After accusations of La Cámpora delays, Alberto Fernández finally signed the law endorsing the amendments and re-establishing the Chinese loan for US $ 4,700 million for the construction of Santa Cruz damsa project that will soon be 10 years old.

Decree 269/2022 approved “Model Agreement for Modification and Restoration of Line of Credit Contract“in connection with the construction activities of hydroelectric plants by President Néstor Kirchner (formerly Cóndor Cliff) and Governor Jorge Cepernic (formerly Barrancosa) between Argentina and the China Development Bank, Industrial and Commercial Bank of China (ICBC) and Bank of China.

The rule also empowers the Minister of Economy to sign that agreement and the corresponding documentation.

The signing of the law will release a disbursement of US $ 600 million, which is pending, as explained by Agustín Gerez, a trustee of the Instituto Patria and president of Ieasa (formerly Enarsa), which oversees the construction of the dams.

The state-owned Ieasa also manages LNG imports and the gas pipeline that will connect Vaca Muerta to Buenos Aires, among other works.

Gerez said negotiations for the loan were completed and approved by technical areas on Jan. 25, but the order was paralyzed at the Secretariat for Strategic Affairs, which he heads Gustavo Belizone of the officials closest to President Alberto Fernández.

Contract Chinese funding for these dams has been paralyzed since 2020. The period of existence has expired, which is the term in which the bank provides the money for the loan.

Work on the dams should be ready by 2019, but that hasn’t happened for one environmental protection groups -which paralyzed it- and changes to the project of Mauricio Macri’s administration.

Chinese banks cannot send money because the issuance term has expired. The Argentine government reactivated the negotiations in 2020. That renegotiation ended in January of this year. Chinese banks agreed to do so new disbursements if a “new period of existence” is approved, that is, the term on which the loans may be granted. What happened to the law.

The debt, as Gerez indicated, is already rated 3.5%, very convenient for a country with a risk of reaching 1,900 points.

Despite the debt delay, the work of the dams, funded by the Treasury, continued, through temporary contributions. Now, when Chinese disbursement is reactivated, the State will recover the funds it contributed by US $ 600 millionwhich will be paid at the official exchange rate and will help with reserves.

China has invested approximately US $ 1.35 billion in dams. The disbursement of US $ 3,364 million is still pending.

The winning consortium of this work is led by electroengineering, who already knew Gerardo Ferreyra. The businessman was arrested on the grounds of “notebooks”. The Chinese group he was with was Gezhouba Group, whose main company is China Energy Engineering.

NE