Argentina’s Aconcagua Energía Generación is preparing to sell a green bond in the local market to finance the construction of a solar power park in the western province of Mendoza, as its parent company considers acquiring more oil and natural gas assets, said CEO Mariana Schoua in an interview

“We are going to issue a bond, most probably in the short term,” she told LatinFinance. “It’s going to be a green bond to build the solar park.”

The power generation firm will seek an initial $28 million in the deal, increasing the amount based on demand, Schoua said on the sidelines of the VI National Energy Forum organized by the business group LIDE in Buenos Aires.

The solar park will have 25 MW of capacity initially and could be expanded in a subsequent stage. The first 25 MW will have dispatch priority on the national power grid, a key for moving forward with the project given that transmission bottlenecks around the country are holding back some projects, she said.

Schoua said she expects financing conditions to improve in the local capital market as the economy emerges from a long financial crisis, helping to reduce borrowing rates and increase tenors.

The right-wing government of Javier Milei, who took office in December, is seeking to balance the budget, improve business conditions, revive economic growth and rein in the world’s highest inflation rate. The efforts, while hobbled by national protests and setbacks for passing structural reforms in Congress, have helped to reduce the country’s risk premium over US Treasuries to 1,272 basis points in May — the lowest since 2019 — from a most recent peak of 2,577 in October last year, according to the JPMorgan Emerging Markets Bond Index.

OIL & GAS

Meanwhile, the company’s parent, Aconcagua Energía, is considering bidding to buy some of the 55 mature conventional oil and gas fields that state-run YPF is seeking to offload, Schoua said.

YPF, the country’s biggest oil and natural gas producer, put the fields up for sale earlier this year to focus investments on Vaca Muerta, a massive shale deposit in Patagonia with potential to increase exports of oil and gas. The company has received 60 expressions of interest to bid for the conventional fields.

“Aconcagua’s core is mature conventional fields, and that is what is up for sale,” Schoua said.