Electrical privatization: three Argentine groups presented themselves to buy the largest transmission network

This Tuesday, those interested made their presentations, through the platform Hire. The process involves the purchase of 50% of Enarsa in Citelec, a company that owns 52.65% of Transener. Thus, the package is equivalent to an indirect 26% of the company that operates more than 12,000 kilometers of high voltage lines in the country. Pampa Energía, from the Mindlin family, will retain half of the shares of Citelec, without being the full controller.

As anticipated, among those who presented the purchase proposals is Edenorthe electricity distributor in the north of the City of Buenos Aires and the suburbs, which belongs to businessmen José Luis Manzano, Daniel Vila and Mauricio Filiberti.

He also joined Genneiacon Jorge Pablo Brito -owner of Banco Macro- at the head. But he did not appear alone but together with Edison Investments, the group made up of brothers Patricio and Juan Neuss -close to presidential advisor Santiago Caputo-; the partners of the Inverlat fund -Carlos Giovanelli, Damián Pozzoli, Guillermo Stanley and Federico Salvai-, owner of Havanna and Aspro; and the businessmen Rubén Cherñajovsky and Luis Galli, owners of Newsan.

The third in the race is Central Puerto, the main private electricity generation company in Argentina, whose shareholders are led by Guillermo Reca.

The family Sieleckia partner of Pampa Energía in Transportadora de Gas del Sur (TGS), who had shown interest, decided not to participate.

Thus, the privatization of Transener begins to outline a duel between traditional businessmenwith history in the energy sector, and other newcomers but with accelerated deployment.

All in all, the concession aroused the interest of many Argentine businessmen, who are consolidating their advance on the businesses that have been left by both multinationals and the State in recent years.

The schedule will continue with the opening of economic offers,and it is expected that the award will be finalized in June.

“The sale of Citelec shares ends an exceptional period in which the State participated directly in the transmission activity and transformation of electrical energy and reestablishes the scheme provided for in the Electrical Regulatory Framework, according to which the provision of the public transportation service should be carried out primarily by the private sectorunder state control and regulation”, indicated from the Ministry of Energy.

Manzano and Vila, for example, are owners in Argentina of several media outlets such as América, A24, Telefé and El Cronista, as well as the distributors Edenor (Buenos Aires) and Edemsa (Mendoza). Between them they are behind the purchase of service stations Shell and a refinery for about 1.6 billion dollars.

The former also owns, together with the Swiss fund Mercuria, the oil company Phoenix Global Resources (PGR), which is the main crude oil producer in Río Negro, and Minera Aguilar, which produces silver in Jujuy. And it seeks to extend its arms to lithium and uranium.

At the same time, José Luis Manzano has between his eyebrows Metrogaswhere it already participates with 9% of the shares, but is interested in buying 70% of YPF, valued at approximately US$ 600 million.

Britofor its part, is one of the owners of Genneia, in addition to Banco Macro and the agricultural company Inversora Juramento, among other firms. Genneia is the main generator of renewable electrical energy (wind and solar) in Argentina, and this year he tried together with Aluar, Javier Madanes Quintanillakeep one of the hydroelectric plants to be privatized in Río Negro and Neuquén.

The former president of River along with his partners, including the Mexican businessman David Martínez, has just obtained financing from the Inter-American Development Bank (IDB, through its private investment vehicle IDB Invest) for US$ 185 million to promote 4 solar parks in Mendoza, San Juan and Buenos Aires, in addition to the installation of battery energy storage systems.

For its part, Edison Investments it grew rapidly in the last two years with purchases of electricity distributors in Tucumán and Jujuy; an electric carrier on the Coast; and a hydroelectric plant in Mendoza.

But its definitive takeoff was the award by the national State of the privatizations of two hydroelectric plants in Comahue, being the best bidders for the Alicurá and Cerros Colorados complexes, for a total of US$ 226 million.

Transener is a strategic piece of the electrical system because it operates the backbone energy transportation network, a monopolistic business with regulated income. Its contractual objective is the operation and maintenance of the network, but not the extension of high voltage lines.

At a structural level, The State stopped investing in new electric transport networks in 2014after extensive deployment in the previous decade. Since then, demand continues to grow at a rate of around 3% annually and the restrictions on adding new supply are notorious, especially in renewable energies.

Without new capacity in electricity generation and without yet defining the scheme for a private concession that allocates investments of 1.1 billion dollars to reinforce the electrical system In Buenos Aires, the Government launched a tender to install energy storage batteries throughout the country, which will help keep the networks up and avoid blackouts.