On April 22, Argentina paid US$9.4 billion to 220 remaining holdout creditors effectively  terminating the decade-long nightmare that shut down the country’s financial connections with the rest of the world. The payment is supported by proceeds from a record-breaking debt issue of US$ 16.5 billion that took place shortly before Alfronso Prat-Gay, Argentinian Minister of Finance, announced that an agreement with the creditors, including Elliot Asset Management, has been reached. New York’s Supreme Court further lifted the injunction against Buenos Aires, enabling the previously blocked payment channels for the pro laissez-faire Macri administration.

While the remaining proceeds, US$ 7.1 billion, raised through the debt restructuring, will be used for infrastructure construction, the settlement will also allow the Central Bank of Argentina to resort to less distortive financial means. The financial supports could mitigate risks of currency overissuance and exhausting foreign reserves, which will in turn lower inflation and unemployment rates.

With no further doubts, the holdout settlement is a milestone for Argentina’s endeavors to rise again after the economic and political crisis in the early 2000s. Yet, it is only the first item on the agenda of the Macri administration, which has more ambitious plans set up for the country. Renewable energy is the next major target.

As is revealed by an earlier released whitepaper by Solarplaza, Argentina’s Second Chance, the Macri government has already initiated several reforms to encourage development and deployment of renewable energies, including but not limited to upgrading the Ministry of Environment and Sustainable Development and partnering up with the United States in fighting climate change. On May 19, President Macri formally announced to organize a renewable energy auction of 1 GW capacity during June to September this year, with the objective of adding the auctioned portfolios into the country’s energy plant mix before 2017/2018. Furthermore, the auction is expected to reduce the current electricity price to under $100/MWh and spur investments of US$ 2 billion. This auction is a part of decree 531/2016, which aims at a renewable energy capacity of 10 GW in 2025 and will get Argentina significantly closer to the goal mandated by the law of Renewable Energies passed in October 2015--8% of electricity consumption will be generated with renewable sources in 2017--if implemented as scheduled. Buenos Aires is expected to organize two more auctions in the coming few years, mobilizing investments of up to US$ 5 billion for renewable energy development.

Although definitive terms of the auction have not yet been revealed, solar, wind, biomass and small hydro projects with capacities between 10 to 40 MW are widely believed to be eligible for participation. The preliminary target price is US$ 100/MWh and approximately half of the spots will be reserved for wind parks, according to Juan José Aranguren, Minister of Energy and Mining.

At the moment, Buenos Aires is seeking financial endorsement for the auction from the World Bank. The Macri government is negotiating for a credit line of US$ 500 million designated for signed contracts during the auction. If successful, the World Bank’s involvement will send out positive signals and further assure international energy giants of the improved market conditions and President Macri’s determination to pivot Argentina on a fast track towards a renewable superpower in Latam.

To find out more about emerging opportunities in Argentina’s solar market join Solarplaza’s 2-day conference El Futuro Solar Argentina, from 9-10 June 2016 in Buenos Aires. Get first-hand content from 25+ expert speakers and network with 150+ attendees from the region.