BUENOS AIRES (Reuters) - The International Finance Corporation, the private-sector lending arm of the World Bank, expects to make investments of around $800 million in Argentina through December, citing particular investor interest in the country’s renewable energy sector.
“The renewable energy agenda in Argentina is probably the most interesting in the world at the moment,” Lizabeth Bronder, director, Latin America and the Caribbean for the IFC, told Reuters in an interview on Thursday.
Argentina invited bids for projects aimed at creating 1,000 megawatts of alternative energy on Wednesday in the country’s first push toward wind and solar power production needed to help narrow its energy deficit.
Business-friendly President Mauricio Macri, who took the reins of Latin America’s third largest economy in December, implemented a law mandating that renewable energy as a share of power consumption rise to 8 percent by 2018 from 1.8 percent currently.
“What we’re hearing from our clients is that they are very encouraged by the recent move into renewables. There is a lot of biomass available, solar and even wind in the country,” said Alzbeta Klein, global head of agribusiness, manufacturing and services at the IFC.
Macri has sought to do away with the interventionist policies of his leftist predecessor, Cristina Fernandez, and has already lifted capital controls, spurred a devaluation of the peso and cut export taxes.
Between 2012 and 2014 the IFC made no new investments in Argentina.
“So far in our fiscal year, which started in July, it’s been $1.6 billion, including the syndications that we’ve done. We expect probably through the end of the year another $800 million or so in new investment,” Bronder said.
“We are expecting to be able to finance some of the renewable energy that is coming,” she added.
Last month, Argentina returned to global debt markets and paid off ‘holdout’ creditors, 14 years after a massive sovereign debt default that triggered an exit of investors and a wave of litigation.
“The immediate attention to paying out the holdouts and listing in the bond markets has really created a channel for private investment in Argentina, that obviously didn’t exist before,” Bronder said .
Macri has promised that a deal with holdouts will help unleash a wave of foreign investment to revive the stagnant economy
“We are seeing investor interest, and we are seeing them coming in carefully and cautiously but they’re not sitting on the sidelines,” said Klein.
Reporting by Anthony Esposito; Editing by Leslie Adler