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September 2018

RENEWABLE ENERGY IN ARGENTINA

RenovAr Program

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RENEWABLE ENERGY IN ARGENTINA

National legal framework for renewable electricity

Law 27,191 Senate 4Q’14 (94% positive vote) Lower Chamber 4Q’15 (93% positive vote)

Decrees 531 and 882 Presidential Decree 1S’16

RENEWABLE ENERGY PROGRAM 2016-2025 Regulatory Framework Documents

RENOVAR PROGRAM

CORPORATE PPAs LEGAL FRAMEWORK (MATER)

Round 1: Res. 71 and 136/2016 Round 1.5: Res. 252/2016 Round 2: Res. 275/2017 Round 3: 3Q´18

Res. 281/2017 Disp. 1E/2018

PROJECTION

Renewables

Transmission

Hydroelectricity

Nuclear

Thermoelectricity

15.0

5.0

10.2

6.0

4.8

Planned Capital Investment in the Power Sector (in billion USD)

+10 GW

+3 GW

+6 GW

+1 GW

> 5k km

Demand 2016 138 TWh Demand 2025 170 TWh

15 Bill USD

CONTRACTUAL FRAMEWORK FOR DE-RISKING

RISK COVERAGE WATERFALL FOR WORST-CASE SCENARIOS

CREDIT ENHANCEMENT EFFECT

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RENEWABLE ENERGY IN ARGENTINA

RenovAr Program Round 1 / 1.5 / 2

OFFERED CAPACITY VS. RECEIVED CAPACITY

1,000 MW OFFERED

6,343 MW RECEIVED

RenovAr Round 1

1,200 MW OFFERED

9,391 MW RECEIVED

RenovAr Round 2

6 x oversubscribed

8 x oversubscribed

ROUND 1 / 1.5 / 2 147 AWARDED PROJECTS: 4,466 MW TOTAL AWARDED CAPACITY & 15,836 GWH/YEAR

WIND PROJECTS: 34 MW: 2,466 GWh/year: 9,778

SOLAR PV PROJECTS: 41 MW: 1,732 GWh/year: 4,290

BIOGAS, BIOGAS FROM LANDFILL, BIOMASS PROJECTS: 58 MW: 236 GWh/year: 1,665

SMALL HYDRO PROJECTS: 14 MW: 32 GWh/year: 103

RENOVAR SUMMARY

95% of the whole

territory

34 Wind 41

Solar

18 Biomass

36 Biogas

14 Small Hydro

12 to 30 Month term to set

the Commercial Operation

Date

4,5 millions homes with electricity

8,4 millions tons of CO2 in

savings, equal to approx. 1,5 million

of cars

USD 7 billions Direct Investment

4 Biogas from

Landfill

15 TWh/year Renewable Energy

4,466 MW New Capacity

147 Awarded Projects

RENOVAR @ 3Q’2018 (ROUNDS 1 / 1.5 / 2 & RES. 202)

RenovAr Rounds 1 & 1.5 and Res. 202

RenovAr Round 2

100 % GUARANTEES PROVIDED

2.92 GW

69 projects awarded 100 % PPAs signed 9.6 TWh/year

LEV

ELS

2018 current awarded projects status

Today December

61 % Under Construction

16 % Commercial Operation

23 % Remaining

28 % Commercial Operation

10 % Remaining

62 % Under Construction

2.04 GW

88 projects awarded 54 PPAs signed 7.3 TWh/year

PRICES DECREASE IN ROUND 2

-22 % lower than average price offered in Rounds 1 & 1.5

40.4 USD/MWh (minimum price)

-29 % lower than average price offered in Rounds 1 & 1.5

37.3 USD/MWh (minimum price) 1 project reached COD

(May 29th 2018)

RenovAr Rounds 1, 1.5 & 2 + Res. 202

AW

AR

DED

CA

PAC

ITY

Biogas 64.85 MW 37 projects

Biomass 202.72 MW 19 projects

Biogas from Landfill

13.12 MW 3 projects

SH 32.13 MW 14 projects

Wind 2,911.22 MW 41 projects

Solar PV 1,742.43 MW 43 projects

STATED LOCAL CONTENT

Round 1: 14 % Round 1.5: 18 % Round 2: 30 %

Expected Commercial Operation Date (aggregate)

2018 2019 2020 2021 660 MW 3,625 MW 4,890 MW 4,966 MW

CORPORATE PPAs (41 projects)

ALLOCATION OF PRIORITY OF DISPATCH: 1,009.58 MW

8 project under construction

PROJECTED

JOB CREATION (IN RENEWABLE ENERGY) Argentina. September 2018

157 RenovAr awarded projects

57%

MaTer projects

RenovAr & MATER

Total: 5,976 MW 15,391 Jobs

2,055 Jobs

3,738 MW 7,086 Jobs

745 Jobs

CONSTRUCTION

Wind

OPERATION & MAINTENANCE

Construction O & M

1,996 MW 5,556 Jobs

431 Jobs

Solar Photovoltaic Construction O & M

281 MW 2,316 Jobs

798 Jobs

Bioenergy Construction O & M

32 MW 433 Jobs

81 Jobs

SH Construction O & M

Bioenergy: Biomass, Biogas & Biogas from Landfill. SH: Small Hycro

81 RenoVar and MaTer Projects under development

(68 projects uder construction and 13 in Commercial Operationl)

Total RenovAr & MATER

Total: 3,051.6 MW 6,375 Jobs

133 Jobs

EXISTING JOBS: 6,508 30% 8% 5%

PORCENTAGES BASED ON THE

TOTAL NUMBER OF JOBS PROJECTED

JOB CREATION AS PER PREVAILING TECHNOL BY REGION:

25%

6%

3% 8%

17%

5%

17%

100%

100%

83%

90%

100%

69%

86%

43%

19%

41 Total Number of Jobs Projected: 17,446

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RENEWABLE ENERGY IN ARGENTINA

RenovAr Program Round 3 (MiniRen)

WHY R3 - MINIREN?

ECONOMIC ADVANTAGE FOR THE SYSTEM Energy loss savings in transport and distribution.

Forced generation displaced by alternative fuel (not gas).

ELECTRIC TECHNICAL ADVANTAGE General quality improvement in weak lines.

Promotion of the National Industry

Value Chain

Federal and Multi-technological

Diversification

Development of New Projects

TO ADD CAPITAL FROM NON-TRADITIONAL STAKEHOLDERS FOR RENEWABLE ENERGY

PROJECTS DEPLOYMENT

TO USE THE AVAILABLE CAPACITY IN THE MV GRID AND TO PROMOTE REGIONAL

DEVELOPMENT

RenovAr - Round 3

40 MW

60 MW

60 MW

30 MW

70 MW 60 MW

30 MW

GENERAL FEATURES

CAPACITY BY PROJECT Max. 10 MW - Min. 0.5 MW

TECHNOLOGIES

Solar Photovoltaic and Wind 350 MW Jointly compete on quotas by regions and provinces.

Distinguishable quota without regions: SH 10 MW Biomass 25 MW Biogas 10 MW Biogas from Landfill 5 MW

REGIONALIZATION FOR WIND AND SOLAR Maximum quota of 20 MW per Province, except for Bs.As. (60 MW).

Region 1 Jujuy, Salta, Catamarca, La Rioja

40 MW

Region 2 Formosa, Chaco, Tucumán, Santiago del Estero

60 MW

Region 3 Misiones, Corrientes, Entre Ríos, Santa Fe

60 MW

Region 4 San Juan, Mendoza

30 MW

Region 5 Chubut, Santa Cruz

30 MW

Region 6 Córdoba, San Luis, La Pampa, Neuquén, Río Negro

70 MW

Region 7 Buenos Aires 60 MW

400 MW Offered MV GRID CONNECTION 13.2kV / 33kV / 66kV

GEOGRAPHIC REQUIREMENT

Expansions of existing power plants are not allowed

+ 50 MW without regionalization

2018 2019

REQUEST FOR PROPOSALS (RFP) AND AGREEMENT

- No competence on COD (Stated Local Content-[SLC]) (730 days) - No Guaranteed Energy

- No Dispatch Priority

OFFERED PRICE Stated maximum prices

WIND – SOLAR PV

Remaining Technologies

AWARD PROCEDURE • Similar to previous rounds = Competence on Adjusted Offered Price for firm capacity

Priority in the ranking for displacing Forced Generation (not gas)

• Greater SLC and lesser amount of Fiscal Incentives

• Before the award, the distributor chooses the quota between WIND - SPV vs SH - Bioenergy

Power Purchase Agreement (PPA) entered into with CAMMESA (similar to previous RenovAr rounds)

FODER ADHESION AGREEMENT (Energy Payment Guarantee for 3 months)

FISCAL INCENTIVES Specific Purpose Entity (SPE): Law 27 191 / Res. 72 No SPE: simplified mechanism (subject to prior regulation) Joint Ventures / Trusts: without Fiscal Incentives

AGREEMENT ENTERED INTO WITH DISTRIBUTORS • Agreement on the connection technical project

• Identification of the maximum capacity made available at the link with the grid

• Agreement on the supply and energy payment by means of CAMMESA with the authorization from the Jurisdictional Regulatory Entity

TECHNICAL / TECHNOLOGICAL Description of the Project + Energy Production Report Identification of Equipment as sworn statement (to estimate the SLC and the Fiscal Incentives)

Change of Technology will be allowed MEASUREMENTS will not be required

SOIL Land Availability Use of Soil

REAL PROPERTY WITH ENCUMBRANCES WILL BE ALLOWED

ENVIRONMENTAL Beginning of the Proceeding

FINAL AUTHORIZATION REQUIRED AT THE COD (demanded to grant Fiscal Incentives and COD)

REQUIREMENTS

- No Financial Strategic Partner

- No Adjustment or Incentive Factor

- Joint Ventures and Trusts will be allowed

Request for Proposals

SCHEDULE

OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER

Submission of Bids

Qualification Award Execution of Agreements

Undersecretary for Renewable Energy Ministry of Treasury Argentine Republic

189 Paseo Colón Avenue, Floor 9 Telephone Number (+54-11) 4349-8033/8186 privadarenovables@minem.gob.ar