Argentine sugar conglomerate enters renewables sector

Ledesma, whose current energy capacity comes mostly from sugar cane biomass, has joined with Eternum Energy to tap the country’s promising solar industry.

Argentina’s renewables push is drawing in some unlikely investors.

Ledesma, a publicly listed Argentine conglomerate specialising in the sugar business, has entered a joint venture with Eternum Energy to develop renewable projects in the country, focusing on solar. Ledesma, which committed $2.2 million, now holds a 53 percent stake in the new company, called Ledesma Renovables, while Eternum holds the remaining share.

While Eternum, launched last year, has experience building and operating more than 500MW of solar assets worldwide, Ledesma is a newcomer to the sector. It currently holds 75MW of installed capacity, most of it powered by biomass from sugar cane, while the rest of its business comprises mainly sugar, paper made from sugar cane, alcohol and consumables.

But Argentina’s promising renewables market has drawn the firm’s attention. Argentina represents Latin America’s third-largest energy market, and some believe the country has the region’s greatest potential for renewables growth. While fossil fuels currently dominate the energy landscape, a government law passed in 2015 established a renewable energy target of 20 percent by the end of 2025. That leaves around 10GW of renewable power that must be added to the grid before then.

“We take a long view in our business strategy and we have identified interesting opportunities for our company in the renewable energy transformation path the country is developing,” said Ledesma chief executive Javier Goñi.

Argentina’s RenovAr Programme launched last year with its first renewable energy auction. Another round of bidding is set for the second half of this year.

“The robust regulatory framework that the government has recently put in place is helping to increase interest from foreign investors,” said Marcelo Lando, chief executive of Ledesma Renovables. “We are in conversations with private companies who are also beginning to consider signing private PPAs to have a more stable outlook for their electricity supply.”