Doing Business In Argentina

Electric Power Systems
Overview Return to top
2005 2006 2007 (estimated)
Total Market Size 1,610 1,878 2,554
Total Local Production 1,000 1,100 1,300
Total Exports 38 52 86
Total Imports 648 830 1,340
Imports from the U.S. 133 130 240
Millions of USD. Exchange Rate: 1 USD=3.10 Argentine Pesos
Sources: The above statistics are unofficial estimates, based on Argentine Customs data and
other sources.
2007 import market share: U.S.: 17.9%, Germany: 18.6%, China: 15.4%, Brazil: 15.1%, U.K.:
6.7%, others: 26.3%
The electric power sector in Argentina was particularly affected by the economic crisis of
2001/2002. Rates had been virtually frozen in 1998, when the government suspended
adjustments based on the U.S. PPI, and no alternate adjustment formula was offered.
The private operators of public utilities found themselves collecting devalued pesos, and
paying for equipment and supplies and serving their debt in hard currency. This
situation seriously affected the private operators’ ability to keep up with maintenance and
expansion programs. Continued pressure from the GOA will force the power companies
to partially resume their investment, in order to keep their assets in working condition.
However, the lack of investment in new assets in the past six years may result in a
temporary inability of the system to accommodate growing demand, especially during
peak use periods. Two combined cycle plants to be financed by several of the
generating companies will be built by Siemens, with start-up date in mid/late 2009. A
coal-fired power plant is to be built at the site of a coalmine in Rio Turbio, Santa Cruz.
Transener, operator of the principal 500 KvA lines, is investing in some expansions to
the National Grid, but has gone on record saying that substantial additional investment
will be needed, both in the grid and in generation. Renewable energy sources are being
mentioned with growing emphasis as a partial solution to growing demand and stagnant
supply. Wind power seems particularly promising given the current potential in several
regions although Spanish, Danish, and German suppliers have to date taken the lead in
the supply of equipment to a very small wind generation market.
Best Prospects/Services Return to top
Specific types of equipment showing the best potential are generators and gen sets,
including used and refurbished units, transformers, turnkey combined cycle plants, gas
turbines, steam turbines, transmission line telecontrols, electronic frequency converters,
reclosers, and switchgears, as well as the aforementioned wind power equipment.
Opportunities Return to top
3/4/2008