US$275 million to support Argentine electricity sector

(Caracas, December 2, 2008).- With the objective of supporting public investments in the Argentine electricity sector for the improvement, expansion and optimization of the infrastructure of the country's electricity system, the Andean Development Corporation approved a US$275 million loan for the Argentine Republic. The agreement for the operation was signed by Secretary of Economic Policy Martín Abeles, and CAF President & CEO Enrique García.

The executing agency will be the Ministry of Economy and Public Finance (formerly Economy and Production), through the National Directorate of Projects with International Credit Organizations, attached to the Secretariat of Economic Policy.

Enrique García said that "CAF has been accompanying the development of the Argentine electricity sector since 2004, having previously approved three loans for investment projects in the sector. Specifically, for the interconnection projects Rincón Santa María-Rodríguez Electricity Interconnection (US$300 million); Comahue-Cuyo Electricity Interconnection (US$200 million) and support for Federal Energy Plan II.

The Argentine government has decided to give priority to investments that strengthen and modernize the national electricity sector. Specific actions include executing an Investment Plan with national impact on power generation, transmission and distribution.

Execution of the projects included in the Investment Plan, implemented by the Argentine government, are expected to provide major benefits for the national electricity network, such as interconnection of transmission systems for greater integration, expansion of capacity and increased coverage, improvement of transmission conditions, and a higher level of reliability and security of the service. The total cost of the electricity program currently in execution in Argentina - third energy market in Latin America - is US$3.08 billion.

In addition to these approvals, CAF support for the integrated development of Argentine infrastructure in recent years includes financing for emblematic projects in the transport sector such as the Road Integration Corridor Program, Phase I (US$150 million); La Picasa Rail Viaduct and Strengthening the Sector (US$35 million); Rehabilitation and Paving El Pehuenche International Pass (US$80 million); Integration Road Works Argentina-Paraguay which are part of the Yacyretá Termination Plan (US$210 million); Integration Rail Works Program Argentina-Paraguay (US$100 million) among others.