Modification to the Payment Guarantee on PPAs under the Renewable Energy Regime
On 3 July 2017, through Decree No. 471/2017 (Decree) the Executive Power modified Decree No. 531/2016, which regulated Law No. 27,191 on the Renewable Energy Promotion Regime.
The Decree improved the payment guarantee in favor of the generators that executed power purchase agreements with CAMMESA (PPA). In this regard, the Decree allowed that the National Treasury’s funds contributed to the FODER may be used as PPAs payment guarantee (Contributions). Previously, the Contributions were only provided to finance the development of projects. Thus, the funds that the FODER currently will have to guarantee the PPAs will be the Contributions and the resources derived from a specific charge that certain power consumers have to pay (Charge). The Ministry of Energy and Mining (Ministry) shall determine the amount of the Charge (which value shall ensure PPA's payment for at least 12 months –Minimum Term–) and the Contributions that will guarantee the PPAs based on the variations derived from entering into new PPAs.
The Ministry may also modify the Minimum Term applicable to PPAs to be entered into in the future, if so allowed in the corresponding bidding documents (in the event such modification is made, it will not be applicable to previous PPAs).