Argentina eyes transport after energy push

The IFC, which has stepped up its operations in the country since the 2016 election of President Mauricio Macri, is backing a $400m modernisation programme in Buenos Aires.

The International Finance Corporation is investing $50 million to support a transportation programme aiming to cut commuter times and reduce carbon emissions in the Argentine capital.

The financing will go towards the introduction of “efficient” bus lines, new bicycle lanes and bike-sharing stations as part of Buenos Aires’ broader $400 million transportation investment plan, the IFC said.

The deal, which marks the institution’s first municipal investment in Argentina, is part of a strategic relationship with Buenos Aires under an IFC scheme called “Cities Initiative”.

“In addition to the loan financing, IFC is providing advisory services to Buenos Aires spanning transformational priorities for the city, including solid waste management, transport, energy efficiency in public buildings,” the IFC said, noting that Buenos Aires, a city of nearly 14 million, is one of the three most populous metropolitan centres in Latin America.

It is unclear if parts of the plan will at some point be pursued under a PPP framework, now more investor-friendly after the country signed a new PPP bill into law last November. A spokesperson for the IFC told Infrastructure Investor the bus programme does not involve any PPP projects so far.

The news comes as Argentina climbs up investors’ wish list after the country made peace with global financing markets in the wake of the 2016 election of President Mauricio Macri, who agreed to settle a dispute with international bondholders within months of his victory.

Amid several liberalisation reforms, Argentina’s latest renewables tender received a total of 123 offers last year to build 6.7GW of new installed capacity, more than six times the 1GW on offer.

Having declared 2017 the year of renewable energy, the government aims to produce 20 percent of its electricity from renewables by 2025. It hopes to catalise $5 billion worth of investments in the sector by the end of this year, and $20 billion by 2020.

Efforts are also gathering pace on the broader energy front with the development of a large oil refinery, to which the IFC lent $378 million last month. About $78 million came from the IFC itself, with the balance provided by commercial lenders.