The Board of Directors of the World Bank (WB) approved today a 20-year guarantee for USD 480 million to give stimulus to private investment in the development of renewable energy in Argentina, which is a key element for the diversification of the energy matrix through clean sources and a contribution to the mitigation of climate change.

“The World Bank’s support has helped our country to make in a few months the progress which had not been done in ten years for renewable energy, contributing to our objective of guaranteeing energy security and reducing the climate change impact”, said Juan José Aranguren, National Minister of Energy and Mining.

In particular, the World Bank will support the Fund for the Development of Renewable Energy (FODER, in its Spanish acronym) created to make available the financing of projects within the framework of the Program RenovAR. This initiative, promoted to comply with the stipulations set forth by Argentine Law No. 27191, encourages the generation of electricity through wind and solar technology, biomass, biogas, and small hydro-electric projects, aimed at “achieving a contribution of renewable energy sources up to 20% of the national electricity consumption, as of December 31, 2025”.

“This project encourages private investment in renewable energy that helps satisfy the growing demand of energy in the country with a clean source that strengthens sustainable development”, said Jesko Hentschel, World Bank Country Director for Argentina, Paraguay and Uruguay.

Of a total of 59 projects awarded to Rounds 1 and 1.5 of the Program RenovAR, 27 requested the guarantee of the World Bank, 12 of which are wind projects (721 MW), 10 of photovoltaic solar energy (306 MW), 4 small hydro-electric projects (4 MW) and 1 of biogas (1 MW).

The Finance Minister, Luis Caputo, as Argentine Governor before the World Bank, said that this guarantee “proves the confidence Argentina has achieved before multilateral credit organizations since the beginning of Macri’s Administration and the joint work of the National Ministry of Energy and Mining and the Ministry of Finance and the World Bank to achieve the objective of promoting renewable energy in the country”, and he added: “This guarantee is an example of the actual benefits for the Argentine people to achieve investment and financing for productive projects and for the development of infrastructure; in this case it is for a strategic area such as renewable energy”.

The Chief of Cabinet of the Ministry of Finance, Pablo Quirno, and the Undersecretary of International Financial Relations, Martín Soto, participated this Thursday of the joint meeting of the Boards of Governors of the Inter-American Development Bank (IDB) and the Inter-American Investment Corporation (IIC) in Washington. Within that framework, they discussed the Draft Agreement establishing MIF III.

The Multilateral Investment Fund (MIF), created in 1993, is one of the units of the IDB Group that designs and finances projects of the private sector with an innovative perspective. Since its creation, Argentina has contributed 28.3 million dollars to MIF and it has benefitted from 69 million dollars of non-refundable resources. In addition, it has received loans and capital investments (refundable resources) for 19 million dollars.

The MIF, in its 2016-2018 Business Plan, will work over three main strategic issues: Integrating Cities, Climate-Smart Agriculture, and Knowledge Economy. It will also include gender and diversity issues, as well as environmental and social sustainability, and will promote a favorable context for investments. Likewise, it will continue supporting small businesses and creating opportunities for vulnerable populations to mitigate poverty.

In addition, the next Inter-American Forum on Microenterprise (Foromic), organized by the MIF, will be held this year in Argentina. It is the most important annual event related to microfinance and business in the region and, after 18 years, it will take place in Argentina. The country hosted Foromic in 1999, a year after its creation.

It is important to consider that while MIF’s contributions are made by the Government, the main beneficiaries of technical cooperation and projects are micro, small, and medium enterprises and non-governmental agencies. Since 2016, MIF has approved projects for Argentina for more than 6 million dollars and it is likely that the country will benefit in the future from transactions for a higher amount than the one to be contributed for the replacement.

The Minister of Finance, Luis Caputo, signed this afternoon, together with the Minister of Internal Affairs, Public Works and Housing, Rogelio Frigerio, a loan for 120 million dollars with the Inter-American Development Bank (IDB) for the Program to Develop and Strengthen Provincial Management. This Program constitutes the background for future agreements to be executed during the next months.

The Ministers were also accompanied by the Governors from Corrientes, Ricardo Colombi, from Mendoza, Alfredo Cornejo, from Misiones, Hugo Passalacqua, from Neuquen, Omar Gutiérrez, and from Salta, Juan Manual Urtubey.

Within this context, the officials signed the commitment between the National Government and each Province to carry out the Program. It is aimed at contributing with growth through the improvement of the administration of income, expenditure, and public investment, as well as implementing infrastructure projects.

The Program has two elements: the strengthening of tax and financial administration and development investment. The first one is aimed at improving the Provinces’ fiscal autonomy and the efficiency of public expenditure; the second one will enable the financing of investments on strategic sectors of the economy.

The strengthening of tax and financial administration will allow developing the provincial abilities related to tax collection, financial administration and the management of the public investment cycle. The IDB will finance 36.4 million dollars and Argentina will invest 6.4 million dollars.

The Finance Minister, Luis Caputo, highlighted that “this program is a progress related to the strategic objective of the Government: to grow creating jobs with financial balance, fiscal responsibility and an equitable distribution of fiscal resources among the Provinces”.

In addition, the investment initiative for development is aimed at financing strategic sectors of each Province. In total, 96 million dollars will be invested, 81.6 out of which will be contributed by the IDB and 14.4 million by the National Government. This way, the estimated cost of the whole Program is of 141.2 million dollars.

In this sense, Caputo said: “With these resources we are going to finance strategic sectors of each Province to promote the economic growth and the creation of private jobs. In addition, it will be an appropriate instrument for a better management of the income and it will give priority to the quality of public expenditure in the provincial jurisdictions”.

The investments for development will benefit five Provinces with a total of 5.5 million inhabitants. Within the different works to be financed by the agreement with the IDB, we can highlight the improvement of the Costanera de Mendoza Avenue, the development of an industrial park in Salta, the i9mprovement of Route 40 in Nequen, and the construction of an aqueduct in Corrientes. It also includes the promotion of the Province of Misiones as a forest, touristic and energy alternative.

February 21, 2017

The Minister of Finance, Luis Caputo, met today with the President of the Inter-American Development Bank (IDB), Luis Alberto Moreno, at the headquarters of the organization in Washington. As governor for Argentina before the IDB, Caputo remarked together with Moreno the main items on the common agenda and said: “This meeting enabled to strengthen the strategic alliance between the IDB and Argentina”.

Likewise, both officials talked about the next Inter-American Forum on Microenterprise (FOROMIC), organized by the Multilateral Investment Fund (MIF) of the IDB Group that will take place in Argentina this year. It is the most important annual event related to microfinance and enterprises of the region. In addition, Argentina is getting ready to host the annual Meeting of the Boards of Governors of the IDB and the IIC in 2018.

After the meeting, Caputo highlighted the importance of the Program to Strengthen Provincial Management in order to achieve the financial stability of the Provinces, promote fiscal responsibility, and develop infrastructure works.

“In this opportunity, we are working with the IDB to achieve better fiscal responsibility, financial stability, and to better distribute fiscal resources among Provinces”, the Finance Minister said, and he added: “The IDB has a strong commitment with productive investment and infrastructure development, which is one of the main pillars of Macri’s Administration for economic growth and employment creation”.

The Finance Minister was accompanied during the meeting with Moreno by the Chief of Cabinet of the Ministry, Pablo Quirno, the Undersecretary of International Financial Relations, Félix Martín Soto, and the Argentine Representative before the International Organization, Raúl Novoa. After that, they had lunch with the President of the IDB and the rest of the Governors of the Bank.

In addition, as responsible for the bilateral relations with this development bank, the Finance Minister will meet this afternoon with the Vice-president of countries of the IDB, Alexandre Meira da Rosa, with the Vice-president of sectors, Santiago Levy, and with the Vice-president of the IDB, Julie Katzman. Caputo will also meet with the General Manager of Inter-American Investment Corporation (IIC), James Scriven, and later he will meet with Argentine experts of the institution.

Caputo is in Washington to develop a working agenda that includes the execution of an agreement for the Program to Develop and Strengthen Provincial Management together with the Minister of Internal Affairs, Public Works and Housing, Rogelio Frigerio, the Secretary of Provinces, Alejandro Caldarelli, and the Governors of Corrientes, Mendoza, Misiones, Neuquen, and Salta. It is a loan for 120 million dollars, which had been approved by the IDB in December 2016, to improve the administration of income, expenditure, and public investment, and to execute investment projects in strategic sectors. The Argentine Ambassador, Martín Lousteau, will also be present.