Argentina’s Pampa Energia has sold a 50% stake in its renewables subsidiary Greenwind to the US-based private equity firm Castlelake.
The US firm paid US$11.2 million for the stake, via its investment vehicle Valdatana Servicios y Gestiones, according to local reports.
Through its acquisition, Castlelake will be able to participate in the development of the 100-MW Corti Wind Farm.
The wind project, which is to be built and operated by Greenwind, is located in Bahia Blanca, in the south of the province of Buenos Aires.
Output from Corti is expected to be sold for US$58 per MWh once operational, under a contract that was awarded last year during the first round of the country’s renewables investment programme, RenovAr.
Construction of the facility is expected to take a total of 14 months and require an investment of US$155 million, local reports said. The project, which was first suggested back in 2009, covers an area of 1,560 hectares.
Patagonia, especially in its far south, has long been touted as a promising area for wind power development in Argentina. However, the remoteness of the region and the lack of existing infrastructure have acted as barriers to progress in the past.
Patagonia’s Atlantic coast, where the Corti project will be built, is also considered a potentially attractive region for development. Although lower wind speeds make expected power yield lower on the Atlantic coast than inland, the region is better placed for connection to transmission and distribution grids.
Argentine lawmakers passed a landmark energy law in September 2015 that requires the nation to source 8% of its electricity from renewables by 2017, and 20% by 2025. Since then, expansion of the sector has been rapid.
Last October, the energy ministry awarded contracts to 17 projects with a total capacity of 1,109 MW in the first round of RenovAR. In a follow-up round, held in November, the government awarded 1,281.5 MW of capacity across 30 wind and solar projects.
The RenovAr programme tries to incentivise renewables development in Argentina by offering fiscal incentives like exemption from import duties and accelerated fiscal depreciation. As well as fiscal incentives, it offers US dollar indexation, World Bank guarantees and government backing, all of which have been successful in attracting an influx of investors and developers.