The 2016 renewable energy tender in Argentina is placed in a disruptive macro-economic environment. After many years of market intervention and scarce investment in new energy capacity on the one hand, and isolation of the country from international financial markets on the other, the new authorities face multiple challenges in their quest to deploy new capacity. In order to achieve the target of the renewable energy law 27.191 from October 2015, to generate between 8% and eventually 20% of the energy consumption from renewable sources, the government launches the public tender for renewable energy PPA RenovAr in July 2016. A strong pipeline of renewable energy projects promises a quick deployment of new capacity with high capacity factors and competitive capex and opex; particularly wind projects will represent 60% of the overall capacity. Local and foreign investors consolidate their confidence in the Argentinian market and specifically in the energy sector. The investors prepare their technical and economical bids based on a solid yield estimate and thorough cost analysis, in a context of high capacity factors and relatively straightforward capex and opex budgeting on the one hand and a complex fiscal incentive structure and challenging definition of cost of capital on the other.
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