a steady supply of renewable energy. In addition, it will be supported by a solid interconnection infrastructure with the SADI, which will facilitate future long-term PPA contracts between supply and demand.

The joint effort of Central Puerto and IFC seeks to transform northwestern Argentina into a key hub for renewable energy generation and sustainable mining, contributing to the country's economic growth and competitive positioning on the global stage.

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About Central Puerto S.A.:

Central Puerto is a leading company in the production of electricity in Argentina that has 14 generation plants of various technologies, more than 1,600 employees and reaches a 20.13% market share thanks to its operational excellence and profitability. Its mission is to produce electricity in an efficient, sustainable way and in harmony with the environment. At the same time, it seeks to contribute to the supply of demand, managing businesses in a way that creates value not only for the company, but also for society. Currently, it has an installed generation capacity of 6,703 MW. For more information, please visit: www.centralpuerto.com.

About IFC

The International Finance Corporation (IFC), part of the World Bank Group, is the leading international development institution dedicated to the emerging market private sector. It works in more than 100 countries and uses its capital, expertise and influence to create markets and opportunities in developing countries. In FY2024, IFC committed a record $56 billion to private companies and financial institutions in developing countries, mobilizing solutions and private sector capital to achieve a world free of poverty on a livable planet. For more information, visit www.ifc.org. 

Contact information:
Chief Financial Officer
Enrique Terraneo 

• Tel:
  (+54 11) 4317 5000 
• Email:
  inversores@centralpuerto.com
• Investor Relations Website:
  https://investors.centralpuerto.com/

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/233102

FAQ

What is the estimated cost of Central Puerto's (CEPU) new power line project in Argentina?

The estimated total investment for Central Puerto's power line project in Argentina is USD 600 million.

How long will the new power line be for Central Puerto's (CEPU) mining energy project?

The high-voltage line (LAT) will be approximately 140 kilometers long, originating from the Puna Transformer Station.

What is the potential power capacity of CEPU's new transmission line project?

The project foresees a potential capacity of up to 400 MW, primarily offering competitive renewable energy supply.

What percentage of Argentina's GDP currently comes from mining, according to CEPU's announcement?

Mining currently represents only 0.7% of Argentina's GDP, significantly lower than neighboring countries like Chile and Peru, which reach 8% to 10%.