Argentina's government has significantly expanded the role of state-owned energy company Ieasa and overturned the previous administration's plan to privatize $1bn in energy sector assets.
Through a decree, the government of President Alberto Fernandez reversed a 2017 order to sell state interests in several thermal power plants, energy transportation companies and uranium dioxide producer Dioxitek, among others.
"The state is once again positioning itself as a central player in the energy sector," said Ieasa, which changed its name from Enarsa under the administration of former president Mauricio Macri.
Ieasa was assigned the state's 65pc stake in the 823MW Manuel Belgrano power plant in Buenos Aires province and 68pc in the 825MW Timbues thermal plant in Santa Fe province.
Under the Macri-era privatization drive, the state sold two thermal plants — a 560MW plant in Buenos Aires province and a 280MW plant in Santa Fe province — at "fire-sale" prices, Ieasa said.
This week's decree also authorizes Ieasa to expand pipeline natural gas imports from Bolivia with funding to make sure the supply contract does not fall into default. The company is already the sole importer of LNG in Argentina, in coordination with state-controlled YPF.
Under the new decree, Ieasa was also reassigned two offshore exploration concessions close to the UK-controlled Falkland Islands (Islas Malvinas), over which Argentina has long claimed sovereignty.
The energy privatization drive was part of a broader effort by the Macri administration (2015-19) to promote private-sector investment and reduce the state's role in the economy.
While Ieasa's future seemed uncertain under Macri, the Fernandez administration, which came to power in December 2019, has been giving the firm greater responsibilities and guaranteed it a budget through revenue from a new wealth tax.
Earlier this year, the government expanded Ieasa's mission to include hydrogen and mining, with a focus on lithium, considered a strategic resource.
Echoes from Mexico
Argentina's move has echoes elsewhere in Latin America, mostly prominently in Mexico, where President Andres Manuel Lopez Obrador is chipping away at an energy reform and restoring the dominance of state-owned oil company Pemex.
In a politically symbolic move, Argentina's new decree also restores the original names of two hydroelectric dams under construction in southern Santa Cruz province, the bastion of influential former president Cristina Fernández de Kirchner (2007-15) who is now vice president. Under Macri the 950MW dam — named Nestor Kirchner in honor of her late husband and predecessor — and the 360MW dam, named Jorge Cepernic after a former Santa Cruz governor — had been changed.
