UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
| REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
OR
| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from __________________ to __________________.
OR
| SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Date of event requiring this shell company report __________________.
Commission file number
(Exact name of Registrant as specified in its charter)
Port Central S.A.
(Translation of Registrant’s name into English)
Republic of
(Jurisdiction of incorporation or organization)
Republic of
(Address of principal executive offices)
Republic of
Facsimile: +
Email:
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act.
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||
| * | Not for trading, but only in connection with the registration of American Depositary Shares pursuant to the requirements of the New York Stock Exchange. |
Securities registered or to be registered pursuant to Section 12(g) of the Act.
None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
None
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.
| Title of each class | Outstanding at December 31, 2024 | |
| Common shares, nominal value Ps.1.00 per share |
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Yes ☐
Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Accelerated filer ☐ | Non-accelerated filer ☐ | Emerging growth company |
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐
The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant has
filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting
under Section 404(b) of the Sarbanes-Oxley Act (§ 15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued
its audit report.
If securities are registered pursuant to Section 12(b)
of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of
an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
| U.S. GAAP ☐ |
by the International Accounting Standards Board ☒ |
Other ☐ |
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.
Item 17 ☐ Item 18 ☐
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐
No
(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
Yes ☐ No ☐
TABLE OF CONTENTS
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CERTAIN DEFINITIONS
In this annual report, except where otherwise indicated or where the context otherwise requires:
| · | “Argentine Corporate Law” refers to Law No. 19,550, as amended; |
| · | “Argentine Government” refers the national government of the Republic of Argentina; |
| · | “Authorized Generators” refers to electricity generators that do not have contracts in the term market in any of its methods; |
| · | “BCRA” or “Central Bank” refers to the Argentine Central Bank; |
| · | “BYMA” refers to Bolsas y Mercados Argentinos S.A.; |
| · | “CAMMESA” refers to Compañía Administradora del Mercado Mayorista Eléctrico Sociedad Anónima. See “Item 4.B, Business Overview— The Argentine Electric Power Sector—General Overview of Legal Framework—CAMMESA;” |
| · | “CNV” refers to the Comisión Nacional de Valores, the Argentine Securities Commission; |
| · | “COD” refers to Commercial Operation Date, the day in which a generation unit is authorized by CAMMESA (in Spanish, “Habilitación Comercial”) to sell electric energy through the grid under the applicable commercial conditions; |
| · | “CTM” refers to Centrales Térmicas Mendoza S.A.; |
| · | “CVO” refers to the thermal plant Central Vuelta de Obligado; |
| · | “CVO Agreement” refers to the Agreement for Project Management and Operation, Increase of Thermal Generation Availability and Adaptation of Remuneration for Generation 2008-2011” executed on November 25, 2010 among the Secretariat of Energy (“SE”) and Central Puerto along with other electric power generators; |
| · | “CVOSA” refers to Central Vuelta de Obligado S.A.; |
| · | “Ecogas” refers collectively to Distribuidora de Gas Cuyana (“DGCU”) and Distribuidora de Gas del Centro (“DGCE”); |
| · | “Ecogas Inversiones” refers to Ecogas Inversiones S.A. (formerly known as Inversora del Gas del Centro S.A., or “IGCE”) |
| · | “Spot Sales” previously known as “Energía Base,” refers to the regulatory framework established under Resolution SE No. 95/13, as amended, and supplemented by Res. 19/17, Res. 1/19, Res. 31/20, Res. 440/21, Res. 238/22, Res. 826/22, Res. 59/23, Res. 750/23, Res. 869/23, Res. 9/24, Res. 99/24, Res. 193/24, Res. 233/24, Res. 285/24, Res. 20/24, Res. 387/24, Res. 603/24, Res. 27/25, 113/25 and, more recently, Res. 1413/25 (as defined below) (see details in “Item 45.B, Business Overview—The Argentine Electric Power Sector. Operating Results— Spot Sales (also known as Energía Base) — Resolution 1/19, amended by Resolution 31/20 and subsequent regulations”); |
| · | “Energía Plus” refers to the regulatory framework established under Resolution SE No. 1281/06, as amended. See “Item 4.B, Business Overview—The Argentine Electric Power Sector—Structure of the Industry—Energía Plus;” |
| · | “FODER” refers to Fondo para el Desarrollo de Energías Renovables (Fund for the Development of Renewable Energies). See “Item 4.B, Business Overview—The Argentine Electric Power Sector —Structure of the Industry—Renewable Energy Program;” |
| · | “FONINVEMEM” or “FONI” refers to the Fondo para Inversiones Necesarias que Permitan Incrementar la Oferta de Energía Eléctrica en el Mercado Eléctrico Mayorista (the Fund for Investments Required to Increase the Electric Power Supply) and similar programs, including the CVO Agreement. See “Item 4.B, Business Overview—The Argentine Electric Power Sector—Structure of the Industry—The FONINVEMEM and Similar Programs;” |
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| · | “FONINVEMEM Plants” refers to the plants José de San Martín, Manuel Belgrano and Vuelta de Obligado; |
| · | “Foreign Exchange Market” refers to the Argentine foreign exchange market; |
| · | “HPDA” refers Hidroeléctrica Piedra del Águila S.A., the corporation that previously owned the Piedra del Águila plant; |
| · | “IEASA” refers to Integración Energética Argentina S.A.; |
| · | “IGCU” refers to Inversora de Gas Cuyana S.A.; |
| · | “La Plata Plant Sale” refers to the sale of the La Plata plant to YPF EE, effective as of January 5, 2018. For further information on the La Plata Plant Sale, see “Item 4.A. History and development of the Company—La Plata Plant Sale;” |
| · | “La Plata Plant Sale Effective Date” is January 5, 2018. For further information on the La Plata Plant Sale Effective Date, see “Item 4.A. History and development of the Company—La Plata Plant Sale;” |
| · | Law 27,742 or “Ley de Bases” refers to Law No. 27,742 passed on June 27, 2024, also known as “Ley de Bases y Puntos de Partida para la Libertad de los Argentinos”, which, among other measures, declared a public emergency in administrative, economic, financial and energy matters, and delegated a series of powers to the National Executive Branch for the duration of the emergency. |
| · | “LPC” refers to La Plata Cogeneración S.A., the corporation that owned the La Plata plant prior to us; |
| · | “LVFVD” refers to liquidaciones de venta con fecha de vencimientos a definir, or receivables from CAMMESA without a fixed due date. See “Item 4.B, Business Overview—FONINVEMEM and Similar Programs;” |
| · | “MATER” refers to Term Market for Renewable Energy set forth under Resolution No. 281-E/17; |
| · | “PPA” refers to Power Purchase Agreements, power capacity and energy supply agreements for a defined period of time or energy quantity; |
| · | “Resolution 19/17” or “Res. 19/17” refers to the Resolution No. 19-E/17 issued on February 2, 2017, by the former Secretariat of Electric Energy of the former National Ministry of Energy and Mining by which the Secretariat modified the remuneration scheme (for capacity and energy) applicable from February 1, 2017, to Authorized Generators (electricity generators which do not have contracts in the term market in any of its modalities) acting in the WEM |
| · | “Resolution 1/19” or Res. 1/19 refers to the Resolution No. 1/19 issued on March 1, 2019, by the former Secretariat of Renewable Resources and Electric Market of the former National Ministry of Treasury (“SRRyME,” for its acronym in Spanish) by which the Secretariat abrogated Res. 19/17 and modified the remuneration scheme (for capacity and energy) applicable to Authorized Generators (electricity generators which do not have contracts in the term market in any of its modalities) acting in the WEM; |
| · | “Resolution 31/20” or “Res. 31/20” refers to the Resolution No. 31/20 issued on February 27, 2020, by the Secretariat of Energy of the former National Ministry of Production Development by which the Secretariat modified the remuneration scheme (for capacity and energy) applicable from February 1, 2020, to Authorized Generators (electricity generators which do not have contracts in the term market in any of its modalities) acting in the WEM; |
| · | “Resolution 440/21” or “Res.440/21” refers to the Resolution No. 440/21 issued on May 21, 2021, by the Secretariat of Energy of the National Ministry of Economy by which the Secretariat modified the remuneration scheme (for capacity and energy) applicable from February 1, 2021, to Authorized Generators (electricity generators which do not have contracts in the term market in any of its modalities) acting in the WEM; |
| · | “Resolution 238/22” or “Res.238/22” refers to the Resolution No. 238/22 issued on April 18, 2022, by the Secretariat of Energy of the National Ministry of Economy by which the Secretariat modified the remuneration scheme (for capacity and energy) applicable from February 1, 2022, to Authorized Generators (electricity generators which do not have contracts in the term market in any of its modalities) acting in the WEM; |
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| · | “Resolution 826/22” or “Res.826/22” refers to the Resolution No. 826/22 issued on December 12, 2022, by the Secretariat of Energy of the National Ministry of Economy by which the Secretariat modified the remuneration scheme (for capacity and energy) applicable from September 1, 2022, to Authorized Generators (electricity generators which do not have contracts in the term market in any of its modalities) acting in the WEM; |
| · | “Resolution 59/23” or “Res.59/23” refers to the Resolution No. 59/23 issued on February 5, 2023, by the Secretariat of Energy of the National Ministry of Economy by which the Secretariat modified the remuneration scheme (for capacity and energy) of Authorized Generators with combined cycle units acting in the WEM that have adhered to the agreement set forth in this resolution; |
| · | “Resolution 750/23” or “Res. 750/23” refers to the Resolution No. 750/23 issued on September 9, 2023, by the Secretariat of Energy of the National Ministry of Economy by which the Secretariat modified the remuneration scheme (for capacity and energy) applicable from September 1, 2023, to Authorized Generators (electricity generators which do not have contracts in the term market in any of its modalities) acting in the WEM; |
| · | “Resolution 869/23” or “Res.869/23” refers to the Resolution No. 869/23 issued on October 27, 2023, by the Secretariat of Energy of the National Ministry of Economy by which the Secretariat modified the remuneration scheme (for capacity and energy) applicable from November 1, 2023, to Authorized Generators (electricity generators which do not have contracts in the term market in any of its modalities) acting in the WEM; |
| · | “Resolution 9/24” or “Res.9/24” refers to the Resolution No. 9/24 issued on February 7, 2024, by the Secretariat of Energy of the National Ministry of Economy by which the Secretariat modified the remuneration scheme (for capacity and energy) applicable from February 1, 2024, to Authorized Generators (electricity generators which do not have contracts in the term market in any of its modalities) acting in the WEM; |
| · | “Resolution 99/24” or “Res.99/24” refers to the Resolution No. 99/24 issued on June 14, 2024, by the Secretariat of Energy of the National Ministry of Economy by which the Secretariat modified the remuneration scheme (for capacity and energy) applicable from June 1, 2024, to Authorized Generators (electricity generators which do not have contracts in the term market in any of its modalities) acting in the WEM; |
| · | “Resolution 193/24” or “Res.193/24” refers to the Resolution No. 193/24 issued on August 1, 2024, by the Secretariat of Energy of the National Ministry of Economy by which the Secretariat modified the remuneration scheme (for capacity and energy) applicable from August 1, 2024, to Authorized Generators (electricity generators which do not have contracts in the term market in any of its modalities) acting in the WEM; |
| · | “Resolution 233/24” or “Res.233/24” refers to the Resolution No. 233/24 issued on August 29, 2024, by the Secretariat of Energy of the National Ministry of Economy by which the Secretariat modified the remuneration scheme (for capacity and energy) applicable from September 1, 2024, to Authorized Generators (electricity generators which do not have contracts in the term market in any of its modalities) acting in the WEM; |
| · | “Resolution 285/24” or “Res.285/24” refers to the Resolution No. 285/24 issued on September 27, 2024, by the Secretariat of Energy of the National Ministry of Economy by which the Secretariat modified the remuneration scheme (for capacity and energy) applicable from October 1, 2024, to Authorized Generators (electricity generators which do not have contracts in the term market in any of its modalities) acting in the WEM; |
| · | “Resolution 20/24” or “Res.20/24” refers to the Resolution No. 20/24 issued on October 31, 2024, by the Secretariat of Energy and Mining Coordination of the National Ministry of Economy by which the Secretariat modified the remuneration scheme (for capacity and energy) applicable from November 1, 2024, to Authorized Generators (electricity generators which do not have contracts in the term market in any of its modalities) acting in the WEM; |
| · | “Resolution 294/24” or “Res.294/24” refers to the Resolution No. 294/24 issued on October 1, 2024, by the Secretariat of Energy of the National Ministry of Economy. This resolution established a "Contingency and Forecast Plan for Critical Months of the 2024/2026 Period," defining measures that cover power generation, transmission, and distribution; |
| · | “Resolution 387/24” or “Res.387/24” refers to the Resolution No. 387/24 issued on December 2, 2024, by the Secretariat of Energy of the National Ministry of Economy by which the Secretariat modified the remuneration scheme (for capacity and energy) applicable from December 1, 2024, to Authorized Generators (electricity generators which do not have contracts in the term market in any of its modalities) acting in the WEM; |
| · | “Resolution 603/24” or “Res.603/24” refers to the Resolution No. 603/24 issued on December 27, 2024, by the Secretariat of Energy of the National Ministry of Economy by which the Secretariat modified the remuneration scheme (for capacity and energy) applicable from January 1, 2025, to Authorized Generators (electricity generators which do not have contracts in the term market in any of its modalities) acting in the WEM; |
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| · | “Resolution 27/25” or “Res.27/25” refers to the Resolution No. 27/25 issued on January 30, 2025, by the Secretariat of Energy of the National Ministry of Economy by which the Secretariat modified the remuneration scheme (for capacity and energy) applicable from February 1, 2025, to Authorized Generators (electricity generators which do not have contracts in the term market in any of its modalities) acting in the WEM; |
| · | “Resolution 113/25” or “Res.113/25” refers to the Resolution No. 113/25 issued on February 28, 2025, by the Secretariat of Energy of the National Ministry of Economy by which the Secretariat modified the remuneration scheme (for capacity and energy) applicable from March 1, 2025, to Authorized Generators (electricity generators which do not have contracts in the term market in any of its modalities) acting in the WEM; |
| · | “Resolution 143/25” or “Res.143/25” refers to the Resolution No. 143/25 issued on April 1, 2025, by the Secretariat of Energy of the National Ministry of Economy by which the Secretariat modified the remuneration scheme (for capacity and energy) applicable from Apil 1, 2025, to Authorized Generators (electricity generators which do not have contracts in the term market in any of its modalities) acting in the WEM; |
| · | “SADI” refers to the Argentine Interconnection System; |
| · | “Sales under contracts” refers collectively to (i) term market sales of energy under contracts with private and public sector counterparties, (ii) sales of energy sold under the Energía Plus and (iii) sales of energy under the RenovAr Program; |
| · | “SE” refers to the Secretariat of Energy; |
| · | “SEE” refers to the former Secretariat of Electric Energy; |
| · | “Spot market” refers to energy sold by generators to the WEM and remunerated by CAMMESA pursuant to the framework in place prior to the Spot Sales. See “Item 4.B, Business Overview—The Argentine Electric Power Sector—Structure of the Industry—Electricity Dispatch and Spot Market Pricing prior to Resolution of the Secretariat of Energy No. 95/13;” |
| · | “T6” refers to Terminal 6 Industrial S.A., a company engaged in soybean crushing and biodiesel and refined glycerin production; |
| · | “YPF” refers to YPF S.A., Argentina’s state-owned oil and gas company; |
| · | “YPF EE” refers to YPF Energía Eléctrica S.A., a subsidiary of YPF; and |
| · | “WEM” refers to the Argentine Mercado Eléctrico Mayorista, the wholesale electric power market. See “Item 4.B, Business Overview—The Argentine Electric Power Sector—General Overview of Legal Framework—CAMMESA”. |
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PRESENTATION OF FINANCIAL AND OTHER INFORMATION
Financial Statements
Central Puerto S.A. is a company incorporated under the laws of Argentina. As used in this Annual Report on Form 20-F, the terms “the Company”, “CEPU”, “CPSA”, “Central Puerto”, “Group”, “we”, “us” and “our” refer to Central Puerto S.A. and its consolidated subsidiaries as of December 31, 2024.
We maintain our financial books and records and publish our consolidated financial statements (as defined below) in Argentine pesos, which is our functional currency. This annual report contains our audited consolidated financial statements as of December 31, 2024 and 2023 and for each of the years ended December 31, 2024, 2023, and 2022 (our “Audited Consolidated Financial Statements”), which were approved by Company's management on April 25, 2025.
We prepare our Audited Consolidated Financial Statements in Argentine pesos and in conformity with the IFRS Accounting Standards as issued by the International Accounting Standards Board (IASB).
In accordance with International Accounting Standard 29, Financial Reporting in Hyperinflationary Economies (“IAS 29”), the restatement of the financial statements is necessary when the functional currency of an entity is the currency of a hyperinflationary economy. To define a hyperinflationary state, IAS 29 provides a series of non-exclusive guidelines that consist of (i) analyzing the behavior of the population, prices, interest rates and wages before the evolution of price indexes and the loss of the currency’s purchasing power, and (ii) as a quantitative characteristic, verifying if the three-year cumulative inflation rate approaches or exceeds 100%. Due to macroeconomic factors, the triennial inflation was above that figure in 2018 and Argentina has been considered hyperinflationary since July 1, 2018. Such conditions remained during 2022, 2023 and 2024. See “Risks Relating to Argentina. As of July 1, 2018, the Argentine Peso qualifies as a currency of a hyperinflationary economy and we are required to restate our historical financial statements to apply inflationary adjustments, which could adversely affect our results of operations and financial condition and those of our Argentine subsidiaries”.
Therefore, our Audited Consolidated Financial Statements included herein, including the figures for the previous periods (this fact not affecting the decisions taken on the financial information for such periods), and, unless otherwise stated, the financial information included elsewhere in this annual report, were restated to consider the changes in the general purchasing power of our functional currency (Argentine peso) pursuant to IAS 29 and General Resolution no. 777/2018 of the CNV. Consequently, the consolidated financial statements are stated in the current measurement unit as of December 31, 2024. The information included in our Audited Consolidated Financial Statements is not comparable to the consolidated financial statements previously published by us. For further information, see “Item 5.A. Operating Results-Factors Affecting our Results of Operations-Inflation” and Note 2.1.2 to our Audited Consolidated Financial Statements.
We remind investors that we are required to file financial statements and other periodic reports with the CNV because we are a public company in Argentina. Investors can access our historical financial statements published in Spanish on the CNV’s website at www.cnv.gob.ar. The information found on the CNV’s website is not a part of this annual report. Investors are cautioned not to place undue reliance on our financial statements not included in this annual report.
Currency and Rounding
All references herein to “pesos,” “Argentine pesos” or “Ps”. are to Argentine pesos, the legal currency of Argentina. All references to “U.S. dollars,” “dollars” or “US$” are to U.S. dollars. All references to “SEK$” are to Swedish krona. A “billion” is a thousand million.
Solely for the convenience of the reader, we have translated certain amounts included in this annual report from pesos into U.S. dollars, unless otherwise indicated, using the seller rate for U.S. dollars quoted by the Banco de la Nación Argentina for wire transfers (divisas) as of December 31, 2024, of Ps. 1,032.50 per US$1.00. The Federal Reserve Bank of New York does not report a noon buying rate for pesos. The U.S. dollar equivalent information presented in this annual report is provided solely for the convenience of the reader and should not be construed to represent that the peso amounts have been, or could have been or could be, converted into U.S. dollars at such rates or at any other rate. See “Item 3.A. Selected Financial Data-Exchange Rates”.
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Certain figures included in this annual report and in the Audited Consolidated Financial Statements contained herein have been rounded for ease of presentation. Percentage figures included in this annual report have in some cases been calculated on the basis of such figures prior to rounding. For this reason, certain percentage amounts in this annual report may vary from those obtained by performing the same calculations using the figures in this annual report and in the consolidated financial statements contained herein. Certain other amounts that appear in this annual report may not sum due to rounding.
Market Share and Other Information
The information set forth in this annual report with respect to the market environment, market developments, growth rates and trends in the markets in which we operate is based on information published by the Argentine federal and local governments through the Instituto Nacional de Estadísticas y Censos (the National Statistics and Census Institute, or “INDEC”), the Ministry of Interior, the Secretariat of Energy, the Banco Central de la República Argentina (the “Argentine Central Bank,” or “Central Bank”) CAMMESA, the Dirección General de Estadística y Censos de la Ciudad de Buenos Aires (General Directorate of Statistics and Census of the City of Buenos Aires) and the Dirección Provincial de Estadística y Censos de la Provincia de San Luis (Provincial Directorate of Statistics and Census of the Province of San Luis), as well as on independent third-party data, statistical information and reports produced by unaffiliated entities, as well as on our own internal estimates. In addition, this annual report contains information from Vaisala, Inc. (“Vaisala - 3 Tier”), a company that develops, manufactures and markets products and services for environmental and industrial measurement.
This annual report also contains estimates that we have made based on third-party market data. Market studies are frequently based on information and assumptions that may not be exact or appropriate.
Although we have no reason to believe any of this information or these sources are inaccurate in any material respect, we have not verified the figures, market data or other information on which third parties have based their studies, nor have we confirmed that such third parties have verified the external sources on which such estimates are based. Therefore, we do not guarantee, nor do we assume responsibility for, the accuracy of the information from third-party studies presented in this annual report.
This annual report also contains estimates of market data and information derived therefrom which cannot be gathered from publications by market research institutions or any other independent sources. Such information is based on our internal estimates. In many cases there is no publicly available information on such market data, for example from industry associations, public authorities or other organizations and institutions. We believe that these internal estimates of market data and information derived therefrom are helpful in order to give investors a better understanding of the industry in which we operate as well as our position within this industry. Although we believe that our internal market observations are reliable, our estimates are not reviewed or verified by any external sources. These may deviate from estimates made by our competitors or future statistics provided by market research institutes or other independent sources. We cannot assure you that our estimates or the assumptions are accurate or correctly reflect the state and development of, or our position in, the industry.
FORWARD-LOOKING STATEMENTS
This annual report contains estimates and forward-looking statements, principally in “Item 3.D. Risk Factors,” “Item 4.B. Business Overview” and “Item 5. Operating and Financial Review and Prospects”.
Our estimates and forward-looking statements are mainly based on our current beliefs, expectations and estimates of future courses of action, events and trends that affect or may affect our business and results of operations. Although we believe that these estimates and forward-looking statements are based upon reasonable assumptions, they are subject to several risks and uncertainties and are made in light of information currently available to us.
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Many important factors, in addition to those discussed elsewhere in this annual report, could cause our actual results to differ substantially from those anticipated in our forward-looking statements, including, among other things:
| · | changes in general economic, financial, business, political, legal, social or other conditions in Argentina; | |
| · | changes in conditions elsewhere in Latin America or in either developed or emerging markets; | |
| · | changes in capital markets in general that may affect policies or attitudes toward lending to or investing in Argentina or Argentine companies, including volatility in domestic and international financial markets; | |
| · | the impact of political developments and uncertainties relating to political and economic conditions in Argentina, on the demand for securities of Argentine companies; | |
| · | increased inflation; | |
| · | fluctuations in exchange rates, including a significant devaluation of the Argentine peso; | |
| · | changes in the law, norms and regulations applicable to the Argentine electric power and energy sector, including changes to the current regulatory frameworks, changes to programs established to incentivize investments in new generation capacity and reductions in government subsidies to consumers; | |
| · | our ability to develop our expansion projects and to win awards for new potential projects; | |
| · | increases in financing costs or the inability to obtain additional debt or equity financing on attractive terms, which may limit our ability to fund new activities; | |
| · | government intervention, including measures that result in changes to the Argentine labor market, exchange market or tax system; | |
| · | adverse legal or regulatory disputes or proceedings; | |
| · | changes in the price of energy, power and other related services; | |
| · | changes in the price and supply of natural gas or liquid fuels; | |
| · | changes in weather conditions (wind, solar radiation, the amount of rainfall and accumulated water, among others); | |
| · | changes in environmental regulations, including exposure to risks associated with our business activities; | |
| · | risks inherent to the demand for and sale of energy; | |
| · | the operational risks related to the generation, as well as the transmission and distribution, of electric power; | |
| · | ability to implement our business strategy, including the ability to complete our construction and expansion plans in a timely manner and according to our budget; | |
| · | competition in the energy sector, including as a result of the construction of new generation capacity; | |
| · | exposure to credit risk due to credit arrangements with CAMMESA; | |
| · | our ability to retain key members of our senior management and key technical employees; | |
|
· |
the effects of a pandemic or epidemic and any subsequent mandatory regulatory restrictions or containment measures; | |
|
· |
general domestic and international political conditions or labor disruptions, including “trade wars” and the armed conflicts in Ukraine and the Middle East; |
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| · | our relationship with our employees; and | |
| · | other factors discussed under “Item 3.D.—Risk Factors” in this annual report. |
The words “believe,” “may,” “will,” “aim,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “forecast” and similar words are intended to identify forward-looking statements. Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities, the effects of future regulation and the effects of competition. Forward-looking statements speak only as of the date they were made, and we do not undertake any obligation to update publicly or to revise any forward-looking statements after we distribute this annual report because of new information, future events or other factors, except as required by applicable law. In light of the risks and uncertainties described above, the forward-looking events and circumstances discussed in this annual report might not occur and do not constitute guarantees of future performance. Because of these uncertainties, you should not make any investment decisions based on these estimates and forward-looking statements.
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PART I
Item 1. Identity of Directors, Senior Management and Advisors
Not applicable.
Item 2. Offer Statistics and Expected Timetable
Not applicable.
Item 3. Key Information
Item 3.A Reserved
Item 3.B Capitalization and indebtedness
Not applicable.
Item 3.C Reasons for the offer and use of proceeds
Not applicable.
Item 3.D Risk Factors
Summary of Risk Factors
We are subject to several risks related to our business that are described under “Risk Factors” and elsewhere in this annual report. These risks could materially and adversely impact our business, results of operations, financial condition, and future prospects. Among these important risks are the following:
Risks Relating to Argentina
| · | Substantially all our revenues are generated in Argentina and thus are highly dependent on economic and political conditions in Argentina. Political uncertainty regarding measures to be adopted by the Argentine Government could affect macroeconomic, political, regulatory, and social conditions in Argentina. | |
| · | The Argentine Peso qualifies as a currency of a hyperinflationary economy and we are required to restate our historical financial statements to apply inflationary adjustments, which could adversely affect our results of operations and financial condition and those of our Argentine subsidiaries. | |
| · | Significant fluctuations in the value of the peso could adversely affect the Argentine economy and, in turn, adversely affect our results of operations. | |
| · | Exchange controls and restrictions on capital inflows and outflows could limit the availability of international credit and could threaten the financial system, adversely affecting the Argentine economy and, as a result, our business. | |
| · | Argentina’s ability to obtain financing from international markets is limited, which could affect its capacity to implement reforms and sustain economic growth and may negatively impact our financial condition or cash flows. | |
| · | The Argentine economy could be adversely affected by economic developments in other markets and by more general “contagion” effects. | |
| · | We may be exposed to adverse effects arising from geopolitical conflicts worldwide. |
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| · | The Argentine banking system may be subject to instability which may affect our operations. | |
| · | Failure to adequately address actual and perceived risks of institutional deterioration and corruption may adversely affect Argentina’s economy and financial condition, which in turn could adversely affect our business, financial condition, and results of operations. |
Risks Relating to the Electric Power Sector in Argentina
| · | The Argentine Government has intervened in the electric power sector in the past and is likely to continue intervening. | |
| · | Changes in regulatory frameworks under which we sell our electricity may affect our financial condition and results of operations. | |
| · | We have, in the recent past, been unable to collect payments, or to collect them in a timely manner, from CAMMESA and other customers in the electric power sector. | |
| · | Argentina has certain energy transmission and distribution limitations that adversely affect the capacity of electric power generators to deliver all of the energy they can produce, which results in reduced sales. | |
| · | Restrictions on the supply of energy could negatively affect Argentina’s economy. | |
| · | We operate in a heavily regulated sector that imposes significant costs on our business, and we could be subject to fines and liabilities that could have a material adverse effect on our results of operations. | |
| · | Risks arise for our business from technological change in the energy market. | |
| · | Competition in the Electric Power Sector in Argentina may adversely affect our results of operations. | |
Risks Relating to Our Business
| · | Our results depend largely on the compensation established by the Secretariat of Energy and received from CAMMESA. | |
| · | Factors beyond our control may affect or delay the completion of the awarded projects or alter our plans for the expansion of our existing plants. | |
| · | Our business may require substantial capital expenditures for ongoing maintenance requirements and the expansion of our installed generation capacity. | |
| · | Covenants in our indebtedness could adversely restrict our financial and operating flexibility. | |
| · | We may be unable to refinance our outstanding indebtedness, or the refinancing terms may be materially less favorable than their current terms, which would have a material adverse effect on our business, financial condition, and results of operations. | |
| · | The government’s decision regarding the future of the hydroelectric concessions could impact the HPDA operations, which may adversely affect our results of operations. | |
| · | Our interests in TJSM, TMB were diluted and CVOSA will be significantly diluted. | |
| · | Future changes in the rainfall amounts in the Limay River basin could adversely affect the revenues from the Piedra del Águila concession and, therefore, our financial results. | |
| · | Our ability to operate wind and solar farms profitably is highly dependent on suitable wind or sun and associated weather conditions, climate change and energy transition could affect our business. |
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| · | Climate change and energy transition could affect our business. | |
| · | Our power plants and forest assets are subject to the risk of mechanical, electrical failures and various catastrophic events, and any resulting unavailability may affect our ability to fulfill our contractual and other commitments and thus adversely affect our business and financial performance. | |
| · | Our insurance policies may not fully cover damage, and we may not be able to obtain insurance against certain risks. | |
| · | We may be exposed to lawsuits and or administrative proceedings that could adversely affect our financial condition and results of operations. | |
| · | Energy demand is seasonal, largely due to climate conditions. | |
| · | We may undertake acquisitions and investments to expand or complement our operations that could result in operating difficulties or otherwise adversely affect our financial conditions and results of operations. | |
| · | If we were to acquire another energy company in the future, such acquisition could be subject to the Argentine Antitrust Authority’s approval. | |
| · | We depend on senior management and other key personnel for our current and future performance. | |
| · | We could be affected by material actions taken by the trade unions. | |
| · | Our equipment, facilities and operations are subject to environmental, health and safety regulations. | |
| · | We are subject to anticorruption, anti-bribery, anti-money laundering and other laws and regulations. | |
| · | A cyberattack could adversely affect our business, balance sheet, results of operations and cash flow. | |
| · | Our ability to generate electricity at our thermal generation plants partially depends on the availability of natural gas and, to a lesser extent, liquid fuel. | |
| · | An outbreak of a disease, including COVID-19, may have material adverse consequences on our operations including new projects. |
Risks Relating to our Shares and ADSs
| · | It may be difficult for you to obtain or enforce judgments against us. | |
| · | Restrictions on transfers of foreign exchange and the repatriation of capital from Argentina may impair your ability to receive dividends and distributions on, and the proceeds of any sale of, shares underlying the ADSs. | |
| · | We will be traded on more than one market, and this may result in price variations; in addition, investors may not be able to easily move shares for trading between such markets. | |
| · | Under Argentine Corporate Law, shareholder rights may be fewer or less well defined than in other jurisdictions. | |
| · | Holders of our common shares and the ADSs located in the United States may not be able to exercise preemptive or accretion rights. | |
| · | Voting rights, and other rights, with respect to the ADSs are limited by the terms of the deposit agreement. | |
| · | The relative volatility and illiquidity of the Argentine securities markets may substantially limit our ADS holders’ ability to sell common shares underlying the ADSs at the price and time they desire. | |
| · | If there are substantial sales of our common shares or the ADSs, the price of the common shares or of the ADSs could decline. |
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| · | Our shareholders may be subject to liability for certain votes of their securities. | |
| · | As a foreign private issuer, we are exempt from several rules under the U.S. securities laws and are permitted to file less information with the Commission than a U.S. company. This may limit the information available to holders of our ADSs. | |
| · | As a foreign private issuer, we are not subject to certain NYSE corporate governance rules applicable to U.S. listed companies. | |
| · | The market price for our common shares or ADSs could be highly volatile. | |
| · | If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud. As a result, shareholders could lose confidence in our financial and other public reporting, which would harm our business and the trading price of our common shares. | |
| · | The protections afforded to minority shareholders in Argentina are different from and more limited than those in the United States and may be more difficult to enforce. | |
| · | Holders of our common shares may determine not to pay any dividends. | |
| · | We may be a passive foreign investment company for U.S. federal income tax purposes. | |
| · | The requirements of being a public company may strain our resources and distract our management, which could make it difficult to manage our business. |
Detailed Risk Factors
You should carefully consider the risks described below, as well as the other information in this annual report. Our business, results of operations, financial condition or prospects could be materially and adversely affected if any of these risks occurs, and as a result, the market price of our common shares and ADSs could decline. The risks described below are those known to us and that we currently believe may materially affect us.
Risks Relating to Argentina
Substantially all of our revenues are generated in Argentina and thus are highly dependent on economic and political conditions in Argentina. Political uncertainty regarding measures to be adopted by the Argentine Government could affect macroeconomic, political, regulatory, and social conditions in Argentina
Central Puerto is an Argentine corporation (sociedad anónima). All of our assets and operations are located in Argentina. Accordingly, our financial condition and results of operations depend to a significant extent on macroeconomic, regulatory, social and political conditions prevailing in Argentina, including but not limited to, the following: (i) international demand and prices for Argentina’s commodity exports; (ii) competitiveness and efficiency of domestic industries and services; (iii) stability and competitiveness of the Argentine peso against foreign currencies; (iv) foreign and domestic investment and financing; (v) level of foreign exchange reserves in the BCRA which may cause abrupt changes in currency values and exchange and capital control regulations (including, to import equipment, payment of cross border indebtedness and other necessities relevant for operations); (vi) high interest and inflation rates to corresponding wage and price controls; (vii) adverse external economic shocks; (viii) changes in economic or fiscal policies implemented by the Argentine Government; (ix) labor disputes and work stoppages; (x) the level of expenditure by the Argentine Government and ability to sustain fiscal balance and (xi) the level of unemployment, political instability and social tensions, such as land-takings and claims in areas where we operate.
The Argentine economy has experienced significant volatility in recent decades, characterized by periods of low or negative growth, high levels of inflation and currency devaluation. Sustainable economic growth in Argentina is dependent on a variety of factors, including the international demand for Argentine exports, the stability and competitiveness of the peso against foreign currencies, confidence among consumers and foreign and domestic investors, a stable rate of inflation, national employment levels and the circumstances of Argentina’s regional trade partners.
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The Argentine economy has contracted over the past three years and remains unstable despite the Argentine Government's efforts to curb inflation and exchange rate volatility. The Argentine economy is still subject to the following challenges:
| · | Persistently high inflation: Inflation remains high and may continue at similar or higher levels. According to reports published by INDEC, cumulative inflation measured by the consumer price index (in pesos) was 94.8% in 2022, 211.4% in 2023 and 117.8% in 2024. In March 2025, the inflation rate was 3.7%. Additionally, past and future monetary issuance by the Central Bank of Argentina to finance the National Treasury may further contribute to inflationary pressures and an upward trend. |
| · | High public debt levels: Argentina’s public debt as a percentage of GDP remains significant despite restructuring processes undertaken since 2020. |
| · | Persistent fiscal deficit: Discretionary increases in public spending have led to persistent fiscal deficits. While the current administration has achieved a fiscal surplus, there is no guarantee that such fiscal surplus will be sustained. Future discretionary increases in public spending or adverse economic conditions could give rise to recurring fiscal deficits. |
| · | Low investment levels: Investment as a percentage of GDP remains low. |
| · | Potential for labor unrest: A significant number of demonstrations and strikes could occur, as has happened in the past, adversely affecting various sectors of the Argentine economy. |
| · | Energy supply constraints: The energy supply may be insufficient to meet industrial demand and domestic consumption, potentially limiting industrial growth. |
| · | High unemployment and informal employment: According to INDEC, the unemployment rate in the last quarter of 2024 was 6.4%, while informal employment remains high. |
| · | Uncertain debt rollover capacity: Argentina’s ability to refinance its peso-denominated debt remains uncertain. |
| · | Capital controls and political instability: Economic conditions have fueled an increased demand for foreign currency, leading to the implementation of capital controls aimed at curbing capital flight. Although these controls are expected to be progressively relaxed and lifted, their continued application—when combined with other internal and external factors—has contributed to increased political and social instability. |
High inflation rates affect Argentina’s foreign competitiveness, social and economic inequality, negatively impacts employment, consumption and the level of economic activity and undermines the confidence in Argentina’s banking system, which could further limit the availability of and access by local companies to domestic and international credit. If the measures adopted by the Argentine Government fail to correct Argentina’s structural inflationary imbalances, inflation may continue or increase and have an adverse effect on Argentina’s economy and on our business, financial condition and results of operations. Inflation can also lead to an increase in Argentina’s local currency-denominated debt and have an adverse effect on Argentina’s ability to service its debt, mainly in the medium and long term when most inflation-indexed debt matures.
Argentina’s fiscal imbalances, its dependence on foreign revenues to cover its fiscal deficit, and material rigidities that have historically limited the ability of the economy to absorb and adapt to external factors, have added to the severity of the current crisis.
In the past, some administrations increased direct intervention in the Argentine economy, including the implementation of expropriation measures, price controls, exchange controls and changes in laws and regulations affecting foreign trade and investment. These measures had a material adverse effect on private sector entities, including us. It is possible that similar measures could be adopted by the current or future Argentine Government or that economic, social and political developments in Argentina, over which we have no control, could have a material adverse effect on the Argentine economy and, in turn, adversely affect our financial condition and results of operations. Uncertainty with respect to government policies may lead to additional volatility of Argentine stock market prices including companies that operate in the energy sector, given the degree of state regulation and intervention in this industry.
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As in the recent past, Argentina’s economy may be adversely affected if political and social pressures inhibit the implementation by the Argentine Government of policies designed to control inflation, generate growth and enhance consumer and investor confidence, or if policies implemented by the Argentine Government that are designed to achieve these goals are not successful. These events could materially adversely affect our financial condition and results of operations.
The Argentine economy is also particularly sensitive to local political developments. Presidential elections take place in Argentina every four years and legislative elections every two years, resulting in the partial renewal of both chambers of Congress. On December 10, 2023, Javier Milei took office as President of Argentina and pledged to implement significant economic reforms. The Argentine Government faces unique macroeconomic challenges, such as reducing and maintaining a low inflation rate, achieving and maintaining commercial and fiscal surpluses, accumulating reserves, supporting the peso, refinancing debt owed to private creditors, and improving the competitiveness of local industries.
Following President Milei’s inauguration, the National Executive Branch enacted Decree No. 70/2023, which outlines a series of measures aimed at reducing the size of the public administration and public expenses, as well as de-regulating the economy. Moreover, on June 28, 2024, the Argentine Congress passed the Ley de Bases. The Ley de Bases formally declares a state of public emergency in administrative, economic, financial and energy matters for a period of one year. During this time, it also confers upon the National Executive Branch a series of legislative powers. The Ley de Bases also established a series of legal, institutional, and tax reforms affecting various sectors of the economy, as well as the creation of the Investment Incentive Regime for Large-Scale Investments (“RIGI”, as per its acronym in Spanish). The RIGI, regulated by Decree No. 592/2024 aims to provide tax, customs and exchange incentives during a period of two years, subject to extensions, to large investment projects across various sectors, including forestry, tourism, infrastructure, mining, technology, steel, gasoil, and energy. Projects subject to the RIGI will be declared of national interest.
Furthermore, on June 28, 2024, the house of representatives of the Argentine Congress provided definitive approval to a fiscal reform (the “Argentine Fiscal Reform”), successfully reinstating the chapter on income tax and personal assets, previously rejected by the Argentine Senate. The Argentine Fiscal Reform was enacted and published in the Argentine Official Gazette (Boletín Oficial de la República Argentina) on July 8, 2024, effective from that date onwards.
On August 22, 2024, the Argentine Congress passed a bill aimed at increasing public pensions. Subsequently, on September 12, 2024, the Argentine Congress passed another bill aimed at increasing funding for national public universities. However, President Milei vetoed both laws, issuing Decree No. 782/2024 on September 2, 2024, for the public pensions bill, and Decree No. 879/2024 on October 2, 2024, for the university funding bill, citing the failure of both bills to identify the fiscal resources needed to cover the additional expenditures. Since the current administration took office, its limited representation in the Argentine Congress has constrained its ability to promote or block legislation, requiring negotiations with the opposition on various aspects of each bill to secure support to its initiatives. Accordingly, certain circumstances have led the opposition to unite and propose bills that the administration had previously publicly opposed. This political dynamic and the current administration’s lack of majorities in the Argentine Congress could lead to a situation where vetoes by the Executive are frequently used for various bills passed by the Argentine Congress, thereby creating political uncertainty and legal claims, thus affecting predictability and investments in Argentina in general. We cannot predict how this situation will evolve and whether it may negatively impact our operations and/or financial conditions.
Additionally, the Argentine economy is vulnerable to adverse events affecting its main trading partners. A continued deterioration of economic conditions in Brazil, Argentina’s main trading partner, and a deterioration of the economies of other important trading partners of Argentina, such as China or the United States, could have a significant adverse impact on Argentina’s trade balance and adversely affect Argentina’s economic growth, and therefore, could negatively impact our financial health and operating results. Furthermore, a significant depreciation of the currencies of our trading partners or competitors may negatively affect Argentina’s competitiveness and, consequently, negatively impact Argentina’s economic and financial condition and the results of our operations.
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Legislative elections will be held in 2025 to renew half of the seats in the house of representatives and one-third of the seats in the Senate. The composition of Congress will determine the National Executive Branch’s ability to implement its agenda. A divided Congress could hinder the enactment of laws and reforms, thereby affecting governability.
It is not possible to predict the social, political, and economic impact of the measures announced and implemented by the Argentine Government to date, as well as any future measures, the outcome of the ambitious deregulation plan set forth in Decree No. 70/2023, the Ley de Bases, the Argentine Fiscal Reform or the results of the 2025 legislative elections. Such measures and the outcome of the above-mentioned events may negatively impact our business, financial condition, results of operations and cash flows.
The Argentine Peso qualifies as a currency of a hyperinflationary economy and we are required to restate our historical financial statements to apply inflationary adjustments, which could adversely affect our results of operations and financial condition and those of our Argentine subsidiaries
Pursuant to the IAS 29, the financial statements of entities whose functional currency is that of a hyperinflationary economy must be adjusted for the effects of changes in a general price index. IAS 29 does not prescribe when hyperinflation arises and the International Accounting Standards Board (“IASB”) does not identify specific hyperinflationary jurisdictions. However, IAS 29 provides a series of non-exclusive guidelines that consist of (i) analyzing the behavior of the population, prices, interest rates and wages before the evolution of price indexes and the loss of the currency’s purchasing power, and (ii) as a quantitative characteristic, verifying if the three-year cumulative inflation rate approaches or exceeds 100.00%. In June 2018, the International Practices Task Force of the Centre for Quality (“IPTF”), which monitors countries experiencing high inflation, categorized Argentina as a country with projected three-year cumulative inflation rate greater than 100.00%. In addition, certain qualitative macroeconomic factors provided under the IAS 29 were also identified. Therefore, Argentine companies using IFRS Accounting Standards, such as us, are required to apply IAS 29 to their financial statements for periods ending on and after July 1, 2018. As a result, our Audited Consolidated Financial Statements included in this annual report, including the figures for the previous periods (this fact not affecting the decisions taken on the financial information for such periods), and, unless otherwise stated, the financial information included elsewhere in this annual report, were restated to consider the changes in the general purchasing power of our functional currency (Argentine peso) pursuant to IAS 29 and General Resolution No. 777/2018 of the CNV.
Significant fluctuations in the value of the peso could adversely affect the Argentine economy and, in turn, adversely affect our results of operations
The depreciation of the peso has had and may continue to have a negative impact on the ability of certain Argentine businesses to service their foreign currency-denominated debt, lead to inflation, significantly reduce real wages and jeopardize the stability of businesses, such as ours, whose success depends on domestic market demand and adversely affect the Argentine Government’s ability to honor its foreign debt obligations. In 2024, the peso depreciated approximately 27.71%, and 4.01% from December 31, 2024, through March 31, 2025. On April 14, 2025, the exchange rate was Ps.1,182.42 to US$1.00, as quoted on the A3500 BCRA exchange rate.
The main effects of the devaluation of the Argentine peso on our net results, expressed in pesos, are related to (i) exchange rate differences as a result of our exposure to the dollar, (due to the fact that our functional currency is the Argentine peso); (ii) higher revenues generated by the sale of energy priced in U.S. dollars, and (iii) higher costs generated by expense items priced in U.S. dollars such as financial obligations and certain maintenance contracts among other costs. In addition, the majority of our debt is denominated in currencies other than the peso; consequently, a devaluation of the peso against such currencies will increase the amount of pesos we need to cover our debt service obligations.
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If the peso depreciates further, all the negative effects on the Argentine economy related to such depreciation could recur, with adverse consequences to our business, financial condition and results of operations. In addition, a further depreciation of the Argentine Peso against the U.S. dollar may also have an adverse impact on our capital expenditure program and increase the Argentine Peso amount of our trade liabilities and financial debt denominated in U.S. dollars. As of December 31, 2024, 55.44% of our financial liabilities were denominated in U.S. dollars.
We remain highly exposed to risks associated with the fluctuation of the Argentine Peso, therefore, a devaluation of the Argentine Peso could have a material adverse effect on our financial condition and results of operations.
Exchange controls and restrictions on capital inflows and outflows could limit the availability of international credit and could threaten the financial system, adversely affecting the Argentine economy and, as a result, our business
The Argentine Government and the BCRA have implemented certain measures that control and restrict the ability of companies and individuals to access to the foreign exchange market to purchase foreign currency and to transfer it abroad. Those measures include, among others: (i) restricting access to the Argentine foreign exchange market for the purchase or transfer of foreign currency abroad for any purpose, including the payment of dividends to non-residents stakeholders; (ii) restrictions on the acquisition of any foreign currency to be held as cash in Argentina; (iii) requiring exporters to repatriate and settle in pesos, in the local exchange market, all or a portion of the proceeds of their exports of goods and services; (iv) limitations on the transfer of securities into and from Argentina; and (v) the implementation of taxes on certain transactions involving the acquisition of foreign currency. While exchange controls and certain restrictions are being progressively eased, significant limitations and regulatory measures remain in effect.
On April 11, 2025, the Argentine government announced a set of measures aimed at easing the regulatory framework governing access to the foreign exchange market. These measures include: (i) the establishment of a floating exchange rate band within which the U.S. dollar may fluctuate in the foreign exchange market. The initial band was set between Ps. 1,000 and Ps. 1,400, with its boundaries to be adjusted at a monthly rate of 1%; (ii) the elimination of the Export Increase Program (Programa de Incremento Exportador), which had allowed for the settlement of export proceeds using a split mechanism of 80% through the foreign exchange market and 20% through the financial market (commonly referred to as the "Dólar Blend"); (iii) the removal of foreign exchange restrictions applicable to individuals, including the US$ 200 monthly purchase limit in the foreign exchange market and restrictions affecting those who had received government assistance during the pandemic, subsidies, or public employment, among others, as well as cross-restrictions contained in Central Bank Communication “A” 7340; ARCA will also eliminate the tax surcharge currently applicable to the purchase of foreign currency in the foreign exchange market (while maintaining it for tourism and credit card payments); (iv) the authorization of dividend distributions by Argentine companies to foreign shareholders with respect to fiscal years beginning in 2025; (v) a relaxation of payment terms for foreign trade transactions, including: (a) imports of goods may now be paid through the foreign exchange market upon customs clearance (previously 30 days thereafter); (b) imports of goods by micro, small, and medium-sized enterprises (MiPyMEs) may be paid upon shipment from the port of origin (previously 30 days after customs clearance); (c) imports of services may be paid as from the date of service provision (previously 30 days thereafter); (d) imports of capital goods may now be paid with a 30% advance, 50% upon shipment, and 20% upon customs clearance (previously limited to a 20% advance and only applicable to MiPyMEs); and (e) imports of services between related parties may be paid once 90 days have elapsed from the date of service provision (previously 180 days); and (vi) a one-time elimination of the 90-day lookback period under Communication “A” 7340 applicable to legal entities, allowing such entities to resume access to the foreign exchange market under regular conditions.
The exchange controls previously in place gave rise to an unofficial U.S. dollar trading market. During 2024 and the first months of 2025, the Argentine peso/U.S. dollar exchange rate in such market substantially differed from the official Argentine peso/U.S. dollar exchange rate, although the gap between the Argentine peso/U.S. dollar exchange rate in this market and the official rate narrowed. In light of the recent regulatory measures aimed at liberalizing the foreign exchange regime—including the adoption of a floating exchange rate band and the removal of certain access restrictions—this gap is expected to diminish significantly or be eliminated altogether. The Argentine Government could nonetheless maintain a single official exchange rate or create multiple exchange rates for different types of transactions in the future, substantially modifying the applicable exchange rate at which we acquire currency to service our outstanding foreign currency denominated liabilities. Furthermore, any political, social, or economic crisis could further impact exchange rate dynamics and exacerbate the referred discrepancies.
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There can be no assurance that the BCRA or other government agencies will not increase or relax such controls or restrictions, make modifications to these regulations, impose further mandatory refinancing plans related to our indebtedness payable in foreign currency, establish more severe restrictions on currency exchange, or maintain the current foreign exchange regime or create multiple exchange rates for different types of transactions, substantially modifying the applicable exchange rate at which we acquire currency to service our outstanding liabilities denominated in currencies other than the peso, all of which could affect our ability to comply with our financial obligations when due, raise capital, refinance our debt at maturity, obtain financing, execute our capital expenditure plans, and/or undermine our ability to pay dividends to foreign shareholders.
In the event of a period of crisis and political, economic, and social instability in Argentina, resulting in a significant economic contraction, there is a possibility that the current administration may radically change its economic, foreign exchange and financial policies. These changes may be implemented with the goal of preserving the balance of payments, BCRA foreign exchange reserves, preventing capital flight, or a significant depreciation of the Argentine peso. The implementation of such restrictive measures, in addition to external factors that are beyond our control, may have a significant impact on our capacity to make payments in foreign currency.
Consequently, exchange controls and restrictions could materially and adversely affect the Argentine economy and/or our business, financial condition, and results of operations. See “Exchange Controls”.
Argentina’s ability to obtain financing from international markets is limited, which could affect its capacity to implement reforms and sustain economic growth, and may negatively impact our financial condition or cash flows.
In recent years, Argentina has experienced financial distress, leading to an increase in public debt.
Since 2020, the Argentine Government has engaged in negotiations with Argentina’s creditors to restore the sustainability of its public external debt. During this time, the Argentine Government held negotiations with the International Monetary Fund (“IMF”) over several disbursements.
On January 28, 2022, the Argentine Government and the IMF announced they had reached an understanding on key policies as part of their ongoing discussions involving an IMF-supported program. On March 17, 2022, the Argentine Government approved an agreement with the IMF for a period of 30 months (the “IMF Agreement”) to refinance US$44.0 billion of debt incurred between 2018 and 2019 under a stand-by agreement originally scheduled for payment between 2021 and 2023. The IMF Agreement comprises ten quarterly reviews over a two-and-a-half-year period, with the objective of ensuring that the Argentine Government complies with the targets set for each review period. Following each review, disbursements are made available. The repayment period for each disbursement is ten years, with a grace period of four and a half years, commencing in 2026 and concluding in 2034.
On March 22, 2022, the Argentine Government reached an agreement with the Paris Club for a new extension of the understanding reached in June 2021 (the “Paris Club Agreement”). On October 28, 2022, the former Minister of Economy, Sergio Massa, announced a new agreement with the Paris Club. The agreement is an addendum to the one signed in 2014 by the then Minister of Economy, Axel Kicillof, and recognizes a principal amount of US$1,971 million, extending a repayment period of thirteen semi-annual installments, starting in December 2022 to be finally cancelled in September 2028. The interest rate was improved from 9.00% to 3.90% in the first three installments, with a gradual increase to 4.50%. The payment profile implies an average semi-annual payment of US$170.0 million (principal and interest included). Over the next two years Argentina will repay 40.00% of the principal due. On June 26, 2023, the former Minister of Economy, Sergio Massa signed bilateral agreements with three members of the Paris Club to refinance the existing debt with the institution. Thus, after signing the new agreement reached in 2022, the former Minister of Economy was able to seal bilateral agreements with 15 of the 16 creditors of the institution.
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On June 13, 2024, the IMF completed its eighth review, after which it disbursed approximately US$800 million to the Argentine Government to support economic recovery and rebuild fiscal and external reserves. As of the date of this annual report, the IMF has disbursed a total of over US$41.4 billion to the Argentine Government in accordance with the terms of the IMF Agreement.
On March 11, 2025, Decree No. 179/2025 was published, through which the Executive Branch approved a new Extended Fund Facility (“EFF”) to be entered into with the IMF for a 10-year term. The funds under this program are expected to be primarily used to refinance liabilities, including non-transferable Treasury notes and outstanding amortization amounts under the existing EFF. On March 19, 2025, the house of representatives of the Argentine Congress approved Decree No. 179/25, thereby affirming its validity and eliminating the risk of revocation. Under the applicable legal framework, an emergency decree remains in force unless expressly rejected by both chambers of Congress. On April 8, 2025, the IMF announced that it had reached a staff-level agreement with the Argentine authorities for a new 48-month EFF arrangement totaling approximately US$20 billion. According to the official statement published by the IMF, the agreement remains subject to approval by its Executive Board, which is scheduled to consider the program on Friday, April 11, 2025.
On April 8, 2025, the IMF announced that it had reached a staff-level agreement with Argentine authorities for a new program under the EFF, with a total value of approximately US$ 20 billion. On April 11, 2025, the IMF Executive Board formally approved the agreement, authorizing an immediate disbursement of US$ 12 billion, with an additional US$ 2 billion disbursement scheduled for June 2025. The agreement has a ten-year term, including a grace period of four and a half years, and carries an annual interest rate of 5.63%.
Also on April 11, 2025, both the World Bank and the Inter-American Development Bank (IDB) approved multi-year financial assistance programs for Argentina, amounting to US$ 12 billion (of which US$ 1.5 billion are to be disbursed immediately) and US$ 10 billion, respectively.
We cannot assure that the Argentine Government will meet the targets of the upcoming reviews of the IMF. In the event that the Argentine Government does not comply with the economic and fiscal commitments and targets agreed with the IMF, or that the agreement is not approved by the IMF Executive Board, Argentina could default on its debt with the IMF and, consequently, its financial and economic situation could be adversely affected.
We cannot assure that the Extended Fund Facility Agreement with the IMF (the “EEF Agreement”) and the Paris Club Agreement will not affect Argentina’s ability to implement reforms and public policies and boost economic growth. Consequently, there can be no assurance that the implementation of the revenue and expenditure policies of the EFF Agreement regarding the reduction of untargeted energy subsidies would not have material adverse effect on our financial condition and results of operations. Also, we cannot predict the impact of the outcome of such reforms on Argentina’s (and indirectly our) ability to access the international capital markets. Moreover, the long-term impact of these measures and any future measures taken by the current administration on the Argentine economy remains uncertain.
In addition, Argentina’s future tax revenue and fiscal results may be insufficient to meet its debt service obligations and the Argentine Republic may have to rely in part on additional financing from domestic and international capital markets, the IMF and other potential creditors, in order to meet future debt service obligations. In the future, the Argentine Republic may not be able or willing to access international or domestic capital markets, which could have a material adverse effect on the Argentine Republic’s ability to make payments on its outstanding public debt, and in turn, could materially adversely affect our financial condition and results of operations.
In spite of the restructuring of the Argentine public debt carried out between 2020 and 2023, the international markets continue skeptical as to whether Argentina’s debt is sustainable and, therefore, country risk indicators remain high. There can be no assurance that Argentina’s credit ratings would remain in place or otherwise be downgraded, suspended or cancelled. Any downgrade, suspension or cancellation of Argentina’s sovereign debt rating may have an adverse effect on the Argentine economy and our business.
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Without renewed access to the financial market the Argentine Government may not have the financial resources to implement reforms and boost growth, which could have a significant adverse effect on the country’s economy and, consequently, on our activities. Likewise, Argentina’s inability to obtain credit in international markets could have a direct impact on our ability to access those markets to finance our operations and our growth, including the financing of capital investments, which would negatively affect our financial condition, results of operations and cash flows. In addition, we cannot predict the outcome of any future restructuring of Argentine sovereign debt.
Any new event of default by the Argentine Government could negatively affect their valuation and repayment terms, as well as have a material adverse effect on the Argentine economy and, consequently, our business and results of operations.
The Argentine economy could be adversely affected by economic developments in other markets and by more general “contagion” effects
Financial and securities markets in Argentina and the Argentine economy are influenced by the effects of global or regional financial crisis and market conditions in other markets worldwide. Weak, flat or negative economic growth of any of Argentina’s major trading partners, such as Brazil (Argentina’s main trading partner), China or the United States, could have a material adverse effect on Argentina’s trade balance and adversely affect Argentina’s economic growth. If interest rates increase significantly in developed economies, Argentina, along with developing economy trading partners such as Brazil, may find it more difficult and expensive to borrow capital and refinance existing debt, affecting economic growth.
On January 20, 2025, Donald Trump was inaugurated for his second term as President of the United States. During the initial months of his mandate, President Trump has brought forth significant changes to trade policies, notably enacting substantial tariffs that affect nearly all U.S. trading partners. A universal tariff of 10% was imposed on U.S. imports, including Argentine goods, with exceptions for Mexico and Canada. Additional tariffs range from 11% to 50% for other countries, with particular rates such as 20% for the European Union and 46% for Vietnam.
China faces unique tariffs set at 145% due to heightened diplomatic tensions. China has also filed a formal complaint with the World Trade Organization (“WTO”) on April 9, 2025, alleging that the U.S. tariffs violate WTO rules and undermine the multilateral trading system.
Although tariffs on Argentine goods remain lower, “custom-made agreements” are under discussion, which might offer relief if Argentina reduces its barriers on U.S. products. As of April 9, 2025, a 90-day pause on reciprocal tariffs was announced by Trump, lowering them to 10%, except for China, for which higher rates were maintained. The European Union responded by suspending its planned retaliatory tariffs for the same 90-day period, signaling a willingness to engage in negotiations during the pause. The Trump administration also announced that certain electronic imports from China are exempt from the above-mentioned tariffs scheme.
These measures contribute to market instability, which can disrupt trade flows to Argentina, impacting import costs and overall economic conditions. Retaliatory measures, such as restrictions on market access and tariffs on U.S. agricultural products by China, pose additional threats to global trade stability. They could alter trade dynamics and increase costs for Argentina and affect various sectors, including ours.
In parallel, Argentina’s largest export market, Brazil, faces heightened pressures due to ongoing political crises. Following the economic challenges of 2015 and 2016, Brazil’s economy is gradually recovering, though political uncertainties persist under the leadership of Lula da Silva. Real growth per capita improved by 10% in 2021 but remains 15% below 2019 levels. The unemployment rate improved to 6.2% by the end of 2024, compared to 7.4% at the end of 2023. Despite these improvements, another devaluation of the Brazilian real, similar to the nearly 20% drop in 2024, could negatively impact Argentine exports, reducing competitiveness and increasing imports as Brazilian goods become more price-competitive internationally. This could adversely impact Argentina's economic performance and financial position.
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Global economic instability such as uncertainty about global trade policies, the deterioration of economic conditions in Brazil and of the economies of other major trading partners of Argentina, such as China or the United States, the withdrawal of the United Kingdom from the European Union, geopolitical tensions between the United States and a number of foreign countries, the ongoing conflict between Russia and Ukraine, decisions by the Organization of Petroleum Exporting Countries (OPEC), the ongoing tensions in the Middle East between Israel and Hamas, as well as the threats to trade through the Red Sea and the Suez Canal and other non-OPEC oil-producing nations with respect to oil production that affect oil prices, idiosyncratic, political and social discords, terrorist attacks, sovereign debt downgrades, a pandemic disease, could impact the Argentine economy and jeopardize Argentina’s ability to stabilize its economy, among others.
There can be no assurance that the Argentine economy and securities markets will not be adversely impacted by events affecting developed economies, emerging markets, or any of Argentina’s major trading partners, which could in turn adversely affect our business, financial condition, and results of operations, and the market value of our ADSs. Furthermore, a significant devaluation of the currencies of our trading partners or trade competitors may adversely affect the competitiveness of Argentina and consequently, adversely affect Argentina’s economy and our financial condition and results of operations.
We may be exposed to adverse effects arising from geopolitical conflicts occurring worldwide
Global geopolitical tensions contribute to uncertainties that affect the Argentine economy. Russia's military actions in Ukraine, which started in 2022, have resulted in regional instability and heightened economic sanctions from the United States and the European Union, which impact global economic conditions and commodity prices. Despite energy markets showing signs of normalization in 2024, the conflict’s continuation could foreseeably disrupt supply chains. After three years since the beginning of the armed conflict, military actions keep growing and fears of an escalation to the use of nuclear weapons are rising as a result of the decision from the Russian government to halt its participation under the Strategic Arms Reduction Treaty III.
Further complicating geopolitical stability, the October 2023 assault by Hamas on Israel has escalated tensions in the Middle East. Prime Minister Netanyahu's declaration of war and subsequent military actions have intensified regional instability. Although a ceasefire was established in January 2025, ongoing tensions, including potential involvement from other nations (given that Israel has received attacks from Iran and from Hezbollah cells spread across the region), continue to threaten global trade dynamics.
Argentina’s reliance on the export of commodities, including soy, renders its economy vulnerable to fluctuations in commodity prices and adverse weather conditions affecting production, which could result in decreased government revenues, foreign exchange availability, and challenges in sovereign debt management. These circumstances may induce inflationary or recessionary pressures, adversely impacting Argentina's economic growth and our financial condition and results of operations.
The Argentine banking system may be subject to instability which may affect our operations
In recent years, the Argentine financial system grew significantly with a marked increase in loans and private deposits, showing a recovery of credit activity. Although the financial system’s deposits continue to grow in nominal terms, they are mostly short-term deposits and the sources of medium and long-term funding for financial institutions are currently limited.
Financial institutions are particularly subject to significant regulation from multiple regulatory authorities, all of whom may, among other things, establish limits on commissions and impose sanctions on the financial institutions. The lack of a stable regulatory framework, or changes to such regulatory framework by the government, could impose significant limitations on the activities of the financial institutions and could induce uncertainty with respect to the financial system stability.
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The persistence of the current economic crisis or the instability of one or more of the larger banks, public or private, could have a material adverse effect on the prospects for economic growth and political stability in Argentina, resulting in a loss of consumer confidence, lower disposable income and fewer financing alternatives for consumers. These conditions could also have a material adverse effect on the Argentine banking system, and therefore, on our business, financial condition and results of operations.
Failure to adequately address actual and perceived risks of institutional deterioration and corruption may adversely affect Argentina’s economy and financial condition, which in turn could adversely affect our business, financial condition and results of operations
A lack of a solid institutional framework and corruption have been identified as, and continue to be, a significant problem for Argentina. Recognizing that the failure to address these issues could increase the risk of political instability, distort decision-making processes and adversely affect Argentina’s international reputation and ability to attract foreign investment, the 2015-2019 administration had adopted several measures aimed at strengthening Argentina’s institutions and reducing corruption. These measures included the reduction of criminal sentences in exchange for cooperation with the government in corruption investigations, increased access to public information, the seizing of assets from corrupt officials, and establishing a corporate criminal liability regime for corruption offenses aimed at promoting anticorruption compliance. According to the Corruption Perceptions Index published by Transparency International on February 11, 2025, Argentina dropped one position in relation to 2023 and finished 99th out of 180 countries with the most corruption. The current administration’s ability to implement the above-mentioned measures or promote further transparency and integrity measures is uncertain in a highly polarized political context. Argentina’s political environment has historically influenced, and continues to influence, the performance of the country’s economy. Political crises have affected and continue to affect the confidence of investors and the general public, which have historically resulted in economic deceleration and heightened volatility in the securities with underlying Argentine risk. The recent economic instability in Argentina has contributed to a decline in market confidence in the Argentine economy as well as to a deteriorating political environment.
Moreover, following several attempts, on April 8, 2025, the opposition in the House of Representatives approved the establishment of a special committee to investigate alleged fraud in connection with the cryptocurrency $LIBRA. The controversy originated on February 14, 2025, when President Milei publicly endorsed the cryptocurrency shortly after its launch. This endorsement triggered a sharp increase in the value of $LIBRA, attracting approximately 40,000 investors. Subsequently, the cryptocurrency’s value collapsed, resulting in significant financial losses for those investors. The incident has prompted legal investigations across multiple jurisdictions and has intensified political pressure on President Milei and his administration. The committee, whose inaugural session is scheduled for April 23, 2025, will operate solely within the House of Representatives and, as such, does not require Senate approval.
In addition, various ongoing investigations into allegations of money laundering and corruption being conducted by the Office of the Argentine Federal Prosecutor, have negatively impacted the Argentine economy and political environment. Certain government officials of previous administrations as well as high ranked officers of companies holding government contracts or concessions have faced or are currently facing allegations of corruption and money laundering as a result of these investigations. These individuals are alleged to have accepted or paid, as applicable, bribes by means of kickbacks on contracts granted by the government to several infrastructure, energy and construction companies. We have no control over and cannot predict for how long the corruption investigations will continue nor whether such investigations or allegations (or any other future investigations or allegations) will lead to further political and economic instability. In addition, we cannot predict the outcome of any such allegations nor their effect on the different sectors of the Argentine economy. See also “—We are subject to anticorruption, anti-bribery, anti-money laundering and other laws and regulations”.
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Risks Relating to the Electric Power Sector in Argentina
The Argentine Government has intervened in the electric power sector in the past, and is likely to continue intervening
Historically, the Argentine Government has played an active role in the electric power industry through the ownership and management of state-owned companies engaged in the generation, transmission and distribution of electric power. Moreover, the Argentine Government made a number of material changes to the regulatory framework applicable to the electric power sector since the Argentine economic crisis of 2001, including adopting Law No. 25,561 (the “Public Emergency Law”), which have had significant adverse effects on electric power generation, distribution and transmission companies and included the freezing of distribution margins, the revocation of adjustment and inflation indexation mechanisms for tariffs, a limitation on the ability of electric power distribution companies to pass on to the consumer increases in costs due to regulatory charges and the introduction of a new price-setting mechanism (i.e., remuneration of power generators) in the WEM, all of which had a significant impact on electric power generators and caused substantial price differences within the market.
In recent years, the Argentine Government has continued to declare emergencies related to the power sector, by means of Decree No. 134/2015, the Solidarity Law No. 27,541, Decree No. 55/2023, Decree No. 70/2023 and Law No. 27,742. For further details, please refer to “Item 4.B. Business Overview—The Argentine Electric Power Sector—Emergency of the Electric Power Sector”.
It is possible that the government of Argentina may adopt certain measures that could materially and adversely affect our business and results of operations. There is also the potential for emergency legislation and measures akin to the Public Emergency Law to be enacted in the future. Such actions could significantly alter the regulatory framework governing the electric power industry. Any changes to the regulation could indirectly have a detrimental impact on the electric power generation industry, and consequently, on our business, financial condition, and results of operations.
For instance, a significant increase in energy costs for consumers, either due to tariff hikes or reductions in consumer subsidies, may lead to a decrease in demand for the energy we generate. Such a material adverse effect on electric power demand could, in turn, result in lower revenues and poorer results of operations for electric power generation companies, including our own, than currently anticipated.
Changes in regulatory frameworks under which we sell our electricity may affect our financial condition and results of operations
We cannot assure what further changes the Argentine Government may make to the regulatory frameworks under which we sell power availability or electricity, nor that these changes will not negatively impact our results of operations. Moreover, we cannot assure under what kind of regulatory framework we will be able to sell our generation capacity and electricity in the future. Any further changes in the current applicable laws and regulations, or adverse judicial or administrative interpretations of such laws and regulations, may adversely affect our results of operations. In addition, some of the measures proposed by the Argentine Government may also generate political and social opposition, which may in turn prevent the Argentine Government from adopting such measures as proposed.
The factors mentioned above for both our operation of power generation and the projects under construction/development, may also lead to an impairment of property, plant and equipment and intangible assets, related to a reduction in the assessed value-in-use of certain assets that may exceed their previously recorded book value.
We have, in the recent past, been unable to collect payments, or to collect them in a timely manner, from CAMMESA and other customers in the electric power sector
A substantial amount of our total revenues comes from our sales to CAMMESA. In addition, we receive significant cash flows from CAMMESA in connection with the FONINVEMEM and similar programs. Payments to us by CAMMESA, depend upon payments that CAMMESA in turn receives from other WEM agents such as electric power distributors as well as subsidies from the Argentine Government to certain users, which in turn requires additional funding to CAMMESA from the government to pay to generators.
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In recent years, due to regulatory conditions and long periods of frozen tariffs in Argentina’s electric power sector that affected the profitability and economic viability of power utilities, certain WEM agents defaulted on their payments to CAMMESA, which adversely affected CAMMESA’s ability to meet its payment obligations with electric power generators, including us. As a consequence of delays in payments that CAMMESA received from other WEM agents, we also saw delays in, receiving payments from CAMMESA more than 90 days of month-end, rather than the required 42 days after the date of billing. Such payment delays resulted in higher working capital requirements that we would typically finance with our own financing sources.
Additionally, a system was implemented in the past whereby a significant portion of unpaid credits were converted into LVFVDs; a practice that could be repeated in the future, or another alternative scheme could be implemented for payments due.
On May 24, 2024, we reported that within the framework of Resolutions No. 58/2024, 66/2024, and 77/2024 of the National Energy Secretariat, issued in connection with the debts of CAMMESA for economic transactions corresponding to the months of December 2023 and January and February 2024, we entered into an agreement with CAMMESA, by virtue of which outstanding debts were paid by CAMMESA as follows:
| 1. | The debts corresponding to the economic transactions for the months of December 2023 and January 2024 were paid through the delivery of public securities "BONDS OF THE ARGENTINE REPUBLIC IN US DOLLARS STEP UP 2038" (BONO USD 2038 L.A.) within ten (10) business days from the signing of the agreement; and |
| 2. | The debts corresponding to the economic transaction for the month of February 2024 were paid with the funds available in the bank accounts enabled in CAMMESA within 48 hours from the signing of the agreement. |
Given that Central Costanera S.A. (one of our subsidiaries) also accepted the offer from the Energy Secretariat, and since the bonds to be received have a parity lower than their nominal value, the subscription of the agreement with CAMMESA represented a consolidated loss for Central Puerto S.A of approximately Ps. 24,783 million.
As of the date of this annual report, CAMMESA is facing difficulties to make payments to generators both in respect of energy dispatched and generation capacity availability on a timely basis or in full, which in turn may substantially and adversely affect our financial position and the results of our operations.
Argentina has certain energy transmission and distribution limitations that adversely affect the capacity of electric power generators to deliver all of the energy they can to produce, which results in reduced sales
The energy that generators can deliver to the transmission system for the further delivery to the distribution system at all times depends on the capacity of the transmission and distribution systems that connects them to it. In the past, the transmission and distribution system operated at near full capacity and both transmission and distributors were not able to guarantee an increased supply of electric power to their customers. In the past years, the increase in demand for electric power resulted in blackouts in Buenos Aires and other cities around Argentina, which resulted in excess capacity for generators. As a result, the amount of hydroelectric energy and thermal energy generated was larger than what the transmission and distribution systems are capable of transmitting or distributing. Any transmission or distribution limitation for generators could reduce the energy sold, which could adversely affect our financial condition.
Restrictions on the supply of energy could negatively affect Argentina’s economy
Demand for natural gas and electricity has increased substantially, driven by a recovery in economic conditions and price constraints, resulting in industry shortages and/or costs increase. In particular, Argentina has been importing gas in order to compensate the shortage in local production. In order to pay for those imports the Argentine Government has frequently used the Argentine Central Bank reserves due to absence of incoming currencies from investment. Argentina’s foreign exchange reserves are particularly limited and, therefore, Argentina’s ability to deal with significant increases in international oil and gas prices remains limited. If the Argentine Government is unable to pay for the gas import in order to produce electricity, business and industries may be affected.
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Moreover, the Argentine Government has taken a number of measures aimed at alleviating the short-term impact of supply restrictions on residential and industrial users such as importing liquefied natural gas transported to Argentina in vessels and, in the past, importing natural gas from Bolivia. If these measures prove to be insufficient, or if the investment that is required to increase natural gas production and energy generation over the medium-and long-term fails to materialize on a timely basis, economic activity in Argentina could be curtailed which may have a significant adverse effect on our business.
Continued disruptions in the supply of energy could cause a significant adverse impact on the electric power generation industry, and therefore, our business, financial condition and results of operations.
We operate in a heavily regulated sector that imposes significant costs on our business, and we could be subject to fines and liabilities that could have a material adverse effect on our results of operations
We are subject to a wide range of federal, provincial and municipal regulations and supervision, including laws and regulations pertaining to tariffs, labor, social security, public health, consumer protection, the environment and competition. Furthermore, Argentina has 23 provinces and one autonomous city (the City of Buenos Aires), each of which, under the Argentine National Constitution, has power to enact legislation concerning taxes, environmental matters and the use of public space. Within each province, municipal governments can also have powers to regulate such matters. Although the generation of electric power is considered an activity of general interest (actividad de interés general) subject to federal legislation, since our facilities are located throughout various provinces, we are also subject to provincial and municipal legislation. Future developments in the provinces and municipalities concerning taxes (including sales, safety and hygiene and general services taxes), environmental matters, the use of public space or other matters could have a material adverse effect on our business, results of operations and financial condition. Compliance with existing or future legislation and regulations could require us to make material expenditures and divert funds away from planned investments in a manner that could have a material adverse effect on our business, results of operations and financial condition.
In addition, our failure to comply with existing regulations and legislation, or reinterpretations of existing regulations and new legislation or regulations, such as those relating to fuel and other storage facilities, volatile materials, cyber security, emissions or air quality, hazardous and solid waste transportation and disposal and other environmental matters, or changes in the nature of the energy regulatory process may subject us to fines and penalties and have a significant adverse impact on our financial results.
Risks arise for our business from technological change in the energy market
The energy market is subject to far-reaching technological change, both on the generation side and on the demand side. For example, with respect to energy generation, the development of energy storage devices (battery storage in the megawatt range) or facilities for the temporary storage of power through conversion to gas (so-called “power-to-gas-technology”), the increase in energy supply due to new technological applications such as fracking or the digitalization of generation and distribution networks should be mentioned.
New technologies to increase energy efficiency and improve heat insulation, for the direct generation of power at the consumer level, or that improve refeeding (for example, by using power storage for renewable generation) may, on the demand side, lead to structural market changes in favor of energy sources with low or zero carbon dioxide emissions or in favor of decentralized power generation, (for instance, via small-scale power plants within or close to residential areas or industrial facilities).
If our business is unable to react to changes caused by new technological developments and the associated changes in market structure, our equity, financial or other position, or our results, operation and business, could be materially and adversely affected.
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Competition in the Electric Power Sector in Argentina may adversely affect our results of operations
The power generation markets in which we operate are characterized by numerous strong and capable participants, many of which may have extensive and diversified developmental or operating experience (including both domestic and international) and financial resources similar to or significantly greater than ours. See “Item 4.B. Business Overview-Competition”. An increase in competition could cause reductions in prices and increase acquisition prices for fuel, raw materials and existing assets and therefore, adversely affect our results of operations and financial condition.
From time to time, we also compete with other generation companies for the megawatt of capacity that are allocated through public auction processes.
We and our competitors are connected to the same electrical grid that has limited capacity for transportation, which, under certain circumstances, may reach its capacity limits. Therefore, new generators may connect, or existing generators may increase, their outputs and dispatch more electric power to the same grid that would prevent us from delivering our energy to our customers. In addition, the Argentine Government (or any other entity on its behalf) might not make the necessary investments to increase the system’s capacity, which, in case there is an increase of energy output, would allow us and existing and new generators to efficiently dispatch our energy to the grid and to our customers. As a result, an increase in competition could affect our ability to deliver our product to our customers, which would adversely affect our business, results of operations and financial condition.
Risks Relating to Our Business
Our results depend largely on the compensation established by the Secretariat of Energy and received from CAMMESA
Since the enactment of Resolution SE No. 95/13, our compensation has depended largely on the compensation determined by energy output and availability. This remuneration scheme was then subject to several modifications, implemented by means of Resolution SE No. 529/14, Resolution SE No. 482/2015, Resolution SEE No. 22/2016, Resolution 19/17 (which established a remuneration scheme in US dollars) and Resolution 1/19 (which maintained the scheme in US dollars).
On February 27, 2020, the Secretariat of Energy of the former National Ministry of Production Development issued Resolution 31/20 which amended Resolution 1/19 and determined the remuneration scheme applicable from February 1, 2020 for Authorized Generators in the WEM, establishing Spot Sales prices in Argentine pesos. Initially, Resolution 31/20 set forth a mechanism for updating the prices denominated in Argentine Pesos. However, on April 8, 2020, the Secretariat of Energy instructed CAMMESA to postpone until further notice the application of the mechanism for updating the prices of energy and capacity provided for in Annex VI of Resolution 31/20, and the mechanism was finally repealed by means of Resolution 440/21. This has caused a material adverse effect on our business and results of operations.
Except for sales under contracts, revenues from energy production are calculated and paid by CAMMESA pursuant to a fixed and variable price system arising —currently— from the Resolution 1/19 (as amended by Resolution 31/20, further regulations and, more recently, Resolution 143/25, applicable since April 2025).
Since March 2020, numerous resolutions have been issued updating prices discretionally (in 2025 alone, prices have been updated by Resolution 604/24, 27/25, 113/25 and 143/25). We cannot assure you that further reductions of these remunerations will not occur in the future. See “Item 4.B. Business Overview-The Argentine Electric Power Sector-Remuneration Scheme”.
Further, as of February 2023, Resolution 59/23 is also applicable as a complementary regulation for combined cycle facilities. See “Item 5.A. Operating Results-Factors Affecting Our Results of Operations-Our Revenues-The Spot Sales”, “Item 3.D. Risk Factors-Risks Relating to the Electric Power Sector in Argentina-We have, in the recent past, been unable to collect payments, or to collect them in a timely manner, from CAMMESA and other customers in the electric power sector” and “Item 4.B. Business Overview—The Argentine Electric Power Sector—Remuneration Scheme—The Current Remuneration Scheme”).
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Moreover, Resolution No. 294/2024 of the Secretariat of Energy, published in the Official Gazette on October 2, 2024, established the 'Contingency and Preparation Plan for the Critical Months of the 2024/2026 Period' (the “Contingency Plan”). The Contingency Plan aims to prevent, reduce, and mitigate potential challenges in energy supply during critical days within the 2024/2026 period, outlining specific actions to be carried out by the Ministry of Energy (SE) in the generation, transmission, and distribution sectors of electricity. For power generation, the resolution proposes an additional, complementary, and exceptional remuneration, with prices for both energy and power set in US dollars (see “Item 4.B. Business Overview—The Argentine Electric Power Sector—Remuneration Scheme—The Current Remuneration Scheme”).
More recently, Resolution No. 21/2025 authorized projects for the generation, self-generation, or cogeneration of electricity from conventional thermal, hydroelectric, or nuclear sources to enter into supply contracts with demand agents, distributors, or large users of the WEM, in accordance with the Procedures for the Scheduling of Operations, Load Dispatch, and Price Calculation. On the other hand, said resolution, by replacing article 8 of Resolution 95/13, authorized thermal generators operating in the spot market to acquire their own fuel, with CAMMESA remaining as supplier of last resort. Furthermore, it established that the costs associated with managing proprietary fuels will be valued based on the reference prices declared in the 'Declaration of Variable Production Costs', including freight, transportation, natural gas distribution, taxes, and related fees.
Our revenues are significantly influenced by the decisions of regulatory authorities. The absence of stable mechanisms for price updates, along with the Argentine Government’s failure to provide regulated remuneration increases or to implement such increases promptly, could materially and negatively affect our revenues. Consequently, this could lead to adverse effects on our operational results.
Factors beyond our control may affect or delay the completion of the awarded projects or alter our plans for the expansion of our existing plants
With regards to projects currently under development or new potential projects, several factors may affect, delay or cancel the completion of such projects currently under development or new projects: (i) sustained or prolonged disease outbreaks and pandemics, that may result in restrictions to mobility and the development of any such projects, as scheduled, (ii) the economic recession in Argentina, (iii) the decrease in demand of electric energy, (iv) the lack of available financing, and (v) the reduction in the prices of electric energy for power units under Spot Sales, among others.
Delays in construction or commencement of operations of expanded capacity in our existing power plants or our new power plants could lead to an increase in our financial needs and cause our financial returns on new investments to be lower than expected, which could materially adversely affect our financial condition and results of operations. Furthermore, delays in the commencement of operation of our gas turbines has negatively affected its estimated recoverability See “Item 5.A. Operating Results-Critical Accounting Policies-Impairment of Property, Plant and Equipment”.
Factors that may impact our ability to commence operations at our existing power plants, expand their power capacity or build new power plants include: (i) the failure of contractors to complete or commission the facilities or auxiliary facilities by the agreed-upon date or within budget; (ii) the unexpected delays of third parties such as gas or electric power distributors in providing or agreeing to project milestones in the construction or development of necessary infrastructure linked to our generation business; (iii) the delays or failure by our turbine suppliers in providing fully operational turbines in a timely manner; (iv) difficulty or delays in obtaining the necessary financing in terms satisfactory to us or at all; (v) delays in obtaining regulatory approvals, including environmental permits; (vi) court rulings against governmental approvals already granted, such as environmental permits; (vii) shortages or increases in the price of equipment reflected through change orders, materials or labor; (viii) opposition by local and/or international political, environmental and ethnic groups; (ix) strikes; (x) adverse changes in the political and regulatory environment in Argentina; (xi) unforeseen engineering, environmental and geological problems and(xii) adverse weather conditions, natural disasters, accidents or other unforeseen events. Any cost overruns could be material. In addition, any of these other factors may cause delays in the completion of expanded capacity at our existing power plants or the construction of our new power plant, which could have a material adverse effect on our business, financial condition and results of operations. These delays may also result in short-term sanctions by CAMMESA and, in extreme cases, sanctions for the duration of the contract.
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Our business may require substantial capital expenditures for ongoing maintenance requirements and the expansion of our installed generation capacity
Incremental capital expenditures may be required to fund ongoing maintenance necessary to maintain our power generation and operating performance and improve the capabilities of our electric power generation facilities. Furthermore, capital expenditures will be required to finance the cost of our current and future expansion of our generation capacity. If we are unable to finance any such capital expenditures in terms satisfactory to us or at all, our business and the results of our operations and financial condition could be adversely affected. Our financing ability may be limited by market restrictions on financing availability for Argentine companies. See “—Risks Relating to Argentina— Argentina’s ability to obtain financing from international markets is limited, which could affect its capacity to implement reforms and sustain economic growth and may negatively impact our financial condition or cash flows” and “Item 4.B. Business Overview”.
Covenants in our indebtedness could adversely restrict our financial and operating flexibility
Some of our current indebtedness (including the debt of our subsidiaries, some of which is guaranteed by us) includes, and our future indebtedness may include, affirmative and restrictive covenants that limit our ability to create liens, incur additional indebtedness, making capital expenditures, dispose of our assets, pay dividends, or consolidate, merge or sell part of our businesses, and require us to maintain certain financial ratios. See “Item 5.B. Liquidity and Capital Resources-Indebtedness”. These restrictions may limit our ability to operate our business and may prohibit or limit our ability to enhance our operations or take advantage of potential business opportunities as they arise. The breach of any of these covenants or the failure to meet any of such conditions could result in a default under the relevant indebtedness. Our ability to comply with these covenants may be affected by events beyond our control, including prevailing economic, financial and industry conditions. If any such default occurs, the holders of such indebtedness may elect (after the expiration of any applicable notice or grace periods) to declare all outstanding amounts, together with accrued and unpaid interest and other amounts payable thereunder, to be immediately due and payable. Further, any such default occurs, it could, in turn, result in a default and acceleration of our other outstanding debt obligations, which would have a further material adverse effect on our business, ability to meet our payment obligations, financial condition, and results of operations. If any of our debt were to be accelerated, our assets may not be sufficient to repay in full that debt or any other debt that may become due as a result of that acceleration.
We may be unable to refinance our outstanding indebtedness, or the refinancing terms may be materially less favorable than their current terms, which would have a material adverse effect on our business, financial condition and results of operations
Factors beyond our control may impair our ability to meet our debt obligations or increase the cost of financing, which in turn, could have a material adverse effect on our cash flow, results of operations and overall financial position.
There is no assurance that we will be able to extend the maturity or otherwise refinance our outstanding indebtedness, or that we may be required to agree to refinancing terms that may be materially less favorable than the terms of our current loans. Any amendment to or refinancing of our indebtedness could result in higher interest rates and may require us to comply with more burdensome restrictive covenants, which may have a material adverse effect on our business, ability to meet our payment obligations, financial condition, and results of operations.
If we are unable to refinance our debt in favorable terms, we may be forced to reduce or delay capital expenditures, seek additional equity capital, restructure our debt, curtail or eliminate our cash dividend to stockholders, or sell assets. Non-payment of our obligations or any other default under any of our debt instruments could, in turn, result in a default and acceleration of our other outstanding debt obligations, which would have a further material adverse effect on our business, ability to meet our payment obligations, financial condition, and results of operations. If any of our debt were to be accelerated, our assets may not be sufficient to repay in full that debt or any other debt that may become due as a result of that acceleration.
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The government’s decision regarding the future of the hydroelectric concessions could impact the HPDA operations, which may adversely affect our results of operations.
The HPDA Concession Agreement executed between us and the Argentine Government, pursuant to which we were permitted to operate our Piedra del Águila plant, expired on December 28, 2023, and did not provide for an automatic renewal.
Resolution No. 574/2023, published on July 11, 2023, extended for 60 days (extendable for another 60 days) the termination date of the HPDA Concession Agreement -among other national hydroelectric power plants whose concession term expired during 2023. Another renewal of such period was established by Resolution 02/24, issued by the Secretariat of Energy, which was set to expire on April 27, 2024. In addition, on March 15, 2024, Resolution 33/24, issued by the Secretariat of Energy, extended once again the transition period for 60 days setting the expiration date on June 28, 2024. This plant has a total installed capacity of 1,440 MW, and it represented approximately 20.12% of our total electric energy generation, and 8.50% of our total revenues in 2024. On August 14, 2024, by virtue of Decree No. 718/2024 issued by the current administration, the concession was extended up to December 28, 2025. This decree also called for a tender process, to be conducted during 2025, for purposes of offering certain hydro assets (including HPDA) to private investors for a new concession term. On April 9, 2025, Decree No. 263/2025 was issued, setting a period of 15 days to launch the National and International Public Tender provided for under Decree No. 718/2024 (as amended by Decree No. 895/2024). We will carefully evaluate the terms and conditions of this process to decide whether we participate. Any governmental decision regarding the future of hydroelectric concessions may adversely affect our results of operations.
Our interests in TJSM, TMB were diluted and CVOSA will be significantly diluted
As of December 31, 2020, we had a 30.875% interest in TJSM which was reduced to 9.627% during 2021 and a 30.946% interest in TMB which was also reduced during 2021 to 10.831%. Both companies are engaged in managing the purchase of equipment, building, operating, and maintaining power plants constructed under the FONINVEMEM program. As of the date of this annual report, we also own 55.89% of CVOSA, the company that operates the thermal power plant in Timbúes.
After ten years of operations, TJSM and TMB were entitled to receive property rights to such power plants from the respective trusts currently holding such power plants. At such time, the term of the trusts expired and the Argentine Government, that financed part of the construction, should be incorporated as a shareholder of TJSM and TMB. Consequently, our interests in TJSM and TMB were diluted in 2021. In the case of TMB and TJSM, the ten-year period expired on January 7, 2020 and on February 2, 2020, respectively. From such dates, during the following 90-days, TJSM and TMB and their shareholders had to perform all the necessary acts to allow the Argentine Government to receive the corresponding shares in the equity stake of TJSM and TMB that their contributions entitle the Argentine Government to receive.
On January 3, 2020, before the aforementioned 90 days period commenced, the Argentine Government sent us a notice (doing the same with TSM, TMB and other generation companies that are shareholders of TJSM and TMB) stating that, in accordance with FONINVEMEM Agreement, TJSM and TMB should perform all necessary acts to incorporate the Argentine Government as shareholder of both companies, claiming, in each case, the following equity interest rights: 65.006% in TMB and 68.826% in TJSM.
On January 9, 2020, we, together with the other generation companies, shareholders of TJSM and TMB, replied such notice stating that the Argentine Government’s equity interest claims did not correspond with the contributions made for the construction of the power plants under the terms of the FONINVEMEM Agreement that give rights to claim such equity interest. On March 4, 2020, the Argentine Government reiterated its previous claim to the Company.
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Additionally, on January 7, 2020 and on January 9, 2020, Central Puerto, together with the other shareholders of TJSM and TMB (as guarantors within the framework and the limits stated by the FONINVEMEM Agreement, the Note SE No. 1368/05 and the trust agreements), BICE, TJSM, TMB and the Energy Secretariat amended the Operation and Maintenance Agreement of the Manuel Belgrano Thermal Facility (the “TMB OMA”) and the Operation and Maintenance Agreement of the San Martín Thermal Facility ( the “TJSM OMA”), respectively. The amendments to the TMB OMA and TJSM OMA extended the agreements until each of the trust’s liquidation effective date.
In March 2020, Central Puerto filed an administrative appeal against the Argentine Government challenging their acts referred to above (the “Claim”). Pursuant to this Claim, the position of the shareholders of TJSM and TMB is that the Argentine Government equity interest in each of the companies should be lower but its incorporation as a shareholder in such companies is unchallenged. Therefore, even if we are successful with our Claim, our interests on TJSM and TMB is significantly diluted.
On May 4, 2020, and May 8, 2020, the extraordinary shareholders’ meetings of TMB and TJSM, respectively, approved the incorporation of the Argentine Government as shareholder of TJSM and TMB. In each of the extraordinary shareholders’ meetings, the equity interest that was approved was the equity interest that the Argentine Government claims that it is entitled to, which is: 65.006% in TMB and 68.826% in TJSM.
In each of the shareholders’ meetings, Central Puerto (and other shareholders), made the corresponding reservation of rights to continue with the Claim, and expressly stated that the incorporation of the Argentine Government as a shareholder in TMB and TJSM was approved for the sole purpose of achieving the transfer of the trust assets -which includes, among others, the power plants- from the respective trusts to TJSM and TMB.
On March 11, 2021, the Argentine Government subscribed its shares and the equity of the shareholders of TJSM and TMB were diluted. In the case of our equity interest, from 30.875% to 9.627% in TJSM and from 30.946% to 10.831% in TMB.
Due to the acquisition of Central Costanera S.A., we hold equity interests of 11.31% in TJSM, 12.72% in TMB and 55.89% in CVOSA. See “Item 3D. Risk Factors—Risks Relating to our Business—Our interests in TJSM, TMB were diluted and CVOSA will be significantly diluted”.
In the case of CVOSA, when the CVO Trust term expires after ten years of operation of the respective power plant the Argentine Government will be incorporated as shareholder, with a stake of at least 70.00% pursuant to FONINVEMEM arrangements for CVOSA.
The dilution of our interest in CVOSA will reduce our income from this power plant, adversely affecting our results of operations. See “Item 4.B. Business Overview-FONINVEMEM and Similar Programs”.
Future changes in the rainfall amounts in the Limay River basin could adversely affect the revenues from the Piedra del Águila concession and, therefore, our financial results
As a hydroelectric facility, Piedra del Águila depends on the availability of water resources in the Limay River basin for electric power generating purposes, which in turn depends on the rainfall amounts in the area and water from thaw. Lack of water resulted in lower electric power generation and, therefore, lower revenue.
In the event of critically low water levels, the Intergovernmental Basin Authority, which is in charge of managing the basin of the Limay, Neuquén and Negro rivers, is entitled to manage the water flows according to its flow control standards, which could result in lower water resources for us, which in turn, would result in decreased generation activities. Further, under the HPDA Concession Agreement, we are not entitled to receive any compensation for revenue losses as a result of such actions.
The Limay River basin’s flow may not be sufficient to maintain a regular generation level at Piedra del Águila and the enforcement authority may implement unfavorable measures for Piedra del Águila, and therefore, for us, which could adversely affect our financial condition and our results of operations. For further information about Piedra del Águila’s seasonality, see “Item 4.B. Business Overview-Seasonality”.
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Our ability to operate wind and solar farms profitably is highly dependent on suitable wind or sun and associated weather conditions, climate change and energy transition could affect our business.
The amount of energy generated by, and the profitability of, wind and solar farms are highly dependent on climate conditions, particularly wind conditions and irradiance, which can vary materially across locations, seasons and years. Variations in wind conditions at wind farm sites and irradiance at solar plant sites occur as a result of daily, monthly and seasonal fluctuations in wind currents and irradiance and, over the longer term, as a result of more general climate changes and shifts. Because turbines will only operate when wind speeds fall within certain specific ranges that vary by turbine type and manufacturer, if wind speeds fall outside or towards the lower end of these ranges, energy output at our wind farms would decline.
Similarly, projections of solar resources depend on assumptions about weather patterns, shading and irradiance, which are inherently uncertain and may not be consistent with actual conditions at the site. During the development phase and prior to the construction of any wind or solar farm, a wind or solar resource study to evaluate the potential wind or solar resource of the site is typically conducted over a period of several years. These wind or solar studies have been conducted by our own team and independent technical consultants with respect to the estimated load factor resulting from our wind studies and the model of turbines used. We base our core assumptions and investment decisions on the findings of these studies. We cannot assure you that observed climate conditions at a project site will conform to the assumptions that were made during the project development phase on the basis of these studies, and, therefore, we cannot assure that our wind or solar farm projects will be able to meet their anticipated production levels. It is possible that future wind or solar resource patterns and electricity production at our wind or solar farms will not reflect the historical wind or solar resource patterns at the respective sites or the projections, and wind or solar resource patterns at each site will change over time. If, in the future, the wind resource in the areas where our wind farms are located or the solar resource in the areas where our solar plants are located is lower than expected, electricity production at such wind farms and/or solar plants would be lower than expected and consequently could materially adversely affect our results of operations.
If in the future the wind resource in the areas where our wind farms are located is lower than expected, electricity production at such wind farms would be lower than expected and consequently could materially adversely affect our results of operations.
Climate change and energy transition could affect our business
We are and will be, directly and indirectly, subject to the effects of climate change and may, directly or indirectly, be affected by local and national laws, as well as international treaties and conventions, and implementing regulations related to climate change. Any passage of climate control treaties, legislation, or other regulatory initiatives by the Argentine Government that restrict emissions of greenhouse gases (“GHGs”) could require us to make significant financial expenditures that we cannot predict with certainty at this time. This could include, for example, the adoption of regulatory frameworks to reduce GHG emissions, such as carbon dioxide, methane and nitrogen oxides. Changes in the regulatory framework could also indirectly impact our business through changes in technology or consumer behavior.
In 2019, the Argentine Congress enacted Law No. 27,520 on Minimal Standards on Global Climate Change Adaptation and Mitigation, focusing on implementing policies, strategies, actions, programs and projects to prevent, mitigate or minimize the damages or impacts associated with climate change. During 2021, the Secretariat of Energy issued Resolution No. 1,036/2021 approving the Guidelines for an Energy Transition Plan to 2030 in order to comply with its new national decarbonization commitments. If additional requirements were adopted in Argentina, these requirements could increase our production costs (including compliance related costs such as for monitoring or reducing emissions) and adversely impact our competitiveness and may also shift demand toward low-carbon sources, such as renewable energies.
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The risks associated with climate change could impact our operations due to severe weather events, change the consumer profile, talent attraction, and energy transitions in the world economy towards a lower carbon matrix. These factors may have a negative impact on the demand for our products and may affect the implementation and operation of our businesses, adversely impacting our operating and financial results and limiting our growth opportunities.
In addition, the pace and extent of the energy transition could pose a risk to our own transition towards decarbonization does not move in sync with society. If we are slower than society, our reputation may suffer and customers may prefer a different supplier which would adversely impact demand for our products. If we move faster than society, we risk investing in technologies, markets or low-carbon products that are unsuccessful because there is limited demand for them. Our failure to time the transition of our production to address climate-change related concerns could have a material adverse effect on our earnings, cash flows and financial condition.
Our power plants and forest assets are subject to the risk of mechanical, electrical failures and various catastrophic events, and any resulting unavailability may affect our ability to fulfill our contractual and other commitments and thus adversely affect our business and financial performance
Our power generation units are at risk of mechanical or electrical failure and may experience periods of unavailability affecting our ability to generate electric power. Past failures on our generators, turbines and transformers have adversely affected our results of operations. Any unplanned unavailability of our generation facilities may adversely affect our financial condition or results of operations.
Our forest assets are subject to the risk of various catastrophic events, including but not limited to the occurrence of significant fires or wide-spread insect or pest infestations on one or more of our assets, severe regional or local weather events or trends, drought, flooding, major earthquakes, and significant geopolitical conditions or developments.
Our generation facilities, or the third-party fuel transportation or electric power transmission infrastructure that we rely on, may be damaged by flooding, fires, earthquakes and other catastrophic disasters arising from natural or accidental or intentional human causes. We could experience severe business disruptions, significant decreases in revenues based on lower demand arising from catastrophic events, or significant additional costs to us not otherwise covered by business interruption insurance clauses. There may be an important time lag between a major accident, catastrophic event or terrorist attack and our definitive recovery from our insurance policies, which typically carry non-recoverable deductible amounts, and in any event are subject to caps per event. In addition, any of these events could cause adverse effects on the energy demand of some of our customers and of consumers generally in the affected market. Some of these considerations, could have a material adverse effect on our business, financial condition, and our result of operations.
Although we comply with all applicable environmental safety laws and best practices, any accident involving the fuels with which we operate could have adverse environmental consequences and could damage our industrial facilities or our personnel. Any structural damage to the dam or any other structure located in any of our hydroelectric plants could compromise its electric power generating capacity. Any generation constraints resulting from structural damage could have a material adverse effect on our financial condition and results of operations.
For more information please see "Item 4.B Business Overview – Maintenance".
Our insurance policies may not fully cover damage, and we may not be able to obtain insurance against certain risks
We maintain insurance policies intended to mitigate our losses due to customary risks. These policies cover certain of our assets against loss for physical damage, loss of revenue and also third-party liability. However, we may not have sufficient insurance to cover any particular risk or loss. If an accident or other event occurs that is not covered by our current insurance policies, such as cybersecurity risk, we may experience material losses or have to disburse significant amounts from our own funds, all of which could have a material adverse effect on our operations and financial position. In addition, an insufficiency in our insurance policies could have an adverse effect on us. In such case, our financial condition and our results of operations could be adversely affected. See “Item 16.K. - Cybersecurity”.
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We may be exposed to lawsuits and or administrative proceedings that could adversely affect our financial condition and results of operations
In the ordinary course of our business, we enter into agreements with CAMMESA and other parties. Litigation and/or regulatory proceedings are inherently unpredictable, and excessive verdicts do occur. Adverse outcomes in lawsuits and investigations could result in significant monetary damages, including indemnification payments, or injunctive relief that could adversely affect our ability to conduct our business and may have a material adverse effect on our financial condition and results of operations.
Energy demand is seasonal, largely due to climate conditions
Energy demand fluctuates according to the season and climate conditions may materially and adversely impact energy demand. During the summer in Argentina (December through March), energy demand may increase significantly due to the need for air conditioning, and, during winter (June through August), energy demand may fluctuate according to the needs for lighting and heating. As a result, seasonal changes could materially and adversely affect the demand for energy and, consequently, affect our results of operations and financial condition.
We may undertake acquisitions and investments to expand or complement our operations that could result in operating difficulties or otherwise adversely affect our financial conditions and results of operations
In order to expand our business, from time to time, we may carry out acquisitions and investments which offer added value and are consistent with or complementary to our business strategy.
Therefore we may be exposed to various risks, including those arising from: (i) not having accurately assessed the value, future growth potential, strengths, weaknesses and potential profitability of potential acquisition targets; (ii) difficulties in successfully integrating, operating, maintaining or managing newly-acquired operations, including personnel; (iii) unexpected costs of such transactions; (iv) difficulties in obtaining the necessary financing and successfully reaching any required financial closing; or (v) unexpected contingent or other liabilities or claims that may arise from such transactions. If any of these risks were to materialize, it could adversely affect our financial condition and results of operations.
If we were to acquire another company in the future, such acquisition could be subject to the Argentine Antitrust Authority’s approval
As of the date of this annual report, the merger control review and antitrust practices investigation in Argentina is carried out by a double-tiered structure. The technical analysis is performed by the Argentine Antitrust Commission (the “CNDC,” for its Spanish acronym), which issues a non-mandatory report to the Secretariat of Domestic Trade (the “SDT,” and together with the CNDC, the “Antitrust Authority”). The SDT then issues the final resolution for all matters related to the Antitrust Act.
The Antitrust Authority is currently serving as the interim enforcement agency until the National Competition Authority (NCA), the National Competition Tribunal (Competition Tribunal), Secretariat of Anti-competitive practices, and Secretariat of Economic Concentrations are appointed, as mandated by the Antitrust Act.
The main change introduced by the Antitrust Act is the shift from a post-merger control review to a pre-merger control regime. However, this system will only take effect one year after the NCA is duly constituted and in full operation. In the meantime, a mandatory notification must be submitted prior to or within one week of the closing (effective takeover) of any economic concentration. The post-closing notification requirement still applies in Argentina.
If the Argentine Antitrust Authority were to reject any business combination or if such authority were to take any action to impose conditions or performance commitments on us as part of the approval process for any business combination, it could adversely affect our financial condition and results of operations and prevent us from achieving the benefits anticipated from such acquisition.
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We depend on senior management and other key personnel for our current and future performance
Our current and future performance depends to a significant degree on our qualified senior management team, and on our ability to attract and retain qualified management. Our future operations could be harmed if any of our senior executives or other key personnel ceased working for us. Competition for senior management personnel is intense, and we may not be able to retain our personnel or attract additional qualified personnel. The loss of a member of senior management may require the remaining executive officers to divert immediate and substantial attention to fulfilling his or her duties and of seeking a replacement. Any inability to fill vacancies in our senior executive positions on a timely basis could harm our ability to implement our business strategy, which would harm our business and results of operations.
We could be affected by material actions taken by the trade unions
Labor relations in Argentina are governed by specific legislation, such as labor Law No. 20,744 and Collective Bargaining Law No. 14,250, which, among other things, dictate how salary and other labor negotiations are to be conducted. Every industrial or commercial activity is regulated by a specific collective bargaining agreement (“CBA”) that groups companies together according to industry sectors and by trade unions. While the process of negotiation is standardized, each chamber of industrial or commercial activity separately negotiates the increases of salaries and labor benefits with the relevant trade union of such commercial or industrial activity.
Argentine employers, both in the public and private sectors, have experienced significant pressure from their employees and labor organizations to increase wages and to provide additional employee benefits. Due to the high levels of inflation, employees and labor organizations are demanding significant wage increases.
Although we have stable relationships with our work force, in the past we experienced organized work stoppages and strikes, and we may face such work stoppages or strikes in the future. Also, we could be indirectly affected by actions taken by trade unions related to suppliers or other related parties. Labor claims are common in the Argentina energy sector, and in the past, unionized employees have blocked access and caused damages to the facilities of various companies in the industry. Moreover, we have no insurance coverage for business interruptions caused by workers’ actions, which could have an adverse effect on our results of operations.
Our equipment, facilities and operations are subject to environmental, health and safety regulations
Our generation business is subject to federal and provincial laws, as well as to the supervision of governmental agencies and regulatory authorities in charge of enforcing environmental laws and policies. We operate in compliance with applicable laws and in accordance with directives issued by the relevant authorities and CAMMESA; however, it is possible that we could be subject to controls, which could result in penalties to be imposed on us. In addition, future environmental regulations could require us to make investments to comply with the requirements set by the authorities, instead of making other scheduled investments and, as a result, could have a material adverse effect on our financial condition and our results of operations.
We are subject to anticorruption, anti-bribery, anti-money laundering and other laws and regulations
We are subject to anti-corruption, anti-bribery, anti-money laundering and other laws and regulations. We may be subject to investigations and proceedings by authorities for alleged infringements of these laws. Although we perform compliance processes and maintain internal control systems, these proceedings may result in fines or other liabilities and could have a material adverse effect on our reputation, business, financial conditions and result of operations. If any such subsidiaries, employees or other persons engage in fraudulent, corrupt, or other unfair business practices or otherwise violate applicable laws, regulations, or internal controls, we could become subject to one or more enforcement actions or otherwise be found to be in violation of such laws, which may result in penalties, fines, and sanctions and in turn adversely affect our reputation, business, financial condition and result of operations.
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A cyberattack could adversely affect our business, balance sheet, results of operations and cash flow
We depend on the efficient and uninterrupted operation of our inter-plant communication systems, for which we have all our links redundant, providing greater security and minimizing the risks of outage. Additionally, we have redundant links with CAMMESA. Temporary or long-lasting failures of our inter-plant communication systems, including their links redundant, could have a material adverse effect on our operations. In general, information security risks have increased in recent years as a result of the proliferation of new and more sophisticated technologies and also due to cyberattack activities. As part of our development and initiatives, more equipment and systems have been connected to the Internet. We also rely on digital technology including information systems to process financial and operational information. Due to the critical nature of our infrastructure and our business and the increased accessibility allowed through the Internet connection, we could face an increased risk of cyberattacks such as computer break-ins, phishing, ransomware, identity theft and other disruptions that could negatively affect the security of information stored in and transmitted through our computer systems and network infrastructure. Despite significant efforts to create security barriers to cybersecurity threats, it is nearly impossible for us to completely mitigate these risks, in particular, as the frequency and sophistication of cyberattacks increases. For example, cybersecurity researchers anticipate an increase in cyberattack activity in connection with the misuse of artificial intelligence. The security measures we have integrated into our internal networks and systems, and into our platform and products may not function as expected or may not be sufficient to protect our internal networks, platform and products against certain attacks.
In the event of a cyberattack targeting our infrastructure or that of third parties and vendors providing services to us, we could experience an interruption of our commercial operations, material damage and loss of customer information; a substantial loss of income or accounts balance, suffering response costs and other economic losses; and it could subject us to more regulation and litigation and damage to our reputation. Although we intend to continue to implement security technology devices and establish operational procedures to prevent disruption resulting from, and counteract the negative effects of cybersecurity incidents, it is possible that not all our current and future systems are or will be entirely free from vulnerability and these security measures will not be successful. Accordingly, cybersecurity is a material risk, and a cyber-attack could adversely affect our business, results of operations and financial condition.
Our ability to generate electricity at our thermal generation plants partially depends on the availability of natural gas and, to a lesser extent, liquid fuel
The supply and price of natural gas and liquid fuel used in our thermal generation plants has been in the past, and may in the future be, affected by, among other things, price fluctuations, geopolitical factors (including the current Russia Ukraine conflict and related sanctions on Russia by certain members of the European Union), as well as the availability of natural gas and liquid fuel in Argentina, given the current shortage of natural gas supply, especially during the winter, and declining reserves in Argentina. In particular, many oil and gas fields in Argentina are mature or require intensive capital investments to extract natural gas, and due to the current economic scenario have not been subject to significant investment into development and exploration activities and, therefore, reserves are likely to be depleted.
CAMMESA is in charge of managing and supplying all fuels required to run our thermal plants except for the Lujan de Cuyo cogeneration plant and to a certain extent, gas provision for the San Lorenzo cogeneration plant related to steam production. We cannot assure you that we will be able to purchase natural gas or liquid fuel on terms comparable to the conditions we currently have with or that are fully reimbursable by CAMMESA. In addition, we cannot assure the supply in the above-mentioned conditions, if in the future we were required to purchase our own natural gas or liquid fuel from third parties for all our operations. Geopolitical factors, including the current Russia Ukraine conflict and related sanctions on Russia by certain members of the European Union, the United Kingdom, the United States, and certain other countries, has led to and is expected to continue to lead to an increase in the price and availability of natural gas and liquid fuel.
Even if we were able to source the requisite natural gas or liquid fuel and CAMMESA accepted to reimburse us for such amounts, it may be uncertain when such reimbursements would occur. In addition, natural gas delivery depends on the infrastructure (including barge facilities, roadways and natural gas pipelines) available to serve each generation facility. As a result, our thermal plants are subject to the risks of disruptions or curtailments in the fuel delivery chain and infrastructure. Any such disruption or curtailment may result in the unavailability, or higher prices, of natural gas or liquid fuel. Moreover, if in the future we are required to purchase our own natural gas or liquid fuel from third parties at prices that are not fully reimbursable by CAMMESA, such situation may have a material adverse effect on our financial condition and results of operations. Resolution No. 70/2018 enabled generators to purchase fuel in the open market. With the enactment of Resolution No. 12/2019, the effectiveness of Section 8 of Resolution No. 95/2013 and Section 4 of Resolution No. 529/2014 was reinstated, centralizing fuel purchases through CAMMESA. However, Resolution No. 21/2025 removed the prohibition that prevented generators, self-generators, or cogenerators of electricity from conventional thermal, hydroelectric, or nuclear sources from acquiring their own fuel, exempting them from the suspension established in Section 9 of Resolution No. 95/2013.
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An outbreak of a disease may have material adverse consequences on our operations including new projects
In late December 2019 a notice of pneumonia originating from Wuhan, Hubei province (COVID-19, caused by a novel coronavirus) was reported to the World Health Organization, with cases soon confirmed in multiple provinces in China, as well as in other countries. On March 11, 2020, the World Health Organization characterized the COVID-19 as a pandemic. Several measures have been undertaken by the Argentine Government and other governments around the globe to contain the pandemic. The outbreak of a pandemic, disease or similar public health threat, such as the COVID-19 pandemic, could materially and adversely affect our business, financial condition and results of operations. Some of the negative effects could include: a further decline in the market prices of our shares and ADSs, adverse impacts on the financial markets; a reduction in the demand for exports and imports and, therefore, in our revenues, generating a reduction in our levels of activity and investment related to our fields of production; a significant drop in the international price of commodities, due to the combined effect of a sharp drop in demand, as well as the inability of producers to reduce supply in an orderly manner, negatively affecting the Argentine economic environment; and substantial changes in business and social behavior and their potential impact on the sale of commodities.
The quarantine and related restrictive measures had and may have a deep impact in the Argentine economy, including drastic reduction in the demand and supply of goods and services, increase in the unemployment rate and poverty levels, businesses bankruptcies, disruption in the payment chain, among many others. Such negative impact in the Argentine economy may, in turn, have an impact on energy demand and negatively affect our results of operations.
Risks Relating to our Shares and ADSs
It may be difficult for you to obtain or enforce judgments against us
We are incorporated in Argentina. All of our directors and executive officers reside outside the United States, and substantially all of our and their assets are located outside the United States. As a result, it may not be possible for you to effect service of process within the United States upon these persons or to enforce judgments against them or us in U.S. courts. We have been advised by our special counsel, Bruchou & Funes de Rioja, that there is doubt as to the enforceability in original actions in Argentine courts of liabilities predicated solely on U.S. federal securities laws and as to the enforceability in Argentine courts of judgments of U.S. courts obtained in actions predicated upon the civil liability provisions of U.S. federal securities laws. The enforcement of such judgments will be subject to compliance with certain requirements under Argentine law, such as Articles 517 through 519 of the Argentine Code of Civil and Commercial Procedure, including the condition that such judgments do not violate the principles of public policy of Argentine Law, as determined by an Argentine court. In addition, an Argentine court will not order an attachment on property located in Argentina and determined by such court to be essential for the provision of a public service.
Restrictions on transfers of foreign exchange and the repatriation of capital from Argentina may impair your ability to receive dividends and distributions on, and the proceeds of any sale of, shares underlying the ADSs
In 2001 and 2002 Argentina imposed exchange controls and transfer restrictions, substantially limiting the ability of companies to retain foreign currency or make payments abroad, including payments of dividends. In addition, new regulations were issued in the last quarter of 2011, which significantly curtailed access to the Foreign Exchange Market by individuals and private sector entities. In December 2015 the 2015-2019 administration lifted many of the foreign exchange restrictions imposed in 2011, including the lifting of certain restrictions for the repatriation of portfolio investment by non-resident investors.
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After almost four years of unrestricted capital flows, the Argentine Government reimposed restrictions on the conversion of Argentine currency into foreign currencies and on the remittance to foreign investors of proceeds from their investments in Argentina. Beginning in September 2019, the Argentine Government implemented monetary and foreign exchange control measures that included restrictions on the transfer of funds abroad, including dividends, without prior approval by the Central Bank or fulfillment of certain requirements. Even though the current administration has already begun to gradually ease foreign exchange controls, certain restrictions imposed since 2019 remain in place, including restrictions on outward remittances of foreign currency to make dividend payments. However, on April 11, 2025, the Central Bank issued Communication “A” 8226, providing that entities may access the foreign exchange market to remit dividends to non-resident shareholders, provided such dividends arise from distributable profits recorded in regular, audited annual financial statements for fiscal years beginning on or after January 1, 2025. See “-Exchange Controls”.
In such a case, the Depositary for the ADSs may hold the Argentine pesos it cannot convert for the account of the ADS holders. In addition, any future adoption by the Argentine Government of additional restrictions to the movement of capital out of Argentina may affect the ability of our foreign shareholders and holders of ADSs to obtain the full value of their shares and ADSs and may adversely affect the market value of the ADSs.
We will be traded on more than one market, and this may result in price variations; in addition, investors may not be able to easily move shares for trading between such markets
Our common shares are listed on the BYMA and, since February 2, 2018, our ADSs are listed on the NYSE. Any markets that may develop for our common shares or for the ADSs may not have liquidity and the price at which the common shares or the ADSs may be sold is uncertain.
Trading in the ADSs or our common shares on these markets takes place in different currencies (U.S. dollars on the NYSE and pesos on the BYMA), and at different times (resulting from different time zones, different trading days and different public holidays in the United States and Argentina). The trading prices of the securities on these two markets may differ due to these and other factors. Any decrease in the price of our common shares on the BYMA could cause a decrease in the trading price of the ADSs on the NYSE. Investors could seek to sell or buy our shares to take advantage of any price differences between the markets through a practice referred to as arbitrage. Any arbitrage activity could create unexpected volatility in both our share prices on one exchange, and the ADSs available for trading on the other exchange. In addition, holders of ADSs will not be immediately able to surrender their ADSs and withdraw the underlying common shares for trading on the other market without effecting necessary procedures with the ADS Depositary. This could result in time delays and additional cost for holders of ADSs.
Under Argentine Corporate Law, shareholder rights may be fewer or less well defined than in other jurisdictions
Our corporate affairs are governed by our bylaws and by the Argentine Corporate Law, which differ from the legal principles that would apply if we were incorporated in a jurisdiction in the United States (such as Delaware or New York), or in other jurisdictions outside Argentina. Thus, the rights of holders of our ADSs or holders of our common shares under the Argentine Corporate Law to protect their interests relative to actions by our board of directors (our “Board of Directors”) may be fewer and less well defined than under the laws of those other jurisdictions. Although insider trading and price manipulation are illegal under Argentine law, the Argentine securities markets may not be as highly regulated or supervised as the U.S. securities markets or markets in some of the other jurisdictions. In addition, rules and policies against self-dealing and regarding the preservation of shareholder interests may be less well defined and enforced in Argentina than in the United States, or other jurisdictions outside Argentina, putting holders of our common shares and the ADSs at a potential disadvantage.
Holders of our common shares and the ADSs located in the United States may not be able to exercise preemptive or accretion rights
Under the Argentine Corporate Law, if we issue new shares as part of a capital increase, our shareholders may have the right to subscribe to a proportional number of shares to maintain their existing ownership percentage. Rights to subscribe for shares in these circumstances are known as preemptive rights. In addition, shareholders are entitled to the right to subscribe for the unsubscribed shares remaining at the end of a preemptive rights offering on a pro rata basis, known as accretion rights. Upon the occurrence of any future increase in our capital stock, United States holders of common shares or ADSs will not be able to exercise the preemptive and related accretion rights for such common shares or ADSs unless a registration statement under the Securities Act is effective with respect to such common shares or ADSs or an exemption from the registration requirements of the Securities Act is available. We are not obligated to file a registration statement with respect to those common shares or ADSs. We may not file such a registration statement, or an exemption from registration may not be available. Unless those common shares or ADSs are registered or an exemption from registration applies, a U.S. holder of our common shares or ADSs may receive only the net proceeds from those preemptive rights and accretion rights if those rights can be sold by the ADS Depositary; if they cannot be sold, they will be allowed to lapse. Furthermore, the equity interest of holders of common shares or ADSs located in the United States may be diluted proportionately upon future capital increases.
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Voting rights, and other rights, with respect to the ADSs are limited by the terms of the deposit agreement
Holders may exercise voting rights with respect to the common shares underlying ADSs only in accordance with the provisions of the deposit agreement. There are no provisions under Argentine law or under our bylaws that limit ADS holders’ ability to exercise their voting rights through the ADS Depositary with respect to the underlying common shares, except if the ADS Depositary is a foreign entity and it is not registered with the Argentine corporate register (the Inspección General de Justicia, or “IGJ”). The ADS Depositary is registered with the IGJ. However, there are practical limitations upon the ability of ADS holders to exercise their voting rights due to the additional procedural steps involved in communicating with such holders. For example, Argentine Capital Markets Law requires us to notify our shareholders by publications in certain official and private newspapers of at least 20 and no more than 45 days in advance of any shareholders’ meeting. ADS holders will not receive any notice of a shareholders’ meeting directly from us. In accordance with the deposit agreement, we will provide the notice to the ADS Depositary, which will in turn, if we so request, as soon as practicable thereafter provide to each ADS holder:
| · | the notice of such meeting; | |
| · | voting instruction forms; and | |
| · | a statement as to the manner in which instructions may be given by holders. |
To exercise their voting rights, ADS holders must then provide instructions to the ADS Depositary how to vote the shares underlying ADSs. Because of the additional procedural step involving the ADS Depositary, the process for exercising voting rights will take longer for ADS holders than for holders of our common shares. Except as described in this annual report, holders of the ADS will not be able to exercise voting rights attaching to the ADSs.
Also, Section 7.6 of the deposit agreement provides that each of the parties to the deposit agreement (including, without limitation, each holder and beneficial owner) waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding against us and/ or the ADS Depositary. This provision may have the effect of limiting and discouraging lawsuits against us and/ or the ADS Depositary. Moreover, you may not be able to exercise your right to vote and you may have no legal remedy if the shares underlying your ADSs are not voted as you requested.
The relative volatility and illiquidity of the Argentine securities markets may substantially limit our ADS holders’ ability to sell common shares underlying the ADSs at the price and time they desire
Investing in securities that trade in developing countries, such as Argentina, often involves greater risk than investing in securities of issuers in the United States (see “Risks Relating to Argentina — Substantially all of our revenues are generated in Argentina and thus are highly dependent on economic and political conditions in Argentina”). The Argentine securities market is substantially smaller, less liquid, more concentrated and can be more volatile than major securities markets in the United States and is not as highly regulated or supervised as some of these other markets. There is also significantly greater concentration in the Argentine securities market than in major securities markets in the United States. During the third quarter of 2022 the ten largest companies in terms of their weight in the S&P MERVAL index represented approximately 80.00 % of its composition. Accordingly, although holders of our ADSs are entitled to withdraw the common shares underlying the ADSs from the ADS Depositary at any time, their ability to sell such shares at a price and time at which they wish to do so may be substantially limited. Furthermore, new capital controls imposed by the Central Bank could have the effect of further impairing the liquidity of the BYMA by making it unattractive for non-Argentines to buy shares in the secondary market in Argentina. See “Item 10.D.— Exchange Controls”.
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If there are substantial sales of our common shares or the ADSs, the price of the common shares or of the ADSs could decline
Sales of substantial number of our common shares or the ADSs could cause a decline in the market price of our common shares. In addition, if our significant shareholders, directors and members of senior management listed in “Item 6. Directors, Senior Management and Employees—Senior Officers,” who, as of April 30, 2025, own in aggregate 0.10% of our outstanding common shares, sell our common shares or the ADSs or the market perceives that they intend to sell them, the market price of our common shares or the ADSs could drop significantly.
Our shareholders may be subject to liability for certain votes of their securities
Our shareholders are not liable for our obligations. Instead, shareholders are generally liable only for the payment of the shares they subscribe. However, shareholders who have a conflict of interest with us and who do not abstain from voting may be held liable for damages to us, but only if the transaction would not have been approved without such shareholders’ votes. Furthermore, shareholders who willfully or negligently vote in favor of a resolution that is subsequently declared void by a court as contrary to Argentine Corporate Law or our bylaws may be held jointly and severally liable for damages to us or to other third parties, including other shareholders.
As a foreign private issuer, we are exempt from several rules under the U.S. securities laws and are permitted to file less information with the Commission than a U.S. company. This may limit the information available to holders of our ADSs
We are a “foreign private issuer,” as defined in the SEC’s rules and regulations and, consequently, we are not subject to all of the disclosure requirements applicable to companies organized within the United States. For example, we are exempt from certain rules under the Exchange Act that regulate disclosure obligations and procedural requirements related to the solicitation of proxies, consents or authorizations applicable to a security registered under the Exchange Act. In addition, our officers and directors are exempt from the reporting and “short-swing” profit recovery provisions of Section 16 of the Exchange Act and related rules with respect to their purchases and sales of our securities. Moreover, while we expect to submit quarterly interim consolidated financial data to the Commission under cover of the Commission’s Form 6-K, we are not required to file periodic reports and financial statements with the Commission as frequently or as promptly as U.S. public companies. Accordingly, there may be less information concerning our company publicly available than there is for U.S. public companies.
As a foreign private issuer, we are not subject to certain NYSE corporate governance rules applicable to U.S. listed companies
We rely on a provision in the NYSE Listed Company Manual that allows us to follow Argentine law with regard to certain aspects of corporate governance. This allows us to follow certain corporate governance practices that differ in significant respects from the corporate governance requirements applicable to U.S. companies listed on the NYSE.
For example, we are exempt from NYSE regulations that require a listed U.S. company, among other things, to:
| · | have a majority of our Board of Directors be independent; | |
| · | establish a nominating and compensation composed entirely of independent directors; |
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| · | adopt and disclose a code of business conduct and ethics for directors, officers and employees; and | |
| · | have an executive session of solely independent directors each year. |
The market price for our common shares or ADSs could be highly volatile
The market price for our common shares or the ADSs after the global offering is likely to fluctuate significantly from time to time in response to factors including:
| · | fluctuations in our periodic operating results; | |
| · | changes in financial estimates, recommendations or projections by securities analysts; | |
| · | changes in conditions or trends in our industry; | |
| · | changes in the economic performance or market valuation of our competitors; | |
| · | announcements by our competitors of significant acquisitions, divestitures, strategic partnerships, joint ventures or capital commitments; | |
| · | events affecting equities markets in the countries in which we operate; | |
| · | legal or regulatory measures affecting our financial conditions; | |
| · | departures of management and key personnel; or | |
| · | potential litigation or the adverse resolution of pending litigation against us or our subsidiaries. |
Volatility in the price of our common shares or the ADSs may be caused by factors outside of our control and may be unrelated or disproportionate to our operating results. In particular, announcements of potentially adverse developments, such as proposed regulatory changes, new government investigations or the commencement or threat of litigation against us, as well as announced changes in our business plans or those of competitors, could adversely affect the trading price of our common shares or the ADSs, regardless of the likely outcome of those developments or proceedings. Moreover, statements made about us, whether publicly or in private, may be misconstrued, particularly if read out of context.
Broad market and industry factors could adversely affect the market price of our common shares or ADSs at any time, regardless of our actual operating performance.
If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud. As a result, shareholders could lose confidence in our financial and other public reporting, which would harm our business and the trading price of our common shares
Effective internal controls over financial reporting are necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud. Any failure to achieve and maintain effective internal controls over financial reporting, implement required new or improved controls, or difficulties encountered in their implementation could cause us to fail to meet our reporting obligations, which in turn could have a material adverse effect on our business and our common shares or the ADSs. In addition, any testing by us or any subsequent testing by our independent registered public accounting firm conducted in connection with Section 404 of the Sarbanes-Oxley Act of 2002, may reveal deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses or that may require prospective or retroactive changes to our financial statements or identify other areas for further attention or improvement. Matters impacting our internal controls may cause us to be unable to report our financial information on a timely basis and thereby subject us to adverse regulatory consequences, including sanctions by the SEC. There also could be a negative reaction in the financial markets due to a loss of investor confidence in us and the reliability of our consolidated financial statements. Confidence in the reliability of our consolidated financial statements also could suffer if we or our independent registered public accounting firm were to report a material weakness in our internal controls over financial reporting. This could in turn limit our access to capital markets and possibly, harm our results of operations, and lead to a decline in the trading price of our common shares or the ADSs.
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We are required to disclose changes made in our internal controls and procedures and our management is required to assess the effectiveness of these controls annually. Undetected material weaknesses in our internal controls could lead to financial statement restatements and require us to incur the expense of remediation.
The protections afforded to minority shareholders in Argentina are different from and more limited than those in the United States and may be more difficult to enforce
Under Argentine law, the protections afforded to minority shareholders are different from, and much more limited than, those in the United States. For example, the legal framework with respect to shareholder disputes, such as derivative lawsuits and class actions, is less developed under Argentine law than under U.S. law as a result of Argentina’s short history with these types of claims and few successful cases. In addition, there are different procedural requirements for bringing these types of shareholder lawsuits. As a result, it may be more difficult for our minority shareholders to enforce their rights against us or our directors or controlling shareholder than it would be for shareholders of a U.S. company.
Holders of our common shares may determine not to pay any dividends
In accordance with the Argentine Corporate Law, after allocating at least 5.00% of our annual net earnings to constitute a mandatory legal reserve, we may pay dividends to shareholders out of net and realized profits, if any, as set forth in our consolidated financial statements prepared in accordance with IFRS Accounting Standards. The approval, amount and payment of dividends are subject to the approval by our shareholders at our annual ordinary shareholders’ meeting. The approval of dividends requires the affirmative vote of a majority of the shareholders entitled to vote at the meeting. As a result, we cannot assure you that we will be able to generate enough net and realized profits so as to pay dividends or that our shareholders will decide that dividends will be paid.
We may be a passive foreign investment company for U.S. federal income tax purposes
A non-U.S. corporation will be considered a passive foreign investment company, which we refer to as a PFIC, for U.S. federal income tax purposes in any taxable year in which 75.00% or more of its gross income is “passive income” or 50.00% or more of the value of its assets (generally determined on the basis of a quarterly average) is attributable to assets that produce or are held for the production of passive income. The determination as to whether a non-U.S. corporation is a PFIC is based upon the application of complex U.S. federal income tax rules (which are subject to differing interpretations), the composition of income and assets of the non-U.S. corporation from time to time and, in certain cases, the nature of the activities performed by its officers and employees.
Based upon our current and projected income, assets and activities, we do not expect to be considered a PFIC for our current taxable year or for future taxable years. However, because the determination of whether we are a PFIC will be based upon the composition of our income, assets and the nature of our business, as well as the income, assets and business of entities in which we hold at least a 25.00% interest, from time to time, and because there are uncertainties in the application of the relevant rules, there can be no assurance that we will not be considered a PFIC for any taxable year.
If we are a PFIC for any taxable year during which a U.S. Holder, as defined in “Item 10.E. Taxation—Certain United States Federal Income Tax Considerations,” holds the ADSs or common shares, the U.S. Holder might be subject to increased U.S. federal income tax liability and to additional reporting obligations. See “Item 10.E. Taxation—Certain United States Federal Income Tax Considerations—Passive Foreign Investment Company”. U.S. Holders are encouraged to consult their own tax advisors regarding the applicability of the PFIC rules to their purchase, ownership and disposition of the ADSs or common shares
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The requirements of being a public company may strain our resources and distract our management, which could make it difficult to manage our business
Since the global offering, we are required to comply with various regulatory and reporting requirements, including those required by the Commission in addition to our existing reporting requirements by the CNV. Complying with these reporting and regulatory requirements will be time consuming, resulting in increased costs to us or other adverse consequences. As a public company, we are subject to the reporting requirements of the Exchange Act, and the requirements of the Sarbanes-Oxley Act, as well as to the Argentine Law No. 26,831 (as amended and supplemented from time to time, the “Argentine Capital Markets Law”) and CNV rules. These requirements may place a strain on our systems and resources. The Exchange Act applicable to us requires that we file annual and current reports with respect to our business and financial condition. Likewise, CNV rules require that we make annual and quarterly filings and that we comply with disclosure obligations including current reports. The Sarbanes-Oxley Act requires that we maintain effective disclosure controls and procedures and internal controls over financial reporting. To maintain and improve the effectiveness of our disclosure controls and procedures, we committed significant resources, hired additional staff and provided additional management oversight. These activities may divert management’s attention from other business concerns, which could have a material adverse effect on our business, results of operations and financial condition.
Item 4. Information on the Company
Recent Developments
Acquisition of interest in AbraSilver
On April 22, 2024, our subsidiary Proener entered into a common shares subscription agreement with AbraSilver Resource Corp. (a Canadian company listed in the Canadian stock market) ("AbraSilver"), granting Proener a 4% interest in the share capital of AbraSilver, which is the owner of the silver-gold project Diablillos located in the Northeast region of Argentina. In turn, and in conjunction with us, Kinross Gold Corporation, a major Canadian mining company, (NYSE: KGC, TSX: K) also acquired a 4% interest on similar terms.
AbraSilver holds 100% ownership of the Diablillos silver-gold project, situated in the provinces of Salta and Catamarca. The current proven resources and estimated mineral reserves at Diablillos are 42.3 Mt with grades of 91 g/t Ag and 0.81 g/t Au, containing approximately 124 Moz of silver and 1.1 Moz of gold. The funds from this subscription of shares will be used, among other purposes, to conduct the feasibility study of the Diablillos project, which is expected to be completed by December 2025. This will enable the determination of the mine's construction start date.
On January 31, 2025, our subsidiary Proener signed a subscription agreement for additional shares of AbraSilver Resource Corp. Our shareholding in AbraSilver through Proener thus increased to 9.9%.
Transfer of Cordillera Solar VIII S.A. and CP Servicios Renovables S.A.’ shares
On December 9, 2024, a share transfer between our subsidiaries Proener and CP Renovables S.A. (“CP Renovables”) was entered into, upon which Proener transferred to CP Renovables its shareholdings in the companies Cordillera Solar VIII S.A. and CP Servicios Renovables S.A. As part of the transfer, Cordillera Solar VIII S.A was renamed as CP Cordillera Solar S.A.
Central Puerto and IFC Partner to Enhance Sustainable Mining in Argentina
On December 10, 2024, Central Puerto and IFC signed an agreement for purposes of conducting feasibility studies regarding a high-voltage power transmission line for mining projects in northwestern Argentina. These studies will evaluate the technical, economic and environmental feasibility of the project, which aims to connect mining projects in the Argentine Puna region to the Argentine Interconnection System (SADI), guaranteeing a reliable supply of renewable energy through private agreements.
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Our initiative contemplates the potential construction of a high-voltage line, which would be approximately 140 kilometers long, originating in the Puna Transformer Station. This project, if undertaken, could potentially give rise to a capacity of up to 400 MW, offering a competitive energy supply of renewable origin.
ECOGAS Inversiones S.A. – Initial Public Offering through a Voluntary Exchange of Shares of Distribuidora de Gas Cuyana S.A. and Distribuidora de Gas del Centro S.A.
On December 19, 2024, Ecogas Inversiones launched its Initial Public Offering (IPO) through a public offer for subscription of shares in kind and a voluntary exchange addressed to (i) all shareholders holding Class “B” common shares of Distribuidora de Gas del Centro S.A., and (ii) all shareholders holding Class “B” and “C” common shares of Distribuidora de Gas Cuyana S.A., to be exchanged for new Class D common shares of ECOGAS.
Such exchange offer settled on January 7, 2025. As a result of the exchange offer, Ecogas Inversiones (by aggregating its holdings of Class “A” and Class “B” shares of DGCU) currently owns 93.10% of the total capital stock of DGCU; while, by aggregating its holdings of Class “A” and Class “B” shares of DGCE, it currently owns 81.64% of the total capital stock of DGCE. See “Item 4. Information of the Company—Recent Developments—Simplification of Corporate Structure at Central Puerto S.A.”. Our direct participation in Ecogas Inversiones, as a result of the exchange offer, is currently 26.17%, while we maintain a 17.20% direct participation in DGCE. Consequently, as of the date of this annual report, we directly and indirectly own 38.56% of DGCE's outstanding shares and indirectly own 24.36% of DGCU's outstanding shares. “See Item 4. Information of the Company—Recent developments— Ecogas Inversiones Spin-off and Merger”.
Acquisition of interest in 3 Cruces lithium mining project
On December 26, 2024, we subscribed 55,000,000 shares, equivalent to 27.5% of the share capital and voting rights of 3C Lithium Pte. Ltd. ("3C"), (a company incorporated under the laws of Singapore), which holds 100% of the share capital of Minera Cordillera S.A. ("MCSA"), an Argentine company that holds the mining rights to the "3 Cruces" project, located in the province of Catamarca, Argentina.
The funds involved in this transaction are intended to finance drilling activities, pending mining property payments, additional explorations, and working capital for the initial development of the project.
Simplification of Corporate Structure at Central Puerto S.A.
Merger Vientos La Genoveva II S.A.
On January 1, 2025, the effective merger of Vientos La Genoveva II S.A. (VLGII), a wholly controlled subsidiary of Central Puerto S.A., with CP Manque S.A.U. (CPM), CP Los Olivos (CPLO), and CPR Energy Solutions S.A.U. (CPRES), took place.
The merger was officially registered with the Public Registry on January 28, 2025. Consequently, the absorbed companies were dissolved without liquidation, and their assets and liabilities were transferred to Vientos La Genoveva II S.A.
Redemption of CP Renovables S.A. shares
On January 7, 2025, the Shareholders' Meeting of our subsidiary CP Renovables approved the redemption of all the shares owned by CP Renovables’ minority shareholders (except for one share retained by Vientos la Genoveva II S.A.U.) pursuant to article 220 paragraph 1 of the Argentine Corporate Law, and voluntarily reduced CP Renovables’ capital stock pursuant to article 203 of the Argentine Corporate Law. Subsequently, on March 31, 2025, we acquired the share that had been retained by Vientos La Genoveva II S.A.U.
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Merger of forestry companies
On March 31, 2025, the Board of Directors of Empresas Verdes Argentina S.A. (EVASA), Forestal Argentina S.A. (FASA), Estancia Celina S.A. (ECSA) and Las Misiones S.A. (LMSA) approved the corporate reorganization whereby, subject to approval by the shareholders’ meetings of the companies involved, convened for May 22, 2025, EVASA will absorb the assets and liabilities of all the above-mentioned companies, with the merger becoming effective as of June 30, 2025.
CP Renovables Merger
On March 31, 2025, CEPU’s Board of Directors approved a corporate reorganization whereby, subject to approval by the shareholders’ meeting of the companies involved, convened for May 22, 2025, CEPU will absorb the entirety of CP Renovables’ assets and liabilities, thereby assuming ownership of all assets, liabilities, rights, and obligations of CP Renovables as of the effective date of the merger.
Since CEPU holds 100% of CP Renovables’ shares, CEPU’s net worth will not increase as a result of the merger, eliminating the need for a capital increase or the issuance of new shares by CEPU. Accordingly, no share exchange ratio is required, as all of CP Renovables’ shares will be canceled without the issuance of new CEPU shares. As a result of the merger, CP Renovables will be dissolved without liquidation.
The effective date of the merger shall occur: (i) at 12:00 a.m. on the first day of the first calendar month following the issuance of the final resolution by the CNV granting administrative approval of the merger, provided such approval is obtained no later than the 15th day of that month; or (ii) at 12:00 a.m. on the first day of the second calendar month following the date on which the CNV grants administrative approval of the merger, should the condition set forth in item (i) is not met.
Ecogas Inversiones Spin-off and Merger
On March 31, 2025, CEPU’s Board of Directors approved the corporate reorganization whereby, subject to approval by the shareholders’ meeting of the companies involved, convened for May 22, 2025, CEPU intends to spin off part of its assets to be absorbed by Ecogas Inversiones as of the effective date of the spin-off and merger. The spun-off assets consist of: (a) 5,998,658 Class “A” book-entry common shares of Ecogas Inversiones, with a nominal value of Ps.10 each and one vote per share, which shall be converted into 59,986,580 Class “A” book-entry common shares of Ecogas Inversiones with a nominal value of Ps.1 each and one vote per share, subject to the approval by Ecogas Inversiones’ shareholders of the nominal value adjustment; (b) 27,597,032 Class “B” book-entry common shares of DGCE, with a nominal value of Ps.1 each and one vote per share; (c) 33,369 registered non-endorsable common shares of Energía Sudamericana S.A., with a nominal value of Ps.1 each and one vote per share; and (d) Ps. 305,000,000 in cash. As a result, CEPU shareholders are expected to receive 8,097,326 Ecogas Inversiones shares (the “New Shares”) (or depositary receipts or cash for holders of ADSs) in proportion to their holdings in CEPU.
The effective date of the spin-off and merger is expected to occur: (i) at 12:00 a.m. on the first calendar day of the month following the issuance of the CNV’s administrative approvals for the New Shares, provided such approval is obtained no later than the 15th day of that month; or (ii) at 12:00 a.m. on the first calendar day of the second month following the date on which the CNV grants administrative approval for the New Shares, should the condition set forth in item (i) is not met.
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Central Puerto and YPF Luz Partner to assess the development of a High-Voltage Transmission Line in Northern Argentina
On January 6, 2025, Central Puerto and YPF Luz signed a strategic agreement outlining the prospective development of a high-voltage transmission line that would supply clean energy to mining projects in the Argentine Puna region. As part of such agreement, the parties expect to create a joint venture responsible for developing and selling energy transport capacity to entities individually owned by Central Puerto and YPF Luz. The project aims to boost the mining industry and local communities by providing efficient and sustainable energy solutions.
Shareholder’s General Meeting
On March 7, 2025, the Board of Directors of Central Puerto convened the Annual General Meeting of Shareholders for April 30, 2025 to discuss the following items of the agenda:
| 1 | Appointment of two shareholders to sign the minutes. | |
| 2 | Consideration of the Consolidated Statement of Income, the Consolidated Statement of Comprehensive Income, the Consolidated Statement Of Financial Position, the Consolidated Statement of Changes In Equity, the Consolidated Statement of Cash Flows, the Notes to the Consolidated Financial Statements and Exhibits, the Individual Income Statement of Income, the Individual Statement of Comprehensive Income, the Individual Statement of Financial Position, the Individual Statement of Cash Flows, Notes to the Individual Financial Statements, Brief, Auditor Report, and Statutory Audit Committee Report, all of them for the fiscal year ended December 31, 2024. | |
| 3 | Consideration of the income (loss) for the fiscal year and the Board of Directors’ proposal that consists of a) assigning Ps. 2.23 billion to the Statutory Reserve; b) allocating the balance of the retained accumulated income to increase the Optional Reserve for the payment of dividends based on the evolution of our financial position and the Dividends Payment Policy in force; and c) delegating to the Board of Directors the partial or total reversal of the payment of dividends and the determination of the opportunity, currency, terms and other terms and conditions for payment, in accordance with such delegation. Consideration and approval of payment of the Profit-Sharing Bond stated by Sections 12 and 33 of the By-laws. | |
| 4 | Consideration of the Board of Directors performance during the fiscal year ended December 31, 2024. | |
| 5 | Consideration of the Statutory Audit Committee performance during the fiscal year ended December 31, 2024. | |
| 6 | Consideration of the remuneration of the Board of Directors for the fiscal year ended December 31, 2024, within the limit of profits in accordance with section 261 of the Business Entities Act and CNV Regulations. Consideration of the advanced payment of fees to the Board of Directors for the fiscal year closing next December 31, 2025. | |
| 7 | Consideration of the remuneration of the members of the Statutory Audit Committee for the fiscal year ended December 31, 2024; and the fee scheme for the period closing next December 31, 2025. | |
| 8 | Board of Directors’ partial renewal. Appointment of three directors and three deputy directors for a period of three fiscal years as per Section 17 of the By-laws. Continuity of the current Chairman until the appointment of a new Chairman by our Board of Directors. | |
| 9 | Appointment of the Statutory Audit Committee members and deputy members for the fiscal year closing next December 31, 2025. | |
| 10 | Consideration of the remuneration of our certifying accountant regarding the annual accounting documents for the fiscal year 2024. | |
| 11 | Appointment of the certifying accountant and of the deputy certifying accountant for the fiscal year closing next December 31, 2025 and the fixing of their remuneration. | |
| 12 | Approval of the Annual Budget for the functioning of the Supervisory Committee. | |
| 13 | Consideration of the extension of our global issuance program for a maximum amount of up to US$500,000,000 (or its equivalent in other currency), issuable in short, mid or long term, simple corporate bonds not convertible into shares. Power delegation to the Board of Directors, and authorization to the Board of Directors to subdelegate such powers. | |
| 14 | Consideration of the increase of the Program’s amount to a maximum amount of up to US$1,000,000,000 (or its equivalent in other currency and/or value units); and the revision, amendment and determination of the terms and conditions of the Program. | |
| 15 | Granting of authorizations. |
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Item 4.A History and development of the Company
Central Puerto S.A. (“Central Puerto” or the “Company”) is incorporated as a sociedad anónima under the laws of Argentina. Our principal executive offices are located at Avenida Thomas Edison 2701, C1104BAB Buenos Aires, Republic of Argentina. Our telephone number is +54 (11) 4317-5000.
We were incorporated pursuant to Executive Decree No. 122/92 on February 26, 1992. We were formed in connection with the privatization process involving Servicios Eléctricos del Gran Buenos Aires (“SEGBA”) in which SEGBA’s electric power generation, transportation, distribution, and sales activities were privatized. We were registered with the Public Registry of Commerce of the City of Buenos Aires on March 13, 1992, and created for a term of 99 years from the date of such registration.
In April 1992, Central Puerto, the consortium-awardee, took possession over SEGBA’s Central Nuevo Puerto (“Nuevo Puerto”) and Central Puerto Nuevo (“Puerto Nuevo”) plants, and we began operations. In November 1999, the Puerto combined cycle plant, which was built on lands owned by Nuevo Puerto in the City of Buenos Aires, started to operate. In 2001, Central Puerto was acquired by the French company, Total S.A. At the end of 2006, Sociedad Argentina de Energía S.A. (“SADESA”) acquired a controlling interest in Central Puerto.
Our shares are listed on the BYMA and, since February 2, 2018, have been listed on the NYSE under the symbol “CEPU”.
The SEC maintains an internet site that contains reports and other information regarding issuers who, like us, file electronically with the SEC. The address of that website is http://www.sec.gov. Central Puerto routinely posts important information for investors in the Investor Relations support section on its website, www.centralpuerto.com. From time to time, Central Puerto may use its website as a channel of distribution of material Company information. Accordingly, investors should monitor Central Puerto’s Investor Support website, in addition to following our press releases, SEC filings, public conference calls and webcasts. The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this annual report.
The 2014 Merger
On October 1, 2014, we merged with three operating companies under the common control of SADESA: (i) HPDA, (ii) CTM and (iii) LPC. The purpose of the merger was to optimize operations and achieve synergies among the businesses. We refer to this merger as the “2014 Merger”. Following the 2014 Merger, each of HPDA, CTM and LPC were dissolved.
Prior to the 2014 Merger, we owned and operated three thermal generation plants for electric power generation located within one complex in the City of Buenos Aires. Our Nuevo Puerto and Puerto Nuevo thermal generation plants are equipped with five steam turbine-generator units in the aggregate and have an installed capacity of 360 MW and 589 MW, respectively. The third plant, the Puerto combined cycle plant has two gas turbines, two heat recovery steam generators and a steam turbine, and it has a total installed capacity of 798 MW. Prior to the 2014 Merger, we had a total installed capacity of 1,747 MW and were already one of the major SADI electric power generators.
As a result of the 2014 Merger, we added the Luján de Cuyo plant, the La Plata plant, which, effective as of January 5, 2018, we sold to YPF EE (for further information see “Item 4.A. History and development of the Company—La Plata Plant Sale”), and the Piedra del Águila hydroelectric complex.
As of December 31, 2024, we operated one hydroelectric generation plant, owned, and operated six thermal generation plants, seven wind farms and one solar farm, for the generation of electric power in Argentina. We had a combined installed capacity of 6,703 MW and have significantly improved our position as a major SADI electric power generator, producing approximately 19.69% of the energy generated by private sector SADI generators in 2024.
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Hidroeléctrica Piedra del Águila S.A. (HPDA)
HPDA was a sociedad anónima (corporation) incorporated in 1993 that operated the Piedra del Águila hydroelectric complex with an installed capacity of 1,440 MW since it started commercial operation in 1993. HPDA entered into the HPDA Concession Agreement (as defined below) to operate and maintain the Piedra del Águila hydroelectric complex, that was assigned to us during the 2014 Merger. For further information regarding the HPDA and the HPDA Concession Agreement, see “—Electricity Generation from our Hydroelectric Complex—Piedra del Águila”.
HPDA’s controlling shareholder was Hidroneuquén S.A. (“HNQ”), a company that was under the control of the SADESA group, which held a 59.00% interest. The remaining shareholders were: (i) the Argentine Government (26.00% interest), (ii) the Province of Neuquén (13.00% interest) and (iii) HPDA’s Employee Stock Ownership Program (2.00% interest). HPDA held 21.00% of the shares of CVOSA, the company that operates the thermal power plant in Timbúes. Following the 2014 Merger, CVOSA became our subsidiary. For more information, see “Item 4. History and development of the Company—The 2014 Merger” and “Item 4. History and development of the Company—The 2016 Merger”.
On April 9, 2025, Decree No. 263/2025 set a 15 day-period to launch the National and International Public Tender provided for under Decree No. 718/2024 (as amended by Decree No. 895/2024), for purposes of offering certain hydro assets (including HPDA) to private investors for a new concession term. See “Risk Factors –Risks relating to our Business - The government’s decision regarding the future of the hydroelectric concessions could impact the HPDA operations, which may adversely affect our results of operations”.
Centrales Térmicas Mendoza S.A. (CTM)
CTM was a sociedad anónima (corporation) incorporated in 1993 focused on electric power generation and steam production. Before the 2014 merger, CTM was focused on two primary activities: electric power generation and steam production. CTM owned the Luján de Cuyo plant located in Luján de Cuyo in the Province of Mendoza, which began commercial operation in 1971. With the installation of its first two steam turbines, had an installed capacity of 576 MW and was the top producer of electric power in the Cuyo region. For further information regarding CTM’s operations that were transferred to us in the 2014 Merger, see “—Electricity Generation from our Thermal Generation Plants—Luján de Cuyo plant”.
CTM’s controlling shareholder was Operating S.A. (“OSA”), a company that was under the control of the SADESA group and which held a 94.10% interest. The other shareholder was Empresa Mendocina de Energía, SAPEM, which held the remaining 5.89% interest. CTM held a minority interest in CVOSA, representing 9.36% of its capital stock.
Distribuidora de Gas Cuyana S.A. (DGCU) and Distribuidora de Gas del Centro S.A. (DGCE)
In addition, on January 7, 2015, acting individually, but simultaneously with other investors, we acquired non-controlling equity interests in DGCU (whose shares are listed on BYMA) and DGCE. Considering the direct and indirect interests, we acquired (i) a 22.49% equity stake in DGCU and (ii) a 39.69% equity stake in DGCE. As of the date of this annual report, these holdings have changed, as described further below.
DGCU
DGCU was incorporated in 1992 by the Argentine Government as part of the privatization of Gas del Estado S.E. (“GES”). The Executive branch enacted Executive Order No. 2,453 in December 1992, whereby it granted a utility license to DGCU to distribute Natural gas through the networks in the provinces of Mendoza, San Juan and San Luis, for a term of 35 years from the date of taking possession (which occurred on December 28, 1992) with an option to extend it for ten additional years.
In December 1992, a transfer agreement was executed to transfer 60.00% of DGCU’s shares. The agreement was entered into among the Argentine Government, GES, the Province of Mendoza and IGCU, which formed the consortium that became the successful bidder in the bidding process at such time. On such date, GES transferred to DGCU the assets used in the licensed utility service, net of liabilities, as an irrevocable capital contribution pursuant to Executive Orders No. 1,189/92 and 2,453/92, and DGCU took possession of the facilities and commenced operations.
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Following the Merger between IGCE, IGCU, RPBC and MAGNA (See Item 4.A–- Merger between IGCE, IGCU, RPBC and MAGNA), and the ECOGAS IPO (See “Item 4. Information on the Company—Recent Developments— “ECOGAS Inversiones S.A. – Initial Public Offering through a Voluntary Exchange of Shares of Distribuidora de Gas Cuyana S.A. and Distribuidora de Gas del Centro S.A.”) as of December 31, 2024, Ecogas Inversiones held a 51.00% interest in DGCU, and we held a 42.31% interest in Ecogas Inversiones. Therefore, we indirectly held a 21.58% equity interest in DGCU. See “Item 4. Information of the Company—Recent Developments—Simplification of Corporate Structure at Central Puerto S.A.”.
DGCE
DGCE was incorporated in 1992 by the Argentine Government as part of the privatization of GES. The Executive branch enacted Executive Order No. 2,454/92 in December 1992, whereby it granted a utility license to DGCE to distribute natural gas through the networks in the provinces of Córdoba, Catamarca and La Rioja for a term of 35 years from the date of taking possession (which occurred on December 28, 1992) with an option to extend it for ten additional years.
In December 1992, a transfer agreement was executed to transfer 60.00% of DGCE’s shares. The agreement was entered into among the Argentine Government, GES and IGCE, which formed the consortium that became the successful bidder in the bidding process at such time. On such Date, GES. transferred to DGCE the assets used in the licensed utility service, net of liabilities, as an irrevocable capital contribution pursuant to Executive Orders No. 1,189/92 and 2,454/92, and DGCE took possession of the facilities and commenced operations.
As of December 31, 2024, we held a 42.31% interest in Ecogas Inversiones and a direct 17.20% interest in DGCE. Therefore, we held, both directly and indirectly, a 40.59% in DGCE. See “Item 4. Information of the Company—Recent Developments—Simplification of Corporate Structure at Central Puerto S.A.”
Ecogas Inversiones is the controlling shareholder of Energía Sudamericana S.A. (“ESSA”), a private company not listed in any commercial stock exchange, and which prepares its financial statements in accordance with IFRS Accounting Standards. We also own a 2.45% direct equity interest in ESSA.
Ecogas has a gas distribution network covering 38,835 km and served approximately 1,463,427 customers as of December 31, 2024. In 2024, Ecogas distributed an average of 12.8 million cubic meters of natural gas per day; and in 2023, Ecogas distributed an average of 12.5 million cubic meters of natural gas per day. This volume of distribution represented approximately 15.4% and 15.0% of the gas delivered by all the distribution companies in Argentina in December 2024 and 2023, respectively, according to data from ENARGAS.
Merger between IGCE, IGCU, RPBC and MAGNA
On March 28, 2018, the Board of Directors of IGCE, IGCU, RPBC Gas S.A. (“RPBC”) and Magna Inversiones S.A. (“Magna”), approved the Preliminary Merger Agreement (Compromiso Previo de Fusión) of the companies (the “Merger”), in which IGCE acted as the surviving company and IGCU, RPBC and Magna, as absorbed companies.
On August 9, 2019, ENARGAS issued resolution No. RESFC-2019-458-APN-DIRECTORIO#ENARGAS, approving the merger in the terms of such resolution.
On September 12, 2019, the merger was registered with the Public Registry of the City of Buenos Aires (Inspección General de Justicia).
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The 2016 Merger
On January 1, 2016, we merged with three holding companies: (i) SADESA, (ii) HNQ and (iii) OSA. The purpose of the merger was to reorganize and optimize our corporate structure. As a result of the merger, we reduced our share capital from Ps.199,742,158 to Ps.189,252,782. We refer to this merger as the “2016 Merger”. Following the 2016 Merger, each of SADESA, HNQ and OSA were dissolved.
SADESA was a holding company with control over Central Puerto, HNQ and OSA that, prior to the 2016 Merger, held a 26.18% direct interest in Central Puerto, a 63.73% interest in HNQ, a 96.79% interest in OSA and a 5.10% direct interest in Proener S.A.U. HNQ was a holding company that prior to the 2016 Merger held a 17.74% interest in Central Puerto. OSA was a holding company that prior to the 2016 Merger held a 30.39% interest in Central Puerto, a 94.90% interest in Proener S.A.U. and a 20.00% interest in TGM. TGM is dedicated to the operation, maintenance, and commercialization of an international gas pipeline between Argentina and Brazil.
La Plata Plant Sale
On December 20, 2017, YPF EE accepted our offer to sell the La Plata plant for a total sum of US$31.50 million (without VAT), subject to certain conditions. On February 8, 2018, after such conditions were met, the plant was transferred to YPF EE, including generation assets, personnel and agreements related to the operation and/or maintenance of the La Plata plant’s assets, with effective date January 5, 2018. The contract between us and Transportadora de Gas del Sur (“TGS”) for the natural gas transportation capacity has remained effective after the sale of the La Plata plant. Pursuant to the terms of our agreement with YPF EE, we resell our gas transportation capacity to YPF EE through the resale system established by Resolution ENARGAS 419/97. The resale under such system is open to third parties and consequentially does not ensure that YPF EE will receive the gas transportation capacity needed to operate the La Plata plant. Therefore, on January 25, 2018, we requested to be registered with the Ministry of Energy and the ENARGAS as a natural gas marketer to permit the resale of our gas transportation capacity to YPF EE without the risk of intervention from interested third parties. On July 20, 2018, we were effectively registered as natural gas marketer. As of the date of this annual report, the delivery of the transportation capacity to YPF EE is done through the “Resale” mechanism.
Renewable energy projects
In 2016, we incorporated a subsidiary, CP Renovables, to develop, renewable energy generation projects. As of the date of this annual report, the company participated in the Renovar Rounds 1.0 and 1.5, in which it was awarded with the La Castellana I and Achiras projects with 20-year PPA contracts with CAMMESA, each of the projects constructed by CP La Castellana S.A.U. (a subsidiary of CP Renovables S.A.) and CP Achiras S.A.U. (a subsidiary of CP Renovables S.A.). La Genoveva I is a project from RenovAr 2.0 developed constructed and operated by Vientos La Genoveva S.A.U. (a subsidiary of Central Puerto S.A.).
In August 2018 and September 2018, respectively, the La Castellana I and Achiras wind farms started operations. The original COD of the La Genoveva I was expected for May 2020, but due to the outbreak of COVID-19, the construction of the plant was delayed. On November 21, 2020, La Genoveva I commenced full commercial operations.
In addition, the former Ministry of Energy and Mining through Resolution No. 281-E/ 2017, established the regulatory framework that allows Large Users to purchase renewable energy from private generating companies and the conditions for granting “dispatch priority” that allows such transactions to take place and ensures that the private generating companies will not be restricted in the future in its generation dispatch (see “Item 4.B. Business Overview—The Argentine Electric Power Sector—Resolution No. 281-E/17: The Renewable Energy Term Market in Argentina”). In July 2019, September 2019, December 2019/January 2020/March 2020, and February 2020, the wind farms La Castellana II (developed by CPR Energy Solutions S.A.U.), La Genoveva II (developed by Vientos La Genoveva II S.A.), Manque (CP Manque S.A.U.), and Los Olivos (CP Los Olivos S.A.U.), respectively, reached their COD. We have entered into long-term PPA contracts with private customers for 100.00% of the estimated energy generation capacity of our term market renewable energy projects developed under Resolution No. 281-E/17 regulatory framework.
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On October 18, 2023, our affiliate Proener acquired 100% of the capital stock and votes of Cordillera Solar and Scatec Equinor Solutions Argentina S.A. (currently, CP Servicios Renovables S.A.), owner and operator, respectively, of a photovoltaic plant located in the Province of San Juan.
Within the framework of Resolution SEE No. 281-E/17, we made an offer to reserve capacity access to the electricity transportation net, in order to develop a solar farm with an installed capacity of 15MW, (the “San Carlos Project”) located in the Province of Salta. In July 2022 we were awarded 10 MW of reserved capacity. The management of the construction and subsequent operation of the San Carlos Project will be carried out by Vientos La Genoveva II S.A. We signed the EPC contracts in March 2024 and expect to have the COD of the project by December 2025 as a tentative date.
Luján de Cuyo and San Lorenzo thermal cogeneration plants
In 2017, pursuant to Resolution No. 287-E/17, the former Secretariat of Electric Energy called for proposals for the supply of electric power to be generated through the installation of co-generation units, among others. We submitted bids on August 9, 2017, and, on September 25, 2017, we were awarded two co-generation projects, the San Lorenzo and the Luján de Cuyo projects, which will entail two additional sources of income for us: (i) electric power sales to CAMMESA through 15-year term PPAs which are priced in U.S. dollars; and (ii) steam sales pursuant to separate steam supply agreements negotiated with private offtakers.
On October 5, 2019, the Luján de Cuyo cogeneration project started operations, with an installed capacity of 95 MW.
San Lorenzo project reached full COD on August 15, 2021 and obtained total commissioning of its combined cycle facility (391 MW).
Purchase of the Brigadier Lopez Plant
On June 14, 2019, Central Puerto, through an offer presented in a local and foreign public tender called by IEASA, purchased the Brigadier Lopez Plant. The transference includes: (a) personal property, recordable personal property, facilities, machines, tools, spare parts, and other assets used in connection with the operation of the Brigadier Lopez Plant; (b) IEASA’s contractual position in certain existing contracts (including Turbogas and Turbosteam supplying contracts with CAMMESA and the Brigadier Lopez Financial Trust Agreement (as defined below), among others); (c) permits and authorizations in effect related to the Brigadier Lopez Plant operation; and (d) Brigadier Lopez Plant employees.
The Brigadier Lopez Plant has a Siemens dual-fuel Siemens SGT5-4000 F gas turbine installed with a capacity of 281 MW. According to the tender specifications and conditions, the project already includes a boiler and a steam turbine, which will complete the combined cycle. This setup is expected to generate a total of 420 MW, increasing the plant's capacity by 140 MW. Additionally, the steam turbine has a 10-year Power Purchase Agreement (PPA) with CAMMESA.
In February 2024, the agreement with the constructor, Sociedad Argentina de Construcción y Desarrollo Estratégico (“SACDE”), was formalized. Under this agreement, all the works, services, and tasks necessary to complete the closure of the cycle were defined, with the “notice to proceed” being delivered on February 26, 2024.
As of the date of this annual report, works for converting the Brigadier Lopez open cycle thermal plant into a combined cycle facility are being conducted. The project is expected to be completed by the end of 2025.
Acquisition of Participation Interests in Enel Generación Costanera S.A. (currently, Central Costanera S.A.).
On February 17, 2023, our subsidiary Proener agreed to purchase from Enel Argentina S.A. a controlling interest in Enel Generación Costanera S.A. (“CECO”) by acquiring all of Enel Argentina S.A.’s 531,273,928 shares with a par value of Ps.1 with one vote each, representing 75.68% of the share capital of CECO, for a total value of US$48,000,000. As of December 31, 2024, CECO is 72.26% owned by Proener S.A.U.
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CECO is located in the City of Buenos Aires and generates energy supply for 3.5 million homes throughout the country. As of the date of this annual report, CECO’s thermal power plant, which is located in the City of Buenos Aires, consists of four turbo-steam units with an installed capacity of 661MW and two combined cycle power plants with a capacity of 1,128 MW. On April 26, 2024, the Secretariat of Energy requested CAMMESA to disconnect the steam turbines COSTTV04 and COSTTV06 (470 MW in total) of Central Costanera, following a request originally made by Enel, former owner of such power plant. In May 2024 units COSTTV04 (120 MW) and COSTTV06 (350 MW), were officially decommissioned through Resolution 57/2024. This decision had no impact on revenues.
In order to comply with the provisions of the Capital Markets Law and the CNV Rules, on March 17, 2023, Proener promoted and made a mandatory tender offer to all the holders of voting shares of CECO (the “Tender Offer”). The Tender Offer commenced on May 30, 2023, and expired on June 12, 2023. On June 13, 2023, Proener published a notice of results of the Tender Offer, reporting that 65,100 shares of CECO were tendered in the Tender Offer, representing approximately 0.0093% of the issued and outstanding shares of CECO, which were acquired by Proener at a price of Ps. 94,189 per share. As a result of the Tender Offer, Proener’s shareholding in CECO increased from 531,273,928 shares to 531,344,028 shares, representing 75.69% of CECO’s share capital.
Foray into the Forestry Business
On December 27th, 2022, Proener, an affiliate controlled by Central Puerto S.A., acquired 100.00% of the capital stock and votes of Forestal Argentina S.A. (“Forestal Argentina”) and Masisa Forestal S.A. (“Masisa Forestal,” currently Loma Alta Forestal S.A.).
Both companies were acquired from Masisa S.A. and Masisa Overseas S.A. (jointly, “Masisa”), consisting of approximately 72,000 hectares in the provinces of Entre Ríos and Corrientes, of which approximately 43,000 hectares are planted with eucalyptus and pine trees. The transaction price was US$69.4 million.
This acquisition was the largest transaction in the forestry sector in the last 30 years in Argentina. Through this acquisition, Central Puerto became the most relevant Argentine company in the forestry sector in Argentina, a market in which mostly companies with foreign capital operate. The Company decided to make this acquisition as part of its strategy to invest in sectors in which Argentina has a comparative advantage. Argentina has one of the highest forestry growth rates worldwide, with trees growing about ten times faster than in the northern hemisphere. This is one of the main reasons why the forestry sector has become one of the businesses in Argentina with the greatest competitive advantage and higher growth potential. Participating in the forestry sector could become a source of future business opportunities linked to carbon credits and energy generation with biomass.
On May 3, 2023, our affiliate Proener acquired 100% of the capital stock and votes of Empresas Verdes Argentina S.A., Las Misiones S.A. and Estancia Celina S.A. See “Item 4. Information of the Company—Recent Developments—Simplification of Corporate Structure at Central Puerto S.A.” These companies own forestry assets, consisting of approximately 88,063 hectares in the province of Corrientes. 26,000 of those hectares are planted with pine, out of a total of approximately 36,000 hectares available for planting. The purchase price amounted to US$29,881,340.
Foray into the Mining Business
See “Item 4. Information on the Company—Recent Developments— “Acquisition of interest in AbraSilver.”
See “Item 4. Information on the Company—Recent Developments— “Acquisition of interest in 3 Cruces lithium mining Project.”
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Item 4.B Business Overview
Overview
We are one of the largest private sector power generation companies in Argentina, as measured by generated power, according to data from CAMMESA. In the year ended December 31, 2024, we generated a total of 21,605 net GWh of power, representing approximately 19.69% of the power generated by private sector generation companies in the country during such period, according to data from CAMMESA. We had an installed capacity of 6,703 MW as of December 31, 2024.
We have a generation asset portfolio that is geographically and technologically diversified. Our facilities are distributed across the City of Buenos Aires and the provinces of Buenos Aires, Córdoba, Mendoza, Neuquén, Río Negro, Santa Fe and San Juan. We use conventional and renewable technologies (including hydro power) to generate power, and our power generation assets include combined cycle, gas turbine, steam turbine, co-generation, hydroelectric, wind turbines and solar panels.
The following table presents a brief description of the power plants we owned and operated as of December 31, 2024.
|
Power plant |
Location |
Installed
capacity |
Technology |
|||
| Puerto Nuevo(1) | City of Buenos Aires | 589.00 | Steam turbines | |||
| Nuevo Puerto(1) | City of Buenos Aires | 360.00 | Steam turbines | |||
| Puerto combined cycle(1) | City of Buenos Aires | 798.00 | Combined cycle | |||
| Central Costanera(3) | City of Buenos Aires | 1,789.00 | Combined cycle, Steam turbines | |||
| Luján de Cuyo plant | Province of Mendoza | 576.00 | Steam turbines, gas turbines, two cycles and mini-hydro turbine generator, producing electric power and steam | |||
| Brigadier Lopez plant | Province of Santa Fe | 281.00 | Gas turbine | |||
| San Lorenzo plant | Province of Santa Fe | 391.00 | Combined cycle | |||
| Piedra del Águila plant | Piedra del Águila (Limay River, bordering provinces of Neuquén and Río Negro) | 1440.00 | Hydroelectric plant | |||
| La Castellana I wind farm(2) | Province of Buenos Aires | 101.00 | Wind turbines | |||
| La Castellana II wind farm(2) | Province of Buenos Aires | 15.00 | Wind turbines | |||
| La Genoveva I wind farm(2) | Province of Buenos Aires | 88.00 | Wind turbines | |||
| La Genoveva II wind farm(2) | Province of Buenos Aires | 42.00 | Wind turbines | |||
| Achiras wind farm(2) | Province of Córdoba | 48.00 | Wind turbines | |||
| Manque wind farm(2) | Province of Córdoba | 57.00 | Wind turbines | |||
| Los Olivos wind farm(2) | Province of Córdoba | 23.00 | Wind turbines | |||
| Guañizuil II A(4) | Province of San Juan |
105.00 |
Solar panel | |||
| Total |
6,703.00 MW |
| __________________ |
| Notes:- |
| (1) | The mentioned plants are included within the “Puerto Complex” as defined in “Business”. |
| (2) | La Castellana I, La Castellana II, Achiras, Manque, Los Olivos, La Genoveva I and La Genoveva II wind farms are owned by CP La Castellana S.A.U., CPR Energy Solutions S.A.U., CP Achiras S.A.U., CP Manque S.A.U., CP Los Olivos S.A.U., Vientos La Genoveva S.A.U. and Vientos La Genoveva II S.A., respectively. As of December 31, 2024, the first five facilities were fully owned subsidiaries of CP Renovables S.A. while the latter two were wholly owned subsidiaries of Central Puerto S.A. As of the same date, we owned a 90.00% interest in CP Renovables. See “Item 4.B. Business Overview—Our Subsidiaries” and “Item 4. Information of the Company— Recent Development – Simplification of Corporate Structure at Central Puerto S.A.”. |
| (3) | The Costanera complex is owned by Central Costanera S.A. which is 72.26% owned by Proener S.A.U., as of December 31, 2024. As of the date of this annual report, we own a 100% interest in Proener. See “Item 4.B. Business Overview—Our Subsidiaries”. |
| (4) | Guañizuil II solar farm is owned by Cordillera Solar which is a wholly-owned subsidiary of CP Renovables, as of December 31, 2024. See “Item 4.B. Business Overview—Our Subsidiaries” and “Item 4. Information of the Company—Recent Developments”. . |
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In addition, we participate in two arrangements known as the FONINVEMEM and the CVO Agreement, which are managed by CAMMESA at the instruction of the Secretariat of Energy (for further information see “Item 4.B. Business Overview—FONINVEMEM and Similar Programs”). The Argentine Government created the FONINVEMEM with the purpose of repaying power generation companies, like us, the existing receivables for electric power sales between 2004 and 2011 and funding the expansion and development of new power capacity. As a result of our participation in the CVO arrangement, we receive monthly payments for certain of our outstanding receivables with CAMMESA. Additionally, we have an equity interest in the companies that operate the FONINVEMEM and CVO Agreement’s new combined cycle projects, which will be entitled to have an ownership of the combined cycle projects.
During 2024 and 2023 we collected Ps.83.66 billion and Ps.83.78 billion from CVO receivables, respectively, in each case measured in Pesos as of December 31, 2024.
As of December 31, 2024, we held equity interests in the companies that operate the following FONINVEMEM thermal power plants:
|
Power plant |
Operating Company |
Location |
Installed capacity (MW) |
Technology |
% Interest in the operating company(1) (2) (3) |
|||||
| San Martin | Termoeléctrica José de San Martín S.A. (TJSM) | Timbúes, Province of Santa Fe | 865.00 | Combined cycle plant, which became operational in 2010 | 11.31 | |||||
| Manuel Belgrano | Termoeléctrica Manuel Belgrano S.A. (TMB) | Campana, Province of Buenos Aires | 873.00 | Combined cycle plant, which became operational in 2010 | 12.72 | |||||
| Vuelta de Obligado | Central Vuelta de Obligado S.A. (CVOSA) | Timbúes, Province of Santa Fe | 847.00 | Combined cycle plant, which became operational in March 2018 | 55.89 |
| __________________ |
| Notes:- |
| (1) | In each case, we are the private sector generator with the largest ownership stake. |
| (2) | As of December 31, 2024, Central Costanera holds a 1.68% equity interest in TJSM, a 1.89% equity interest in TMB and a 1.30% equity interest in CVOSA. |
| (3) | Numbers include Central Puerto and Central Costanera information. |
On January 3, 2020, the Argentine Government sent us a notice stating that, in accordance with the FONINVEMEM Agreement, TJSM and TMB should perform all necessary acts to incorporate the Argentine Government as shareholder of both companies, claiming, in each case, the following equity interest rights: 65.006% in TMB and 68.826% in TJSM.
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On March 11, 2021, the Argentine Government subscribed its shares and the equity of the shareholders of TJSM and TMB were diluted. In the case of our equity interest, from 30.875% to 9.627% in TJSM and from 30.946% to 10.831% in TMB.
Due to the acquisition of Central Costanera S.A., as of December 31, 2024, we hold equity interests of 11.31% in TJSM, 12.72% in TMB and 55.89% in CVOSA. The equity stake in CVOSA was marginally reduced during 2024 due to a minor sale. See “Item 3D. Risk Factors—Risks Relating to our Business—Our interests in TJSM, TMB were diluted and CVOSA will be significantly diluted” and “Item 4.B. Business Overview—Our Affiliates—Termoeléctrica José de San Martín S.A. (TJSM) and Termoeléctrica Manuel Belgrano S.A. (TMB)”.
The following set of graphs shows our total assets under the FONINVEMEM program, as of December 31, 2024:
| __________________ |
Source: TJSM, TMB and CVOSA
| Notes:- |
| (1) | Future ownership structure of the operating companies is subject to the Claim that we filed against the Argentine Government. |
| (2) | “FONINVEMEM Plants” refers to the plants José de San Martín, Manuel Belgrano and Vuelta de Obligado, see “Item 4.B. Business Overview—FONINVEMEM and Similar Programs”. |
| (3) | Power capacity numbers have been rounded. The power capacity with respect to certain assets is the nominal power capacity of the plant, which may differ from the awarded capacity. |
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The following graphic breaks down where our plants and power investments were located in Argentina as of December 31, 2024, and their installed capacity:
| __________________ |
| Notes:- |
| (1) | CAMMESA, corresponds to the total theoretical power of each asset. |
| (2) | Net available power capacity reported to CAMMESA. |
| (3) | MW over available capacity. |
| (4) | Part of these MW are remunerated under Res. 59/23 - For more information, please refer to slide 18 “Annex 1 - Regulatory framework”. |
| (5) | The facility Includes 290 MW of combined cycles, 95 MW of cogeneration, 190 MW of gas/steam turbines and 1 MW of mini-hydro. |
| (6) | On April 26, 2024, the Secretariat of Energy requested CAMMESA to disconnect the steam turbines COSTTV04 and COSTTV06 (470 MW in total) of Central Costanera, following a request originally made by Enel, former owner of such power plant, and followed-up by Central Puerto. In May 2024 units COSTTV04 (120 MW) and COSTTV06 (350 MW), were officially decommissioned through Resolution 57/2024. This decision had no impact on our revenues. |
In the year ended December 31, 2024, we had revenues of Ps.738.17 billion. In the year ended December 31, 2024, we sold approximately 77.27% of our electric energy sales (in MWh) under Spot Sales. Sales under Spot Sales accounted for 48.34% of our revenues in the year ended December 31, 2024.
In the year ended December 31, 2024, tariffs under the Spot Sales were paid by CAMMESA according to Resolution No. 59/23, Resolution 869/2023, Resolution No. 9/2024, Resolution No. 99/2024, Resolution No, 193/2024, Resolution No. 233/2024, Resolution No. 285/2024, Resolution No. 20/2024, Resolution No. 387/2024 and Resolution No. 294/2024. The remuneration scheme is based on a fixed and variable costs system which was determined by the Secretariat of Energy pursuant to Resolution No. 95/13, as amended and complemented successively by Resolution SE No. 529/14, Resolution SE No. 482/15, Resolution SEE No. 22/16, as well as Res. 19/17, Res 1/19, Res. 31/20, Res. 440/21, Res. 238/22, Res. 826/22, Res, 59/23, Res. 750/23, Res. 869/23, Res. 9/24, Res. 99/24, Res. 193/24, Res. 233/24, Res. 285/24, Res. 20/24, Res. 387/24, Res. 294/24, Res. 603/24, Res. 27/25, Res. 113/25 and, more recently, Res. 143/25 (see details in “Item 5.A. Operating Results—Spot Sales (also known as Energía Base)”.
Regarding fuel costs, on November 7, 2018, pursuant to Resolution No. 70/18 of the Secretariat of Electric Energy, the Argentine Government authorized generators to purchase their own fuel for assets under the Spot Sales Regulatory framework. If generation companies opt to take this option, CAMMESA values and pays the generators their respective fuel costs in accordance with the Variable Costs of Production (CVP) declared by each generator to CAMMESA. The dispatch agency (Organismo Encargado del Despacho or “OED” using the Spanish acronym), which is part of CAMMESA, continued to supply the fuel for those generation companies that do not elect to take this option. In accordance with Resolution of the Secretariat of Electric energy, in November 2018, we started purchasing fuel for our Luján de Cuyo combined cycle, and in December 2018, for all our thermal units.
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On December 27, 2019, the former Ministry of Productive Development issued Resolution No. 12/2019, repealing Resolution of the former Government Secretariat of Energy No. 70/18 and restoring Art. 8 of Resolution SE No. 95/2013. Beginning January 2020, CAMMESA became the only fuel supplier for generation companies, except for (i) thermal units that had prior commitments with CAMMESA for energy supply contracts with their own fuel management and (ii) thermal units under the Energía Plus regulatory framework, authorized under Resolution SE No. 1281/06 to supply energy to large private users.
Recently, Resolution SE – MEC No. 21/2025, published in the Official Gazette on January 28, 2025, set forth a series of measures including the following:
| · | It repealed Resolution SE No. 354/2020 as of February 1, 2025, which had (i) established the parameters for CAMMESA’s involvement in the “Gas.Ar Plan” and (ii) determined firm gas volumes for thermal generation consumption based on a dispatch priority order. |
| · | It replaced Section 8 of Resolution SE No. 95/2013, and set forth the following: |
| o | As of March 1, 2025, fuel costs will be acknowledged by valuing them at the corresponding reference price used and accepted in the 'Declaration of Variable Production Costs', including freight, transportation, natural gas distribution, taxes, and related fees. |
| o | With the purpose of supplying fuel for thermal generation PPAs without management obligations, fuel procurement and dispatch shall be centralized by CAMMESA. |
| o | Thermal generators operating in the spot market are authorized to acquire their own fuel, with CAMMESA remaining as supplier of last resort. |
| · | As of February 1, 2025, the provisions of Resolution No. 1281/2006 that implemented the “Energía Plus” regime were repealed. Existing contracts under this scheme will continue to be transacted under the same conditions until their expiration. The execution of new contracts or the renewal of contracts in the MEM term market under the “Energía Plus Service” modality will be permitted only until October 31, 2025. |
Additionally, we have sales under contracts, including (i) term market sales under contract, (ii) MATER sales under contracts, (iii) Energía Plus sales under contract; and (iii) sales of energy under the RenovAr Program.
Term market sales under contract include sales of electric power under negotiated contracts with public sector counterparties. MATER sales under contracts include sales of electric power under negotiated contracts with private companies generated exclusively from renewable energy plants. In all cases, sales under contracts generally involve PPAs with customers and are contracted in U.S. dollars. Prices in term market sales under contracts from thermal units and Energía Plus contracts include price of fuel used for generation, cost of which is assumed by the generator or include such cost as a component of the sale that is charged to the client. For terms longer than one year, these contracts typically include electric power price updating mechanisms in case of fuel price variations or the generator being required to use liquid fuels in the event of a shortage of natural gas. For further information regarding our main clients for term market sales under contract, see “Business—Our Customers”.
Term market sales under contract, and MATER sales under contracts accounted for 14.09% and 2.67% of our electric power sales (in MWh) and 24.90% and 5.36% of our revenues for the year ended December 31, 2024, respectively.
In our Luján de Cuyo plant, we are also permitted to sell a minor portion (up to 16 MW) of our generation capacity and electric power under negotiated contracts with private sector counterparties under the Energía Plus scheme, designed to encourage private sector investments in new generation facilities. Energía Plus sales under contracts accounted for 0.42% of our electric power sales (in MWh) and 0.80% of our revenues for the year ended December 31, 2024. These contracts are typically one-to-two years long, are denominated in U.S. dollars and are paid in pesos at the exchange rate determined in the contract as of the date of payment. Under the rules and regulations of the Energía Plus, the generator buys the fuel to cover the committed demand of electric power and supplies the electric power to large electric power consumers at market prices, denominated in U.S. dollars, previously agreed between the generator and its clients.
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RenovAr sales under contracts include sales of electricity generated exclusively from renewable energy power plants under negotiated contracts with public sector counterparties. We have long-term contracts signed with CAMMESA. Prices under these PPAs are denominated in U.S. dollars and guaranteed by the FODER. In the RenovAr Program, our subsidiaries, Achiras, La Castellana I, La Genoveva I and Cordillera Solar entered in a 20-year PPA with CAMMESA that establishes that 100% of the contracted generation capacity of the power plants will be sold to CAMMESA at the awarded price plus the respective incentive and adjustment factors, which increase the awarded price approximately by 10.00% to 15.00%. See “Item 4.B, Business Overview—The Argentine Electric Power Sector —Structure of the Industry—Renewable Energy Program”. Sales under RenovAr Program accounted for 5.55% of our electric power sales (in MWh) and 9.39% of our revenues for the year ended December 31, 2024. See “Item 4.B. Business Overview—The Argentine Electric Power Sector”.
We also produce steam. As of December 31, 2024, we had an installed capacity of 465 tons per hour: the San Lorenzo cogeneration plant had an installed capacity of 340 tons per hour while the installed capacity of Luján de Cuyo plant was 125 tons per hour. Steam sales accounted for 5.35% of our revenues for the year ended December 31, 2024. Our production of steam for the year ended December 31, 2024, was 2,942 thousand metric tons, of which 1,778 thousand metric tons were provided by the San Lorenzo plant and 1,164 thousand metric tons by the facilities installed in Luján de Cuyo.
Our Luján de Cuyo plant supplies steam under negotiated contracts with YPF while the San Lorenzo plant provides steam under a negotiated contract with T6 Industrial S.A. Our Luján de Cuyo plant has a combined heat and power (CHP) unit in place, which started operations on October 5, 2019, replacing the previous CHP, and supplies up to 125 metric tons per hour of steam to YPF’s refinery in Luján de Cuyo under a steam supply agreement. This contract is denominated in U.S. dollars but can be adjusted in the event of variations in U.S. dollar-denominated prices of fuel necessary for power generation. This new steam supply contract with YPF was entered into on December 15, 2017, for a period of 15 years and replaced the contract in place with YPF. For further information on the steam supply agreements with YPF for the Luján de Cuyo plant, see “Item 5.A. Operating Results—Factors Affecting Our Results of Operations—Sales Under Contracts, Steam Sales and Others —Steam supply to YPF—Luján de Cuyo plant”.
The contract between us and Transportadora de Gas del Sur (“TGS”) for the natural gas transportation capacity has remained effective after the sale of the La Plata plant. Pursuant to the terms of our agreement with YPF EE, we resell our gas transportation capacity to YPF EE through the resale system established by Resolution ENARGAS 419/97. The resale under such system is open to third parties and consequentially does not ensure that YPF EE will receive the gas transportation capacity needed to operate the La Plata plant. Therefore, on January 25, 2018, we requested to be registered with the Ministry of Energy and the ENARGAS as a natural gas trader to permit the resale of our gas transportation capacity to YPF EE without the risk of intervention from interested third parties. On July 20, 2018, we were effectively registered as natural gas trader. As of the date of this annual report, the delivery of the transportation capacity to YPF EE is done through the “Resale” mechanism. The resale to YPF EE of our natural gas transportation capacity accounted for 0.82% of our revenues for the year ended December 31, 2024.
In addition, we have income derived from the operating fee that we receive for the management of the Central Vuelta de Obligado plant. Revenues from the management of the Central Vuelta de Obligado plant accounted for 2.07% of our revenues for the year ended December 31, 2024.
Finally, as a result of our acquisitions in the forestry industry, carried out in December 2022 and May 2023, we have another source of revenues provided by five subsidiaries: Forestal Argentina S.A., Loma Alta Forestal S.A., EVASA, Estancia Celina S.A. and Las Misiones S.A. These subsidiaries as a whole generated 2.96% of our aggregate revenues for the year ended December 31, 2024. Since Forestal Argentina S.A. and Loma Alta Forestal S.A. were acquired on December 27, 2022, and EVASA, Estancia Celina S.A. and Las Misiones S.A. were acquired on May 3, 2023, the year 2023 is the first one with forestry sales.
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The following graph breaks down our revenues in the year ended December 31, 2024, by regulatory framework:
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Source: Central Puerto. Includes sales of energy and power to CAMMESA remunerated under Resolution No. 59/23, Resolution 869/2023, Resolution No. 9/2024, Resolution No. 99/2024, Resolution No, 193/2024, Resolution No. 233/2024, Resolution No. 285/2024, Resolution No. 20/2024, Resolution No. 294/2024 and Resolution No. 387/2024 (See “Item 4.B. Business Overview—The Argentine Electric Power Sector—Remuneration Scheme”).
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The following graph breaks down our electric energy sales in the year ended December 31, 2024, by regulatory framework, in MWh:
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Source: Central Puerto.
In 2014, we acquired four heavy-duty, highly efficient gas turbines: (i) one General Electric gas turbine with a capacity of 373 MW; (ii) two Siemens gas turbines, each with a capacity of 298 MW; and (iii) one Siemens gas turbine with a capacity of 286 MW, which we installed in our San Lorenzo co-generation project, which commenced operations as a combined cycle on August 15, 2021. During 2021 two Siemens gas turbines stored in Germany, each with a capacity of 298 MW were sold. With respect to the GE gas turbine, which is already in Argentina, we are considering it for potential projects in the future and analyzing other prospects. Additionally, we have also acquired 130 hectares of land in the north of the Province of Buenos Aires, in a location that provides excellent conditions for fuel delivery and access to power transmission lines.
We also own long-term significant non-controlling investments in companies that have utility licenses to distribute natural gas through their networks in the provinces of Mendoza, San Juan, San Luis, Córdoba, Catamarca and La Rioja. Considering our direct and indirect interests as of December 31, 2024, we held (i) a 21.58% equity stake in DGCU and (ii) a 40.59% equity stake in DGCE. See “Item 4. Information of the Company—Recent Developments—Simplification of Corporate Structure at Central Puerto S.A.”
Ecogas has a gas distribution network covering 38,835 km and served approximately 1,463,427 customers as of December 31, 2024. In 2024, Ecogas distributed an average of 12,8 million cubic meters of natural gas per day; and in 2023, Ecogas distributed an average of 12.5 million cubic meters of natural gas per day. This volume of distribution represented approximately 15.4% and 15.0% of the gas delivered by all the distribution companies in Argentina in December 2024 and 2023, respectively, according to data from ENARGAS. In the year ended December 31, 2024, our interest in Ecogas produced Ps. 16.858 million in share profit of an associate, which represented 27.52% of our net income for such period.
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Through Resolution No. 17,949 dated January 7, 2016, the CNV granted us a conditional authorization to enter the public offering regime through the issuance of simple, non-negotiable obligations, convertible into shares and the creation of a global program for the issuance of negotiable obligations (the “Program”) and, on March 16, 2016, the CNV decided to give effect to the Resolution. On September 9, 2019, our shareholders’ meeting resolved to approve our voluntary withdrawal from the Public Offering Regime in which we were stating that we had not issued negotiable obligations, and to cancel of the Program. On October 24, 2019, the CNV gave us notice of the joint signature CNV Resolution No. RESFC-2019-20506-APN-DIR # CNV of the same date, through which it resolved to cancel, as of the date of Resolution, the authorization granted to make a public offering of our Negotiable Obligations, due to the lack of outstanding securities. Likewise, having the shareholders’ meeting of January 26, 2018, resolved to approve our application to join the Public Offering of shares, the CNV authorized the Public Offering of class “B” shares (Resolutions No. 19,384 and No. 19,391 dated March 1, 2018, and March 8, 2018, respectively); However, the selling shareholders decided to postpone the offering, due to market reasons. Consequently, the CNV, on October 24, 2019, notified us of the CNV Resolution of joint signature No. RESFC-2019-20511-APN-DIR # CNV of the same date, through which it was resolved to cancel, as of that date, the authorization granted to us to make a public offering of our shares, due to the absence of placement of the negotiable securities.
Our Competitive Strengths
We believe that we have achieved a strong competitive position in Argentina mainly as a result of our development in the power generation sector, which has allowed us to accomplish the following strengths:
| · | One of the largest private sector power companies in Argentina. We are one of the largest private sector power generation companies in Argentina, as measured by power generated, according to data from CAMMESA. In the year ended December 31, 2024, we generated a total of 21,605 net GWh of power. As of December 31, 2024, we had an installed generating capacity of 6,703 MW. Our size within the Argentine market positions us well to take advantage of future developments as investments are made in the electric power generation sector. Our ample installed capacity is also an advantage, as we have enough capacity to support large, negotiated contracts. |
The following graphs show the SADI’s total power generation by private companies and market share for 2024 (grouped by related companies and subsidiaries):
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| Notes:- |
| (1) | Source: CAMMESA. |
| (2) | Energy Generation of SADI private generators. |
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| · | High quality assets with strong operational performance. We have a variety of high-quality power generation assets, including combined cycle turbines, gas turbines, steam turbines, wind farms, solar panels, hydroelectric technology and steam and power co-generation technology, with a combined installed generating capacity of 6,703 MW, as of the date of this annual report. Our efficiency levels compare favorably to those of our competitors due to our efficient technologies. |
The following chart shows the availability ratio of our thermal assets as compared to the market average:
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Source: Central Puerto, CAMMESA.
| Notes:- |
| (1) | Availability reported by CAMMESA, as determined by the total installed capacity of each power plant. |
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| · | Diversified and strategically located power sector assets. Our business is both geographically and technologically diverse. Our assets are critical to the Argentine electric power network due to the flexibility provided by the large fuel storage capacity, which allows us to store 72,000 tons of fuel oil (enough to cover 7.0 days of consumption) and 88,000 tons of gas oil (enough to cover 7.0 days of consumption) at our thermal generation plants, in addition to our access to deep water docks, our dam water capacity and our ability to store energy for 45 days operating at full capacity at Piedra del Águila. The prices for power transmission are regulated and based on the distance from the generating company to the user, among other factors. In this regard, our thermal power plants are strategically located in important city centers or near some of the system’s largest customers, which constitutes a significant competitive advantage. For example, approximately 36.7% of Argentine energy consumption was concentrated within the metropolitan area of Buenos Aires during 2024 according to the monthly report of December 2024 prepared by CAMMESA. Because the lack of capacity in SADI limits the efficient distribution of energy generated in other geographic areas, our generation plants in Buenos Aires and Mendoza are essential to the supply of energy to meet the high demand in these areas. In addition, this need to generate energy close to a high consumption area in Argentina means that our plants are less affected by the installation of new capacity in other regions. |
The diversification of our fuel sources enables us to generate energy in different contexts, as shown in the following chart:
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Source: Central Puerto
Luján de Cuyo’s Siemens Combined Cycle unit (290 MW installed capacity) and Buenos Aires’ Combined Cycle unit (277 MW installed capacity) are CEPU’s only units relying exclusively on natural gas.
| · | Expansion of the current installed capacity. We have taken steps to improve our strategic position as a leader among power generators by expanding and developing our thermal generation and renewable energy capacity. Likewise, our recent investments in the forestry industry allow us to both diversify our operations and source of revenues and complement and strengthen our energy business in the energy transition era. | |
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Thermal Generation
In 2014, we acquired four heavy-duty, highly efficient gas turbines: (i) one General Electric gas turbine with a capacity of 373 MW; (ii) two Siemens gas turbines, each with a capacity of 298 MW; and (iii) one Siemens gas turbine with a capacity of 286 MW. We also acquired 130 hectares of land in the north of the Province of Buenos Aires. For example, we are currently using a Siemens gas turbine, with a capacity of 286 MW, for the San Lorenzo co-generation project. During 2021 two Siemens gas turbines stored in Germany, each with a capacity of 298 MW were sold. With respect to the GE gas turbine, which is already in Argentina, we are considering it for potential projects in the future and analyzing other prospects. |
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In addition, in 2018, we acquired two additional Siemens gas turbines with a capacity of 56 MW for a purchase price of SEK$381.37 million (which, converted at the exchange rate quoted by the Central Bank as of the date of each payment, equals US$45.46 million) for our Luján de Cuyo project, which started commercial operations on October 5, 2019.
Pursuant to Resolution No. 287-E/17, the former Secretariat of Electric Energy called for proposals for supply of electric power to be generated through existing units, the conversion of open cycle units into combined cycle units or the installation of co-generation units. We submitted bids on August 9, 2017, and, on September 25, 2017, we were awarded two co-generation projects at San Lorenzo (with an awarded electric capacity of 330 MW and 317 MW for the winter and summer, respectively) that started operations on August 15, 2021 and Luján de Cuyo (with an awarded electric capacity of 93 MW and 89 MW for the winter and summer, respectively), which started operations on October 5, 2019, seven weeks ahead of the committed COD.
On July 26, 2023, the National Secretariat of Energy announced, through Resolution 621/2023, a national and international “Terconf” public tender for the submission of offers for new or existing thermal plants with the aim of incorporating stable and reliable thermal power to the national interconnected system. | ||
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The public tender was divided into:
· Thermal Generation for the reliability and supply of the interconnected system (“SADI”), targeting a range between 2,250 MW and 3,000 MW; and · Thermal Generation to replace and make the Tierra del Fuego power generation system more efficient, targeting a range between 30 MW and 70 MW. | ||
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The public tender was further divided into subcategories that had a power limit to be awarded:
· Line 1.0: Power increase of existing combined cycles. · Line 1.1: Improvement of supply reliability in critical areas. · Line 1.2: Improvement of regional supply reliability. · Line 1.3: Improvement of general supply reliability. | ||
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As part of the bidding process, the group presented projects in Central Puerto for 312 MW and in Central Costanera for 516 MW. The submission of bids took place on September 26, 2023 while the technical qualification and the opening of the bids were carried out on October 25 and October 27, respectively. Finally, on November 29, 2023, CAMMESA announced the outcome of the bidding process, resulting in the awarding of the two projects presented by Central Costanera for a total of 516 MW. However, the bidding process and its result were revoked by the current administration in June 2024.
As of the date of this annual report, works for converting the Brigadier Lopez open cycle thermal plant into a combined cycle facility are being conducted and are expected to be completed by the end of 2025. "See Item 4. A History and development of the Company— Purchase of the Brigadier Lopez Plant".
Renewable Generation
In connection with our renewable energy efforts, Law No. 27,191, provides that Large Users, whose demand exceeds 300 KW of average annual power, should comply with the obligation to purchase renewable energy by entering into a contract with a generating company or through self-generation. The former Ministry of Energy and Mining through Resolution 281-E/ 2017, established the regulatory framework that allows Large Users to purchase renewable energy from private generating companies and the conditions for granting the “dispatch priority” that allows such transactions to take place and ensures that the private generating companies will not be restricted in the future in its generation dispatch (see “Item 4.B. Business Overview—The Argentine Electric Power Sector—Resolution No. 281-E/17: The Renewable Energy Term Market in Argentina”). We have signed long-term PPA contracts with private customers for 100% of the estimated energy generation capacity of our term market renewable energy projects developed under Resolution No. 281-E/17 regulatory framework and our seven wind farms commenced commercial operations. |
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We successfully participated in CAMMESA’s auction for 10 MW of dispatch priority for our Parque Solar San Carlos Project under the MATER framework, located in San Carlos, Province of Salta. "See Item 4. A History and development of the Company—Renewable energy projects"
With the aim of diversification of our energy matrix, on October 18, 2023, our subsidiary Proener, directly acquired 100% of the capital stock of Cordillera Solar and Scatec Equinor Solutions S.A. (currently, CP Servicios Renovables S.A.), owner, and operator respectively of the solar power plant “Guañizuil II A”.
The Guañizuil II A solar power plant is located in the province of San Juan, Argentina, and has a nominal rated power capacity of 105 MW, generating approximately 300 GWh/year. The plant counts with 358,560 solar panels and covers a total area of 270 hectares, being the third largest solar farm in Argentina. This acquisition has been recorded as an assets acquisition as per IFRS 3.
In addition, the Guañizuil II A solar power plant has a capacity factor of 33%, exceeding the average for the region and positioning it as one of the farms with the best capacity factor in the world, which allows it to produce energy to supply the demand of approximately 86,000 homes. The remuneration scheme of the power plant is a PPA with CAMMESA under the Program Renov.ar 2.5 for 20 years.
We consider the acquisition of our first photovoltaic technology park represents another milestone in the diversification of our energy matrix within the framework of our expansion strategy and consolidation in the renewable energy market. Thus, Central Puerto will generate 9.6% of the country’s total solar energy and will reach a capacity of 475 MW of renewable energy, of which 80% corresponds to wind energy and 20% to solar energy.
We cannot assure you that the Argentine Government will open new auction processes, or our bids will be successful or that we will be able to enter into PPAs in the future. See “Item 3D. Risk Factors—Risks Relating to our Business—Factors beyond our control may affect or delay the completion of the awarded projects or alter our plans for the expansion of our existing plants”. |
Stable cash flow generation, partially supported by U.S. dollar denominated contracts payable in Argentine pesos. Part of our cash flows are denominated in US dollars mainly from (a) long term contracts (PPAs) with CAMMESA, and (b) contracts signed directly under Energía Plus framework, MATER and Steam Sales. Such payments principally depend on two factors: (i) the availability of power capacity (in the case of thermal units) and (ii) the amount of power or steam generated. All variables have been relatively stable in recent years, as a result of the diversified technology and high efficiency of our power generation units. In addition, our cash flows have little exposure to the fuel price changes as the fuel needed to produce the energy under the Spot Sales is supplied by CAMMESA without charge and our term market sales under contracts typically include price adjustment mechanisms based on fuel price variations, if applicable.
Adequate financial position. We benefit from an adequate financial position, operating efficiency and a relative low level of indebtedness, allowing us to deliver on our business growth strategy and create value for our shareholders. In terms of our financial position, our total cash and cash equivalents and current other financial assets was Ps. 244.02 billion as of December 31, 2024 (approximately US$236.34 million).
Solid and experienced management team with a successful track record in delivering growth. Our executive officers have vast experience and a long track record in corporate management with, on average, 20 years of experience in the industry. Our management has diverse experience navigating different business cycles, markets and sectors, as evidenced by the growth and expansion we have undergone since the early 1990s. They also have a proven track record in acquisitions and accessing financial markets. On June 14, 2019, Central Puerto, in the context of a local and foreign public tender called by IEASA, which had been awarded to us, purchased the Brigadier Lopez Plant. Our management successfully obtained US$180.0 million loan from Citibank N.A., JP Morgan Chase Bank N.A. and Morgan Stanley Senior Funding INC. to fulfill the acquisition. “See Item 5.B. Liquidity and Capital Resources—Indebtedness—Loan from Citibank N.A., JP Morgan Chase Bank N.A. and Morgan Stanley Senior Funding INC”.
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Additionally, during 2018, 2019 and 2020, our management also obtained financing for the expansion of our installed capacity from multilateral credit agencies, export credit agencies, commercial banks and the local securities market, as described in “Item 5.B. Liquidity and Capital Resources—Indebtedness”.
In addition, in 2015, jointly with an investment consortium, we acquired non-controlling equity interests in Ecogas. We believe that our management team has been successful in identifying attractive investment opportunities, structuring innovative business plans and completing complex transactions efficiently.
Our management has significant in-country know-how, with professionals who have taken an active role in project development and construction, developing private and public investment plans with both Argentine and international partners. In addition, our management team has business experience at the international and national level, are familiar with the operation of our assets in a constantly changing business environment and are strongly committed to our day-to-day decision-making process.
Finally, our executive officers have a solid understanding of Argentina’s historically volatile business environment. They have built and maintained mutually beneficial and long-lasting relationships with a diversified group of suppliers and customers and have cultivated relationships with regulatory authorities.
Strong corporate governance. We have adopted a corporate governance code to put into effect corporate governance best practices, which are based on strict standards regarding transparency, efficiency, ethics, investor protection and equal treatment of investors. The corporate governance code follows the guidelines established by the CNV. We have also adopted a code of ethics and an internal conduct code designed to establish guidelines with respect to professional conduct, morals, and employee performance. In addition, the majority of our Board of Directors qualifies as “independent” in accordance with the criteria established by the CNV, which may differ from the independence criteria of the NYSE and NASDAQ.
Our Business Strategy
We seek to consolidate and grow our position in the Argentine energy industry by maintaining our existing asset base and by acquiring and developing new assets related to the sector. We decided to expand our businesses lines in those sectors in which Argentina has clear comparative advantages. The key components of our strategy are as follows:
| · | Consolidating our leading position in the energy sector. We seek to consolidate our position in the energy sector by analyzing value-generating alternatives through investments with a balanced approach to profitability and risk exposure. We are committed to maintaining our high operating standards and availability levels. To this end, we follow a strict maintenance strategy for our units based on recommendations from their manufacturers, and we perform periodic preventive and predictive maintenance tasks. We plan to focus our efforts on optimizing our current resources from a business, administrative and technological perspective, in addition to capitalizing on operating synergies from the plants currently under construction that rely on similar systems, know-how, customers and suppliers. |
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| · | Becoming a leading company in renewable energy in Argentina. Several research studies from organizations such as the Cámara Argentina de Energías Renovables suggest that Argentina has a significant potential in renewable energy (mainly in wind and solar energy). We also believe that renewable energy will become a larger part of the installed capacity in Argentina. The former Ministry of Energy and Mining, through Law No. 27,191, has established a target for renewable energy sources to account for 20% of Argentina’s electric power consumption by December 31, 2025. We intend to capitalize on this opportunity by expanding our investments into renewable energy generation. To achieve this goal, we are strengthening our renewable energy portfolio. In August 2018, September 2018, July 2019, September 2019, December 2019/January 2020, February 2020 and November 2020 our wind farms La Castellana I, Achiras, La Castellana II, La Genoveva II, Manque, Los Olivos and La Genoveva I started operations, respectively. In October 2023, our subsidiary Proener also acquired 100% of the capital stock and votes of Cordillera Solar and Scatec Equinor Solutions Argentina S.A (currently, CP Servicios Renovables S.A.), owner and operator, respectively, of a photovoltaic plant located in the Province of San Juan. Additionally, we are also exploring several other options to diversify our generation assets to include sustainable power generation sources (see Item 3D. Risk Factors—Risks Relating to our Business— Factors beyond our control may affect or delay the completion of the awarded projects or alter our plans for the expansion of our existing plants). In 2016, we formed our subsidiary, CP Renovables, to develop, construct and operate renewable energy generation projects. | |
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Acquiring assets in the forestry sector. In line with the global trend of developing innovative projects that increase the environmental performance of companies and contribute to global decarbonization objectives, we took a first step by acquiring one of the largest forestry companies in Argentina from Masisa Chile, seeking to consolidate our position as a relevant player in the forestry sector. Argentina has clear regional and global comparative advantages in the sector, while Forestal Argentina S.A. and Loma Alta Forestal S.A., acquired by our affiliate Proener, have a highly experienced management and a significant growth potential. On May 3, 2023, our affiliate Proener also acquired 100% of the capital stock and votes of Empresas Verdes Argentina S.A., Las Misiones S.A. and Estancia Celina S.A.
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Maintaining an adequate financial position and sound cash flow levels. We have a relatively low level of debt, which reflects our adequate financial position and additional debt capacity. We believe our adequate financial position is the result of our responsible financial policies and stable cash flows. We will preserve our current cash flow levels in the coming years by, among other things, keeping a rigorous maintenance program for our production units, which we expect will help us continue the positive operational results we have experienced, particularly regarding our electric power dispatch availability. We intend to finance our expansion plans through market alternatives that enhance the return on capital of the projects, relying on loan agreements -such as credit facilities and project financing- and on the local and international capital markets. Each of CP La Castellana, CP Achiras, CPR Energy Solutions, Vientos La Genoveva I, Vientos La Genoveva II, entered into long term loans to fund the development of renewable energy projects they were awarded and to purchase wind turbines. We also obtained a long-term loan from Kreditanstalt für Wiederaufbau (“KfW”) to support the construction of the Luján de Cuyo cogeneration project, and a loan from Citibank N.A., JP Morgan Chase Bank N.A. and Morgan Stanley Senior Funding INC. to purchase the Brigadier Lopez plant, which was fully paid on January 12, 2024. See “Item 5.A. Operating Results—Indebtedness”. We expect that the new capacity from these projects will allow us to further increase our cash flow, while enhancing our financial position. |
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On January 4, 2024, we reported our annual investment and divestment plan, which sets the following goals: · Exploring growth opportunities in electric power generation, either through the development and construction of new projects or the acquisition of electric assets in the local and international markets; · Seeking synergies and operational efficiencies by merging or consolidating our controlled thermal assets; · Reorganizing the group's holding companies through mergers or consolidations, including those related to renewable assets, in order to simplify their structure; · Reorganizing forestry assets by focusing on the most convenient regions and analyzing alternatives to increase their value through industrialization; · Optimizing the management of our liquid assets portfolio; and · Analyzing opportunities in the mining industry to diversify our sources of income while receiving foreign currency (dollars) through exports. We have made significant progress towards achieving the goals set at the beginning of 2024. Our strategic initiatives have been successful in various areas, demonstrating our commitment to growth and operational efficiency. Firstly, we have explored growth opportunities in electric power generation. As of the date of this annual report, works for the conversion of the Brigadier Lopez open cycle thermal Plant into a combined cycle facility have started and are expected to be completed by the end of 2025, "See Item 4. A History and development of the Company - Purchase of the Brigadier Lopez Plant". Additionally, works for the San Carlos Project solar farm have also commenced and are pending completion, with an expected completion date in 2025, "See Item 4. A History and development of the Company - Renewable energy projects". These initiatives underscore our dedication to expanding our capabilities in the electric power generation sector. We have also made significant strides in reorganizing the group's holding companies. The effective merger of Vientos La Genoveva II S.A. with CP Manque S.A.U., CP Los Olivos, and CPR Energy Solutions S.A.U. has simplified our corporate structure. Furthermore, we have planned mergers involving Empresas Verdes Argentinas S.A., Forestal Argentina S.A., Estancia Celina S.A., and Las Misiones S.A., which will further streamline our operations. Our focus on reorganizing forestry assets is evident through the planned mergers involving forestry companies such as Forestal Argentina S.A. and Estancia Celina S.A. These efforts are aimed at increasing the value of our forestry assets through industrialization. Lastly, we have proactively analyzed opportunities in the mining industry. This is shown by our acquisition of an interest in AbraSilver, which owns the Diablillos silver-gold project, and our acquisition of interest in the 3 Cruces lithium mining project. These initiatives diversify our income sources and enable us to receive foreign currency through exports. Our achievements clearly reflect our dedication to meeting the goals set at the beginning of 2024. We are confident that these strategic initiatives will continue to drive our growth and success in the future. |
Our Subsidiaries
Central Vuelta de Obligado S.A.
CVOSA is a private, unlisted company, engaged in managing the purchase of equipment and building, operating and maintaining the CVOSA power plant that was constructed and began operations on March 20, 2018 under a program substantially similar to the FONINVEMEM program.
We have 55.89% of the voting rights in CVOSA, which grants us the power to unilaterally approve resolutions for which a majority is required at the relevant shareholders’ meeting. However, pursuant to a shareholders’ agreement entered into among Hidroeléctrica El Chocón S.A., Central Dock Sud S.A. and Central Costanera S.A (the “Other CVOSA Shareholders”) and us, we will only be able to approve the following decisions with the affirmative vote of the Other CVOSA Shareholders: (i) entering into a merger, spin-off, transformation or liquidation; (ii) increasing or decreasing the capital stock; (iii) receiving capital contributions; (iv) entering into transactions with related parties; (v) amending the bylaws; (vi) entering into an operating and maintenance agreement for the Vuelta de Obligado power plant; (vii) approving the trust agreement in connection with the Vuelta de Obligado power plant and its amendments; (viii) filing any lawsuit against any governmental authorities, CAMMESA and/or the FONINVEMEM trust fund currently holding the Vuelta de Obligado power plant; (ix) entering into engineering services, gas supply and transportation agreements; and (x) entering into a power purchase agreement with CAMMESA for the Vuelta de Obligado power plant. If such decisions are to be decided at a board of directors’ meeting, they can only be approved with the affirmative vote of at least one member of the board of directors appointed by the Other CVOSA Shareholders.
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Currently the board of directors of CVOSA is composed by four members, two of which have been appointed by us. In addition, we have the right to appoint the chairman of the board of directors of CVOSA, who has double vote in case of a tie. In addition, we have the right to appoint one member of the supervisory committee of CVOSA.
Pursuant to the terms of the FONINVEMEM agreement relating to the Vuelta de Obligado power plant, on the tenth anniversary of the start of operations of the Vuelta de Obligado power plant, which occurred on March 20, 2018, all governmental entities that financed the construction of the Vuelta de Obligado power plant have the right to be incorporated as shareholders of CVOSA, which in turn may dilute our interest in CVOSA. If such dilution were to occur, we may no longer control CVOSA.
Proener S.A.U.
Proener S.A.U. is a private, unlisted company. We hold a 100.00% interest in Proener S.A.U., a company engaged in investment activities in the energy and forestry sectors.
CP Renovables S.A.
In 2016, we formed a subsidiary, CP Renovables S.A. (“CP Renovables”), to develop, construct and operate renewable energy generation projects. As of December 31, 2024, we directly own a 86.53% interest in CP Renovables. The remaining interest is owned through CPR Energy Solutions S.A.U. (0.33%) and Vientos La Genoveva II S.A.U. (3.14%). See “Item 4. Information of the Company— Recent Developments – Simplification of Corporate Structure at Central Puerto S.A.”
Our Board of Directors has instructed our management to take the necessary corporate actions to facilitate the merger of CPSA, as the merging company, with CP Renovables, as the merged company. See “Item 4 – Information of the Company – Recent Developments – Simplification of Corporate Structure at Central Puerto S.A.”
CP Achiras S.A.U.
CP Achiras S.A.U. is a private, unlisted company. As of December 31, 2024, CP Renovables holds a 100.00% interest in the capital stock of CP Achiras S.A.U., a company engaged in the generation and commercialization of electric power through renewable sources.
CPR Energy Solutions S.A.U.
CPR Energy Solutions S.A.U. is a private, unlisted company. As of December 31, 2024, CP Renovables holds a 100.00% interest in the capital stock of CPR Energy Solutions S.A.U., a company engaged in generation and commercialization of electric power through renewable sources.
On January 1, 2025, the effective merger of Vientos La Genoveva II S.A. (VLGII), with CPR Energy Solutions S.A.U. (CPRES), took place. See “Item 4. Information of the Company— Recent Developments – Simplification of Corporate Structure at Central Puerto S.A.”
Puerto Energía S.A.U.
Puerto Energía S.A.U. is a private, unlisted company., engaged in generation and commercialization of electric power through renewable sources.
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CP La Castellana S.A.U.
CP La Castellana is a private, unlisted company. As of December 31, 2024, CP Renovables holds a 100.00% interest in the capital stock of CP La Castellana, a company engaged in generation and commercialization of electric power through renewable sources.
Vientos La Genoveva S.A.U.
Vientos La Genoveva S.A.U. is a private, unlisted company. On March 7, 2018, our subsidiary CP Renovables S.A. acquired 100% of the equity interests in Vientos La Genoveva S.A. and, on that same date, transformed it into a S.A.U. (sole-shareholders corporation) On August 6, 2018, we purchased from our subsidiary, CP Renovables S.A., 100.00% of the equity interests in Vientos La Genoveva S.A.U. Vientos La Genoveva is a company engaged in generation and commercialization of electric power through renewable sources.
Vientos La Genoveva II S.A.
Vientos La Genoveva II S.A. is a private, unlisted company. On June 28, 2018, our subsidiary CP Renovables S.A. acquired 100% of the equity interests in Vientos La Genoveva II S.A. and, and was later transformed it into a S.A.U. On August 6, 2018, we purchased from our subsidiary, CP Renovables S.A., 100.00% of the equity interests in Vientos La Genoveva II S.A.U. On September 18, 2024, Vientos La Genoveva II S.A.U. was effectively registered with the IGJ as Vientos La Genoveva II S.A.
Effective January 1, 2025, Vientos La Genoveva II S.A. merged with our subsidiaries, CP Manque S.A.U., CP Los Olivos S.A.U. and CPR Energy Solutions S.A.U., being Vientos la Genoveva II S.A. the continuing company, whose legal form was converted to a corporation (sociedad anónima) under Argentine law. See “Item 4. Information of the Company— Recent Developments – Simplification of Corporate Structure at Central Puerto S.A.”
CP Manque S.A.U.
CP Manque S.A.U. is a private, unlisted company. As of December 31, 2024, CP Renovables holds a 100.00% interest in the capital stock of CP Manque S.A.U., a company engaged in generation and commercialization of electric power through renewable sources.
On January 1, 2025, the effective merger of Vientos La Genoveva II S.A. (VLGII)., with CP Manque S.A.U., took place. See “Item 4. Information of the Company— Recent Developments – Simplification of Corporate Structure at Central Puerto S.A.”
CP Los Olivos S.A.U.
CP Los Olivos S.A.U. is a private, unlisted company. As of December 31, 2024, CP Renovables holds a 100.00% interest in the capital stock of CP Los Olivos S.A.U., a company engaged in generation and commercialization of electric power through renewable sources.
On January 1, 2025, the effective merger of Vientos La Genoveva II S.A. (VLGII)., with CP Los Olivos S.A.U., took place. “Item 4. Information of the Company— Recent Developments – Simplification of Corporate Structure at Central Puerto S.A.”
Forestal Argentina S.A.
Forestal Argentina S.A. is a private, unlisted company. Our subsidiary Proener holds a 98.20% interest while Central Puerto S.A. holds 1.80% of the capital stock of Forestal Argentina S.A., a company engaged in the production and commercialization of forestry assets.
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On March 31, 2025, the Board of Directors of Empresas Verdes Argentina S.A. (EVASA), Forestal Argentina S.A. (FASA), Estancia Celina S.A. (ECSA) and Las Misiones S.A. (LMSA) approved the corporate reorganization whereby, subject to approval by the shareholders’ meetings of the companies involved, convened for May 22, 2025, EVASA will absorb the assets and liabilities of all the above-mentioned companies, with the merger becoming effective as of June 30, 2025. “Item 4. Information of the Company—Recent Developments— Simplification of Corporate Structure at Central Puerto S.A.”
Loma Alta Forestal S.A.
Loma Alta Forestal S.A. is a private, unlisted company. Our subsidiary Proener holds a 98.00% interest while Central Puerto S.A. holds a 2.00% interest in the capital stock of Loma Alta Forestal S.A., a company engaged in production and commercialization of forestry assets.
On March 31, 2025, the Board of Directors of Empresas Verdes Argentina S.A. (EVASA), Forestal Argentina S.A. (FASA), Estancia Celina S.A. (ECSA) and Las Misiones S.A. (LMSA) approved the corporate reorganization whereby, subject to approval by the shareholders’ meetings of the companies involved, convened for May 22, 2025, EVASA will absorb the assets and liabilities of all the above-mentioned companies, with the merger becoming effective as of June 30, 2025.
Empresas Verdes Argentina S.A
Empresas Verdes Argentina S.A. is a private, unlisted company. Our subsidiary Proener holds a 98.01% while our subsidiary Forestal Argentina S.A. holds a 1.99% interest in the capital stock of Empresas Verdes Argentina S.A., a company that owns forestry assets in the Province of Corrientes.
On March 31, 2025, the Board of Directors of Empresas Verdes Argentina S.A. (EVASA), Forestal Argentina S.A. (FASA), Estancia Celina S.A. (ECSA) and Las Misiones S.A. (LMSA) approved the corporate reorganization whereby, subject to approval by the shareholders’ meetings of the companies involved, convened for May 22, 2025, EVASA will absorb the assets and liabilities of all the above-mentioned companies, with the merger becoming effective as of June 30, 2025. “Item 4. Information of the Company— Recent Developments – Simplification of Corporate Structure at Central Puerto S.A.”
Las Misiones S.A.
Las Misiones S.A. is a private, unlisted company. Our subsidiary Proener holds an 88.67% while Empresas Verdes Argentina S.A. holds a 11.33% interest in the capital stock of Las Misiones S.A., a company that owns forestry assets in the Province of Corrientes.
On March 31, 2025, the Board of Directors of Empresas Verdes Argentina S.A. (EVASA), Forestal Argentina S.A. (FASA), Estancia Celina S.A. (ECSA) and Las Misiones S.A. (LMSA) approved the corporate reorganization whereby, subject to approval by the shareholders’ meetings of the companies involved, convened for May 22, 2025, EVASA will absorb the assets and liabilities of all the above-mentioned companies, with the merger becoming effective as of June 30, 2025. “Item 4. Information of the Company— Recent Developments – Simplification of Corporate Structure at Central Puerto S.A.”
Estancia Celina S.A.
Estancia Celina S.A. is a private, unlisted company. Our subsidiary Las Misiones S.A. holds a 79.20%, our subsidiary Proener holds a 17.20% and Empresas Verdes Argentina S.A. holds a 3.60% interest, respectively, in the capital stock of Estancia Celina S.A., a company that owns forestry assets in the Province of Corrientes.
On March 31, 2025, the Board of Directors of Empresas Verdes Argentina S.A. (EVASA), Forestal Argentina S.A. (FASA), Estancia Celina S.A. (ECSA) and Las Misiones S.A. (LMSA) approved the corporate reorganization whereby, subject to approval by the shareholders’ meetings of the companies involved, convened for May 22, 2025, EVASA will absorb the assets and liabilities of all the above-mentioned companies, with the merger becoming effective as of June 30, 2025. “Item 4. Information of the Company— Recent Developments – Simplification of Corporate Structure at Central Puerto S.A.”
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Central Costanera S.A.
Central Costanera S.A. is a public, listed company on BYMA that is 72.26% owned by Proener as of December 31, 2024 and is engaged in the production and commercialization of electric energy.
CP Cordillera Solar S.A. (Previously known as Cordillera Solar VIII S.A.)
Cordillera Solar is a private, unlisted company which owns the Guañizuil IIA photovoltaic plant located in the Province of San Juan. As of December 31, 2024, CP Renovables held a 99.99% interest in the capital stock of Cordillera Solar VIII S.A., while Central Puerto held the remaining 0.01%.
CP Servicios Renovables S.A. (Previously known as Scatec Equinor Solutions Argentina S.A.)
CP Servicios Renovables S.A.is a private, unlisted company, which operates the Guañizuil IIA photovoltaic plant located in the Province of San Juan. As of December 31, 2024, CP Renovables held a 99.99% interest in the capital stock of CP Servicios Renovables S.A., while Central Puerto held the remaining 0.01%.
Our Affiliates
Termoeléctrica José de San Martín S.A. (TJSM) and Termoeléctrica Manuel Belgrano S.A. (TMB)
TJSM and TMB are private, unlisted companies, which are engaged in managing the purchase of equipment, and building, operating and maintaining the San Martín and Belgrano power plants, respectively, each constructed under the FONINVEMEM program.
As of December 31, 2024, we had 11.31% of the voting rights in TJSM and 12.72% of the voting rights in TMB.
The board of directors of each of TJSM and TMB consists of nine members.
After ten years of operations, TJSM and TMB were entitled to receive property rights to such power plants from the respective trusts currently holding such power plants. At such time, the term of the trusts expired and the Argentine Government, that financed part of the construction, should be incorporated as a shareholder of TJSM and TMB. Consequently, our interests in TJSM and TMB were diluted in 2021. In the case of TMB and TJSM, the ten-year period expired on January 7, 2020, and on February 2, 2020, respectively. From such dates, during the following 90-days, TJSM and TMB and their shareholders had to perform all the necessary acts to allow the Argentine Government to receive the corresponding shares in the equity stake of TJSM and TMB that their contributions entitle the Argentine Government to receive.
On January 3, 2020, before the aforementioned 90 days period commenced, the Argentine Government sent a notice to us (doing the same with TSM, TMB and other generation companies that are shareholders of TJSM and TMB) stating that, in accordance with the FONINVEMEM Agreement, TJSM and TMB should perform all necessary acts to incorporate the Argentine Government as shareholder of both companies, claiming, in each case, the following equity interest rights: 65.006% in TMB and 68.826% in TJSM.
On January 9, 2020, we, together with the other generation companies, shareholders of TJSM and TMB, replied such notice stating that the Argentine Government’s equity interest claims did not correspond with the contributions made for the construction of the power plants under the terms of the FONINVEMEM Agreement that give rights to claim such equity interest. On March 4, 2020, the Argentine Government reiterated its previous claim to us.
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Additionally, on January 7, 2020 and on January 9, 2020, Central Puerto, together with the other shareholders of TJSM and TMB (as guarantors within the framework and the limits stated by the FONINVEMEM Agreement, the Note SE No. 1368/05 and the trust agreements), BICE, TJSM, TMB and the Energy Secretariat, amended the Operation and Maintenance Agreement of the Manuel Belgrano Thermal Facility (the “TMB OMA”) and the Operation and Maintenance Agreement of the San Martín Thermal Facility ( the “TJSM OMA”), respectively. The amendments to the TMB OMA and TJSM OMA extended the agreements until each of the trust’s liquidation effective date.
In March 2020, Central Puerto filed an administrative appeal against the Argentine Government challenging their acts referred to above (the “Claim”). Pursuant to this Claim, the position of the shareholders of TJSM and TMB is that the Argentine Government equity interest in each of the companies should be lower but its incorporation as a shareholder in such companies is unchallenged. Therefore, even if we are successful with our Claim, our interests on TJSM and TMB were significantly diluted.
On May 4, 2020, and May 8, 2020, the extraordinary shareholders’ meetings of TMB and TJSM, respectively, approved the incorporation of the Argentine Government as shareholder of TJSM and TMB. In each of the extraordinary shareholders’ meetings, the approved equity interest that was approved was the equity interest that the Argentine Government claims that it is entitled to, which is: 65.006% in TMB and 68.826% in TJSM.
In each of the shareholders’ meetings, Central Puerto (and other shareholders), made the corresponding reservation of rights to continue with the Claim, and expressly stated that the incorporation of the Argentine Government as a shareholder in TMB and TJSM was approved for the sole purpose of achieving the transfer of the trust assets -which includes, among others, the power plants- from the respective trusts to TJSM and TMB.
On March 11, 2021, the Argentine Government has subscribed its shares and the equity of the shareholders of TJSM and TMB were diluted. In the case of our equity interest, from 30.875% to 9.627% in TJSM and from 30.946% to 10.831% in TMB.
Due to the acquisition of Central Costanera S.A., we hold equity interests of 11.31% in TJSM, 12.72% in TMB and 55.89% in CVOSA. As of the date of this annual report, the transfer of power stations to TSM and TMB was not completed. See “Item 3D. Risk Factors—Risks Relating to our Business—Our interests in TJSM, TMB were diluted and CVOSA will be significantly diluted”.
In the case of CVOSA, when the CVO Trust term expires after ten years of operation of the respective power plant the Argentine Government will be incorporated as shareholder, with a stake of at least 70.00% pursuant to FONINVEMEM arrangements for CVOSA. The dilution of our interest in CVOSA will reduce our income from this power plant, adversely affecting our results of operations. This will also take place when the Argentine Government incorporates as a shareholder of CVOSA and our equity interest in that company is diluted. See “Item 4.B. Business Overview—FONINVEMEM and Similar Programs”.
Ecogas Inversiones S.A.
Ecogas Inversiones S.A. (former Inversora de Gas del Centro S.A.) is a listed company. As of December 31, 2024 its only significant assets were a 55.29% interest in DGCE, a company engaged in the distribution of natural gas in the provinces of Córdoba, La Rioja and Catamarca and a 51.00% interest in DGCU, a company engaged in the distribution of natural gas in the provinces of Mendoza, San Juan and San Luis. In the fiscal year ended December 31, 2024, our investment in Ecogas Inversiones, together with our direct interest in DGCE, accounted for a gain equal to 27.52% of our consolidated net income. Such gain is primarily explained by Ecogas Inversiones’ higher net income during 2024 when compared to the previous year, and Central Puerto’s lower consolidated net income when compared to the previous year. Central Puerto’s lower consolidated net income was due to the following non-cash effects: (i) the impairment registered in the fiscal year ended December 31, 2024 and (ii) no registered gains from bargain purchases during the fiscal year ended December 31, 2024, as had been the case in our previous fiscal year.
As of the date of this annual report, Ecogas Inversiones holds a 81.64% interest in DGCE and a 93.10% interest in DGCU.
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On December 19, 2024, Ecogas Inversiones launched its Initial Public Offering (IPO) through the public offer for subscription of shares in kind and voluntary exchange addressed to (i) all shareholders holding Class “B” common shares of Distribuidora de Gas del Centro S.A., and (ii) all shareholders holding Class “B” and “C” common shares of Distribuidora de Gas Cuyana S.A., to be exchanged for new Class D common shares of Ecogas Inversiones. For additional information see “Item 4. Information on the Company—Recent Developments- Initial Public Offering of ECOGAS Inversiones S.A.”
As of December 31, 2024, we held a 42.31% interest in Ecogas Inversiones and a direct 17.20% interest in DGCE. Therefore, as of said date we held, both directly and indirectly, 40.59% of DGCE’s capital stock and indirectly a 21.58% interest in DGCU’s capital stock. See “Item 4. Information of the Company—Recent Developments—Simplification of Corporate Structure at Central Puerto S.A.”
Energía Sudamericana S.A.
Energía Sudamericana S.A. is a private, unlisted company, engaged in natural gas commercialization. As of December 31, 2024, we hold a 2.45% direct interest in the capital stock of Energía Sudamericana S.A., plus a 41.06% indirect interest in its capital stock, through our equity interest in Ecogas Inversiones.
COySERV S.A.
COySERV S.A. is a private, unlisted company, engaged in services and constructions related to the gas industry. As of December 31, 2024, we hold a 9.02% indirect interest in the capital stock of COySERV S.A., through our equity interests in Ecogas Inversiones S.A.
GESER S.A.U.
On March 24, 2022, we acquired an 8.599% interest in the related company GESER S.A.U., an entity controlled by Ecogas Inversiones. The purchase price was Ps.2,631 thousand. GESER S.A.U. is a private unlisted company which is engaged in providing administrative services.
Transportadora de Gas del Mercosur S.A. (TGM)
TGM is a private, unlisted company. We hold a 20.00% interest in the capital stock of TGM, which owns a natural gas pipeline extending from Aldea Brasilera (in the Province of Entre Rios) to Paso de los Libres (in the Province of Corrientes).
The remaining 80.00% is owned by Total Gas y Electricidad Argentina S.A. (32.68%), Tecpetrol S.A. (21.79%), RPM Gas S.A. (14.63%) and Compañía General de Combustibles S.A. (10.90%).
The pipeline is approximately 450 km long and its transportation capacity reaches up to 15 million cubic meters per day.
3C Lithium Pte. Ltd.
See “Item 4. Information of the Company—Recent developments”.
Business Overview
All of our operations in the power generation sector are concentrated in fourteen plants in Argentina, and our portfolio can be divided into two types of electric power generation plants: (i) electric power generation from conventional sources and (ii) electric power generation from renewable sources.
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The table below details certain operating features regarding our power generation assets for the periods indicated:
|
For the year ended December 31, |
|||||||
|
2024 |
2023 |
2022 |
|||||
| Generation—GWh/year | |||||||
| Puerto Complex | 5,109 | 5,371 | 7,414 | ||||
| Costanera Complex(4) | 4,638 | 3,367 | — | ||||
| Luján de Cuyo plant | 3,376 | 3,138 | 3,090 | ||||
| Brigadier Lopez plant | 95 | 67 | 153 | ||||
| San Lorenzo plant | 2,263 | 2,037 | 1,934 | ||||
| Piedra del Águila plant | 4,348 | 5,173 | 3,283 | ||||
| La Castellana I wind farm(2) | 372 | 398 | 432 | ||||
| La Castellana II wind farm(2) | 46 | 70 | 62 | ||||
| Achiras wind farm(2) | 186 | 188 | 201 | ||||
| Manque wind farm(2) | 254 | 238 | 231 | ||||
| Olivos wind farm(2) | 106 | 99 | 102 | ||||
| La Genoveva I wind farm(2) | 360 | 378 | 391 | ||||
| La Genoveva II wind farm(2) | 171 | 177 | 191 | ||||
| PS Guañizuil II(3) | 281 | 73 | — | ||||
| Total | 21,605 | 20,774 | 17,484 | ||||
| Sales under Spot Sales and electric power sales on the spot market—GWh/year | |||||||
| Puerto Complex | 5,109 | 5,371 | 7,414 | ||||
| Costanera Complex(4) | 4,638 | 3,367 | — | ||||
| Luján de Cuyo plant | 2,284 | 2,489 | 2,480 | ||||
| Brigadier Lopez plant | 95 | 69 | 34 | ||||
| San Lorenzo plant | 32 | 41 | 72 | ||||
| Piedra del Águila plant | 4,348 | 5,174 | 3,283 | ||||
| La Castellana I wind farm(2) | — | — | — | ||||
| La Castellana II wind farm(2) | — | — | — | ||||
| Achiras wind farm(2) | — | — | — | ||||
| Manque wind farm(2) | 4 | — | — | ||||
| Olivos wind farm(2) | 2 | — | — | ||||
| La Genoveva I wind farm(2) | — | — | — | ||||
| La Genoveva II wind farm(2) | — | — | — | ||||
| PS Guañizuil II(3) | — | — | — | ||||
| Total |
16,512 |
16,511 | 13,283 | ||||
| Sales under contracts and Power Purchase Agreements—GWh/year | |||||||
| Puerto Complex | — | — | — | ||||
| Costanera Complex(4) | — | — | — | ||||
| Luján de Cuyo plant | 698 | 641 | 609 | ||||
| Brigadier Lopez plant | — | — | 118 | ||||
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|
For the year ended December 31, |
|||||||
|
2024 |
2023 |
2022 |
|||||
| San Lorenzo plant | 2,013 | 1,987 | 1,863 | ||||
| Piedra del Águila plant | — | — | — | ||||
| La Castellana I wind farm(2) | 340 | 398 | 432 | ||||
| La Castellana II wind farm(2) | 43 | 70 | 62 | ||||
| Achiras wind farm(2) | 169 | 188 | 202 | ||||
| Manque wind farm(2) | 225 | 245 | 239 | ||||
| La Genoveva II wind farm(2) | 166 | 378 | 391 | ||||
| Olivos wind farm(2) | 88 | 177 | 191 | ||||
| La Genoveva I wind farm(2) | 331 | 92 | 94 | ||||
| PS Guañizuil II(3) | 256 | 73 | — | ||||
| Total |
4,329 |
4,249 | 4,201 | ||||
| Energy purchases—GWh/year | |||||||
| Puerto Complex | 32 | 49 | 71 | ||||
| Costanera Complex(4) | 64 | 66 | — | ||||
| Luján de Cuyo plant | 11 | 11 | 17 | ||||
| Brigadier Lopez plant | — | — | 3 | ||||
| San Lorenzo plant | 2 | 3 | 225 | ||||
| Piedra del Águila plant | — | — | — | ||||
| La Castellana I wind farm(2) | — | 1 | 1 | ||||
| La Castellana II wind farm(2) | — | — | — | ||||
| Achiras wind farm(2) | — | — | — | ||||
| Manque wind farm(2) | — | — | 8 | ||||
| La Genoveva II wind farm(2) | — | — | — | ||||
| Olivos wind farm(2) | — | — | — | ||||
| La Genoveva I wind farm(2) | — | — | — | ||||
| PS Guañizuil II(3) | 2 | — | — | ||||
| Total | 111 | 130 | 325 | ||||
| Steam production (metric tons/ear) | |||||||
| Luján de Cuyo plant | 1,164,375 | 928,381 | 918,044 | ||||
| San Lorenzo plant | 1,777,811 | 1,089,509 | 1,042,066 | ||||
| Total |
2,942,186 |
2,017,890 | 1,960,110 | ||||
| Natural gas consumption—MMm3/year | |||||||
| Puerto Complex | 999 | 876 | 899 | ||||
| Costanera Complex(4) | 929 | 902 | — | ||||
| Luján de Cuyo plant | 644 | 660 | 637 | ||||
| Brigadier Lopez plant | 12 | 1 | 2 | ||||
| San Lorenzo plant | 288 | 274 | 199 | ||||
| Total |
2,872 |
2,713 | 1,737 | ||||
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|
For the year ended December 31, |
|||||||
|
2024 |
2023 |
2022 |
|||||
| Gas oil consumption—thousands of m3/year | |||||||
| Puerto Complex | 62 | 44 | 222 | ||||
| Costanera Complex(4) | 1 | 10 | — | ||||
| Luján de Cuyo plant | — | — | — | ||||
| Brigadier Lopez plant | 15 | 19 | 43 | ||||
| San Lorenzo plant | 87 | 105 | 161 | ||||
| Total | 165 | 178 | 426 | ||||
| Fuel oil consumption—thousands of tons/year | |||||||
| Puerto Complex | 104 | 278 | 567 | ||||
| Costanera Complex(4) | 21 | 52 | — | ||||
| Luján de Cuyo plant | 8 | 4 | 4 | ||||
| Brigadier Lopez plant | — | — | — | ||||
| San Lorenzo plant | — | — | — | ||||
| Total | 133 | 334 | 571 | ||||
| Availability—% per year(1) | |||||||
| Puerto Complex | 73% | 75 | % | 79 | % | ||
| Costanera Complex(4) | 70% | 43 | % | — | |||
| Luján de Cuyo plant | 88% | 89 | % | 89 | % | ||
| Brigadier Lopez plant | 97% | 93 | % | 95 | % | ||
| Piedra del Águila plant | 98% | 98 | % | 100 | % | ||
| San Lorenzo plant | 99% | 99 | % | 91 | % | ||
| Weighted average for thermal units(1) |
90% |
66 | % | 84 | % | ||
| Weighted average for thermal and hydro plants(1) | 98% | 73 | % | 89 | % | ||
| __________________ |
Source: CAMMESA
| Notes:- |
| (1) | Weighted average based on the power capacity of each unit without considering renewable energy units, which do not receive payments tied to their availability. |
| (2) | La Castellana I, La Castellana II, Achiras, Manque, Olivos, La Genoveva I and La Genoveva II wind farms are owned by CP La Castellana S.A.U., CPR Energy Solutions S.A.U., CP Achiras S.A.U., CP Manque S.A.U., CP Los Olivos S.A.U, Vientos La Genoveva I S.A.U and Vientos La Genoveva II S.A. As of December 31, 2024, the first five facilities were fully owned subsidiaries of CP Renovables S.A. while the last two were a fully owned subsidiaries of Central Puerto S.A. As of the same date, we owned a 90.00% interest in CP Renovables. See “Item 4.B. Business Overview—Our Subsidiaries and “Item 4. Information of the Company—Simplification of Corporate Structure at Central Puerto S.A.”. |
| (3) | PS Guañizuil II solar farm is owned by CP Cordillera Solar S.A. which is a fully owned subsidiary of CP Renovables, as of December 31, 2024. See “Item 4.B. Business Overview—Our Subsidiaries and “Item 4. Information of the Company—Recent Developments”. |
| (4) | Costanera complex is owned by Central Costanera S.A. which is 72.26% owned by Proener S.A.U., as of December 31, 2024. As of the date of this annual report, we own a 100% interest in Proener. See “Item 4.B. Business Overview—Our Subsidiaries”. |
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Additionally, the table below shows the availability features regarding the three FONINVEMEM Plants for 2024, this availability rate considers 100% of the hours of the year:
| __________________ |
Source: Central Puerto, CAMMESA
The following graph shows the evolution of Central Puerto’s electric power generation for the period 2014-2024:
| __________________ |
Source: CAMMESA. The graph (i) includes generation of companies that were absorbed by Central Puerto in 2014 (see Business Section—The 2014 merger) and (ii) excludes the La Plata plant, which effective as of January 5, 2018, we sold to YPF EE. For further information, see “Item 4.A. History and development of the Company—La Plata Plant Sale”).
Electricity Generation from our Thermal Generation Plants
As of December 31, 2024, we owned six thermal generation plants across five complexes: Puerto Complex, Costanera Complex, Brigadier Lopez, Luján de Cuyo and San Lorenzo.
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Puerto Complex
Our Puerto Complex is composed of two facilities, Nuevo Puerto, including the Puerto combined cycle plant, and Puerto Nuevo (collectively, the “Puerto Complex”), located in the port of the City of Buenos Aires on the bank of the Río de la Plata. The two facilities are close to one another inside a complex of 246,475 square meters with a total installed capacity of 1,747 MW. Nuevo Puerto’s facilities (which includes both the Nuevo Puerto plant and the Puerto combined cycle plant) has 70,518 square meters. Puerto Nuevo has approximately 92,370 square meters.
Nuevo Puerto’s facilities were completed in 1926 and Puerto Nuevo’s facilities were completed in 1930. The two facilities were merged into a single company in the 1980s within SEGBA, which was later converted to Central Puerto after the privatization in 1992.
Nuevo Puerto is located at Av. Thomas Edison 2001/2151 in the City of Buenos Aires in the northern part of the complex and has two conventional steam turbine generator sets (steam turbine units 5 and 6). The plant can run on natural gas and fuel oil and has a current installed capacity of 360 MW.
The Puerto combined cycle plant was built at Nuevo Puerto’s facilities and commenced commercial operations in 2000. The Puerto combined cycle plant has an installed capacity of 798 MW and is composed of two General Electric 9FA gas turbines, two heat recovery steam generators and a General Electric D11 steam turbine. The Puerto combined cycle plant is one of the most modern and efficient plants in Argentina and can run on natural gas and gas oil. In addition, since 2011, the facilities were modified to allow for the use of a blend of up to 20.00% gas oil and biodiesel when running on liquid fuel.
Puerto Nuevo is located at Av. Thomas Edison 2701 in the City of Buenos Aires in the southern part of the complex and has three conventional steam turbine generator sets (steam turbine units 7, 8 and 9). The plant is capable of running on natural gas and fuel oil and has an installed capacity of 589 MW.
Technology. The steam turbine generators at both facilities include turbines with high, medium and low-pressure stages that run on superheated steam from a dedicated conventional heat generator. The steam turbine generator works on a cycle. Water flows towards a heat generator that creates steam. The expansion of the steam makes the turbine rotate, triggering an electric power producing generator. Once the steam has been used in the turbine, it is collected in condensers where it returns to its liquid form, and the water flows again towards the heat generator to produce more steam and feed the turbine again.
The combined cycle technology is one of the most efficient fossil fuel-based electric power generation technologies available. It works by first feeding each gas turbine with a mix of fuel and air. The gas that is produced from this process expands rapidly due to combustion and the generator and turbine ultimately convert the resulting rotational energy into electric power. The exhaust gas from each turbine is collected and channeled to a heat recovery steam generator that uses the heat energy contained in the gas turbine exhaust gas to produce steam. The steam that is produced is injected into a steam turbine where it expands and transmits energy to the turbine, which converts the energy into electric power through a generator. Similar to the case of a conventional steam turbine, the steam is condensed and sent back to the circuit to produce more steam.
Location. The Puerto Complex is located inside the port of the City of Buenos Aires and has a right-of-way to use the port facilities, allowing it to receive and store fuel on a large scale. The liquid fuel (gas oil, fuel oil and biodiesel) is delivered by ships that dock near the premises, where the fuel is directly unloaded at the complex. To provide operating flexibility, the Puerto Nuevo and Nuevo Puerto facilities have underground connection systems, which are used to move fuel between plants based on each plant’s delivery needs.
The Puerto Complex’s location on the bank of the Río de la Plata is also convenient in terms of water supply, which is a basic input for our plants. Water is integral both for creating steam and cooling the generation units. Puerto Nuevo and Nuevo Puerto have water treatment facilities that are capable of taking water from the river and delivering it at the quality required for each stage of the electric power generation process.
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We currently own the property where the Nuevo Puerto, Puerto combined cycle and Puerto Nuevo plants are located.
Supply. The electric power produced at each plant is delivered to the SADI through a transformer belonging to our generation units. The transformer adjusts the generator output voltage to the voltage required by the network. The electric power is delivered at 132 KV sub-stations neighboring the plants, which are currently operated by Edenor S.A. (the holder of the electric power distribution concession in the area where the Puerto Complex is located).
Costanera Complex
Technology. It ranks among the country's largest thermal power plants, boasting over 1,789 MW of installed capacity. This capacity is comprised of four Steam Turbine units totaling around 661 MW (including i. three British Thomson-Houston - BTH - units, each approximately 120 MW, operational since the 1960s, and ii. one 310 MW LMZ unit from 1984), capable of being fueled by both natural gas and fuel oil.
Location. The Central Costanera complex stands as one of Argentina’s primary thermal power plants. Commencing operations in 1963, it strategically sits in the southern area of the port of the Autonomous City of Buenos Aires, adjacent to the Río de la Plata. This positioning allows a significant flexibility in fuel supply, and also a key proximity to the country’s major electricity consumption center, the Greater Buenos Aires area.
Additionally, it features two high-efficiency combined cycles, a Siemens unit of approximately 277 MW, which was Argentina's first combined cycle, built during 1995-1996, and a Mitsubishi unit of 851 MW, capable of operating with either natural gas or gas oil, commissioned in 1999. In May 2024 units COSTTV04 (120 MW) and COSTTV06 (350 MW), were officially decommissioned through Resolution 57/2024, following a request originally made by Enel, former owner of such power plant. This decision had no impact on revenues.
Supply. Central Costanera injects its energy into the SADI via connections at 132kv and 220kv, facilitated by a transformer station operated by EDESUR.
Luján de Cuyo Plant
The Luján de Cuyo plant is located in Luján de Cuyo, Mendoza and has an installed capacity of 576 MW. The plant began operating in 1971.
Technology. The Luján de Cuyo plant has eleven generating units, seven gas turbines, three steam turbines and a mini-hydroelectric turbine (which began operating in 2013). The plant has a total installed capacity of 576 MW.
The main generator is a combined cycle unit composed of a Siemens gas turbine (TG25) and a Sköda steam turbine (TV15). We believe this is state-of-the-art technology is and our combined cycle unit is highly efficient.
The plant also has a combined heat and power (CHP) unit in place, which commenced operations on October 5, 2019. This unit supplies up to 125 tons per hour of steam to YPF’s refinery in Luján de Cuyo under a steam provision contract. The plant has two Siemens gas turbines (TG26 and TG27) and two heat recovery steam generators. The steam flows into YPF’s facilities through a steam duct that connects the plant to the refinery. Both gas turbines can operate on natural gas or gas oil.
The Luján de Cuyo plant also has two Alstom-branded Frame5-type gas turbines (TG23 and TG24). Prior to the commencement of operation of units TG26 and TG 27 described above, TG23 and TG24 supplied steam to the YPF Luján de Cuyo refinery in a combined heat and power (cogeneration) configuration. Beginning October 5, 2019, TG23 and TG24 have been set up to work in an open cycle configuration Both gas turbines can operate on natural gas or gas oil.
The Luján de Cuyo plant also had an ABB combined cycle unit in place composed of two gas turbines (TG21, TG22) and a steam turbine (TV14), which operates on natural gas or gas oil, or on blends of gas oil and biodiesel (up to 30.00%). Since TG21 had been out of service since 2014, we petitioned CAMMESA an authorization to disconnect this unit from the WEM, which was granted in April 2019. Additionally, we requested the disconnection of the steam turbine unit TV14, due to the low power output capacity of the unit, which was granted in October 2019. The technical characteristics of TG22 allow it to operate as an open cycle gas turbine. As a result, only the power capacity of TG22 was considered for the purpose of describing the total capacity of the Luján de Cuyo plant in this annual report.
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In 2013, a mini hydroelectric turbine began operations under the GENREN program, a renewable energy program sponsored by the Ministerio de Planificación (Planning Ministry), (later, the Secretariat of Electric Energy and currently the Secretariat of Energy). The operation consists of a turbine and a 1 MW Ossberger generator and relies on the waterfall inside the Luján de Cuyo plant’s premises to generate energy. The waterfall is connected to the Mendoza River, and the water from the waterfall is channeled towards the plant to cool the steam turbine condensers.
In 2013, we also made the necessary investments to generate and sell electric power in the Energía Plus. To such end, we augmented the combined-cycle facilities (TG25-TV15) to increase the power of the generator assembly by 16 MW. Under the rules and regulations of the Energía Plus, the generator buys the fuel to cover the committed demand of electric power and supplies the energy to large electric power consumers at market prices, denominated in U.S. dollars, previously agreed between the generator and its clients. Under these agreements, the generator needs to have a contract for the supply of fuel for generation purposes to cover the committed demand.
Location. The plant is located inside the Provincial Industrial Park in Luján de Cuyo, Mendoza. The plant is close to other industrial facilities, including YPF’s Luján de Cuyo refinery.
The premises on which the Luján de Cuyo plant is located are on the banks of the Mendoza River, a major river in the Province of Mendoza. The Luján de Cuyo plant’s access to water from the Mendoza River provides it with a source of water to supply the generation process and to cool the condensers. The facility has a water treatment plant with production levels suitable to meet its requirements.
Supply. The electric power generated by the units installed in the Luján de Cuyo plant is delivered to the SADI through a connection between the network and the Luján de Cuyo 132 KV sub-station, which is adjacent to the plant. The sub-station is operated by Distrocuyo, an operator of the trunk pipeline system from the Cuyo region. Steam is delivered to YPF pursuant to separate contract (apart from the La Plata plant YPF agreement) through a short pipeline that connects our Luján de Cuyo plant with YPF’s adjacent Luján de Cuyo refinery.
Because the Luján de Cuyo plant is land-locked, liquid fuels must be transported by land, typically by truck. To accommodate the fuel supply chain, the plant has an unloading area for trucks with facilities equipped to receive gas oil, fuel oil and biodiesel. YPF is required to supply natural gas to be used on-site, and, in the event of a shortage, YPF is required to supply gas oil for up to 45 days per year. The location of the YPF-owned Luján de Cuyo refinery makes the logistics process easier due to the proximity of the Luján de Cuyo refinery to the Luján de Cuyo plant.
Brigadier Lopez Plant
Brigadier Lopez power plant is located in the Sauce Viejo Industrial Plant, in the city of Sauce Viejo, Santa Fe. The plant has an installed capacity of 281 MW and has been in operation since August 2012.
In 2010, the public sector power generation company IAESA (formerly named ENARSA) began the construction of the plant. In 2012, ENARSA set the COD of the open cycle Gas Turbine, completing the first stage of the project. In June 2019, Central Puerto acquired the plant, with the objective to install a steam turbine, which was already acquired, with an installed capacity of up to 140 MW in a combined cycle configuration together with the existing gas turbine. As of the date of this annual report, the facilities construction of the combined cycle plant has started and is expected to be completed during 2025 (see "See Item 4. A History and development of the Company—Purchase of the Brigadier Lopez Plant").
Technology: The Brigadier Lopez Power Plant has one operating power generation unit, with 281 MW of installed capacity (which could reach up to 420 MW of total capacity, operating as a combined cycle unit). This generating unit is composed of a modern Siemens Gas Turbine (TG01) model SGT5-4000 F and an air-cooled Siemens power generator, model SG 1000A. The Gas Turbine can operate both on natural gas and gas oil (diesel oil).
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In addition, the plant has at its location a 140 MW Steam Turbine model SST-900 RH Dual Casing and a Heat Recovery Steam Generator, installation of which has not been completed as of the date of this annual report. Under a combined cycle configuration, the Brigadier Lopez plant would operate as a highly efficient combined cycle, increasing both its efficiency and total power capacity.
Location: The plant is located in the Sauce Viejo Industrial Plant, nearby many other industrial facilities. Sauce Viejo industrial plant is located on the National Highway N° 11, 20 km from Santa Fe City, capital district of the Province of Santa Fe. This location is highly convenient due to its accessibility and logistic advantages.
Furthermore, the Brigadier Lopez power plant is located on the banks of the Coronda River, one of the major branches of the Paraná River. Such access from the Coronda River provides a source of water supply for the generation process and the steam turbine’s condenser. The facility has a water treatment plant with production levels suitable to meet its requirements.
Supply: The electric power generated by the units installed in the Brigadier Lopez power plant is delivered to the SADI, first through a high voltage power transformer, and then through the Brigadier Lopez 132 kV power sub-station. While the transformer is property of Central Puerto, the sub-station is operated by EPE Santa Fe (holder of the electric distribution and transmission concession in the Province of Santa Fe). The transformer changes the generator’s voltage output to meet the required voltage of the electrical grid, and the sub-station serves as an interface between the Brigadier Lopez plant and the overhead transmission lines connected to the SADI.
The plant operates most of the time using natural gas. It is connected to the main gas pipeline (GNEA) through a 19 km dedicated pipeline that guarantees supply of natural gas. Alternatively, the plant can also be operated using liquid fuels which must be transported by land, typically by truck. To accommodate the fuel supply chain, the plant has an unloading area for trucks with facilities equipped to receive and deliver gas oil. Alternatively, the plant also has a dock (operation not available yet), that will be capable of receiving liquid fuels transported by ship.
San Lorenzo
San Lorenzo power plan is located near San Lorenzo city in the Province of Santa Fe. This is a greenfield cogeneration project, with a total installed capacity of 391 MW and a steam generation capacity of 370 tn/h. The plant started commercial operations by the end of 2020 and started commercial operations under the CAMMESA contract on August 15, 2021.
Technology: San Lorenzo power plant is a Siemens combined cycle able to generate up to 391 MW, with a 291 MW Gas turbine and a 100 MW Steam turbine. By electric output regulation, the plant can supply up to 370 tn/h of steam to our neighbor customer, T6 Industrial S.A. Gas turbine can operate on natural gas or gas oil.
Supply: The electric power generated by the units installed in the San Lorenzo plant is delivered to the SADI through two connections. The steam turbine generator is connected by a 132 KV cable with San Lorenzo Substation (EPESF facility) and the gas turbine generator is connected by a 500 KV line to TRANSENER facilities.
Maintenance
The plants have repair shops, warehouses and facilities suitable for the operation and maintenance of the units. Maintenance of the plants is coordinated with CAMMESA to avoid shortage in the power grid. Repair and maintenance procedures are key to the success of our business and are conducted according to unit type by either our own staff or under long-term service agreements executed with leading global companies in the construction and maintenance of thermal generation plants, such as (i) General Electric, which is in charge of the maintenance of the Puerto combined cycle plant and part of the Luján de Cuyo-based units, and (ii) Siemens, which carries out the maintenance of the combined cycle of the Mendoza site, the Brigadier Lopez thermoelectric plant and the Luján de Cuyo and San Lorenzo cogeneration units, and (iii) Mitsubishi, which carries out the maintenance of the remaining combined cycle located in Central Costanera.
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Under long-term service agreements, suppliers provide materials, spare parts, labor and on-site engineering guidance in connection with scheduled maintenance activities, in accordance with the applicable technical recommendations.
Our own staff is in charge of the maintenance of the steam turbine generator sets. We maintain an inventory of the necessary spare parts on-site, which ensures the immediate availability of parts when needed. This reduces the time it takes to replace the spare parts while ensuring a supply of spare parts that may no longer be available in the market.
Our accurate planning of in-house maintenance and outsourced maintenance by General Electric, Siemens and Mitsubishi under the long-term service agreements, all of them with their own monitoring systems to anticipate future failures. These agreements allows us to minimize downtime and reduce the government-imposed outage rate of the units, thus maximizing their efficiency.
We have long-term maintenance service agreements for our thermal generation plants provided by world-leading companies in the construction and maintenance of thermal power plants such as (i) General Electric, which maintains the combined cycle plant of Nuevo Puerto and Luján de Cuyo, (ii) Siemens, which carries out the maintenance of the combined cycle of the Mendoza site, the Brigadier Lopez thermoelectric plant and the Luján de Cuyo and San Lorenzo cogeneration units, and (iii) Mitsubishi, which carries out the maintenance of the remaining combined cycle located in the Central Costanera.
Within the framework of the aforementioned agreements, these suppliers provide materials, spare parts, labor and engineering direction of scheduled maintenance in accordance with the corresponding technical recommendations.
We have entered into long term contracts with Vestas Argentina S.A. for the operation and maintenance of the La Genoveva I wind farms until August 30, 2040, La Genoveva II until May 31, 2039, La Castellana II until May 31, 2039 and Manque and Los Olivos until May 31, 2039. We also have entered into long term contracts with Nordex Energy Argentina S.A for the operation and maintenance of the Achiras wind farm until September 3, 2028 and La Castellana until August 12. 2028. As for Guañizuil II A solar farm we currently hold a long-term contract with Huawei International Corporation until April 16, 2025. Currently, negotiations are being held and we expect to extend this contract through 2030.
We have long-term maintenance contracts with the manufacturers of our combined cycle units and co-generation plants with the largest capacity, namely the Puerto combined cycle unit, the Luján de Cuyo combined cycle unit at the Luján de Cuyo plant, the Brigadier Lopez gas turbine, the co-generation units at the Luján de Cuyo plant, the San Lorenzo cogeneration plant, the Mitsubishi combined cycle in Central Costanera and our windfarms and solar farms, under which the manufacturers provide maintenance using best practices recommended for such units. Our remaining units receive maintenance through our highly trained and experienced personnel, who strictly follow the recommendations and best practices established by the manufacturers of such units. We are also capable of generating power from several sources of fuel, including natural gas, diesel oil and fuel oil. In addition, in recent years we have invested in adapting our facilities to be able to generate power from biofuels, and we have developed business relationships over the years with strategic companies from the oil and gas and the biofuel sectors. Our power generation units are also favorably positioned along the system’s power dispatch curve, also known as the WEM marginal cost curve. This advantageous position is due to our technologically diverse power generation assets and high fuel consumption efficiency. These factors ensure a robust energy dispatch to the system, even considering upcoming capacity additions that were awarded under auctions seeking to increase thermal generation capacity and capacity from renewable energy sources.
During 2024, the main failures resulting in unavailability of our power generation units were the following:
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| Central Puerto Complex | CEPUCC | TG11: Turbine blade replacement and generator rotor replacement. |
|
TG12: Generator Rotor Replacement and inspection of the hot gas path area in the turbine HRSG tube rupture occurred in April (4 days) TV10: replacement of blades in low pressure stage. | ||
| PNUETV's | Air heater failures. Tube rupture and boiler insulation. | |
| PNUETV08 not operating since October for boiler preservation. | ||
| PNUETV09 air heater failure in March (10 days). | ||
| NPUETV's | Problems in air heaters, in regulating oil circuit, and cooling water system. | |
| Central Costanera Complex | COSTCC | Exhaust gas losses and replacement of combustors during September/October. |
| COSTTV’s | Boiler tube ruptures, failures in the lubrication circuit and problems in the feed water and cooling circuits. | |
| BSASCC01 | Failure of IGV and turbine sensors. 132KV circuit breaker fails for 23 days in November. | |
| Luján de Cuyo Plant | LDCUCC | Failure of IGV in August (8 days). |
| LDCUTV's | Air heater failures. Boiler tube rupture. | |
| Throughout the year, both units operating with limited power for boiler conservation. | ||
| LDCUTG's | Failures in the combustion system and transformer protections. | |
| LDCUCOG | Combustion system failures (VGV - Variable Guide Vanes failure) in the unit LDCUTG27 for 2 days in August. | |
| San Lorenzo Plant | TER6 | Atmospheric discharge failure for 2 days in June. |
| 132 KV circuit breakers fail for 4 days in October. |
Fuel and Water Supply for Thermal Generation
Our conventional resource plants operate on three different types of fuel: (i) natural gas in all units, (ii) fuel oil in the steam turbines exclusively and (iii) gas oil in the gas turbines and combined cycle units. In addition, a mix of bio-diesel and gas oil may be used in certain percentages in our dual combined cycle units.
The table below shows the potential consumption (calculated as the standard consumption declared by CAMMESA based on the unit manufacturer’s specifications, assuming the unit produces energy throughout the entire day) of fossil fuel by the units in the conventional resource plants we owned as of December 31, 2024:
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|
Plan |
Unit |
Natural gas (thousands of m3/day) |
Gas oil (m3/day) |
Fuel oil (tons/day) |
|||||
| Puerto combined cycle | CEPUCC11 | 1,804 | 1,917 | — | |||||
| Puerto combined cycle | CEPUCC12 | 1,804 | 1,917 | — | |||||
| Nuevo Puerto | NPUETV05 | 791 | — | 690 | |||||
| Nuevo Puerto | NPUETV06 | 1,611 | — | 1,369 | |||||
| Puerto Nuevo | PNUETV07 | 992 | — | 826 | |||||
| Puerto Nuevo | PNUETV08 | 1,319 | — | 1,109 | |||||
| Puerto Nuevo | PNUETV09 |
1,600 |
— |
1,356 |
|||||
| Subtotal Puerto Complex | 9,921 | 3,834 | 5,350 | ||||||
| Central Costanera | COSTTV01 | 1,074 | — | 807 | |||||
| Central Costanera | COSTTV02 | 927 | — | 776 | |||||
| Central Costanera | COSTTV03 | 936 | — | 734 | |||||
| Central Costanera | COSTTV07 | 2,278 | — | 1,859 | |||||
| Central Costanera | COSTCC08 | 1,947 | 2,072 | — | |||||
| Central Costanera | COSTCC09 | 1,947 | 2,072 | — | |||||
| Central Costanera | BSASCC01 |
1,387 |
— |
— |
|||||
| Subtotal Central Costanera Complex | 10,496 | 4,144 | 4,176 | ||||||
| Luján de Cuyo | LDCUCC25 | 1,342 | — | — | |||||
| Luján de Cuyo | LDCUTV11 | 457 | — | 379 | |||||
| Luján de Cuyo | LDCUTV12 | 463 | — | 379 | |||||
| Luján de Cuyo | LDCUTG22 | 285 | 288 | — | |||||
| Luján de Cuyo | LDCUTG23 | 205 | 201 | — | |||||
| Luján de Cuyo | LDCUTG24 | 211 | 206 | — | |||||
| Luján de Cuyo | LDCUTG26 | 207 | 202 | — | |||||
| Luján de Cuyo | LDCUTG27 |
210 |
206 |
— |
|||||
| Subtotal Luján de Cuyo plant | 3,380 | 1,103 | 758 | ||||||
| Brigadier Lopez | BLOPTG01 |
1,758 |
1,820 |
— |
|||||
| Subtotal Brigadier Lopez plant | 1,758 | 1,820 | — | ||||||
| San Lorenzo | TER6CC11 |
1,586 |
1,639 |
— |
|||||
| Subtotal San Lorenzo plant | 1,586 | 1,639 | — | ||||||
| Total Central Puerto |
27,141 |
12,540 |
10,284 |
| __________________ |
Source: CAMMESA. Definitive Seasonal Programming
Our exposure to changes in fuel prices is limited because, under the existing regulations, the necessary fuel to produce our base energy is supplied by CAMMESA without any charge. The price that the generators receive for this energy is determined by the Secretariat of Energy, without provisions for the price of the fuel supplied.
With respect to water consumption, water has an associated cost only in certain specific cases since we produce the necessary water with our own facilities. In the case of the supply of steam to YPF’s Luján de Cuyo plant in Mendoza, we pay for the water when the water consumption thresholds set forth in the contract with YPF are exceeded.
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Electricity Generation from our Hydroelectric Complex
Piedra del Águila
The Piedra del Águila hydroelectric complex is the largest private sector hydroelectric generation complex in Argentina. It was completed in 1994 and is located approximately 1,200 kilometers to the southwest of Buenos Aires at the edge of Limay River and on the border of the provinces of Neuquén and Río Negro. Piedra del Águila has an installed capacity of 1,440 MW from four 360 MW generating units.
Piedra del Águila has a gravity dam made of concrete, with a maximum height of 170 meters from its foundation, a power plant with four generating turbines of 360 MW each, intake and pipeline work, a spillway with an unloading capacity of 10,000 cubic meters per second, river diversion works, unloading equipment with a capacity of 1,500 cubic meters per second, and construction facilities, including access roads, a bridge and electric power supply. The dam is designed to be able to accommodate two additional turbines of 360 MW, although, as of the date of this annual report, we do not plan to have them installed (they would provide the plant with increased power to supply demand peaks but would not change the electric power generated per year since such generation depends on river water levels).
Water resources allow Piedra del Águila to generate an average of 4,490 GWh per year (based on historical operations between 1994 and 2024, exclusive of electric power generated for internal use). During this period, the maximum generation in a single year was 7,333 GWh in 2006 and the lowest was 2,351 GWh in 2016.
The following table shows the electric power generated by Piedra del Águila during the period 1994-2024:
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Source: CAMMESA.
The Dam. The Piedra del Águila dam is composed of approximately 2.8 million cubic meters of waterproof concrete. It is 860 meters long and approximately 170 meters high (from its foundation). The storage capacity of the dam totals 12 billion cubic meters, out of which 6 billion cubic meters are usable, which would allow for 45 days’ generation at a capacity of 1,440 MW on a 24-hour basis.
Safety of the Paleochannel. On the left bank of the dam there is a fluvial valley filled with basalt, which we refer to as the “paleochannel”. This natural structure consists of the second part of the river closing, which was made waterproof to ensure stability. The paleochannel contained a potential leakage zone on the left bank. To mitigate risks associated with this potential leakage zone, a number of works were performed to reduce drainage gradients and ensure stability prior to the initial filling of the dam:
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| · | Cutoff Curtain: To make the alluvial fill between the bedrock and the basalt contact area watertight, a cutoff curtain was created through grouting and chemical injections from horizontal tunnels of about 1,200 meters in length that were dug into the massif. | |
| · | Diaphragm Wall: This is a transition concrete structure of about 150 meters in length that connects the cutoff curtain to the dam. | |
| · | Drainage Curtain: This is a horizontal tunnel of over 400 meters in length dug in the rock massif that covers the entire transversal section of the paleochannel, from which drillings were performed to capture the leakage water that passes the cutoff curtain. | |
| · | Drainage Wells: These consist of five vertical wells of about 40 meters in depth and five meters in diameter located in a downstream area of the drainage curtain, from which sub-horizontal holes were drilled directed towards the basalt-alluvium contact to capture the water draining through such highly permeable zone. | |
| · | Pumping System: This consists of ten electric pumps installed in a gallery located in the amphitheater (the area at the bottom of the paleochannel massif) intended to maintain piezometric levels of one of the existing aquifers in the alluvium at predetermined levels to ensure the zone stability. |
The Power plant. The hydroelectric generation plant is located at the foot of the dam and has four Francis-type turbines with corresponding generators, transformers for each generator and operating, control and auxiliary equipment. The turbines are hydraulic turbines composed of vertical axes with a spiral steel casing. Each turbine has a rated capacity of 360 MW and a rated hydraulic load of 350 cubic meters per second and is designed to rotate at 125 rpm.
Each generator has a corresponding set-up transformer of 500 kV, which consists of a dual guide rod system, with a single SF-6 iron-isolated switch, to which all generating units are connected. The switch is connected to the SADI’s transformer substation through two transmission lines. Energy is delivered at Piedra del Águila’s 500 KV plant, which is operated by Compañía de Transporte de Energía Eléctrica en Alta Tensión S.A. (“Transener”), which owns, operates and maintains the largest high voltage electric power transmission system in Argentina.
During the shutdowns and start-ups of the power plant, there are two 13.2 kV lines in place that serve as auxiliary service related to the local distribution network operated by Neuquén’s energy regulatory authorities, two back-up generators, and two 110V stationary batteries, each of which is capable of supplying electric power.
The operation and maintenance of a hydroelectric plant are relatively simple compared to the labor-intensive requirements of thermal plants. To operate the plant, we mainly monitor the water flow, the electric power generation and the related equipment. The plant’s operations staff is organized into several departments: (i) civil engineering (in charge of monitoring the equipment and the dam structure); (ii) operations (in charge of monitoring the delivery of the electric power); (iii) special services and technical support; and (iv) administration. Our employees are in charge of plant maintenance.
Operation and maintenance of the hydroelectric plant are managed in accordance with manufacturers’ recommendations and industry standards. To monitor management of the plant, we use performance metrics specified in Standard 762 of the Institute of Electrical and Electronics Engineers (IEEE).
All ordinary operation and maintenance tasks are performed by company personnel. Electromechanical maintenance of generators and auxiliary equipment focuses on fault prediction and prevention and is intended to minimize corrective maintenance and maximize availability of the generators.
Generators are operated in accordance with the requirements of the Organismo Encargado del Despacho (OED) (the “Dispatching Agency”) and in compliance with the Normas de Manejo de Aguas (NMA) (Water Management Standards). Water management and dam operation are overseen by the Autoridad Interjurisdiccional de Cuencas (Intergovernmental Basin Authority).
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The status of the dam and paleochannel is audited every five years by an independent expert panel under the supervision of the Organismo Regulador de Seguridad de Presas (ORSEP) (Dam Safety Regulator). Fish and water quality are also monitored in the dam and tributaries at least four times per year.
The HPDA Concession Agreement. We entered into a concession agreement with the Argentine Government that expired on December 28, 2023 (the “HPDA Concession Agreement”). Under the HPDA Concession Agreement, we are entitled to generate and sell electric power and use certain state-owned property, including the plant and its water resources. We can use the plant solely for the purpose of generating electric power. The Argentine Government and the Intergovernmental Basin Authority are entitled to allocate or use in any other manner the current or future water resources without any obligation to compensate us. The HPDA Concession Agreement and the rights granted therein may not be assigned without the Argentine Government’s prior consent. Upon the expiration of the concession term, the Argentine Government will recover possession of the plant without any obligation to compensate us. As of the date of this report, we are currently in the Transition Period, as established in Section 67.1 of the HPDA Concession Agreement.
Resolution No. 574/2023, published on July 11, 2023, extended for 60 days (extendable for another 60 days) the termination date of the HPDA Concession Agreement, among other national hydroelectric power plants whose concession term expired during 2023. Another renewal of such period was established in Resolution 02/24, issued by the Secretariat of Energy, which was set to expire on April 27, 2024. In addition, on March 15, 2024, Resolution 33/24, issued by the Secretariat of Energy, extended once again the transition period for 60 days setting the expiration date on June 28, 2024. On August 14, by virtue of Decree No. 718/2024 issued by the current administration, the concession was extended until December 28, 2025. On April 9, 2025, Decree No. 263/2025 was issued, setting a period of 15 days to launch the National and International Public Tender provided for under Decree No. 718/2024 (as amended by Decree No. 895/2024) for purposes of offering certain hydro assets (including HPDA) to private investors for a new concession term.
By virtue of the extension granted by Decree No. 718/2024, we extended the useful life of the turbogroups and auxiliary equipment of the Piedra del Águila Hydroelectric Complex, in order to depreciate them until the new date of termination of the HPDA Concession Agreement.
Below we summarize certain terms of the HPDA Concession Agreement:
| · | Operations: We are required to comply with certain standards and conduct certain activities, including maintaining Ps.2.7 million as a guarantee, maintaining the plant and complying with certain safety and environmental obligations, contributing to a repair fund, maintaining books and maintaining insurance, among others. | |
| · | Mandatory works: The Argentine Government may require us to carry out works jointly funded by it and us. | |
| · | Fees and royalties: The Intergovernmental Basin Authority is entitled to a fee of 2.50% of the plant’s revenues, and the provinces of Río Negro and Neuquén are entitled to royalties of 12.00% of such revenues. | |
| · | Indemnity: The Argentine Government indemnifies us in certain circumstances, including, among others, for damages or repairs that are not attributable to us, or our agents and damages caused by downstream waters, in each case subject to certain conditions. We also indemnify the Argentine Government in certain circumstances. | |
| · | Fines: Any delay or failure by us to comply with the provisions of the HPDA Concession Agreement or the regulations concerning the generation and sale of electric power may result in fines imposed by the applicable regulatory authorities, calculated as a percentage of the plant annual revenues, depending on the type of breach. The Argentine Government may require that CAMMESA make payment of the fines directly to the Argentine Government out of proceeds from the electric power sold in the WEM. |
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| · | Termination: The original period for the concession granted under the HPDA Concession Agreement expired in 2023. However, such period was extended through subsequent regulations, most recently, through Decree No. 718/2024 issued by the current administration, until December 28, 2025. See “Item 4.A History and development of the Company - Hidroeléctrica Piedra del Águila S.A. (HPDA)”. According to the HPDA Concession Agreement, the Company and the Argentine Government may terminate the HPDA Concession Agreement in certain circumstances in which we fail to perform our obligations under the agreement and in which we are subject to fines or do not comply with the certain laws and regulations, among others. |
Supply. Substantially all of the electric power produced by Piedra del Águila and other generators in the Comahue area is transported to locations where demand is higher. Demand is highest primarily in the Buenos Aires metropolitan area, which is located some 1,200 kilometers away from the plant. The distribution system from the Comahue region comprises two corridors with a total of four 500 kV transmission lines (the last of them started to operate in December 1999), in addition to a fifth line that connects Comahue to the Cuyo region, which started to operate in September 2011. Since the end of the construction of these last two lines, the plants in the Comahue region have been able to use the entire generation capacity.
Relationship with Provincial Governments. As members of the governing body of the Intergovernmental Basin Authority, the governments of Neuquén and Río Negro are involved in the regulatory oversight of the water resources used by Piedra del Águila. In accordance with the HPDA Concession Agreement and Section 43 of Law No. 15,336, we are required to pay a 12.00% royalty on the revenues derived from electric power generation. This royalty is distributed between the provinces of Neuquén and Río Negro in equal parts. The government of Neuquén owns a 4.13% stake in us.
Electricity Generation from our Wind Generation Plants
As of the date of this annual report we operate seven wind farms: La Castellana I, La Castellana II, Achiras, Manque, Los Olivos, La Genoveva I and La Genoveva II.
La Castellana I Wind Farm
La Castellana I is a wind farm operated by CP La Castellana S.A.U., a wholly-owned subsidiary of CP Renovables as of December 31, 2024 (see “Item 4 – Information of the Company - Recent Developments - Simplification of Corporate Structure at Central Puerto S.A.”), in which we have a majority interest. The wind farm is located in the south of the Province of Buenos Aires, near the cities of Villarino and Bahía Blanca, and started its operations in August 2018.
It has a total installed capacity of 100.8 MW, from 32 wind turbines, supplied from Nordex-Acciona, of 3.15 MW each.
Achiras Wind Farm
Achiras is a wind farm operated by CP Achiras S.A.U., a wholly-owned subsidiary of CP Renovables as of December 31, 2024 (see “Item 4 - Information of the Company - Recent Developments - Simplification of Corporate Structure at Central Puerto S.A.”), in which we have a majority interest. The wind farm is located in the east of the Province of Córdoba, near the city of Achiras, and started its operations in September 2018.
It has a total installed capacity of 48 MW, from 15 wind turbines, supplied from Nordex-Acciona, of 3.2 MW each.
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La Castellana II Wind Farm
La Castellana II is a wind farm operated by Vientos La Genoveva II S.A., a wholly-owned subsidiary of CP Renovables, in which we have a majority interest. See “Item 4 - Information of the Company - Recent Developments - Simplification of Corporate Structure at Central Puerto S.A.”.
The wind farm is located in the south of the Province of Buenos Aires, near the cities of Villarino and Bahía Blanca, and started its operations in July 2019. It has a total installed capacity of 15.2 MW, from 4 wind turbines, supplied by Vestas, of 3.6 MW each.
Manque Wind Farm
Manque is a wind farm operated by Vientos La Genoveva II S.A., a wholly-owned subsidiary of CP Renovables as of December 31, 2024, in which we have a majority interest. "See Item 4 - Recent Developments - Simplification of Corporate Structure at Central Puerto S.A.".
The wind farm is located in the east of the Province of Córdoba, near the city of Achiras, and started its operations partially in December 2019 (38 MW), in January 2020 (15.2 MW), and fully in March 2020 (3.8 MW). It has a total installed capacity of 57 MW, from 15 wind turbines, supplied by Vestas, of 3.8 MW each.
Los Olivos Wind Farm
Los Olivos is a wind farm operated by Vientos La Genoveva II S.A., a wholly-owned subsidiary of CP Renovables as of December 31, 2024, in which we have a majority interest. "See Item 4 - Recent Developments - Simplification of Corporate Structure at Central Puerto S.A.".
The wind farm is located in the east of the Province of Córdoba, near the city of Achiras, and started its operations in February 2020. It has a total installed capacity of 22.8 MW, from 6 wind turbines, supplied from Vestas, of 3.8 MW each.
La Genoveva I Wind Farm
La Genoveva I is a wind farm operated by Vientos La Genoveva I S.A.U., in which we have a majority interest. The wind farm is located in the south of the Province of Buenos Aires, near the town of Cabildo and 30 km to the northwest of the city of Bahía Blanca and started its operations in November 2020.
It has a total installed capacity of 88.2 MW, from 21 wind turbines, supplied from Vestas, of 4.2 MW each.
La Genoveva II Wind Farm
La Genoveva II is a wind farm operated by Vientos La Genoveva II S.A., in which we have a majority interest. The wind farm is located in the south of the Province of Buenos Aires, near the town of Cabildo and 30 km to the northwest of the city of Bahía Blanca and started its operations in September 2019.
It has a total installed capacity of 41.8 MW, from 11 wind turbines, supplied by Vestas, of 3.8 MW each.
Electricity Generation from our Photovoltaic Plant
Solar Farm Guañizuil IIA
Proener acquired 100% of the capital stock and votes of Cordillera Solar VIII S.A. (currently, CP Cordillera Solar S.A.), and Scatec Equinor Solutions Argentina S.A. (currently, CP Servicios Renovables S.A.), owner and operator, respectively, of the Guañizuil IIA photovoltaic plant located in the Province of San Juan. The photovoltaic plant has an installed capacity of 117 MW dc /105 MW ac.
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We successfully participated in CAMMESA’s auction for 10 MW of dispatch priority for our Parque Solar San Carlos Project under the MATER framework, located in San Carlos, Province of Salta. “See Item 4. A History and development of the Company—Renewable energy projects”
FONINVEMEM and Similar Programs
Following Argentina’s economic crisis in 2001 and 2002 and the subsequent devaluation of the peso, there were significant imbalances between the electric power prices generators received and their operating costs. As resources in the country’s Stabilization Fund, a fund administered by CAMMESA intended to make up for fluctuations between the seasonal price paid by distributors and the spot price in the WEM, became scarce due to the Argentine Government’s decision to maintain seasonal prices (the energy prices paid by distributors) below the spot price paid to generators, the Argentine Government, through a series of resolutions, fixed a set of priorities with respect to payments made from this fund. This resulted in a system under which generators collected payment for only variable generation costs and power capacity, while the resulting monthly obligations to generators for the unpaid balance were to be considered LVFVD.
In 2004, through Resolution SE No. 826/2004, generators with receivables due to the lack of funds in the Stabilization Fund (including us) were invited to participate in forming the FONINVEMEM, created by Resolution SE No. 712/04. The FONINVEMEM allowed electric energy generators to link the collection of their outstanding receivables relating to electric power sales to CAMMESA from January 2004 through December 2006 to one or more combined cycle projects, with a right to receive payment of their receivables once the new combined cycle plants built with FONINVEMEM financing become operational. For more details regarding the Program, see also “Item 4.B. Business Overview—The Argentine Electric Power Sector—Structure of the Industry — The FONINVEMEM and Similar Programs”.
In December 2004, we agreed to participate in the creation of the FONINVEMEM. We entered into an agreement on October 17, 2005, which stated that generators would receive (i) their receivables relating to sales of electric power from January 2004 through December 2006, amounting to US$157 million in our case, plus an interest rate of 360-day LIBOR plus 1.00% in 120 equal, consecutive monthly installments and (ii) their proportional equity interest in the generating companies formed for such projects, TJSM and TMB, which are in charge of managing the purchase of equipment, and of building, operating and maintaining each of the new power plants, and after ten years of operation would receive the property of these plants. The generation plants are not owned by TJSM and TMB but rather owned by two trusts, created by the Argentine Government, that receive revenue from the sale of electric power generated by the plants, among others, to repay the LVFVD receivables.
On October 16, 2006, we entered into two pledge agreements with the Secretariat of Energy to guarantee our performance obligations in favor of the two trusts under certain construction management and operation management agreements and provided as collateral: (a) 100% of our shares in TJSM and TMB and (b) 50% of the rights conferred by our LVFVD receivables for the duration of the construction management agreement and the operation management agreement.
On July 13, 2007, we agreed to include 50.00% of our total receivables relating to the sale of electric power to CAMMESA from January through December 2007 in the FONINVEMEM arrangement, which totaled US$30.3 million. These receivables were also reimbursed in 120 equal, consecutive monthly installments starting from the commercial launch date of the plants, converted into U.S. dollars at the applicable exchange rate pursuant to the FONINVEMEM arrangement, with an interest rate of 360-day LIBOR plus 2.00%. We received no additional equity interest in TJSM and TMB as a result of the inclusion of these additional receivables in the FONINVEMEM arrangement.
After the commercial authorization was granted to the Manuel Belgrano power plant (on January 7, 2010) and the San Martín power plant (on February 2, 2010), we started to collect monthly payments of the receivables. As of December 31, 2024, there is no balance owed to us under the FONINVEMEM arrangement relating to the sale of electric power to CAMMESA from 2004 through 2007. As of December 31, 2024, we owned 11.31% of TJSM and 12.72% of TMB. The operating companies have a variable revenue (US$1.00 per MW generated) and a fixed revenue to compensate for their operating costs. In 2024, we received no dividends from our equity interests. See “Item 3D. Risk Factors—Risks Relating to our Business—Our interests in TJSM, TMB were diluted and CVOSA will be significantly diluted” and “Item 4.B. Business Overview—Our Affiliates—Termoeléctrica José de San Martín S.A. (TJSM) and Termoeléctrica Manuel Belgrano S.A. (TMB)”.
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With respect to the LVFVD corresponding to the sales of electric power to CAMMESA from 2008 to 2011, on December 28, 2010, our Board of Directors approved an agreement with the former Secretariat of Electric Energy that established, among other agreements, a framework to determine a mechanism to settle receivables accrued by generators over the 2008-2011 period. For that purpose, (i) the construction of the new generation plant, CVOSA, was agreed upon, with receivables earned from January 1, 2008 through December 31, 2011 to be paid starting as of the commercial launch date of the CVOSA plant’s combined cycle unit; (ii) a managing company for this project, CVOSA, was created in which we hold a controlling interest and (iii) a trust was created by the Argentine Government to hold the property of the plant under construction. The combined cycle unit commenced operations on March 20, 2018.
After the CVOSA power plant became operational, in the case of receivables accrued between 2008 and September 2010, the amount due was converted into U.S. dollars at the exchange rate effective at the date of the CVO agreement (i.e., November 25, 2010), which was Ps.3.97 per U.S. dollar. Additionally, certain receivables that accrued after September 2010 and that were also included in the CVO Agreement, were converted into U.S. dollars at the exchange rate effective at the due date of each monthly sale transaction. The total estimated amount due to us under the Agreement for the LVFVD 2008-2011 was US$548 million (including VAT), plus the accrued interest after the CVO Commercial Approval. Under the CVO Agreement, we are entitled to receive payment for the LVFVD 2008-2011 receivables in the form of 120 equal, consecutive monthly installments, starting from March 20, 2018, the date of commencement of commercial operations of the combined cycle plant, bearing interest at a nominal annual rate of 30-day LIBOR plus 5.00%. The U.S. denominated monthly payments under the CVO Agreement are payable in pesos, converted at the applicable exchange rate in place at the time of each monthly payment.
As of March 20, 2018, CAMMESA granted the CVO Commercial Approval in the WEM, as a combined cycle, of the thermal plant Central Vuelta de Obligado. A PPA between the CVO Trust and CAMMESA, through which the CVO Trust makes energy sales and, consequently, receives the cash flow to pay the trade receivables, had to be signed in order to start the collections.
The PPA agreement was signed on February 7, 2019, with retroactive effect to March 20, 2018.
As a result, the original amortization schedule from the CVO Agreement is in full force and effect.
As a result of the Central Costanera acquisition, we have incorporated the portion of the CVO agreement that this company was entitled to receive for the LVFVD 2008-2011 receivables starting on February 17, 2023. The total estimated amount due to us was US$ 17.86 million.
During 2024 and 2023, we collected Ps. 83.66 billion and Ps. 83.78 billion, respectively in CVO receivables, in each case measured as of December 31, 2024.
In accordance with the CVO agreements, after the first ten years of operation, ownership of the combined cycle plants was transferred from the trust to the operating companies, and the operating companies began to receive revenues from the sale of electric power generated by the plants. At such time, since the Argentine Government financed part of the construction, it was incorporated as shareholder of CVOSA, and our interests in CVOSA were significantly diluted. Although the effect of the potential dilution has also not yet been defined for the same reasons, the Argentine Government’s stake in CVOSA will be at least 70% due to an agreement between the parties. The dilution of our interest in CVOSA will reduce our income, which could adversely affect our results of operations.
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Forestry assets
On December 27, 2022, our subsidiary Proener acquired 100.00% of the capital stock and votes of Forestal Argentina S.A. and Masisa Forestal S.A. (currently, Loma Alta Forestal S.A.) which own forestry assets, consisting of approximately 72,000 hectares in the provinces of Entre Ríos and Corrientes, of which approximately 43,000 hectares are planted with eucalyptus and pine trees.
On May 3, 2023, we further expanded our forestry business, as our subsidiary Proener acquired 100% of the capital stock and votes of Empresas Verdes Argentina S.A., Las Misiones S.A. and Estancia Celina S.A.
These companies own forestry assets, consisting of approximately 88,063 hectares in the province of Corrientes, of which approximately 26,000 hectares are planted with pine, out of a total of approximately 36,000 harvested hectares.
As a result of such acquisitions, we became the largest Argentine company in the forestry sector, a market in which mostly foreign capital companies operate. Argentina has one of the highest growth rates not only in the region, but in the world: trees grow approximately ten times faster than in the Northern Hemisphere. By means of these acquisitions, we have diversified our asset portfolio and operations and strengthened our position in the energy sector, since these assets are a source of future business opportunities linked to carbon credits and energy generation with biomass. Our property, plant and equipment now also include over 160,000 hectares.
Market Area and Distribution Network
Market Area
Our power generation plants are located at various locations in Argentina. All of them are connected to the SADI, enabling coverage for residential and industrial users nationwide.
Puerto plants: The Puerto Nuevo, Nuevo Puerto and Puerto combined cycle plants are situated in a unique location within the port of the City of Buenos Aires, one of the most populated metropolitan areas in the world, which reduces costs arising from lost power during transmission. In addition, the plants have three docks for unloading liquid fuels from large vessels, thus facilitating the supply of fuel.
Central Costanera plant: The Central Costanera plant sits strategically in the southern area of the port of the City of Buenos Aires adjacent to the Río de la Plata. This positioning allows a significant flexibility in fuel supply, and also a key proximity to the country’s major electricity consumption center, the Greater Buenos Aires area. This city, together with Greater Buenos Aires, requires about 40% of the total electricity produced in the country.
Piedra del Águila Hydroelectric Complex: the Piedra del Águila hydroelectric complex is located on the Limay river, which serves as the border between the provinces of Río Negro and Neuquén. The dam is close to the city of Neuquén and is able to supply energy to cities far from the complex through existing transmission lines.
Brigadier Lopez plant: The Brigadier Lopez Plant is located in the Province of Santa Fe, near the City of Sauce Viejo.
San Lorenzo plant: The San Lorenzo Plant is located in the Province of Santa Fe, near the City of San Lorenzo.
Luján de Cuyo plant: The Luján de Cuyo plant is located within YPF’s Luján de Cuyo refinery and supplies steam to such refinery. This location enables it to obtain gas oil supplies from the refinery itself in case of natural gas shortages.
La Castellana I and II Wind Farms: La Castellana I and II wind farms are located in the Province of Buenos Aires, near the cities of Villarino and Bahía Blanca.
La Genoveva I and II Wind Farms: La Genoveva I and II wind farms are located in the Province of Buenos Aires, near the town of Cabildo and the city of Bahía Blanca.
Achiras Wind Farm: Achiras wind farm is located in the Province of Córdoba, near the City of Achiras.
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Manque Wind Farm: Manque wind farm is located in the Province of Córdoba, near the City of Achiras.
Los Olivos Wind Farm: Los Olivos wind farm is located in the Province of Córdoba, near the City of Achiras.
Guañizuil II A Solar Farm: Guañizuil II A Solar Farm is located in the Province of San Juan, located near National Route 150.
Manuel Belgrano plant: The Manuel Belgrano plant is located in the Province of Buenos Aires, near the City of Campana.
San Martín plant: The San Martín plant is located in the Province of Santa Fe, near the City of Timbúes.
Vuelta de Obligado plant: The Vuelta de Obligado plant is located in the Province of Santa Fe, near the City of Timbúes.
Distribution Network
All of our plants are connected to the SADI, which allows us to reach almost all the users in the country. The SADI permits interaction among all agents in the Argentine WEM and allows generating companies to dispatch power to Large Users and distributors through the transmission companies. The system is regulated and allows participation of all WEM agents (generators, transmission companies, distributors, Large Users and the Argentine Government through CAMMESA), thus preventing discrimination among any involved participants.
The prices for power transmission are regulated and based on the distance from the generating company to the user, among other factors. In this regard, our thermal power plants are strategically located in important city centers or near some of the system’s largest customers (e.g., YPF’s refineries), which constitutes a significant competitive advantage.
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Our Customers
|
For the
year ended |
|||||||
| Modality continuing operations | Main clients |
2024 |
|||||
|
(in thousands of Ps.) |
(percentage of revenues) |
||||||
| (in millions of U.S. dollars) | |||||||
| Spot Sales(2) | CAMMESA | 356,845,619 | 48.34% | ||||
| Term market Sales Under Contract | CAMMESA | 183,790,758 | 24.90% | ||||
| RenovAr Program | CAMMESA | 69,328,414 | 9.39% | ||||
| MATER sales under contracts | Cervecería y Maltería Quilmes S.A.I.C.A. y G. (subsidiary of AB Inbev); PBBPolisur S.A. (subsidiary of Dow Quemicals); Aguas y Saneamientos Argentinos S.A.; Minera Alumbrera Limited -Proyecto MARA – Glencore (subsidiary of Glencore in Argentina); Rayen Cura S.A.I.C – Verallia; Metrive – Sabrositos; N. Ferraris – Autoperforantes; INC – Carrefour; SCANIA, San Miguel; Frío Dock. | 39,545,313 |
5.36%
|
||||
| Steam sales | YPF / T6 Industrial S.A. |
39,511,074 |
5.35% |
||||
| Forestry |
Enrique Zeni & Cia Saciafei Gran Mandisovi S.A. A.C.B. Alimentos Coronel Baigorria Urcel Argentina S.A. Borgo Horacio Rene |
21,849,750 |
2.96% |
||||
| Revenues from CVO thermal plant management | Fideicomiso Central Vuelta de Obligado |
15,307,807 |
2.07% |
||||
| Other | YPF | 6,086,260 | 0.82% | ||||
| Energía Plus sales under contracts | Pbbpolisur S.A. – Bahia Blanca (Subsidiary Of Dow Chemical Company); Diaser S.A. – Bioetanol Plant; Aces – Hospital Universitario Austral; Frio Dock S.A.; N Ferraris S.A; Marlew S.A.- Ezeiza; H.J. Navas Y Cia Sacia; Bolsapel; Pet Foods Saladillo S.A.; Ceres Agropecuaria S.A.; Acon Timber S.A.U.; Bio Sidus S.A.; Bco. Patagonia; Andres Lagomarsino E Hijos; Sinteplast S.A.; Plasticos Romano S.A. |
5,904,741 |
0.81% |
||||
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| Notes:- |
| (1) | Includes sales of energy and power to CAMMESA remunerated under Resolution No. 59/23, Resolution 869/2023, Resolution No. 9/2024, Resolution No. 99/2024, Resolution No, 193/2024, Resolution No. 233/2024, Resolution No. 285/2024, Resolution No. 20/2024, resolution No. 294/2024 and Resolution No. 387/2024 (See “Item 4.B. Business Overview—The Argentine Electric Power Sector—Remuneration Scheme—The Current Remuneration Scheme”). |
For a discussion of the different regulatory regimes under which we sell our electric power, see “Operating and Financial Review and Prospects—Factors Affecting our Results of Operation—Our Revenues” and “Item 4.B. Business Overview—The Argentine Electric Power Sector—Structure of the Industry”.
Seasonality
Seasonality of Electricity Generation by Thermal Facilities
The following graphic breaks down our average thermal energy production over the last six years on a month-by-month basis:
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Source: CAMMESA.
Seasonality of Water Resources and Electricity Generation of Piedra del Águila
The availability of water is the key factor for determining Piedra del Águila’s electric power generation capacity and is tied to annual and seasonal changes in rains in the upstream mountain area of Piedra del Águila. Water levels generally increase between May and December due to the winter rains and the spring thaw, and we are able to produce more energy over such periods. The following graphic breaks down our average hydroelectric energy production over the last seven years on a month-by-month basis:
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Source: CAMMESA.
Seasonality of Wind and Solar Resources and Electricity Generation of Achiras, La Castellana I, La Castellana II, La Genoveva I, La Genoveva II, Manque and Los Olivos wind farms and Guañizuil II solar farm
The availability of wind resources is the key factor for determining the wind farms electric power generation capacity and is tied to annual and seasonal changes in wind speed in the areas where each farm is located. Wind speed is generally higher between May and September, and we are able to produce more energy over such periods. For additional information on environmental issues that may affect our operations, see “Item 3.D.—Risk Factors—Risks relating to Our Business—Our ability to operate wind and solar farms profitably is highly dependent on suitable wind or sun and associated weather conditions, climate change and energy transition could affect our business”.
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The following graphic shows the energy production of our wind farms on a month-by-month since inception and until December 2024:
| __________________ |
Source: CAMMESA
Competition
The demand for electric power in Argentina is served by a variety of generation companies, both state-owned and private-owned. These companies pursue the right to supply generation capacity and electric power and to develop projects to serve the demand for electric power in Argentina. Some of our foreign competitors are substantially larger and have substantially greater resources than our company. Because of the significant gap between the demand and supply of electric power in Argentina, voluntary and forced blackouts at times of seasonal peak consumption have occurred. During 2024, specifically in February, there was a historic demand peak recorded totaling 29,653 MW. In 2024, 4,654 GWh were imported, representing a 25.43% decrease in energy imports as compared to 2023.
Our primary competitors in the electric power generation market are Pampa Energía S.A., The AES Corporation, YPF EE, MSU Energy, Albanesi, and GENNEIA.
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Below we detail the installed capacity of the main private sector generators in Argentina, as of December 31, 2024:
|
Power (MW) |
|||
| Central Puerto | 6.703 | (1) | |
| Pampa Energía S.A. | 4,991 | (2) | |
| The AES Corporation | 3,620 | (3) | |
| YPF EE | 3,575 | (4) | |
| MSU Energy | 1,741 | (5) | |
| Albanesi | 1,706 | (6) | |
| GENNEIA | 1,271 | (7) |
| __________________ |
| Notes:- |
| (1) | Based on company’s financial statements as of and for the year ended December 31, 2024. Data from CAMMESA. Does not include Foninvemem. |
| (2) | Source: Institutional website and data from the CAMMESA website. It is considered 50% of the equity stake in Ensenada de Barragán. Does not include Foninvemem. |
| (3) | Source: Institutional website and data from the CAMMESA website. AES (2,985 MW) + Termoandes CT with 642.7MW of installed power is considered (CAMMESA). Does not include Foninvemem. |
| (4) | Source: Institutional website and data from the CAMMESA website. Includes YPF Luz + YPF EE. Does not include Foninvemem. |
| (5) | Source: Institutional website and data from the CAMMESA website. MSU absorbs these assets (Lujan, San Pedro, Las Palmas, Matheu) (owned by Araucaria Energy) after agreeing to a corporate restructuring with shareholders to avoid bankruptcy of the company. |
| (6) | Source: Institutional website and data from the CAMMESA website. |
| (7) | Source: Institutional website and data from the CAMMESA website. |
For more information about our market share please See “Item 4. Business Overview—Our Competitive Strengths”:
Our efficiency levels compare favorably to those of our competitors due to our efficient technologies. The following chart shows the efficiency level of our most important generating units compared to the units of the rest of the market based on heat rate, which is the amount of energy used by an electrical generator or power plant to generate one kWh of electric power:
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Source: CAMMESA’s seasonal programing.
We are also one of the largest consumers of natural gas in Argentina’s electric power sector, as well as the one of the largest consumers of fuel oil, gas oil and biodiesel. Although CAMMESA is our current supplier of fuels, we have developed business relationships over the years with strategic companies from the oil and gas and the biofuel sectors, and in the past have participated in certain joint ventures with some of them.
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Insurance
We carry commercial and personal insurance coverage for certain of our power generation plants, placed at different geographical locations within Argentina. The following list includes all the insurance risk covered:
| 1. | Operational All Risks–- Including Material Damage & Machinery Breakdown and Business Interruption (Loss of Profits) | |
| This coverage protects against unexpected events due to a sudden or accidental cause, including weather, fire and natural disasters, that may damage property or fixed assets (Material Damage); and Mechanical and Electrical breakdown events that may cause sudden and unforeseen physical loss or damage to machinery (Machinery Breakdown) that is operational; any of which may damage our ability to generate power, including coverage for consequential Loss of Profits (Business Interruption) for a maximum period of 12 months. | ||
| 2. | Commercial General Liability | |
| This coverage protects against the claims from third parties arising out of bodily injury or death and property damage resulting from the insured activities including Premises, Operations, Products and/or Completed operations. The coverage limit is up to US$10,000,000 per occurrence. | ||
| 3. | C Commercial Excess Liability (CPSA only) | |
| This coverage protects against the same risks described in the previous bullet point but covers “in excess” of the coverage limit of the underlying primary insurance for a combined limit (concurrent in all locations) of up to US$50,000,000. | ||
| 4. | Port Operators Liability (CPSA only) | |
| Covers CPSA’s liability to third parties for Personal Injury or Property Damage as a result of an occurrence or event in connection with day-to-day Port Operator Activities. | ||
| 5. | Directors and Officers Liability | |
| This policy covers individuals for claims made against them while serving on a board of directors and/or as an officer and it is payable to those directors and officers of a company, or to the organization(s) itself, as indemnification (or reimbursement) for losses or advancement of defense costs in the event an insured suffers such a loss as a result of a legal action brought for alleged wrongful acts in their capacity as directors and officers. | ||
| 6. | Motor Vehicle + Mobile Equipment | |
|
CPSA and its subsidiaries carry cover for all its fleet vehicles as well as trucks and mobile equipment for daily operation. The coverage goes from basic third-party liability in mobile equipment to Comprehensive Coverage in some cars (theft, fire, hail, vandalism, property and vehicle damage).
| ||
| 7. | Worker’s Compensation | |
| This coverage provides wage replacement and medical benefits to employees injured in the course of employment and/or while commuting to and from work. | ||
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| 8. | Compulsory Life Insurance | |
| This coverage is provided by the employer and guarantees the payment of a death benefit to named beneficiaries upon the death of the insured (employee). | ||
| 9. | Optional Term Life Insurance | |
| This is an optional and additional coverage the employer pays over the basic Compulsory Life insurance in order to guarantee its employees the payment of 24 additional wages in case of death. This is part of an Employee Benefits Plan. | ||
| 10. | Ocean & Inland Transit All Risks (floating policy) | |
| Transit Coverage for an annual period during all stages of transit and delivery, whether marine, on the dock, by air or inland transportation from anywhere in the world to anywhere within the Argentine territory and vice versa. Premiums are paid monthly at an Ex-Post basis. | ||
| 11. | Commercial Business Combined | |
| This is a tailored policy to cover specifically the offices and warehouses owned by CPSA in the city of Neuquén, Piedra del Águila Town and Piedra del Águila Hydroelectric Dam. This is a comprehensive business coverage in a single policy, bringing together a range of coverages: Employers’ Liability, Public Liability, Product Liability, Legal Expenses, Material Damage and Theft, Goods in Transit and others. | ||
| 12. | Construction All Risks / Erection All Risks (CAR/EAR) | |
| This is a non-standard policy that provides coverage for Property Damage and third-party injury or damage claims during construction projects. We carry this insurance every time we undertake a new construction. | ||
| 13. | Compulsory Environmental Pollution Insurance | |
| This coverage protects against third party personal injury; third party property losses; ecological damage and costs incurred in provision of emergency services and environmental clean-up. |
We believe that the level of insurance and reinsurance coverage we maintain is reasonably adequate in light of the risks we are exposed to and is comparable to the level of insurance and reinsurance coverage maintained by other similar companies doing business in the same industry.
Environment
As of the date of this annual report, we are not involved in pending or threatened judicial proceedings in connection with environmental issues.
As of the date of this annual report, we have obtained or have applied for the environmental permits required by the applicable environmental regulations and our environmental management plans have been approved by the applicable regulatory authorities. To maintain high environmental standards, we carry out periodic controls in accordance with applicable legislation.
Our activities are subject to certain environmental regulations. Our management considers that our operations comply in all relevant respects with applicable laws and regulations related to environmental protection. On the other hand, we record provisions for decommissioning for renewable wind and solar assets based on the commitments assumed with the owners of the properties where they are located. We also monitor potential changes relevant to environmental legislation related to our activity and we have not identified significant changes in the foreseeable future.
We have developed a broad environmental compliance and management program, which is subject to periodic internal and external audits by TÜV Rheinland.
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In August 2024, TÜV Rheinland completed a series of ISO recertification audits. The details of the certificates are the following:
Standard: ISO 14001/2015
Certificate Register. No.: 01 10406 1629668
Certificate Holder: Central Puerto S.A. Av. Tomas Edison 2701 Ciudad Autónoma de Buenos Aires Argentina.
Scope: Generation of electric energy from: hydraulic energy, thermal energy (gaseous and liquid fuel), wind energy, photovoltaic energy. Steam production. Operation and maintenance of extra high voltage line.
Validity: The certificate is valid from 2022-08-18 until 2025-07-12
Including the locations:
| No: | Name/Location | Scope |
| 1 |
Central Planta Buenos Aires Av. Thomas Edison 2701 Ciudad Autónoma de Buenos Aires |
Generation of electric energy from: thermal energy (gaseous and liquid fuels). |
| 2 |
Central Mendoza Parque Industrial Provincial, Ruta 84 s/n, Lujan de Cuyo, Provincia de Mendoza |
Generation of electric energy from: thermal energy (gaseous and liquid fuels). Steam production. |
| 3 |
Central Hidroeléctrica Piedra del Águila Ruta Nacional 237, Km 1450.5 8315 Piedra del Águila Provincia de Neuquén |
Generation of electric energy from: hydraulic energy |
| 4 | c/o Central Puerto S.A. – for its subsidiary Parque Eólico Achiras, Lote 325, Parcela 1274 (Latitude 33° 12’ 44,23’’S, Longitude 65° 5’ 16,52’’O), Achiras, Córdoba – Argentina | Generation of electric energy from: wind energy. |
| 5 | c/o Central Puerto S.A. – for its subsidiary Parque Eólico La Castellana, Camino rural a la altura de la RN 3, Km 712,5 (Latitud 38° 38’22,40’’ S, Longitud 62° 43’1,04’’ O), Villarino, Buenos Aires–- Argentina | Generation of electric energy from: wind energy. |
| 6 |
Planta Brigadier Lopez Ruta 11 Km 455 3017 Parque Industrial Sauce Viejo, Calle 8, Colectora Norte Santa Fe–- Argentina |
Generation of electric energy from: thermal energy (gaseous and liquid fuels). |
| 7 |
c/o Central Puerto S.A. – for its subsidiary Parque Eólico La Castellana II Ruta 3 km 712,5 sobre camino vecinal, Villarino, Buenos Aires–- Argentina. |
Generation of electric energy from: wind energy. |
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| 8 |
c/o Central Puerto S.A. – for its subsidiary Parque Eólico La Genoveva II Ruta 51 Km 705, Cabildo, Buenos Aires–- Argentina |
Generation of electric energy from: wind energy. |
| 9 | c/o Central Puerto S.A. – for its subsidiary Parque Eólico Manque (Latitude 33°13’35.26”S; Longitude 65° 4’38.69”O), Achiras. Córdoba – Argentina | Generation of electric energy from: wind energy. |
| 10 | c/o Central Puerto S.A. – for its subsidiary Parque Eólico Los Olivos (Latitude 33°13’50.34”S; Longitude 65° 2’59.94”O) Achiras. Córdoba – Argentina | Generation of electric energy from: wind energy. |
| 11 |
c/o Central Puerto S.A. – for its subsidiary Parque Eólico La Genoveva I Ruta 51 Km 705, Cabildo, Buenos Aires, Argentina |
Generation of electric energy from: wind energy. |
| 12 |
Planta Cogeneración San Lorenzo Combate Punta Quebracho s/n (esquina Vucetich), zona rural Puerto Gral. San Martín, Santa Fe, Argentina |
Generation of electric energy from: thermal energy (gaseous and liquid fuels). Operation and maintenance of extra high voltage line (EVL) |
| 13 | Central Puerto S.A. – Guañizuil II A. Ruta Nacional 150 Km 304, Las Flores, San Juan, Argentina | Generation of electric energy from: photovoltaic energy |
Certificate Register. No.: 01 10406 2329630
Certificate Holder: Central Costanera S.A. Av. España 3301.Ciudad Autónoma de Buenos Aires
Scope: Generation of electric energy from: thermal energy (gaseous and liquid fuel).
Validity: The certificate is valid until 2025-07-27
Including the locations:
|
No: |
Name/Location |
Scope |
|||
| 1 |
Central Costanera S.A. Av. España 3301 Ciudad Autónoma de Buenos Aires |
Generation of electric energy from: thermal energy (gaseous and liquid fuels). |
Additionally, pursuant to Section 22 of Argentina’s Environmental Policy Law No. 25,675, any individual or legal entity, whether public or private, engaged in activities that endanger the environment, ecosystems and their constituent elements, including us, must carry insurance for an amount sufficient to cover the cost of repairing the damages such individual or legal entity may cause. We fully comply with this regulation.
Safety and Hygiene
In managing occupational safety and health we seek to protect people and our own and third parties’ property, assuming that:
| · | all accidents and occupational diseases can be prevented. | |
| · | compliance with applicable occupational and health standards is the responsibility of all individuals participating in activities in our facilities; and |
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| · | raising awareness among individuals contributes to the welfare at the workplace and to the improved individual and collective development of the members of the work community. |
Our commitment to ongoing improvement compels us to review the sufficiency of our current policy and its stated goals on an ongoing basis to ensure conformance to the changes required by the market and the applicable laws.
In August 2024, TÜV Rheinland completed a series of ISO recertification audits to expand the scope of the existing certificates and include two new sites: Lujan de Cuyo and San Lorenzo. As of the date of this annual report, we hold the following certificates:
Standard: ISO 45001/2018
Certificate Register. No.: 01 21306 2329655
Certificate Holder: Central Puerto S.A. Calle 8 Colectora Norte, Ruta 11, Km455 Parque Industrial Sauce Viejo 3017 Santa Fe, Argentina.
Scope: Generation of electric energy from: hydraulic energy, thermal energy (gaseous and liquid fuel) and wind Energy. Steam production. Operation and maintenance of extra high voltage line.
Validity: The certificate is valid from 2024-10-21 until 2027-10-04.
Including the locations:
|
No: |
Name/Location |
Scope |
|||
| 1 | Central Hidroeléctrica Piedra del Águila Ruta Nacional 237, Km 1450.5 8315 Piedra del Águila Provincia de Neuquén |
Generation of electric energy from: hydraulic energy | |||
| 2 | Central Puerto S.A. – Planta Brigadier Lopez Ruta 11 Km 455 3017 Parque Industrial Sauce Viejo, Calle 8, Colectora Norte Santa Fe–- Argentina |
Generation of electric energy from: thermal energy (gaseous and liquid fuels). | |||
| 3 | c/o Central Puerto S.A.–- para su subsidiaria Parque Eólico Achiras Lote 325, Parcela 1274 Lat 33° 12’ 44,23’’S, Long 65º 5’ 16,52 ’’ O Córdoba-Achiras, Argentina |
Generation of electric energy from: wind energy. | |||
| 4 | c/o Central Puerto S.A.–- para su subsidiaria Parque Eólico La Castellana Camino rural altura de la RN 3, Km 712,5’Lat. 38º 38 ́ 22,40’’S Long. 62º 43 ́1,04 ́ ́ O–- Villarino, Buenos Aires Argentina | Generation of electric energy from: wind energy. | |||
| 5 | c/o Central Puerto S.A. para su subsidiaria Parque Eólico La Castellana II Ruta 3 km 712,5 sobre camino Vecinal Villarino, Buenos Aires, Argentina | Generation of electric energy from: wind energy. | |||
| 6 | c/o Central Puerto S.A. para su subsidiaria Parque Eólico La Genoveva II Ruta 51 Km 705 Cabildo, Buenos Aires, Argentina |
Generation of electric energy from: wind energy. | |||
| 7 | c/o Central Puerto S.A. para su subsidiaria Parque Eólico Manque (Latitud 33°13’35.26”S; Longitud 65° 4’ 38.69”O) Achiras, Córdoba, Argentina |
Generation of electric energy from: wind energy. |
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| 8 | c/o Central Puerto S.A. para su subsidiaria Parque Eólico Los Olivos (Latitud 33°15’50.34”S; Longitud 65° 2’59.94”O) Achiras, Córboba, Argentina |
Generation of electric energy from: wind energy. | |||
| 9 |
c/o Central Puerto S.A.
para su subsidiaria Parque Eólico Vientos La Genoveva I Ruta 51 Km 705 Cabildo, Buenos Aires |
Generation of electric energy from: wind energy. | |||
| 10 | Central Puerto S.A – Planta Mendoza (Centrales Lujan de Cuyo y Cruz de Piedra) Ruta 84 S/N Parque Industrial Provincial 5507 Lujan de Cuyo, Mendoza, Argentina | Generation of electric energy from: thermal energy (gaseous and liquid fuels). | |||
| 11 | Central Puerto S.A – Planta Cogeneración San Lorenzo. Combate punta quebracho s/N, zona rural, Puerto Gral. San Martín, Santa Fe, Argentina | Generation of electric energy from: thermal energy (gaseous and liquid fuels). Stem production and Operation and Maintenance of extra high voltage line | |||
Certificate Register. No.: 01 21306 2329630
Certificate Holder: Central Costanera S.A. Av. España 3301.Ciudad Autónoma de Buenos Aires
Scope: Generation of electric energy from: thermal energy (gaseous and liquid fuel).
Validity: The certificate is valid until 2025-07-27
Including the locations:
|
No: |
Name/Location |
Scope |
|||
| 1 | Central Costanera S.A. Av. España 3301 Ciudad Autónoma de Buenos Aires |
Generation of electric energy from: thermal energy (gaseous and liquid fuels). |
Integrated Management System with ISO Certifications
Our management has put an integrated management system (“IMS”) in place for its electric power and steam generation plants in order to meet the needs and requirements of our internal policies and goals, as well as the needs and requirements of our clients, the applicable laws and regulations and ISO standards, namely, ISO 9001/2015 (quality), ISO 14001/2015 (environment) and ISO 45001/2018 (Occupational health and safety Assessment Series. Our IMS is certified by renowned international entities and audited from time to time, as required by the aforementioned standards.
The IMS seeks to achieve the following goals:
| · | equip the plants with useful and proactive management tools; | |
| · | ensure process quality; | |
| · | satisfy clients’ requirements; | |
| · | pursue ongoing improvement in processes; |
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| · | safeguard people and our own and third party’s property; | |
| · | prevent pollution; | |
| · | make efficient use of resources; | |
| · | preserve the ecological balance; and | |
| · | improve life quality. |
We identify the processes and the necessary support for the accurate operation of a sustainable, participatory and bureaucracy-free IMS that is useful for implementing the principles established by management with respect to environmental, quality, and occupational safety and health policies and for ensuring the availability of human, material and financial resources. We have used a management model based on planning-doing-checking-acting in order to guarantee the maintenance and ongoing improvement of the IMS in our facilities, which involves one or several of the following systems:
| · | Quality Management System | |
| · | Environmental Management System | |
| · | Occupational Safety and Health Management System |
The individual scope of the IMS at each plant is as follows:
| · | Puerto Complex: | |
| · Nuevo Puerto plant: Environmental Management System with ISO 14001/2015 certificate and Quality Management System with ISO 9001/2015 certificate | ||
| · Puerto Nuevo plant: Environmental Management System with ISO 14001/20015 certificate and Quality Management System with ISO 9001/2015 certificate | ||
| · Puerto Nuevo plant: Environmental Management System with ISO 14001/20015 certificate and Quality Management System with ISO 9001/2015 certificate | ||
|
Certification body:
From 2004 through 2015: IRAM
From 2016-2025: TÜV Rheinland | ||
| · Luján de Cuyo plant: Environmental Management System with ISO 14001/2015 certificate and Quality Management System with ISO 9001/2015 certificate and Occupation Safety and Health Management System with ISO 45001/2018 (through Aug 2024) certificate. | ||
|
Certification body:
From 2004 through 2015: SGS
From 2016 through 2025: TÜV Rheinland | ||
| · Piedra del Águila plant: Environmental Management System with ISO 14001/2015 certificate, Quality Management System with ISO 9001/2015 certificate and Occupation Safety and Health Management System with ISO 45001:2018 (through March 2021) certificate |
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|
Certification body:
From 2004 through 2015: IRAM
From 2016 through 2023 (through 2024 to ISO 45001): TÜV Rheinland | ||
| · Brigadier Lopez plant: Environmental Management System with ISO 14001/2015 certificate, Quality Management System with ISO 9001/2015 certificate and Occupation Safety and Health Management System with ISO 45001:2018 (through March 2021) certificate | ||
|
Certification body:
From 2019 through 2023 (through 2024 to ISO 45001): TÜV Rheinland | ||
| · Wind Farms Achiras, La Castellana I, La Castellana II and La Genoveva II: Environmental Management System with ISO 14001/2015 certificate, Quality Management System with ISO 9001/2015 certificate and Occupation Safety and Health Management System with ISO 45001:2018 (through July 2022) certificate. | ||
|
Certification body:
From 2019 through 2023 (through 2024 to ISO 45001): TÜV Rheinland | ||
| · Wind Farms Manque and Los Olivos: Environmental Management System with ISO 14001/2015 certificate, Quality Management System with ISO 9001/2015 certificate and Occupation Safety and Health Management System with ISO 45001:2018 (through July 2022) certificate. | ||
|
Certification body:
From 2020 through 2023 (through 2024 to ISO 45001): TÜV Rheinland | ||
| · Wind Farms La Genoveva I: Environmental Management System with ISO 14001/2015 certificate, Quality Management System with ISO 9001/2015 certificate and Occupation Safety and Health Management System with ISO 45001/2018 (through July 2022) certificate. | ||
|
Certification body:
From 2024 through 2027: TÜV Rheinland | ||
| · Cogeneración San Lorenzo: Environmental Management System with ISO 14001/2015 certificate, Quality Management System with ISO 9001/2015 certificate and Occupation Safety and Health Management System with ISO 45001/2018 (through July 2024) certificate. | ||
|
Certification body:
From 2021 through 2023: TÜV Rheinland | ||
|
· Central Costanera Complex: Environmental Management System with ISO 14001/2015 certificate, Quality Management System with ISO 9001/2015 certificate and Health Management System with ISO 45001/2018. Certification body:
From 2024 through 2027: TÜV Rheinland
| ||
|
· Cordillera Solar Complex: Environmental Management System with ISO 14001/2015 certificate,
|
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It is our policy that the IMS be reviewed upon a change to our organizational structure, operating procedures, processes or facilities and that it be updated as applicable. Once updated, the IMS is subject to a comprehensive review considering the existing interrelations to avoid overlap or omissions. Where no changes have occurred, the IMS is reviewed every five years, unless a new version of the reference ISO standards is released during that period, in which case the IMS is adjusted to conform to the new standards.
The Argentine Electric Power Sector
The following is a summary of certain matters relating to the electric power industry in Argentina, including provisions of Argentine laws and regulations applicable to the electric power industry and to us. This summary is not intended to constitute a complete analysis of all laws and regulations applicable to the electric power industry. Investors are advised to review the summary of such laws and regulations published by the Secretariat of Energy (https://www.argentina.gob.ar/economia/energia), CAMMESA (www.cammesa.com.ar) and the Ente Nacional Regulador de la Electricidad (Argentine Electricity Regulatory Entity, or “ENRE”) (www.enre.gob.ar) and to consult their respective business and legal advisors for a more detailed analysis. None of the information on such websites is incorporated by reference into this annual report.
History
During the majority of the second half of the 20th century, the assets and operation of the Argentine electric power sector were controlled by the Argentine Government. By 1990, virtually all of the electric power supply in Argentina was controlled by the public sector (97% of total generation). The Argentine Government had assumed responsibility for the regulation of the industry at the national level and controlled all of the national electric power companies. In addition, several Argentine provinces operated their own electric power companies. As part of the economic plan adopted by former President Carlos Menem, the Argentine Government undertook an extensive privatization program of all major state-owned industries, including those in the electric power generation, transmission and distribution sectors. Argentine Law No. 23,696 passed in 1989 (the “Federal Reform Law”) declared a state of emergency for all public services and authorized the Argentine Government to reorganize and privatize public companies. The privatization had two ultimate objectives: first, to reduce tariffs and improve service quality through free competition in the market, and second, to avoid the concentration of control of each of the three subsectors of the market in a small group of participants and thereby reduce their ability to fix prices. Separate limitations and restrictions for each subsector were imposed in order to reach these goals. In accordance with the Federal Reform Law, Decree No. 634/1991 established guidelines for the decentralization of the electric power industry, for the basic structure of the electric power market, and for the participation of private sector companies in the generation, transmission, distribution and trading sub-sectors.
General Overview of Legal Framework
Key Statutes and Complementary Regulations
The body of rules that constitutes the basic regulatory framework of the Argentine electric power sector currently in force are the following: (i) Law No. 15,336, enacted on September 20, 1960, as amended by Law No. 24,065, passed on December 19, 1991, partially promulgated by Decree No. 13/92, and regulated by Decree No. 1398/92 and Decree No. 186/95 (collectively, the “Regulatory Framework”), (ii) Law 24,065 which implemented privatizations of government-owned companies in the electric power sector and separated the industry vertically into four categories: generation, transmission, distribution and demand, and it also provided for the organization of the WEM (described in greater detail below) based on the guidelines set forth in Decree No. 634/91; and (iii) Decree No. 186/95 also created the notion of “participant,” among which it is worth mentioning the “trader,” which is defined as a company that is not a WEM agent but trades electric power in bulk; (iv) Decree No. 55/23 declared an emergency in the generation, transportation and distribution segments of electric energy, as well as in the transportation and distribution of natural gas under federal jurisdiction, until December 31, 2024, which was then extended until July 9, 2025 by Decree No. 1023/2024, and it also instructed the Secretariat of Energy to develop, enact and implement a program of necessary actions, with the stated purpose of establishing price sanction mechanisms under competitive conditions, maintaining revenue levels and covering investment needs to guarantee the continued provision of public utilities for the transportation and distribution of electric power and natural gas; and (v) Law No. 27,742, which declared a public emergency in administrative, economic, financial and energy matters, and delegated a series of powers to the National Executive Branch for the duration of the emergency; Decree No. 1023/2024 extended the state of emergency concerning the energy sector, in relation to the segments of electricity generation, transmission and distribution under federal jurisdiction, as well as the transmission and distribution of natural gas and any actions arising therefrom, until July 9, 2025.
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In addition to the regulations previously mentioned, it is important to highlight that, in response to the economic crisis that Argentina experienced between 2001 and 2002, the Argentine Government has declared, ever since, various public emergencies in the context of which a series of significant measures were introduced to the regulatory framework applicable to the electricity sector. These measures have had significant adverse effects on electricity generation, distribution and transmission companies.
Procedures for the Programming of Operation, Dispatch and Price Calculation
For the purposes of implementing the provisions set forth in the Regulatory Framework, a set of regulatory provisions were issued, through Resolution No. 61 of April 29, 1992 of the former Secretariat of Electric Energy, which are referred to as the “Procedures for the Programming of Operation, Dispatch and Price Calculation” (the “Procedures”). The Procedures have been amended, supplemented and extended by subsequent resolutions issued by the relevant authorities.
Provincial Regulatory Powers
Provinces regulate the electrical system within their territories and are enforcement authorities in charge of granting and controlling electric power distribution concessions therein. Nonetheless, if a provincial electric power market participant is connected to the SADI, it must also comply with federal regulations. In general terms, provinces have followed federal regulatory guidelines and have established similar regulatory institutions. In addition, isolated provincial electric power systems are very rare, and most provincial market participants are connected to the SADI and buy and sell electric power in the WEM, which falls within the regulatory powers of the Argentine Government.
ENRE
Law No. 24,065 also created the Ente Nacional Regulador de la Electricidad (Argentine National Electricity Regulator) (ENRE) as an autonomous entity within the scope of the current Secretariat of Energy, the main duties of which are as follows: (a) enforcing the Regulatory Framework and controlling the rendering of public services and the performance of the obligations set forth in the concession contracts at a national level; (b) issuing the regulations applicable to the WEM agents; (c) setting forth the basis for calculation of tariffs and approving the tariff schedules of transmission and distribution companies holding national concessions; (d) authorizing electrical conduit easements; and (e) authorizing the construction of new facilities. Besides, Law No. 24,065 has entrusted ENRE with a jurisdictional activity. Any dispute arising between WEM agents should be subject to prior compulsory jurisdiction of ENRE (subject to further judicial review).
Pursuant to art. 58 of Law No. 24,065, regulated by Decree No. 1398/92, ENRE’s board of directors should be composed of five (5) members, who shall be elected through a selection procedure by open call (convocatoria abierta) among professionals who have the required curricular background.
However, in 2019, Section 6 of the Solidarity Law No. 27,541 authorized the Executive branch to intervene the ENRE’s board for one year.
| · | In that context, the ENRE was intervened by virtue of Decree No. 277/2020 —initially until December 31, 2020 |
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|
· |
Such intervention was subject to numerous extensions that remain in force to this date, by means of Decrees No. 1020/2020, 871/2021, 815/2022 and recently, Decree No. 55/2023 issued by the Milei administration, which ordered the intervention of the ENRE as from January 1, 2024, until the new members of the board of Directors are appointed. |
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Decree No. 55/2023, issued by the current administration, ordered the intervention of the ENRE as from January 1, 2024, until the new members of the board of Directors are appointed. More recently, Decree No. 1023/2024 maintained the intervention until the new members of the board of Directors of the Ente Nacional Regulador del Gas y la Electricidad (Argentine National Gas and Electricity Regulator) are appointed. |
In July 2024, Law No. 27,742 established the creation of the Ente Nacional Regulador del Gas y la Electricidad (Argentine National Gas and Electricity Regulator), which, once constituted, will replace and assume the functions of the ENRE and ENARGAS, pursuant to art. 161. As of the date of this annual report, the new entity has not yet been constituted, and as a result, the ENRE remains operational under intervention.
The Secretariat of Energy
In addition to the ENRE, one of the main regulatory entities in Argentina is the Secretariat of Energy.
Its role is defined in Law No. 24,065 and Decree No. 50/2019. Pursuant to Decree No. 50/2019 (as amended, particularly by Decree No. 480/2022), the Secretariat of Energy, currently under the orbit of the Ministry of Economy, has overall responsibility of organizing the electricity industry and establishing the policies applicable to the sector, among other objectives according to Decree No. 293/2024. Within the scope of the Secretariat of Energy, the Undersecretariat of Electric Energy is in charge of assisting the enforcement authority.
CAMMESA
The creation of the WEM made it necessary to create an entity in charge of the management of the WEM and the dispatch of energy into the SADI. These duties were entrusted to CAMMESA, created by virtue of Decree 1192/1992, as a non-profit corporation. Each of the shareholders of CAMMESA hold twenty percent of its shares and are as follows: the Argentine Government (represented by the Secretariat of Energy) and the four associations representing the different segments of the electric power sector (generation, transmission, distribution and large users).
CAMMESA is managed by a board of directors composed of ten regular directors and up to ten alternate directors, which are appointed by its shareholders. Each of the associations that represent the different segments of the electric power sector is entitled to appoint two regular directors and two alternate directors. The two remaining regular directors of CAMMESA are the current Secretariat of Energy, who serves as chairman of the board and an independent member who acts as vice chairman, appointed at a meeting of the shareholders. The decisions adopted by the board of directors of CAMMESA require the affirmative vote of a majority of the directors present at the meeting, including the affirmative vote of the chairman of the board.
CAMMESA is in charge of managing the SADI in accordance with the Regulatory Framework.
In addition, under current applicable regulations, CAMMESA has been tasked with the role of acquiring and supplying the fuel for the electric power sold under the Spot Sales free of cost to the generators.
It should be noted that, pursuant to Resolution No. 2022/2025, the Secretariat of Energy had the power to define the regulatory instructions and mandates that could be issued to CAMMESA. However, such power was revoked by Resolution No. 150/2024, published in the Official Gazette on July 10, 2024. The purpose was to gradually channel the National Electric Sector towards the guiding principles of the Regulatory Framework (especially Laws. No. 15,336 and 24,065) and reduce the intervention of the Argentine Government in the electric power market.
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WEM (Wholesale Electricity Market)
Transactions among different participants in the electricity industry take place in the WEM, administrated by CAMMESA, which clears all transactions as a power pool administrator. The WEM was originally conceived as a competitive market in which generators, distributors and certain large users of electricity could buy and sell electricity at prices determined by supply and demand, and were also allowed to enter into medium and long-term power purchase contracts.
The WEM consisted mainly of:
| 1. | a term market, where contractual quantities, prices and conditions were freely agreed upon among sellers and buyers; however, it should be noted that Resolution SE No. 95/2013 established the suspension of the incorporation of new contracts in the term market, with the exception of those contracts entered into under certain special regimes, and those contracts that have a differential remuneration regime (this suspension remains in effect to this day). Since then, large users of the WEM must purchase their electricity demand directly from CAMMESA, except in the case of contracts entered into under the excepted regimes; | |
| 2. | a spot market, where prices were established on an hourly basis based on the economic production cost, represented by the short-term marginal cost measured at the system’s load center (market node) (however, in practice, this system has suffered significant regulatory distortions since the year 2002). Purchases made in the spot market vary according to the nature of the buyer: large users, generators and self-generators pay the Spot Price, while distributors pay a seasonal price calculated by CAMMESA and approved by the Secretariat of Energy. Seasonal prices are periodically established by the Secretariat of Energy based on the programming made by CAMMESA, and maintained for six-month periods (subject to quarterly adjustments), in order for distributors to pay a stabilized price, and thus be able to transfer it to the tariffs paid by end users. It should be noted that since 2002, this price is not transferred in full to demand agents of the WEM, which in turn leads to relevant deficits in the stabilization fund administered by CAMMESA. Finally, the electricity remuneration values for generators (Spot Sales) are set by the National Executive Branch; and | |
| 3. | a quarterly stabilization system of spot market prices, managed by CAMMESA, intended for the purchases of electric power by distributors. |
The following chart shows the relationships among the various actors in the WEM:
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Source: CAMMESA.
Structure of the Industry
Generation
According to Law No. 24,065, electric power generation is classified as an activity of general interest associated with the provision of the public service of transmission and distribution of electric power but conducted within the framework of a competitive market.
Thermal electric power generators (i.e., generation using natural gas, liquid fuels derived from oil, such as gas oil and fuel oil, coal, solar panels or wind turbines) do not need a concession granted by the government to operate, whereas hydroelectric power generators do need a concession granted by the government to be able to use water sources. Typical terms included in concession agreements include the right to use water resources and facilities for a fixed amount of time (e.g., thirty years), in cases where the dam is owned by the Argentine Government or an Argentine provincial government, and the option to extend or renew the concession period for a fixed number of years. Usually, the concessionaire must make a one-time initial payment to the Argentine Government or an Argentine provincial government in exchange for the rights granted in the concession and periodically must pay a fee and/or royalties to the respective provincial government where the river is located in exchange for the use of this water resource. Normally, these periodic fees vary according to the amount of energy generated.
Following the enactment of Resolution SE No. 95/2013, the incorporation of new PPAs in the term market was suspended, except for those power purchase agreements executed under certain special regimes. However, more recently, Resolution 21/2025 introduced a new exception to the temporary suspension and stipulated that, effective from January 1, 2025, projects for the generation, self-generation, or cogeneration of electricity from thermal, hydroelectric, or nuclear sources may enter into PPAs in the WEM, and manage them in accordance with the 'Procedures for the Scheduling of Operations, Load Dispatch, and Price Calculation’. See “Item 4.B. Business Overview— The Argentine Electric Power Sector—Remuneration Scheme” below.
In addition, it should be noted that in recent years, Argentina has prioritized the generation of electric power from renewable sources. In such regard, it has not only issued regulations intended to regulate and incorporate this type of energy into the WEM, but it has also promoted it by granting incentives in the form of tax benefits and preferential or subsidized tariffs.
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In this regard, through the enactment of Law No. 26.190 in December 2006, amended and supplemented by Law No. 27.191, both regulated by Decree No. 531/2016, the generation of electric energy from the use of renewable energy sources for public service provision was declared to be of national interest. See “Item 4.B. Business Overview—The Argentine Electric Power Sector—Structure of the Industry—Renewable Energy” below.
Within this framework, the Argentine Government launched a series of bidding processes for the development of renewable power generation projects —See “Item 4.B. Business Overview—The Argentina Electric Power Sector— RenovAR (Round 1, Round 1.5 and Round 2): Bidding Process for Renewable Energy Generation Projects”—, and also implemented the Renewable Energy Term Market by means of Resolution No. 281-E/2017 of the former Ministry of Energy and Mining — See “Item 4.B. Business Overview—The Argentina Electric Power Sector— The Renewable Energy Term Market in Argentina - Resolution No. 281-E/17”.
Transmission and Distribution
Pursuant to Law No. 24,065, transmission and distribution activities are regulated as public services due to the fact that they are natural monopolies. The Argentine Government has granted concessions to private entities conducting these activities, subject to certain conditions, such as service quality standards and fixing the tariffs they are entitled to collect for their services.
Electricity transmission is comprised of (i) a high-voltage transmission system, operated by the company Transener, which connects the main electric power production and consumption areas allowing the transmission of electric power between different Argentine regions and (ii) several regional trunk systems, which transmit electric power within a particular region and connect the generators, distributors and Large Users that operate in such region.
Electricity distribution is regulated only at the federal level for the City of Buenos Aires and the districts in the metropolitan areas of Greater Buenos Aires. EDENOR operates in the northern area of both the City of Buenos Aires and Greater Buenos Aires, and EDESUR operates in the southern area of both the City of Buenos Aires and Greater Buenos Aires. In the rest of the country, the electric power distribution service is regulated at the provincial level and subject to concession granted by provincial authorities. Section 124 of Law No. 27,467 established that both EDENOR and EDESUR would be transferred to the regulatory jurisdiction of the Province of Buenos Aires and the City of Buenos Aires, as applicable. However, such transfer was not implemented, and was later suspended by the Solidarity Law that established that the ENRE will retain its regulatory powers over such companies for as long as the emergency declared by such law remain in force.
Transmission services are rendered by concessionaires that operate and use high and medium voltage transmission lines. Transmission services consist of the transformation and transmission of electric power from generators’ delivery points to distributors or Large Users’ reception points. Law No. 24,065 provides that electricity transmission companies must be independent from other WEM participants and prohibits them from purchasing or selling electricity.
Distribution companies are in charge of supplying electric power to end-users who cannot contract with an independent electric power supply source due to their consumption levels, such as residential end-users.
The main characteristics of concession contracts for the transmission and distribution of electric power are: (i) service quality standards with penalties that are applied in case of breach; (ii) a concession term of 95 years for the monopoly of the supply service in a supply area or network, divided into “management periods,” with an initial term of 15 years and subsequent terms of ten years (at the end of each management period, the Argentine Government must call for bids to sell the majority stake of the corresponding transmission or distribution company); and (iii) tariffs fixed based on economic criteria with a price cap system and predefined processes regarding their calculation and adjustment.
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Large Users
The WEM classifies Large Users of energy into three categories: (i) Grandes Usuarios Mayores (Major Large Users, or “GUMAs”), (ii) Grandes Usuarios Menores (Minor Large Users, or “GUMEs”) and (iii) Grandes Usuarios Particulares (Particular Large Users, or “GUPAs”).
GUMAs are users with a maximum capacity equal to or greater than 1 MW and a minimum annual energy consumption of 4,380 MWh. Their transactions in the spot market are invoiced by CAMMESA.
GUMEs are users with a maximum capacity ranging from 0.03 to 2.0 MW. They are not required to have any minimum annual demand.
GUPAs are users with a minimum capacity of 0.030 MW and a maximum of 0.1 MW. They are not required to have any minimum annual demand.
Traders
Since 1997, traders have been authorized to participate in the WEM by intermediating block sales of energy.
Vertical and Horizontal Restrictions
The WEM agents are subject to vertical restrictions, pursuant to Law No. 24,065 and Decree No. 1398/92, according to which:
| 1. | neither a generation or distribution company nor a Large User or any of its controlled companies or its controlling company, can be an owner or a majority shareholder of a transmission company or the controlling entity of a transmission company. Nevertheless, the Executive branch may authorize a generation or distribution company or a Large User to build, at its own cost and for its own need, a transport network for which it will establish the modality and form of operation. | |
| 2. | the holder of a distribution concession cannot be the owner of generation units; however, the shareholders of the electric power distributor may own generation units, either by themselves or through any other entity created with the purpose of owning or controlling generation units; and | |
| 3. | no transmission company may purchase or sell electricity. |
Section 33 of the Argentine Corporate Law states that “companies are considered as controlled by others when the holding company, either directly or through another company: (1) holds an interest, under any circumstance, that grants the necessary votes to control the corporate will in board meetings or ordinary shareholders’ meetings; or (2) exercises a dominant influence as a consequence of holding shares, quotas or equity interest or due to special linkage between the companies”. However, we cannot assure you that the electric power regulators will apply this standard of control in implementing the restrictions described above. According to the ENRE resolutions, a company controlled by or controlling an electric power transmission company is a company that owns more than 51.00% of the voting shares of the controlled company and exercises a majority control.
Both electric power transmitters and distributors are also subject to horizontal restrictions. The horizontal restrictions applicable to transmission companies are the following:
| 1. | two or more transmission companies can merge into or be part of a same economic group only if they obtain an express approval from the ENRE; such approval is also necessary when a transmission company intends to acquire shares in another electric power transmission company; | |
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| 2. | pursuant to the terms of the concession agreement that govern the transmission of electric power through transmission lines above 132 kv and below 140 kv, the transmission service is rendered exclusively in the specific areas indicated in such agreement; and | |
| 3. | pursuant to the terms of the concession agreement of the company that renders electric power transmission services through lines with voltage equal to or higher than 220 kv, the service must be rendered exclusively and without territorial restrictions, throughout Argentina. |
The horizontal restrictions applicable to electric power distribution companies are the following:
| 1. | two or more distribution companies can merge into or be part of a same economic group only if they obtain an express approval from the ENRE; such approval is also necessary when a distribution company intends to acquire shares in another electric power distribution company; and | |
| 2. | the distribution service is rendered within the areas specified in the respective concession contracts. |
Import and Export Transactions
Pursuant to Decree No. 974/97, import and export transactions are conducted through the TEII (Sistema de Transporte de Energía Eléctrica de Interconexión Internacional), a public service subject to the concession granted by the former Secretariat of Electric Energy. Under such system, through Resolution No. 348/99, the former Secretariat of Electric Energy granted Interandes Sociedad Anónima a concession for the TEII through the Güemes Transmission System, which connects the Central de Salta Thermal Generation plant located in Güemes, Salta, with the Sico Border Crossing, on the border with the Republic of Chile.
All import and export transactions conducted through the term market require the prior authorization of the Secretariat of Energy and CAMMESA.
Electricity Dispatch and Spot Market Pricing prior to Resolution SE No. 95/13
According to the Regulatory Framework, an electric power generator’s remuneration was a function of two components: (1) a variable component, based on quantity of energy sold in the market, and (2) a fixed component that aims to remunerate the generator for each MW of capacity of its units available per hour in the WEM, regardless of the consumption of the electric power generated by such units. The value of the fixed component depended on, among other things, the connection node to which the unit connects to the SADI.
In accordance with the spot market that was in place prior to Spot Sales, electric power was traded at prices reflecting supply and demand. CAMMESA dispatched the available power units based on the variable costs of production determined by the generation agents, either based on the cost of fuel or the price of water determined, dispatching the most efficient power units first. The spot market price was determined by CAMMESA on an hourly basis at a specific geographic location, referred to as the “market node,” which is located in the system’s load center at Ezeiza, Province of Buenos Aires. The energy price consisted of a value referred to as the “marginal system price” or “market price,” and represented the economic cost of generating the next MWh to satisfy an increase in demand at the same value. The seasonal price fixing system was directly related to the quarterly average prices of the spot market.
However, in practice, the Spot Market pricing mechanisms have suffered significant changes since 2002, and by means of Resolution of the Secretariat of Energy No. 95/2013, relevant changes were made to the remuneration of the generation sector, transforming the system into a “cost plus” regime, in which generators were remunerated on the basis of variable “non-fuel” costs, fixed costs and an additional margin. In addition, Resolution No. 95/2013 prohibited generators to purchase their own fuel, with CAMMESA being the only buyer and administrator of fuel.
The remuneration regime for electricity generation was modified and supplemented by numerous resolutions in the years that followed: (i) Resolution SE No. 529/14, (ii) Resolution SE No. 482/2015, (iii) Resolution SEE No. 22/2016, (iv) Resolution No. 19/17 (which established a remuneration scheme in US dollars); (v) Resolution 1/19 (which maintained the scheme in US dollars).
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Afterwards, Resolution 1/19 was amended by (i) Resolution 31/20 (which re-established a remuneration scheme valued in Argentine pesos), (ii) Resolution 440/21, (iii) Resolution 238/22, (iv) Resolution 826/22, (v) Resolution 750/23, (vi) Resolution No. 869/23, (vii) Resolution 9/24, (viii) Resolution 99/24, (ix) Resolution 193/24, (x) Resolution 233/24, (xi) Resolution 285/24, (xii) Resolution 20/24 (issued by the Secretariat of Energy and Mining Coordination), (xiii) Resolution 387/24, (xiv) Resolution 603/24, (xv) Resolution 27/25, (xvi) Resolution 113/25 and (xvii) Resolution 143/25.
More recently, Resolution No. 21/2025, published in the Official Gazette on January 28, 2025, amended certain provisions of Resolution No. 95/2013. It established that the commercial management and fuel dispatch for thermal generators with supply contracts without the obligation of self-management will remain the responsibility of CAMMESA. However, for thermal generators operating in the spot market, the prohibition on acquiring their own fuel was lifted, with CAMMESA remaining as the supplier of last resort. Furthermore, it stipulated that the costs associated with managing proprietary fuels will be valued based on the reference prices declared in the 'Declaration of Variable Production Costs,' including freight, transportation, natural gas distribution, taxes, and related fees.
The Stabilization Fund
Energy prices are passed on to end-users through the public utility distribution companies. To fix prices for end-users, CAMMESA analyzes electric power supply and demand for the period for which the price is being calculated. The seasonal price is a fixed quarterly price. The Regulatory Framework created the Stabilization Fund that absorbs the differences between the seasonal price and the spot price in the WEM. When the seasonal price is higher than the spot price, there is an accumulated surplus in the Stabilization Fund. Any surplus is used to offset any losses resulting from periods during which the spot price has been higher than the seasonal price. However, due to tariffs’ public policies, the Stabilization Fund has been in deficit since 2003.
Tariffs
The tariffs charged by electric power transmission companies include: (i) a connection charge, (ii) a transmission capacity charge and (iii) a charge for actually transmitted energy. In addition, transmission companies may receive income derived from the expansion of the system. Transmission tariffs are passed on to final users through the distributors.
The amounts that distribution companies charge to end-users include: (i) the price for the purchase of energy in the WEM (the seasonal price as described above), (ii) transmission costs, (iii) the value-added for distribution (“VAD”), which compensates the distributor, and (iv) taxes. The VAD is the marginal cost of providing services, including the network development and investment costs, operation maintenance and commercialization costs, as well as depreciation and a reasonable return on the invested capital. The tariffs determined as set forth above must enable an efficient distributor to cover its operating costs, finance the renovation and improvement of its facilities, satisfy increasing demand, comply with established quality standards and obtain a reasonable return, while also enabling such distributor to comply with certain operating efficiency standards and operate in a manner consistent with the amounts it has invested and the national and international risks inherent in its operations.
Please note that tariffs have been impacted by subsequent emergencies of the power sector, as described in the following section.
Emergency of the Electric Power Sector
The electric power sector has been significantly affected by the Public Emergency Law enacted on January 6, 2002, and the measures adopted as a consequence thereof. As a result of the law, electric power transmission and distribution tariffs were converted into pesos and frozen for more than six years. They were only subject to limited and small-scale increases.
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Since the approval of the Public Emergency Law, a series of temporary provisions amended the original mechanism for the determination of prices in the WEM. The measures adopted pursuant to the Public Emergency Law also distorted this mechanism: in spite of an increase in the spot price, the seasonal price remained frozen for all users until 2004, when a partial adjustment was adopted that did not affect residential demand. As a result, the amounts collected based on seasonal prices have been lower than the amounts based on spot prices, therefore increasing the Stabilization Fund deficit.
In addition, the remuneration to power generators was maintained at artificial low levels through regulations that, among other measures, sets a cap on spot prices freezing the capacity payments.
On December 15, 2015, through Decree 134/2015 the Executive Branch declared a state of emergency with respect to the Argentine electric power sector until December 31, 2017.
On December 20, 2019, the Solidarity Law No. 27,541 was enacted, which once again declared a public emergency in tariff and energy matters, extending such declaration to the economic, financial, fiscal, administrative, pension, health, and social fields, delegating to the National Executive Branch a variety of powers to fulfill the objectives envisaged in the regulation.
The Solidarity Law implemented a series of relevant measures related to the power sector:
| (i) | it suspended increases in transportation and distribution rates for 180 days, which was later subject to extensions by means of Decree No. 543/2020 and Decree No. 1020/2020. | |
| (ii) | it instructed the initiation of a tariff renegotiation process, which was initiated by means of Decree No. 1020/2020 (for a term of two years), and was extended by means of Decree No. 815/2022 (for a term of one year). | |
| (iii) | it granted the Executive branch broad powers to intervene the ENRE, initially until December 2020. However, the intervention was also subject to extensions throughout the entire Fernández Administration, by means of Decree No. 277/2020, Decree No. 1020/2020, Decree No. 871/2021 and Decree No. 815/2022. |
On June 16, 2022, with the publication of Decree No. 332/2022, a subsidy segmentation regime for residential users of electricity and natural gas public services by network was established, starting from June 2022, with the aim of achieving reasonable energy values and susceptible to be applied with criteria determined by the regulatory authority (the Secretariat of Energy).
On December 18, 2023, the National Executive Branch (under the Milei Administration) issued Decree No. 55/2023 which resolved:
| · | Regarding the emergency: | |
| · Declare a state of emergency in the segments of electricity generation, transmission, and distribution, as well as in the transmission and distribution of natural gas under federal jurisdiction until December 31, 2024. | ||
| · Instruct the Secretariat of Energy to develop, implement, and enforce a program of necessary actions. The objective is to establish price sanction mechanisms under conditions of competition, maintain income levels, and cover investment needs to ensure the continuous provision of public services for the transmission and distribution of electricity and natural gas | ||
| · | Regarding tariff review: |
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| · Initiate the tariff review for providers of electricity and natural gas transmission and distribution services. | ||
| · The resulting new tariff schedules shall not enter into force until after December 31, 2024. | ||
| · Until the tariff review process is completed, temporary tariff adjustments and periodic adjustments may be approved, aiming at the continuity and normal provision of the involved public services, on account of the tariff review outcome. | ||
| · Establish mechanisms for citizen participation in the temporary tariff adjustment process. | ||
| · | Regarding the intervention of ENRE and ENARGAS: | |
| · Order the intervention of ENRE and ENARGAS as of January 1, 2024, until the appointment of new members of the Board of Directors. | ||
| · Grant the Secretariat of Energy the authority to appoint the interveners of ENRE and ENARGAS. | ||
| · Grant the interveners the authority to conduct the tariff review process. | ||
| · The Secretariat of Energy must initiate the process of selecting members of the Board of Directors of ENARGAS within 180 days. It must also review and/or redirect and/or confirm and/or annul the process of selecting members of the Board of Directors of ENRE. |
On December 20, 2023, through Decree No. 70/2023, the National Executive Branch resolved, among other matters, to:
| · | Empower the Secretariat of Energy to redetermine the current subsidy structure in order to ensure that end-users have access to basic and essential electricity and natural gas consumption. For this purpose, it must consider the income of the household group. | |
| · | Empower the Secretariat of Energy to define specific mechanisms that materialize the allocation and effective perception of subsidies, determining the roles and tasks to be performed by public actors, concessionaire companies, and other relevant actors or agents. |
On January 3, 2024, through Resolutions No. 2/2023 and 3/2023 of ENRE, it was resolved to convene a public hearing to be held on January 26, 2024, for the temporary adjustment of transportation and distribution tariffs (of EDENOR and EDESUR).
Accordingly, on February 16, 2024, through Resolutions No. 101/2024 and 102/2024 of ENRE (amended by Resolutions No. 115/2024, 198/2024 and 199/2024), the Tariff Schedule for residential users Level 1, Level 2, Level 3 and other tariff categories were approved.
In addition, through Resolution No. 270/2024 the ENRE established the “Program for the Distribution Tariff Review in 2024”. The criteria and methodological aspects to be followed by EDENOR and EDESUR distributors to carry out the tariff studies in the Tariff Review process were established therein (pursuant to the provisions of Decree No. 55/2023, Section 45 of Law No. 24,065 and its regulations, and the respective Concession Agreements).
On May 24, 2024, we reported that within the framework of Resolutions No. 58/2024, 66/2024, and 77/2024 of the National Energy Secretariat, issued in connection with the debts of CAMMESA for economic transactions corresponding to the months of December 2023 and January and February 2024, we entered into an agreement with CAMMESA, by virtue of which outstanding debts were paid by CAMMESA as follows:
| 1. | The debts corresponding to the economic transactions for the months of December 2023 and January 2024 were paid through the delivery of public securities "BONDS OF THE ARGENTINE REPUBLIC IN US DOLLARS STEP UP 2038" (BONO USD 2038 L.A.) within ten (10) business days from the signing of the agreement; and |
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| 2. | The debts corresponding to the economic transaction for the month of February 2024 were paid with the funds available in the bank accounts enabled in CAMMESA within 48 hours from the signing of the agreement. |
The aforementioned payment agreements do not affect the ordinary course of our business or our ability to pay and obtain financing.
On May 27, 2024, Decree No. 465/2024 determined the restructuring of the energy subsidy regimes of national jurisdiction in order to ensure a gradual, orderly and predictable transition towards a scheme that allows: (i) the transfer to users of the real costs of energy; (ii) the promotion of energy efficiency; and (iii) ensuring vulnerable residential users access to the necessary consumption of electricity, gas through networks and bottled gas. A Transition Period towards Targeted Energy Subsidies was established, from June 1 to November 30, 2024.
Law No. 27,742, on the other hand, and within the framework of the energy emergency declared in its Section 1, empowers the National Executive Branch to adjust the Regulatory Framework for a period of one year, in order to:
| · | Promote the opening of international trade of electric energy, guaranteeing safety and reliability. |
| · | Ensure free commercialization and competition in the industry, allowing end users to choose their supplier. |
| · | Promote the economic dispatch of energy transactions based on hourly economic costs. |
| · | Adjust energy tariffs according to the real costs of supply in order to guarantee investment and the continuous provision of public services. |
| · | Explain the payment concepts for the end user and establish the distributor as the agent for the collection and withholding of amounts. |
| · | Guarantee the development of energy transportation infrastructure through open and competitive processes. |
| · | Modernize and professionalize the structures of the electric sector, reorganizing the Federal Electric Energy Council as a non-binding advisory body. |
Moreover, Resolution No. 294/2024 of the Secretariat of Energy, published in the Official Gazette on October 2, 2024, established the 'Contingency and Preparation Plan for the Critical Months of the 2024/2026 Period' (the Contingency Plan). The Contingency Plan aims to prevent, reduce, and mitigate potential challenges in the energy supply during critical days within the 2024/2026 period, outlining specific actions to be carried out by the Ministry of Energy (SE) in the generation, transmission, and distribution sectors of electricity.
More recently, Decree No. 1023/2024 extended the state of emergency concerning the energy sector, in relation to the segments of electricity generation, transmission and distribution under federal jurisdiction, as well as the transmission and distribution of natural gas and any actions arising therefrom, until July 9, 2025
The FONINVEMEM and Similar Programs
In 2004, the Argentine Government, seeking to increase generation capacity, created the FONINVEMEM (Resolution SE No. 712/2004), a fund to be administered by CAMMESA. To provide capital for the FONINVEMEM, the former Secretariat of Electric Energy invited all WEM participants holding LVFVDs (Liquidaciones de Venta con Fecha de Vencimiento a Definir, as per Resolution SE No. 406/2003 and 943/2003) that originated from amounts owed by CAMMESA’s to generators from the period January 2004 to December 2006, to contribute these credits to the FONINVEMEM. In the initial stages of the FONINVEMEM, generators had to participate in the construction of two new 800 MW combined cycle thermal generation plants. Consequently, on December 13, 2005, the generation companies TMB and TJSM were created. Subsequently the generators also contributed the LVFVDs from 2007 to said projects.
The FONINVEMEM reimburses the private sector contributors the amount of their contributed receivables in 120 equal, consecutive monthly installments starting from the commercial launch date of the plants, converted into U.S. dollars at the rate effective as of the date of the applicable agreement, with interest at the interest rate specified in the applicable agreement for each project. For further information, see “Item 4.B. Business Overview —FONINVEMEM and Similar Programs”.
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Subsequently, in 2010, a new agreement with WEM generators was entered into to promote new electric power generation to satisfy the increase in the energy and capacity demand and also to facilitate the settlement of the generators’ receivables from CAMMESA (LVFVDs) for electric power sales. Within the framework of such agreement, Central Puerto and the Endesa and Duke groups participated in a project for the construction of a thermal combined cycle plant named Central Vuelta de Obligado, in Timbúes, Province of Santa Fe, and, in turn, The AES Group was part of a project for the construction of Central Guillermo Brown, located in Bahía Blanca, Province of Buenos Aires. In connection with the former, the generation company CVOSA was created.
Energía Plus
In September 2006, the Secretariat of Energy issued Resolution No. 1281/06 which created the Energía Plus Service, to respond to the sustained increase in energy demand and to foster new private sector interested parties to invest fresh capital into the energy sector in order to generate new energy sources.
The resolution provided that:
| 1. | The energy available in the market will be used primarily to serve residential customers, public lighting, public entities and industrial and commercial users whose energy demand is at or below 300 kW and that have not entered into term contracts. | |
| 2. | GUMAs, GUMEs and large customers of distribution companies (in all cases with consumption equal or higher than 300 kilowatts) are allowed to satisfy any consumption in excess of their base demand (equal to their demand in 2005) with energy from the Energía Plus service, consisting of the supply of additional energy generation from new generators and generation agents, co-generators or self-generators that are not agents of the WEM or who, as of the date of publication of the resolution, were not interconnected with the WEM. The price required to pay for excess demand, if not previously contracted for under the Energía Plus, was originally fixed to be equal to the marginal cost of operation. The marginal cost is equal to the generation cost of the last generation unit transmitted to supply the incremental demand from electric power at any given time. With the Energía Plus, the price has been amended to for GUMAs and GUMEs and has been maintained for large customers of distribution companies for their excess demand (Note No. 111/16 issued by the former Secretariat of Electric Energy). |
PPAs for additional generation and associated energy from generation – Secretariat of Energy - Resolution 220/07
Pursuant to Resolution No. 220/07, the Secretariat of Energy authorized the execution of Power Purchase Agreements (“PPAs”) between the WEM (represented by CAMMESA) and companies that offer additional generation to the system (i.e., the so-called offer of additional generation and associated energy from generation, co-generation and self-generation agents that, as of the date of publication of the resolution, were not WEM agents or did not have the generation facilities to commit to such supply). PPAs are applicable to all such projects for additional energy generation that involved the participation of the Argentine Government or ENARSA or those that be determined by the former Ministry of Federal Planning, Public Investment and Services (currently, the Secretariat of Energy).
Resolution No. 220/07 sets forth the standard terms of PPAs, including:
| 1. | Effective Term: Maximum of ten years. | |
| 2. | Parties: The company whose offer has been approved by the former Secretariat of Electric Energy, as seller, and the WEM as a whole, represented by CAMMESA, as buyer. |
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| 3. | Remuneration: To be determined based on the costs accepted by the former Secretariat of Electric Energy and approved by the former Ministry of Planning. | |
| 4. | Delivery Point: The connection node of the plant with the SADI. | |
| 5. | Remedies: The PPAs must include remedies for breach based on the effect that the unavailability of the units committed under the PPAs may have on the proper supply of the electric power demand in the SADI. | |
| 6. | Dispatch: The machines and plants assigned to the PPAs will generate electric power to the extent they are dispatched by CAMMESA. |
However, Resolution No. 21/2025 from the Secretariat of Energy partially repealed the Energía Plus regime. The inclusion of new contracts or the renewal of contracts under this regime will only be possible until October 31, 2025. Existing contracts will continue in effect under the same terms until their completion.
The National Hydroelectric Works Program
The Secretariat of Energy issued Resolution No. 724/2008, which authorized the execution of WEM committed supply agreements associated with the repair or repowering of diesel generation groups and related equipment with WEM generation agents. The compensation to be received by the seller will be paid according to the payment priority provided in subsector “I” of Section 4 of Resolution SE No. 406/03.
On November 11, 2009, Resolution SE No. 762/2009, which created the National Hydroelectric Works Program (the “National Program”), was published in the Official Gazette.
The purpose of the National Program is to promote and support the construction of hydroelectric plants within Argentina through the creation of funding sufficient to assure the repayment of investments made and loans provided in such framework.
Within this framework, the Argentine Government has provided that CAMMESA and the WEM generation agents to be determined by the former Ministry of Energy and Mining may enter into electric power supply agreements in respect of the energy generated by the hydroelectric works that are part of the National Program. One of the purposes of the supply agreements for hydroelectric works is to repay the investments made and the loans used to complete all hydroelectric works included in the National Program.
The standard term of such agreements may be of up to 15 years, but such agreements may be extended by the former Ministry of Energy and Mining. Upon expiration of such term, each hydroelectric plant that is part of the National Program may sell the energy generated by it at the price then specified by the WEM.
The terms and conditions of the agreements were determined by the former Secretariat of Electric Energy taking into account principles of economic reasonableness, equity and operating benefits for the electric power system as a whole, according to which it will qualify the hydroelectric works to be executed within the scope of the National Program.
Call for Bids for New Thermal Generation Capacity and Associated Electricity Generation
By means of Resolution SEE No. 21/16, the former Secretariat of Electric Energy called for bids for thermal generation capacity and associated electric power generation. The energy was to be made available in the WEM to meet essential demand requirements beginning with the following seasons: summer 2016/2017, winter 2017 and summer 2017/2018.
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The agent whose bid was finally accepted was required to enter into a contract for the sale of electric power generation capacity availability and the related generated electric power in the WEM (a “wholesale demand contract”) with the distribution agents and Large Users of the WEM represented by CAMMESA.
Resolution No. 21 sets forth the guidelines for wholesale demand contracts, which included, among other things, the following terms: (i) the contractual term is required to be between five and ten years; (ii) the maximum specific consumption of each generating unit by type of fuel used is required to be lower than 2,500 kilocalories per kilowatt-hour; (iii) a set of remedies are required to be defined for failures to comply with the committed availability of generation capacity; (iv) the supply of and recognition of the cost of fuel used by the machines and power plants involved is required to be included in accordance with applicable regulations; (v) contracts are required to have first priority in payment and rank equally with existing supply agreements with the Banco de Inversión y Comercio Exterior (BICE) in its role as trustee of the trusts “Central Termoeléctrica Manuel Belgrano” and “Central Termoeléctrica Timbúes” since January and February 2010, respectively, and priority in payment must rank equally with payment obligations in respect of liquid fuel purchases for electric power generation; and (vi) the contracts are required to include other features stemming from the provisions of Resolution No. 21.
In accordance with Resolution No.21, the former Secretariat of Electric Energy received bids for 6,611 MW and awarded an aggregate amount of 2,871 MW.
Pursuant to Resolution No. 155/16 and Resolution No. 216/16, the former Secretariat of Electric Energy authorized CAMMESA to subscribe the wholesale demand contracts with every winning bidder, for 1,915 MW with an average price of US$21.833/MW-month, and for 956 MW with an average price of US$19.907/MW-month, respectively. In addition, through Resolution No. 387/16, the former Secretariat of Electric Energy authorized CAMMESA to execute additional wholesale demand contracts for two generation projects (one for 100 MW and the other for 137 MW).
Thermal Power Tender Offer – former Secretariat of Electric Energy Resolution 287-E/2017
Through Resolution No. 287-E/2017, of May 11, 2017, the former Secretariat of Electric Energy called for a new thermal power tender for the execution of long-term power purchase agreements. The tender focuses on combined cycle conversion projects and co-generation project.
The main features of the tender were as follows (further requirements and conditions apply):
| a) | Combined cycle conversion projects had to be related to thermal power plants (i) existing at that time or near to reach commercial operation in simple cycle mode; (ii) with low specific consumption; (iii) with the possibility of improving its efficiency once converted into a combined cycle; (iv) that its conversion did not affect the current grid transmission capacity (being any required expansion to be borne by the bidder); (v) which had the appropriate fuel infrastructure system to guarantee permanent operation of the combined cycle; and (vi) with, in principle, a maximum construction term of 30 months. | |
| b) | Co-generation projects (i) had to be efficient, (ii) did not affect the current grid transmission capacity, (iii) had to guarantee its own principal and alternative permanent fuel supply, and (iv) had to entail, in principle, a maximum construction term of 30 months. | |
| c) | 15-year PPAs extension. | |
| d) | CAMMESA-as the offtaker, acting on behalf of distributors and large users of the Argentine Wholesale Electricity Market. The PPAs might be proportionally assigned to large users and distributors at a later stage. | |
| e) | The generator would receive both a fixed capacity payment (subject to power availability) and a variable payment for actual power supplied to the grid. |
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| f) | Prices under the PPAs should be established in US dollars. However, CAMMESA should make payment in Argentine pesos at the prevailing exchange rate on the business day immediately before the payment date established in the sales liquidation document issued by CAMMESA. | |
| g) | Payments under the PPAs will benefit from a priority payment mechanism (equal to the one established for the payment of fuel costs for power generation). | |
| h) | Within three months after execution of the PPAs, CAMMESA had to constitute a Payment Guarantee Fund to guarantee the obligations undertaken under each PPA. It should cover six months of the estimated capacity payments under each PPA. The Secretariat of Electricity should provide the specifics with respect to the Fund’s constitution and administration. |
PPAs were awarded to different projects, by means of Resolution SE No. 820/2017 and Resolution SEE 926/2017.
ENARSA transfers
Decree No. 882/2017 instructed the former Ministry of Energy and Mining (acting as a shareholder of IEASA, now named ENARSA), to implement the necessary measures so that ENARSA sells, assigns or transfers its assets, rights and/or shares (as the case may be) related to Ensenada Barragan, Brigadier Lopez and Manuel Belgrano II thermal power plants and Compañía Inversora de Transmisión Eléctrica CITELEC S.A.
Pursuant to Decree No. 882/2017, the former Ministry of Energy and Mining was also instructed to implement the necessary measures and procedures to execute the sale, assignment or transfer (as the case may be) of (i) the Argentine Government’s shares in Central Puerto S.A. equity and the equity of other energy companies (Central Dique S.A., Central Térmica Güemes S.A., Centrales Térmicas Patagónicas S.A., TRANSPA and Dioxitek S.A), (ii) the rights held by the Argentine Government regarding the following power plants, companies and shares: Termoeléctrica Manuel Belgrano, Termoeléctrica José de San Martín (Central Timbúes), Termoeléctrica Vuelta de Obligado and Termoeléctrica Guillermo Brown.
The subsequent sales and transfers had to contemplate public and competitive procedures which had to protect the rights established in the companies’ bylaws and related corporate and contractual documentation.
The bidding terms and conditions of the bidding contest to transfer Ensenada Barragan and Brigadier Lopez power plants were approved by means of Resolution No. 289/2018 of the former Ministry of Energy and Mining. We submitted offers for both power plants, on February 27, 2019, and we were notified that we had been awarded Brigadier Lopez Power Plant, which was effectively transferred on June 14, 2019.
On June 14, 2019 the transfer agreement for the production unit part of Brigadier Lopez Plant and for the premises on which the Brigadier Lopez Plant is located, was executed, also including: (a) personal property, recordable personal property, facilities, machines, tools, spare parts, and other assets used in connection with the operation of the Brigadier Lopez Plant; (b) IEASA’s (now ENARSA) contractual position in the following contracts: (i) Turbogas and Turbosteam supplying contracts with CAMMESA, (ii) the Brigadier Lopez Financial Trust Agreement (as defined below), (iii) the long term maintenance agreement with Siemens, (iv) the spare part sales agreement with Siemens, (iv) insurance contracts; (c) permits and authorizations in effect related to the Brigadier Lopez Plant operation; and (d) Brigadier Lopez Plant employees.
The Brigadier Lopez Plant has a 280.50 MW Siemens gas turbine installed. It is expected that such gas turbines will be supplemented with a boiler and a steam turbine to complete the combined cycle, which will increase the Brigadier Lopez Plant capacity to 420 MW in the aggregate. The installation of all necessary items for the completion of the combined cycle has not been finalized as of the date of this annual report. Completion is expected to occur by the end of 2025 (see "See Item 4. A History and development of the Company—Purchase of the Brigadier Lopez Plant").
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Under the above-mentioned trust agreement (the “Brigadier Lopez Financial Trust Agreement”), Central Puerto replaced ENARSA as the trustor of the Brigadier Lopez Financial Trust Agreement, and BICE Fideicomisos is the trustee. The financial debt balance of the trust as of June 14, 2019, was US$154,662,725. The amount paid on June 14, 2019, amounted to US$165,432,500, formed by a cash amount of US$155,332,500, plus an amount of US$10,100,000 settled through the assignment of LVFVD to ENARSA.
Under the terms of the trust agreement, the financial debt accrued interest at an annual rate equal to the greater of (i) LIBOR plus 5% or (ii) 6.25% and amortized principal on a monthly basis. BICE Fideicomisos, as the trustee, was in charge of the administration, and paid such debt, using for that purpose the proceeds from certain components of the sales of Brigadier Lopez power plant that were assigned to the Brigadier Lopez Financial Trust Agreement and were paid monthly directly from CAMMESA to the Brigadier Lopez Financial Trust Agreement. Additionally, there was a reserve account founded, for a total amount of two monthly debt services. In case of insolvency according to the Brigadier Lopez Financial Trust Agreement, creditors had no recourse against other assets of Central Puerto. As of the date of this annual report, this financial debt has been cancelled.
Renewable Energy
Renewable Energy Program
In recent years, Argentina has prioritized the generation of electric power from renewable sources. In such regard, it has not only issued regulations intended to regulate and incorporate this type of energy into the WEM, but it has also promoted it by granting incentives in the form of tax benefits and preferential or subsidized tariffs.
To promote renewable energy, Law No. 26,190 was enacted in December 2006 and approved the National Promotional Regime for the Use of Sources of Renewable Energy destined to Power Generation (the “Promotional Regime”). The renewable energy sources provided for in this system include wind, solar, geothermal, tidal, hydraulic (hydroelectric power plants up to 30 MW), biomass, landfill gas, sewage-treatment plant gas and biogas (except for the uses provided for in Law No. 26,093 on biofuels). The purpose of Law No. 26,190 is to increase the proportion of energy provided by renewable energy sources to 8% of the national electric power consumption within ten years from its effective date. Law No. 26,190 also established a system of investments for the construction of new works intended to generate electric power from renewable energy sources, which will remain in force for a term of ten years. The system set forth by Law No. 26,190 has been excluded from the general remuneration scheme regulated by Resolution SE No. 95/13 as amended (as described below).
The beneficiaries of this system are individuals and legal entities that hold investments and concessions for new renewable energy generation works in Argentina that have been approved by the enforcement authority. The energy must be intended for the WEM and the project must be related to the rendering of public services.
On September 23, 2015, Law No. 26,190 was amended by Law No. 27,191. The amendments seek to establish a legal framework to increase investments in renewable energies and foster the diversification of the electric power generation mix, increasing the participation of renewable sources. To such end, the law, among other things:
| 1. | sets renewable energies consumption targets for all of Argentina’s electric power consumers, with minimum percentages progressively increasing from 8% in 2017, to 20% in 2025; | |
| 2. | expands the tax benefits for eligible projects; | |
| 3. | establishes the Fund for the Development of Renewable Energies (Fondo para el Desarrollo de Energías Renovables o “FODER”, for its acronym in Spanish) as a trust fund for which the Argentine Government serves as the trustor, the Investment and Foreign Trade Bank (Banco de Inversión y Comercio Exterior or “BICE”, for its acronym in Spanish) serves as the trustee, and the owners of the approved investment projects are the beneficiaries. The trust fund will be allocated to finance eligible projects involving electric power generation from renewable sources; and |
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| 4. | establishes obligations for Large Users and large demand consumers (over 300 KW) to meet gradual targets through self-generation or the purchase of electrical energy from generators (either directly or through electric power distributors or electricity agents, or CAMMESA -the wholesale market operator-), with regulated prices until March 30, 2018, and thereafter as determined by the former Ministry of Energy and Mining (current Secretariat of Energy). In this respect, Resolution 281/2017 allows Large Users to purchase renewable energy from private generators. |
Pursuant to Decree No. 531/16, the Argentine Government set forth general guidelines and principles for the development of energy projects, and delegated the procedures for compliance with energy targets, bids or auctions for the implementation of the FODER to the former Ministry of Energy and Mining. The most important aspects of these regulations are as follows:
| 1. | The Secretariat of Energy must be the enforcement authority of the law. | |
| 2. | The system is applicable to projects for the construction of new facilities or for expanding or upgrading existing ones, the acquisition of new or second-hand equipment, to the extent new assets, works and other services are used for the project and are directly connected to the project. Access to the system is allowed for projects for which, after having been selected under Resolutions Nos. 220/2007, 712/2009 and 108/2011 set forth by the Secretariat of Energy, construction has not yet begun and that have been selected by the enforcement authority and the executed agreement is terminated. Projects for which construction has begun may also be eligible to the extent amendments to the executed contracts are allowed, as required by the enforcement authority. The enforcement authority must establish the merit order for projects that have been approved and determine the granting of the promotional benefits for each project. | |
| 3. | The renewable energy consumption targets will be audited annually commencing on December 31, 2018, with a margin of error of 10% per year allowed. | |
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The enforcement authority will allocate funds from the FODER to projects that develop the value chain for the local production of power generating equipment, using renewable energy sources, parts or components.
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More recently, pursuant to Resolution No. 27/2025, the Ministry of Defense established the Unit for the Cooperation of Renewable Energies (Unidad de Cooperación para la Producción de Energías Renovables or “UCOPER”, for its acronym in Spanish), which is tasked with coordinating, designing, planning, and executing renewable energy policies and projects. Its responsibilities encompass the assessment of resources, the implementation of logistical and information systems, the preparation of semi-annual reports, the development of guidelines and terms of reference, and the facilitation of cooperation agreements and technical assistance with public and private entities.
Tax Benefits Under Law No. 26,190
The former regime includes the following tax benefits:
| · | Early refund of the VAT on the project’s new depreciable assets or infrastructure works: the VAT as invoiced to the beneficiaries on the purchase, production, manufacture or final import of capital goods or the execution of infrastructure works shall be credited against other taxes by the ARCA as soon as at least three fiscal periods have elapsed, as counted from the fiscal period in which the investments were made, or it shall be recoverable in the term provided upon approving the project, under conditions and with the guarantees set forth in that respect. | |
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| · | Accelerated asset depreciation for purposes of income tax: the beneficiaries may apply depreciations on the investments associated with the projects subsequent to their approval and under the terms set forth therein. These depreciations are subject to a differential treatment depending on their timing, within the first, second or third twelve-month period after project approval. This alternative is subject to the condition that the assets are to remain as property of the project holder for at least three years. | |
| · | Non-calculation of the minimum presumed income tax provided by Law No. 25,063 on the assets allocated to the projects initiated under the system created by the renewable energy law: this benefit applies to the three fiscal periods preceding the completion of the relevant project. The assets must be connected to the relevant project and must be acquired by the company after the approval of the project. Pursuant to Law No. 27,260, passed by the Argentine Congress on June 29, 2016, the minimum presumed income tax was eliminated for tax periods beginning as of January 1, 2019. |
Tax benefits under Law No. 27,191
Law No. 26,190, as amended by Law No. 27,191, together with Decree No. 531/2016 and the regulations of the former Ministry of Mining and Energy, set forth the National Promotional Regime for the Use of Renewable Sources of Energy (the “Promotional Regime”). The Promotional Regime includes the following tax benefits:
| 1. | Early refund of VAT and accelerated depreciation of assets for income tax purposes, with beneficiaries being able to apply for both benefits simultaneously, subject to reduced benefits based on the actual commencement date of the project’s execution. | |
| 2. | Extension to ten years of the tax loss carry forward term. Tax loss carry forwards arising from the promoted activity may only be set off against net income arising from the same activity. | |
| 3. | Exclusion of assets connected to the activity subject to the Promotional Regime from the taxable base related to the minimum presumed income tax until the eighth fiscal year following the project’s commencement (inclusive of the first year). Excluded assets are those connected to the project subject to the Promotional Regime and included in the owner’s net worth after the approval of such project. Pursuant to Law No. 27,260, the minimum presumed income tax was repealed effective as of the fiscal periods beginning on or after January 1, 2019. | |
| 4. | A 10% exemption on tax on the dividends distributed by the companies that own the projects subject to the Promotional Regime, which are reinvested in new infrastructure projects within Argentina. This tax was eliminated under the terms of Law No. 27,260. The exemption would not apply to the tax applicable to the net gain derived from dividends and profits distributed by Argentine entities to individuals, undivided estates, and beneficiaries abroad, established by the enactment of Law No. 27,430 and amendments, currently subject to a 7% withholding tax on the amount of such dividends. | |
| 5. | Tax certificate applicable to the payment of income tax, VAT, minimum presumed income tax and excise taxes for an amount equal to 20% of the value of components of electromechanical facilities made in Argentina, provided that at least 60% of the components (excluding civil works) are made in Argentina. Where there is insufficient or a lack of production in Argentina, the percentage is reduced to 30%. The assignment of the tax certificate is conditioned upon the fact that the taxpayer cannot have liquidated debts due and payable to the ARCA. The tax credit certificate may be transferred to third parties only once. | |
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| 6. | Other benefits, including the possibility of shifting increased costs arising from tax increases to the price of the renewable energy sold and exemptions established after the execution of said contracts. In the contracts executed by CAMMESA, the generator has the right to request recognition of a new price for the energy supplied when there are increases in taxes, rates, contributions or federal, provincial or municipal charges. For such purposes, CAMMESA must be provided with the information and documentation necessary to assess the adjustment of the value of the energy supplied. Decree No. 531/2016 details the definition and scope of the above-mentioned fiscal increases. The request for recognition of the new price due to fiscal increases, together with proof of the information and documentation, is subject to an automatic expiration period. | |
| 7. | Exemption from import duties and the statistical rate for the import of new capital assets, special equipment and related parts and components that are necessary for, among other things, the execution of the project. This benefit was valid until December 31, 2017. | |
| 8. | Exemption from special taxes, fees and royalties of any jurisdiction imposed on the access to and use of renewable sources of energy within participating jurisdictions until December 31, 2025, excluding potential fees payable on the use of the state-owned land where the projects are based. Those who wish to participate in the Promotional Regime must waive the benefits afforded by previous systems under Laws No. 25,019 and 26,360, and the projects that benefitted from such systems may only have access to the Promotional Regime if the works committed under the contracts executed thereunder have not commenced as of the date of the application. |
Those interested in joining the Renewable Energy Promotion Regime must renounce the benefits provided for in previous regimes under Laws No. 25,019 and 26,360, while projects that have benefited from such regimes can only access the Renewable Energy Promotion Regime if the works agreed upon under the relevant contracts have not commenced as of the date of submission of the application.
The Renewable Energy Term Market in Argentina - Resolution No. 281-E/17
On August 22, 2017, the former Ministry of Energy and Mining published Resolution No. 281-E/17 (“Resolution No. 281”) for the Renewable Energy Term Market (private PPAs between generators and Large Users, self-generation, co-generation, traders and distributors). Resolution No. 281 was later modified by means of Resolutions SE No. 230/2019, No. 551/2021 and No. 14/2022, Resolution No. 370/2022 of the Ministry of Economy and Resolution SE 360/2023.
Resolution No. 281 seeks to promote and encourage a dynamic participation in the term market and to foster the increase of private agreements between the WEM’s agents and participants. Its aim is to provide a feasible alternative for the purchase of energy to tenders by CAMMESA.
Resolution No. 281 makes it possible for Large Users to comply with their renewable energy consumption quotas through either (i) the joint purchase system (i.e., through CAMMESA), (ii) the execution of a private PPA or (iii) the development of a self-generation project or a co-generation project.
As a general principle, PPAs executed in the term market (outside the joint purchase system) may be freely negotiated between the parties with respect to term, priorities, prices and other contractual conditions.
Section 7 of Resolution No. 281 provides that, in the case of curtailment, the following power generation plants will have (i) equal dispatch priority between them and (ii) first dispatch priority over renewable generation projects operating in the term market without an assigned dispatch priority:
| 1. | run-of-the-river hydropower plants and renewable power plants having commenced commercial operation prior to January 1, 2017; | |
| 2. | power plants supplying energy pursuant to PPAs executed in connection with Resolution SE No. 712/2009 or No. 108/2011 having commenced commercial operation prior to January 1, 2017; | |
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| 3. | renewable power plants supplying energy pursuant to PPAs executed with CAMMESA through the RenovAr Program (e.g., the La Castellana Project and the Achiras Project); | |
| 4. | renewable power plants supplying energy pursuant to Resolution MINEM No. 202/2016 of the former Ministry of Energy and Mining; and | |
| 5. | renewable power plants operating in the term market (e.g., private PPAs) which have obtained dispatch priority in accordance with the regime established pursuant to Resolution No. 281. |
Moreover, Resolution No. 281 established the National Registry of Renewable Energy Power Generation Projects (Registro Nacional de Proyectos de Generación de Energía Eléctrica de Fuente Renovable or “RENPER”, for its acronym in Spanish) for the registration of all projects related to power generation, cogeneration, and self-generation of electrical energy from renewable sources.
Only the expansion of the abovementioned projects needs to file the request for dispatch priority with CAMMESA, who will then evaluate submissions on a quarterly basis and prepare a list of granted dispatch priorities in interconnection points or transmission corridors with restrictions to the transmission capacity.
Through Resolution No. 360/2023, new Dispatch Priority Assignment alternatives were established:
| · | The possibility of requesting “Dispatch Priority Associated to Joint Projects of Incremental Demand with New Renewable Generation” is incorporated (new art. 6 bis, Annex I, Resolution No. 281). | |
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The assignment of dispatch priority to new renewable generation projects that have an agreement with future large incremental power demands is allowed. It will be considered as “Incremental Demand Associated Projects with New Renewable Generation” those whose incremental power demand is greater than or equal to 10 MW. The priority is intended for large future demands that seek to ensure their expected consumption of electric energy totally or partially by means of renewable generation and that, due to their expected influence on the transmission grid, produce an increase in the dispatch priority assignable capacities over the existing capacities at the time of the request. CAMMESA will make the associated dispatch priority allocations only for the incremental transmission capacity associated with the entry of the aforementioned joint projects, provided that it does not compromise the transmission capacity allocated to other projects and/or existing generation plants or those that are expected to enter. | ||
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The figure of “Dispatch Priority for Expansions Associated to MATER Projects” is incorporated (new article 6 ter, Annex I, Resolution No. 281). The purpose is for generators to build and pay for transmission expansions in order to commercialize their energy under the MATER. Thus, the dispatch priority over the incremental transmission capacity may be reserved to renewable generation projects that carry out the expansion works at their own cost. | |
| · | The “Dispatch Priority for Expansions Associated with MATER Projects” is incorporated (new art. 6 ter, Annex I, Resolution 281). The purpose is for generators to construct and finance transport expansions to commercialize their energy under MATER. Thus, dispatch priority over incremental transport capacity may be reserved for renewable generation projects that carry out expansion works at their own cost. | |
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CAMMESA is instructed to implement, for corridors where there is no availability to assign dispatch priority fully and for all hours of the year, a mechanism of “Referential Type A Dispatch Priority Assignment”. The mechanism will allow generators to obtain Referential Type A Dispatch Priority, in which they foresee circumstantial limitations for their evaluations that allow them to inject energy with an expected probability of 92% over their characteristic annual energy under the foreseen operating conditions of the different nodes and corridors of the SADI, until transport works are carried out to avoid limitations. The conditions for assignment and maintenance of Referential Type A Dispatch Priority shall be governed by the same mechanisms used for the assignment and maintenance of current Dispatch Priority. Generators who, prior to the first call for Referential Type A Dispatch Priority, have commercially enabled capacity above their assigned Dispatch Priority, may adhere to this regime for their inclusion in the priority assignment for up to that difference. |
Non-compliance with requirements to maintain priority: In case of non-compliance with the committed deadline for entry or payments for the maintenance of dispatch priority, project owners who have requested extensions will not be able to reiterate the request for dispatch priority for the following four (4) quarters. Additionally, projects that have not obtained commercial enablement for the entirety of the assigned capacity, once the committed deadline plus any extensions have expired, will automatically lose dispatch priority for the capacity resulting from the difference between (i) the assigned priority capacity and (ii) the commercially enabled capacity, without any right to claim for payments made (new art. 9 bis, Annex I, Resolution 281).
Extensions to obtain commercial enablement: The maximum period of twenty-four (24) months, or the commercial enablement period declared in case dispatch priority has been assigned by tiebreaker with the mechanism prior to Resolution No. 14/2022, may be extended by CAMMESA under certain conditions (new article 11, Annex I, Resolution 281).
Use of proceeds: Proceeds collected by CAMMESA for payments made by generators corresponding to dispatch priority reservations, extensions, relocations, and MATER adhesions shall be allocated to a Separate Account for the Expansion of the Transport System associated with renewable energies, administered by CAMMESA through the Trust for Electric Supply Transport Works (FOTAE) (new art. 13, Resolution No. 230/2019).
Partial enablement of projects with dispatch priority: Those who have obtained dispatch priority and carry out partial commercial enablement regarding the total capacity assigned with priority shall pay the Dispatch Priority Reservation fee exclusively for the capacity that has not obtained commercial enablement at the beginning of the corresponding payment obligation period. For this, the accumulated commercially enabled capacity must be at least 50% of the capacity assigned with dispatch priority (art. 20 Disposition 1/2019 of the former Subsecretariat of Renewable Energies).
RenovAR (Round 1, Round 1.5 and Round 2): Bidding Process for Renewable Energy Generation Projects
Resolution No. 136-E/16, issued by the former Ministry of Energy and Mining and published in the Official Gazette on July 26, 2016, launched the public auction process for submitting bids for Round 1 of the RenovAR Program. Resolution No. 136-E/16 also approved both the bidding terms and conditions of the above-mentioned auction and the PPAs with CAMMESA.
According to the terms and conditions of such bid, the relevant PPAs shall include the following features and provisions:
| 1. | Purpose: The purpose of the agreement must be to supply the amount of electric power associated with the new equipment for electric power generation from renewable sources to the WEM beginning on the date on which the power plant is permitted to operate in the WEM until the termination of the contractual term. | |
| 2. | Seller: The generation, co-generation or self-generation agent of the WEM whose bid is accepted pursuant to the provisions of this resolution and supplementary regulations set forth by the former Secretariat of Electric Energy. | |
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| 3. | Buyer: CAMMESA, on behalf of the distribution agents and Large Users of the WEM (until such role is reassigned among distribution agents or Large Users of the WEM), to meet the goals of renewable energy source contribution set since December 31, 2017, for the demand of electric power in the WEM. | |
| 4. | Term: Up to twenty years from the date on which operations commence. | |
| 5. | Type and technology of the energy to be supplied. | |
| 6. | Electricity committed to be delivered per year. | |
| 7. | Generation capacity of each unit and total installed capacity committed. | |
| 8. | Remuneration to be received by the seller and paid by the buyer for the electric power to be supplied, determined on the basis of the bid price in U.S. dollars per megawatt/hour (US$/MWh). | |
| 9. | The terms and conditions of the seller’s contractual performance guarantee. | |
| 10. | The point of delivery of the electric power purchased shall be the connection node to the SADI. | |
| 11. | The remedies for contractual breach. | |
| 12. | The enforcement of the guarantee for payment through FODER’s escrow account. | |
| 13. | Contracts for the purchase of electric power shall have first priority in payment and rank equally with payments to the WEM. |
Pursuant to Resolution No. 213/16 of the former Minister of Energy and Mining, the results of the tender were published on October 7, 2016. A total of 29 projects with a total installed capacity of 1,141.51 MW, located in nine different provinces were awarded:
| · | 12 wind projects for a total installed capacity of 707 MW, with a weighted average price of US$59.39/MWh, a minimum price of US$49.10/MWh and a maximum price of US$67.20/MWh; | |
| · | four solar projects for total installed capacity of approximately 400 MW, with a weighted average price of US$59.75/MWh, a minimum price of US$59.00/MWh and a maximum price of US$60.00/MWh; | |
| · | five small hydro projects for total installed capacity of 11.37 MW, all at a price of US$105/MWh; | |
| · | six biogas projects with a total installed capacity of approximately 8.64 MW, with a weighted average price of US$154 /MWh, a minimum price of US$118/MWh and a maximum price of US$160/MWh; and | |
| · | two biomass projects, for a total installed capacity of 14.5 MW, both at a price of US$110/MWh. |
Round 1.5 of the RenovAr Program: Public Bid Process for New Renewable Energy Generation Units
In October 2016, the former Ministry of Energy and Mining also issued Resolution No. 252-E/16, calling for national and international bids under round 1.5 of the RenovAr Program to auction an additional 600 MW of renewable energy (400 MW of wind and 200 MW of solar). On November 11, 2016, CAMMESA began analyzing the technical aspects of the bids that were filed, which included 47 projects totaling 2,486.4 MW.
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Pursuant to Resolution No. 281-E/16 of the Minister of Energy and Mining, the results of the tender were published on November 25, 2016. A total of 30 projects with a total installed capacity of 1,281.53 MW, located in 12 different provinces were awarded:
| · | ten wind projects for a total installed capacity of 765.35 MW, with a weighted average price of US$53.34/MWh, a minimum price of US$46/MWh and a maximum price of US$59.38/MWh; and | |
| · | 20 solar projects for total installed capacity of approximately 516.18 MW, with a weighted average price of US$54.94/MWh, a minimum price of US$48.00/MWh and a maximum price of US$59.20/MWh. |
Round 2 of the RenovAr Program: Public Bid Process for New Renewable Energy Generation Units
Following Rounds 1 and 1.5 of the RenovAR Program, the former Ministry of Energy and Mining pursuant to Resolution No. 275/17, launched Round 2 of the program on August 17, 2017 and granted awards in the amount of 2,043 MW of renewable power capacity.
We submitted bids for Round 2 of the RenovAR Program on October 19, 2017, and, on November 29, 2017, we were awarded a wind energy project called, “La Genoveva I,” which allowed us to add an additional capacity of 86.6 MW to our portfolio.
Round 2.5 of the RenovAr Program: Public Bid Process for New Renewable Energy Generation Units
After Round 2.0, the former Ministry of Energy and Mining issued Resolution No. 473-E/2017 of November 30, 2017, which launched Round 2.5. The companies invited to participate in this new round were those companies that filed bids in Round 2.0 and were unsuccessful due to a small margin.
As a result of Round 2.5 by means of Resolution No. 488-E/2017 of the former Ministry of Energy and Mining, issued on December 19, 2017, 22 additional projects (totaling 634.3 MW of projected power) were awarded.
Round 3.0 of the RenovAr Program: Public Bid Process for New Renewable Energy Generation Units
Through Resolution No. 100/2018, dated November 14, 2018, the former Secretariat of Energy launched Round 3.0 of the RenovAr program and issued the bidding terms and conditions ruling such bidding contest.
In this new round, participants can submit bids with respect to electricity projects of no more than 10 MW of capacity each, regardless of the applicable technology (wind, solar, etc.). The total capacity to be awarded in this round is 400 MW of renewable energy.
On August 2, 2019, pursuant to Disposition SSERyEE 91/2019 the awarding of the PPAs was decided for a total of 259 MW.
Pursuant to the RenovAr regulatory framework, we were awarded 3 wind projects: La Castellana I in Round 1, Achiras in Round 1.5, and La Genoveva I in Round 2.0. The wind farm La Castellana I reached commercial operation date (COD), in August 2018, and Achiras reached commercial operation date on September 2018 while La Genoveva I in November 2020. The following table shows the main characteristics of each of the wind farms:
| 120 |
|
La Castellana I |
Achiras |
La Genoveva I |
|||||
| Location | Province of Buenos Aires | Province of Córdoba | Province of Buenos Aires | ||||
| Status | In operation | In operation | In operation | ||||
| Commercial operation date / Expected commercial operation date | August 18, 2018 | September 20, 2018 | November 21, 2020 | ||||
| Awarded power capacity in the bidding process(1) | 99 MW | 48 MW | 86.60 MW | ||||
| Current/Expected power capacity(1) | 100.80 MW | 48 MW | 88.2 MW | ||||
| Regulatory Framework | RenovAr 1.0 | RenovAr 1.5 | RenovAr 2.0 | ||||
| Awarded price per MWh | US$61.50 | US$59.38 | US$40.90 | ||||
| Contract length | 20 years, starting from commercial operation | 20 years, starting from commercial operation | 20 years, starting from commercial operation | ||||
| Power purchase agreement signing date | January 2017 | May 2017 | July 2018 | ||||
| Number of units | 32 wind turbines | 15 wind turbines | 21 wind turbines | ||||
| Wind turbine provider | Acciona Wndpower—Nordex | Acciona Wndpower—Nordex | Vestas |
| __________________ |
| Notes:- |
| (1) | The companies that were awarded with project during the bidding process were authorized pursuant to the conditions of such bidding process to introduce minor changes in the power capacity of the project. |
Remuneration Scheme
The Current Remuneration Scheme for generators (Spot Sales)
The current remuneration scheme for generators engaged in spot sales was initially established through the Secretariat of Energy's Resolution 31/20 on February 27, 2020. This resolution introduced a remuneration framework in Argentine pesos applicable to Authorized Generators operating within the Wholesale Electricity Market. This scheme has been amended by multiple resolutions aiming at fine-tuning the remuneration values in response to market conditions.
Amendments include Res. No. 440/2021, Res. No. 238/2022, and Res. No. 826/2022 through 2022, extending through Res. No. 750/2023, Res. No. 869/2023, Res. No. 9/2024, Res. No. 99/2024, Res. No. 193/2024, Res. No. 233/2024, Res. No. 285/2024, Res. No. 20/2024 and Res. No. 387/2024 during 2023 and 2024. During 2025, as of the date of this annual report, additional amendments have been issued, including Res. 27/25, Res. 113/25 and Res. 143/25. Each resolution featured incremental updates to the remuneration values for power and energy generation that is not bound by electricity supply contracts. It highlighted continuous adaptations consistent with the Secretariat's agenda to balance fiscal and operational needs in the electricity sector.
In addition, Res. No. 59/2023, issued in February 2023, introduced a specialized price scheme for thermal power plants categorized as "Combined Cycles." Generating agents who are not tied into electricity supply contracts were encouraged to adhere to a "Power Availability and Efficiency Improvement Agreement" with CAMMESA, facilitating the investments necessary for maintaining machinery. These agents had to submit applications to CAMMESA within 90 days following the resolution's publication.
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Further strategic adjustments followed the emergency declared by Decree No. 55/2023, as amended, culminating in Res. No. 143/2025 in April 2025. This resolution replaced Annexes I to V of Res. No. 113/2025 and established values applicable for various types of generation, including thermal generation within MEMSTDF, authorized thermal generation, authorized hydroelectric generation, and other energy sources like renewables. It also provided criteria for financing repayment concerning significant maintenance tasks.
The following is a chronological list of the latest Secretariat of Energy Resolutions for the Spot Market:
|
Secretariat of Energy Resolution #/Year |
Valid From |
Through |
|||
| Res. 440/2021 | Feb-21 | Jan-22 | |||
| Res. 238/2022 | Feb-22 | Oct-22 | |||
| Res. 826/2022 | Nov-22 | Aug-23 | |||
| Res. 750/2023 | Sep-23 | Oct-23 | |||
| Res. 869/2023 | Nov-23 | Jan-24 | |||
| Res. 009/2024 | Feb-24 | May-24 | |||
| Res. 099/2024 | Jun-24 | Jul-24 | |||
| Res. 193/2024 | Aug-24 | Aug-24 | |||
| Res. 233/2024 | Sep-24 | Sep-24 | |||
| Res. 285/2024 | Oct-24 | Oct-24 | |||
| Res. 020/2024 (issued by the Secretariat of Energy and Mining Coordination) | Nov-24 | Nov-24 | |||
| Res. 387/2024 | Dec-24 | Dec-24 | |||
| Res. 603/2024 | Jan-25 | Jan-25 | |||
| Res. 027/2025 | Feb-25 | Feb-25 | |||
| Res. 113/2025 | Mar-25 | Apr-25 | |||
| Res. 143/2025 | Apr-25 | - |
Remuneration of thermal generators
Regarding generation from thermal sources, that Authorized Thermal Generators will be remunerated for (i) monthly available capacity and (ii) energy.
Remuneration for Available Power (DRP) for generators that do not declare DIGO (Base Remuneration) compensates, at the Base Price, the average monthly available power (excluding scheduled maintenance hours agreed with CAMMESA) of the unit to those generators that do not declare a Guaranteed Availability Commitment (DIGO). The Base Price is established by technology and unit scale.
Remuneration for the guaranteed availability of offered power (DIGO) for generators that declare DIGO (DIGO Remuneration) compensates, at the DIGO Price, the average monthly available power (excluding scheduled maintenance hours agreed with CAMMESA) of the unit to those generators that declare a Guaranteed Availability Commitment (DIGO). The DIGO Price is established according to the season: summer/winter, and the others. A change is introduced in the determination of the remuneration, compared to Resolution 238/2022, whereby the remuneration price is independent of the achieved available power value each month.
Remuneration for energy will be the sum of two items: (i) Generated Energy and (ii) Operated Energy (associated to the rotating power in each hour). The hourly volume of Operated Energy must correspond with the optimal dispatch for the fulfilment of energy and reserves assigned. Remuneration for energy is determined at the connection node of the generator.
Finally, there is an additional remuneration concept for energy during peak-hours, which consists of recognizing income equivalent to twice the price of the energy generated for energy generated every day between 6:00 pm and 11:00 pm during the summer and winter months, and once the price for the energy generated during the same hours, during the spring and autumn months.
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| PrecBasePot (Ps./MW-month) | ||||||||||||||||||||||||
|
Technology/ Scale |
Res. 869/23 |
Res. 9/24 |
Res. 99/24 |
Res. 193/24 |
Res. 233/24 |
Res. 285/24 |
Res. 20/24 |
Res. 387/24 |
Res. 603/24 | Res. 27/25 | Res. 113/25 |
Res. 143/25 | ||||||||||||
| Jan | Feb | Jun | Aug | Sep | Oct | Nov | Dec | Jan | Feb | Mar | Apr | |||||||||||||
| Combined-cycle Large > 150 MW. | 617,377 | 1,073,619 | 1,342,024 | 1,382,285 | 1,451,399 | 1,490,587 | 1,580,022 | 1,659,023 | 1,725,384 | 1,794,399 | 1,821,315 | 1,848,635 | ||||||||||||
| Combined-cycle Small <= 150 MW | 688,220 | 1,196,815 | 1,496,019 | 1,540,900 | 1,617,945 | 1,661,630 | 1,761,328 | 1,849,394 | 1,923,370 | 2,000,305 | 2,030,310 | 2,060,765 | ||||||||||||
| Steam Turbine Large > 100 MW | 880,520 | 1,531,224 | 1,914,030 | 1,971,451 | 2,070,024 | 2,125,915 | 2,253,470 | 2,366,144 | 2,460,790 | 2,559,222 | 2,597,610 | 2,636,574 | ||||||||||||
| Steam Turbine Small <= 100 MW | 1,052,573 | 1,830,424 | 2,288,030 | 2,356,671 | 2,474,505 | 2,541,317 | 2,693,796 | 2,828,486 | 2,941,625 | 3,059,290 | 3,105,179 | 3,151,757 | ||||||||||||
| Gas Turbine Large > 50 MW | 718,586 | 1,249,621 | 1,562,026 | 1,608,887 | 1,689,331 | 1,734,943 | 1,839,040 | 1,930,992 | 2,008,232 | 2,088,561 | 2,119,889 | 2,151,687 | ||||||||||||
| Gas Turbine Small <= 50 MW | 931,122 | 1,619,221 | 2,024,026 | 2,084,747 | 2,188,984 | 2,248,087 | 2,382,972 | 2,502,121 | 2,602,206 | 2,706,294 | 2,746,888 | 2,788,091 | ||||||||||||
| Internal Combustion Engines>42 MW | 1,052,573 | 1,830,424 | 2,288,030 | 2,356,671 | 2,474,505 | 2,541,317 | 2,693,796 | 2,828,486 | 2,941,625 | 3,059,290 | 3,105,179 | 3.151,757 | ||||||||||||
Remuneration for Available Capacity: the price to remunerate capacity from thermal sources will be determined pursuant to the following values of capacity base price (PrecBasePot) and price of guaranteed capacity (PrecPotDIGO). Until Resolution 283/22, it also applied a Utilization Factor (FU).
| PrecPotDIGO Summer/Winter (Ps./MW-month) | ||||||||||||||||||||||||
|
Res. 869/23 |
Res. 9/24 |
Res.9 9/24 |
Res. 193/24 |
Res. 233/24 |
Res. 285/24 |
Res. 20/24 |
Res. 387/24 |
Res. 603/25 |
Res. 27/25 |
Res. 113/25 | Res. 143/25 | |||||||||||||
| Technology/Scale | Jan | Feb | Jun | Aug | Sep | Oct | Nov | Dec | Jan. | Feb. | Mar. | Apr. | ||||||||||||
| Combined-cycle Large > 150 MW | 2,208,193 | 3,840,051 | 4,800,060 | 4,944,062 | 5,191,265 | 5,331,429 | 5,651,315 | 5,933,881 | 6,171,236 | 6,418,085 | 6,514,356 | 4,959,055 | ||||||||||||
| Combined-cycle Small <= 150 MW | 2,208,193 | 3,840,051 | 4,800,060 | 4,944,062 | 5,191,265 | 5,331,429 | 5,651,315 | 5,933,881 | 6,171,236 | 6,418,085 | 6,514,356 | 6,612,071 | ||||||||||||
| Steam Turbine Large > 100 MW | 2,208,193 | 3,840,051 | 4,800,060 | 4,944,062 | 5,191,265 | 5,331,429 | 5,651,315 | 5,933,881 | 6,171,236 | 6,418,085 | 6,514,356 | 6,612,071 | ||||||||||||
| Steam Turbine Small <= 100 MW | 2,208,193 | 3,840,051 | 4,800,060 | 4,944,062 | 5,191,265 | 5,331,429 | 5,651,315 | 5,933,881 | 6,171,236 | 6,418,085 | 6,514,356 | 6,612,071 | ||||||||||||
| Gas Turbine Large > 50 MW | 2,208,193 | 3,840,051 | 4,800,060 | 4,944,062 | 5,191,265 | 5,331,429 | 5,651,315 | 5,933,881 | 6,171,236 | 6,418,085 | 6,514,356 | 6,612,071 | ||||||||||||
| Gas Turbine Small <= 50 MW | 2,208,193 | 3,840,051 | 4,800,060 | 4,944,062 | 5,191,265 | 5,331,429 | 5,651,315 | 5,933,881 | 6,171,236 | 6,418,085 | 6,514,356 | 6,612,071 | ||||||||||||
| Internal Combustion Engines>42 MW | 2,208,193 | 3,840,051 | 4,800,060 | 4,944,062 | 5,191,265 | 5,331,429 | 5,651,315 | 5,933,881 | 6,171,236 | 6,418,085 | 6,514,356 | 6,612,071 | ||||||||||||
| 123 |
| PrecPotDIGO Remaining Periods (Ps./MW-month) | ||||||||||||||||||||||||
|
Res. 869/23 |
Res. 9/24 |
Res.9 9/24 |
Res. 193/24 |
Res. 233/24 |
Res. 285/24 |
Res. 20/24 |
Res. 387/24 |
Res. 603/25 |
Res. 27/25 |
Res. 113/25 | Res. 143/25 | |||||||||||||
| Technology/Scale | Jan | Feb | Jun | Aug | Sep | Oct | Nov | Dec | Jan. | Feb. | Mar. | Apr. | ||||||||||||
| Combined-cycle Large > 150 MW | 1,656,146 | 2,880,038 | 3,600,048 | 3,708,049 | 3,893,451 | 3,998,574 | 4,238,488 | 4,450,412 | 4,628,428 | 4,813,565 | 4,885,768 | 4,959,055 | ||||||||||||
| Combined-cycle Small <= 150 MW | 1,656,146 | 2,880,038 | 3,600,048 | 3,708,049 | 3,893,451 | 3,998,574 | 4,238,488 | 4,450,412 | 4,628,428 | 4,813,565 | 4,885,768 | 4,959,055 | ||||||||||||
| Steam Turbine Large > 100 MW | 1,656,146 | 2,880,038 | 3,600,048 | 3,708,049 | 3,893,451 | 3,998,574 | 4,238,488 | 4,450,412 | 4,628,428 | 4,813,565 | 4,885,768 | 4,959,055 | ||||||||||||
| Steam Turbine Small <= 100 MW | 1,656,146 | 2,880,038 | 3,600,048 | 3,708,049 | 3,893,451 | 3,998,574 | 4,238,488 | 4,450,412 | 4,628,428 | 4,813,565 | 4,885,768 | 4,959,055 | ||||||||||||
| Gas Turbine Large > 50 MW | 1,656,146 | 2,880,038 | 3,600,048 | 3,708,049 | 3,893,451 | 3,998,574 | 4,238,488 | 4,450,412 | 4,628,428 | 4,813,565 | 4,885,768 | 4,959,055 | ||||||||||||
| Gas Turbine Small <= 50 MW | 1,656,146 | 2,880,038 | 3,600,048 | 3,708,049 | 3,893,451 | 3,998,574 | 4,238,488 | 4,450,412 | 4,628,428 | 4,813,565 | 4,885,768 | 4,959,055 | ||||||||||||
| Internal Combustion Engines>42 MW | 1,656,146 | 2,880,038 | 3,600,048 | 3,708,049 | 3,893,451 | 3,998,574 | 4,238,488 | 4,450,412 | 4,628,428 | 4,813,565 | 4,885,768 | 4,959,055 | ||||||||||||
In addition to the abovementioned, the remuneration for available capacity will also depend on the actual available capacity (DRP), which is the average monthly availability corresponding to the “m” month of each generation unit (“g”) that is not under programmed and agreed maintenance and that will be calculated for Authorized Thermal Generators considering the hourly values registered during the month. The application in the calculation for the “m” month will be made taking into consideration the values registered during the month.
In case of generators that do not declare DIGO, their capacity remuneration is determined by:
REM BASE (Ps./month) = PrecBasePot * DRP (MW) * kFM
Being kFM: hours of the month outside agreed maintenance/hours of the month.
Energy Remuneration
Energy remuneration is comprised of two items: (i) generated energy and (ii) operated energy. This remuneration is determined at the connection node of the generator.
In case of generators that declare DIGO, their capacity remuneration is determined by using the following, which has been valid since Resolution 440/2021 and the subsequent resolutions (currently valid through Resolution 143/2025):
| a) | REM DIGO (Ps./month) = DRP (MW) * kFM * PrecPotDIGO |
The total remuneration for available capacity of generators will depend on whether they declared DIGO or not.
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Remuneration for Generated Energy
For conventional thermal generation, a maximum value (depending on the kind of fuel used by the generation unit “g”) will be considered in concept of non-fuel variable costs (CostoOYMxComb), as indicated in the below chart, for the energy delivered in each hour:
Energy price - Resolution No. 869/23 (Nov)
|
CostoOYMxComb |
|||||||||
|
Technology/Scale |
Natural Gas |
Fuel Oil/ |
BioComb |
Mineral Coal |
|||||
| (Ps./MWh) | |||||||||
| Combined-cycle Large > 150 MW | 1,473 | 2,578 | 3,681 | — | |||||
| Combined-cycle Small <= 150 MW | 1,473 | 2,578 | 3,681 | — | |||||
| Steam Turbine Large > 100 MW | 1,473 | 2,578 | 3,681 | 4,417 | |||||
| Steam Turbine Small <= 100 MW | 1,473 | 2,578 | 3,681 | 4,417 | |||||
| Gas Turbine Large > 50 MW | 1,473 | 2,578 | 3,681 | — | |||||
| Gas Turbine Small <= 50 MW | 1,473 | 2,578 | 3,681 | — | |||||
| Internal Combustion Engines>42 MW | 1,473 | 2,578 | 3,681 | — | |||||
Energy price – Resolution No. 9/24 (Feb)
|
CostoOYMxComb |
|||||||||
|
Technology/Scale |
Natural Gas |
Fuel Oil/ |
BioComb |
Mineral Coal |
|||||
| (Ps./MWh) | |||||||||
| Combined-cycle Large > 150 MW | 2,562 | 4,483 | 6,401 | — | |||||
| Combined-cycle Small <= 150 MW | 2,562 | 4,483 | 6,401 | — | |||||
| Steam Turbine Large > 100 MW | 2,562 | 4,483 | 6,401 | 7,681 | |||||
| Steam Turbine Small <= 100 MW | 2,562 | 4,483 | 6,401 | 7,681 | |||||
| Gas Turbine Large > 50 MW | 2,562 | 4,483 | 6,401 | — | |||||
| Gas Turbine Small <= 50 MW | 2,562 | 4,483 | 6,401 | — | |||||
| Internal Combustion Engines>42 MW | 2,562 | 4,483 | 6,401 | — | |||||
Energy price – Resolution No. 99/24 (Jun)
|
CostoOYMxComb |
|||||||||
|
Technology/Scale |
Natural Gas |
Fuel Oil/ |
BioComb |
Mineral Coal |
|||||
| (Ps./MWh) | |||||||||
| Combined-cycle Large > 150 MW | 3,203 | 5,604 | 8,001 | — | |||||
| Combined-cycle Small <= 150 MW | 3,203 | 5,604 | 8,001 | — | |||||
| Steam Turbine Large > 100 MW | 3,203 | 5,604 | 8,001 | 9,601 | |||||
| Steam Turbine Small <= 100 MW | 3,203 | 5,604 | 8,001 | 9,601 | |||||
| Gas Turbine Large > 50 MW | 3,203 | 5,604 | 8,001 | — | |||||
| Gas Turbine Small <= 50 MW | 3,203 | 5,604 | 8,001 | — | |||||
| Internal Combustion Engines>42 MW | 3,203 | 5,604 | 8,001 | — | |||||
| 125 |
Energy price – Resolution No. 193/24 (Aug)
|
CostoOYMxComb |
|||||||||
|
Technology/Scale |
Natural Gas |
Fuel Oil/ |
BioComb |
Mineral Coal |
|||||
| (Ps./MWh) | |||||||||
| Combined-cycle Large > 150 MW | 3,299 | 5,772 | 8,241 | — | |||||
| Combined-cycle Small <= 150 MW | 3,299 | 5,772 | 8,241 | — | |||||
| Steam Turbine Large > 100 MW | 3,299 | 5,772 | 8,241 | 9,889 | |||||
| Steam Turbine Small <= 100 MW | 3,299 | 5,772 | 8,241 | 9,889 | |||||
| Gas Turbine Large > 50 MW | 3,299 | 5,772 | 8,241 | — | |||||
| Gas Turbine Small <= 50 MW | 3,299 | 5,772 | 8,241 | — | |||||
| Internal Combustion Engines>42 MW | 3,299 | 5,772 | 8,241 | — | |||||
Energy price – Resolution No. 233/24 (Sep)
|
CostoOYMxComb |
|||||||||
|
Technology/Scale |
Natural Gas |
Fuel Oil/ |
BioComb |
Mineral Coal |
|||||
| (Ps./MWh) | |||||||||
| Combined-cycle Large > 150 MW | 3,464 | 6,061 | 8,653 | — | |||||
| Combined-cycle Small <= 150 MW | 3,464 | 6,061 | 8,653 | — | |||||
| Steam Turbine Large > 100 MW | 3,464 | 6,061 | 8,653 | 10,383 | |||||
| Steam Turbine Small <= 100 MW | 3,464 | 6,061 | 8,653 | 10,383 | |||||
| Gas Turbine Large > 50 MW | 3,464 | 6,061 | 8,653 | — | |||||
| Gas Turbine Small <= 50 MW | 3,464 | 6,061 | 8,653 | — | |||||
| Internal Combustion Engines>42 MW | 3,464 | 6,061 | 8,653 | — | |||||
Energy price – Resolution No. 285/24 (Oct)
|
CostoOYMxComb |
|||||||||
|
Technology/Scale |
Natural Gas |
Fuel Oil/ |
BioComb |
Mineral Coal |
|||||
| (Ps./MWh) | |||||||||
| Combined-cycle Large > 150 MW | 3,558 | 6,225 | 8,887 | — | |||||
| Combined-cycle Small <= 150 MW | 3,558 | 6,225 | 8,887 | — | |||||
| Steam Turbine Large > 100 MW | 3,558 | 6,225 | 8,887 | 10,663 | |||||
| Steam Turbine Small <= 100 MW | 3,558 | 6,225 | 8,887 | 10,663 | |||||
| Gas Turbine Large > 50 MW | 3,558 | 6,225 | 8,887 | — | |||||
| Gas Turbine Small <= 50 MW | 3,558 | 6,225 | 8,887 | — | |||||
| Internal Combustion Engines>42 MW | 3,558 | 6,225 | 8,887 | — | |||||
| 126 |
Energy price – Resolution No. 20/24 (Nov)
|
CostoOYMxComb |
|||||||||
|
Technology/Scale |
Natural Gas |
Fuel Oil/ |
BioComb |
Mineral Coal |
|||||
| (Ps./MWh) | |||||||||
| Combined-cycle Large > 150 MW | 3,771 | 6,599 | 9,420 | — | |||||
| Combined-cycle Small <= 150 MW | 3,771 | 6,599 | 9,420 | — | |||||
| Steam Turbine Large > 100 MW | 3,771 | 6,599 | 9,420 | 11,303 | |||||
| Steam Turbine Small <= 100 MW | 3,771 | 6,599 | 9,420 | 11,303 | |||||
| Gas Turbine Large > 50 MW | 3,771 | 6,599 | 9,420 | — | |||||
| Gas Turbine Small <= 50 MW | 3,771 | 6,599 | 9,420 | — | |||||
| Internal Combustion Engines>42 MW | 3,771 | 6,599 | 9,420 | — | |||||
Energy price – Resolution No. 387/24 (Dec)
|
CostoOYMxComb |
|||||||||
|
Technology/Scale |
Natural Gas |
Fuel Oil/ |
BioComb |
Mineral Coal |
|||||
| (Ps./MWh) | |||||||||
| Combined-cycle Large > 150 MW | 3,960 | 6,929 | 9,891 | — | |||||
| Combined-cycle Small <= 150 MW | 3,960 | 6,929 | 9,891 | — | |||||
| Steam Turbine Large > 100 MW | 3,960 | 6,929 | 9,891 | 11,868 | |||||
| Steam Turbine Small <= 100 MW | 3,960 | 6,929 | 9,891 | 11,868 | |||||
| Gas Turbine Large > 50 MW | 3,960 | 6,929 | 9,891 | — | |||||
| Gas Turbine Small <= 50 MW | 3,960 | 6,929 | 9,891 | — | |||||
| Internal Combustion Engines>42 MW | 3,960 | 6,929 | 9,891 | — | |||||
Energy price – Resolution No. 603/24 (Jan)
|
CostoOYMxComb |
|||||||||
|
Technology/Scale |
Natural Gas |
Fuel Oil/ |
BioComb |
Mineral Coal |
|||||
| (Ps./MWh) | |||||||||
| Combined-cycle Large > 150 MW | 4,118 | 7,206 | 10,287 | — | |||||
| Combined-cycle Small <= 150 MW | 4,118 | 7,206 | 10,287 | — | |||||
| Steam Turbine Large > 100 MW | 4,118 | 7,206 | 10,287 | 12,343 | |||||
| Steam Turbine Small <= 100 MW | 4,118 | 7,206 | 10,287 | 12,343 | |||||
| Gas Turbine Large > 50 MW | 4,118 | 7,206 | 10,287 | — | |||||
| Gas Turbine Small <= 50 MW | 4,118 | 7,206 | 10,287 | — | |||||
| Internal Combustion Engines>42 MW | 4,118 | 7,206 | 10,287 | — | |||||
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Energy price – Resolution 27/2025 (Feb)
|
CostoOYMxComb |
|||||||||
|
Technology/Scale |
Natural Gas |
Fuel Oil/ |
BioComb |
Mineral Coal |
|||||
| (Ps./MWh) | |||||||||
| Combined-cycle Large > 150 MW | 4,283 | 7,494 | 10,698 | — | |||||
| Combined-cycle Small <= 150 MW | 4,283 | 7,494 | 10,698 | — | |||||
| Steam Turbine Large > 100 MW | 4,283 | 7,494 | 10,698 | 12,837 | |||||
| Steam Turbine Small <= 100 MW | 4,283 | 7,494 | 10,698 | 12,837 | |||||
| Gas Turbine Large > 50 MW | 4,283 | 7,494 | 10,698 | — | |||||
| Gas Turbine Small <= 50 MW | 4,283 | 7,494 | 10,698 | — | |||||
| Internal Combustion Engines>42 MW | 4,283 | 7,494 | 10,698 | — | |||||
Energy price – Resolution 113/2025 (Mar)
|
CostoOYMxComb |
|||||||||
|
Technology/Scale |
Natural Gas |
Fuel Oil/ |
BioComb |
Mineral Coal |
|||||
| (Ps./MWh) | |||||||||
| Combined-cycle Large > 150 MW | 4,347 | 7,606 | 10,858 | — | |||||
| Combined-cycle Small <= 150 MW | 4,347 | 7,606 | 10,858 | — | |||||
| Steam Turbine Large > 100 MW | 4,347 | 7,606 | 10,858 | 13,030 | |||||
| Steam Turbine Small <= 100 MW | 4,347 | 7,606 | 10,858 | 13,030 | |||||
| Gas Turbine Large > 50 MW | 4,347 | 7,606 | 10,858 | — | |||||
| Gas Turbine Small <= 50 MW | 4,347 | 7,606 | 10,858 | — | |||||
| Internal Combustion Engines>42 MW | 4,347 | 7,606 | 10,858 | — | |||||
Energy price – Resolution No. 143/25 (Apr)
|
CostoOYMxComb |
|||||||||
|
Technology/Scale |
Natural Gas |
Fuel Oil/ |
BioComb |
Mineral Coal |
|||||
| (Ps./MWh) | |||||||||
| Combined-cycle Large > 150 MW | 4,412 | 7,720 | 11,021 | — | |||||
| Combined-cycle Small <= 150 MW | 4,412 | 7,720 | 11,021 | — | |||||
| Steam Turbine Large > 100 MW | 4,412 | 7,720 | 11,021 | 13,225 | |||||
| Steam Turbine Small <= 100 MW | 4,412 | 7,720 | 11,021 | 13,225 | |||||
| Gas Turbine Large > 50 MW | 4,412 | 7,720 | 11,021 | — | |||||
| Gas Turbine Small <= 50 MW | 4,412 | 7,720 | 11,021 | — | |||||
| Internal Combustion Engines>42 MW | 4,412 | 7,720 | 11,021 | — | |||||
Remuneration for Operated Energy
Operated Energy remuneration applies to the addition of rotating capacity along the month. When a generating unit is operating under forced condition, requested by the generator, Operated Energy remuneration will be determined considering only 60% of its installed capacity.
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| Operated energy | |
| (Ps./MWh) | |
| Resolution No. 869/23 (Nov) | 513 |
| Resolution No. 09/24 (Feb) | 892 |
| Resolution No. 99/24 (Jun) | 1,115 |
| Resolution No. 193/24 (Aug) | 1,148 |
| Resolution No. 233/24 (Sep) | 1,205 |
| Resolution No. 285/24 (Oct) | 1,238 |
| Resolution No. 20/24 (Nov) | 1,312 |
| Resolution No. 387/24 (Dec) | 1,378 |
| Resolution No. 603/24 (Jan 25) | 1,433 |
| Resolution No. 27/25 (Feb 25) | 1,490 |
| Resolution No. 113/2025 (March 2025) | 1,512 |
| Resolution No. 143/2025 (April 2025) | 1,535 |
Remuneration of hydroelectrical generators
Resolution 869/2023, valid until January 2024; Resolution 9/2024, valid between February 2024 and May 2024; Resolution 99/2024, valid between June 2024 and July 2024; Resolution 193/2024, valid for August 2024; Resolution 233/2024, valid for September 2024; Resolution 285/2024, valid for October 2024; Resolution 20/2024, valid for November 2024; Resolution 387/2024, valid for December 2024; Resolution 603/2024, valid for January 2025; Resolution 27/2025, valid for February 2025, Resolution 113/2025, valid for March 2025 and Resolution 143/2025, valid since April 2025, established that Authorized Hydroelectrical Generators will be remunerated for (i) monthly available capacity and (ii) energy (which is comprised of two items: (a) generated energy and (b) operated energy).
Finally, there is an additional remuneration concept for energy during peak-hours, which consists of recognizing income equivalent to twice the price of the energy generated for energy generated every day between 6:00 pm and 11:00 pm during the summer and winter months, and once the price of the same for the energy generated during the same hours, during the spring and autumn months.
Remuneration for Available Capacity.
This remuneration will depend on the DRP and a capacity base price. The latter will be determined pursuant to the following values considering the technology of the generation unit and its size.
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| Technology/Scale | Capacity Base Price (PrecBasePot) (Ps./MW-month) | |||||||||||||||||||||||
| Res.869/23 | Res.9/24 | Res.99/24 | Res.193/24 | Res.233/24 | Res.285/24 | Res.20/24 | Res.387/24 |
Res. 603/ 24 |
Res. 27/ 25
|
Res. 113/ 25 |
Res. 143/ 25 | |||||||||||||
| Jan | Feb | Jun | Aug | Sep | Oct | Nov | Dec | Jan | Feb | Mar | Apr | |||||||||||||
| Large HI Units with P > 300 MW | 607,254 | 1,056,015 | 1,320,019 | 1,359,620 | 1,427,601 | 1,466,146 | 1,554,115 | 1,631,821 | 1,697,094 | 1,764,978 | 1,791,453 | 1,818,325 | ||||||||||||
| Medium size HI Units with P > 120 and < 300 MW | 809,672 | 1,408,020 | 1,760,025 | 1,812,826 | 1,903,467 | 1,954,861 | 2,072,153 | 2,175,761 | 2,262,791 | 2,353,303 | 2,388,603 | 2,424,432 | ||||||||||||
| Small HI Units with P > 50 and < 120 MW | 1,113,298 | 1,936,025 | 2,420,031 | 2,492,632 | 2,617,264 | 2,687,930 | 2,849,206 | 2,991,666 | 3,111,333 | 3,235,786 | 3,284,323 | 3,333,588 | ||||||||||||
| Renewable HI Units with P < 50 MW | 1,821,760 | 3,168,041 | 3,960,051 | 4,078,853 | 4,282,796 | 4,398,431 | 4,662,337 | 4,895,454 | 5,091,272 | 5,294,923 | 5,374,347 | 5,454,962 | ||||||||||||
| Large HB pumping Units with P > 300 MW | 607,254 | 1,056,015 | 1,320,019 | 1,359,620 | 1,427,601 | 1,466,146 | 1,554,115 | 1,631,821 | 1,697,094 | 1,764,978 | 1,791,453 | 1,818,325 | ||||||||||||
| Medium size HB pumping Units with P > 120 and < 300 MW |
809,672 |
1,408,020 | 1,760,025 | 1,812,826 | 1,903,467 | 1,954,861 | 2,072,153 | 2,175,761 | 2,262,791 | 2,353,303 | 2,388,603 | 2,424,432 | ||||||||||||
| __________________ |
| Notes:- |
Prices shown on table were increased by maintenance factor (1.05)
DRP is the average monthly available capacity corresponding to the “m” month of each generation unit (“g”) that is not under programed and agreed maintenance and that will be calculated for hydroelectrical authorized generators considering the monthly average real availability determined independently from the real level of the dam or the inputs and expenditures. The application in the calculations for month “m” is made taking into consideration the values registered in the month. In the case of hydroelectrical pumping units (HB), it must be considered, for the evaluation of its availability, both the corresponding to its operation as a turbine in all the hours of the period, as well as its availability as pump in all the hours of the period.
Following the abovementioned, remuneration of availability capacity (REM PBASE Ps./month) is calculated pursuant to the following formula:
REM PBASE (Ps./month) = PrecBasePot * DRP (MW) * kFM
Where:
kFM: hours of the month outside agreed maintenance period/hours of the month
Remuneration for Energy
This remuneration, which is determined at the connection node of the generator, is comprised of two items (i) remuneration for generated energy and (ii) remuneration for operated energy.
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With respect to the remuneration for generated energy, in each hour, the price of the energy generated will be:
|
Generated energy |
|||
| (Ps./MWh) | |||
| Resolution 750/23 (Sep) | 1,006 | ||
| Resolution 869/23 (Nov) | 1,288 | ||
| Resolution No. 9/24 (Feb) | 2,240 | ||
| Resolution No. 99/24 (Jun) | 2,800 | ||
| Resolution No. 193/24 (Aug) | 2,884 | ||
| Resolution No. 233/24 (Sep) | 3,028 | ||
| Resolution No. 285/24 (Oct) | 3,110 | ||
| Resolution No. 20/24 (Nov) | 3,297 | ||
| Resolution No. 387/24 (Dec) | 3,462 | ||
| Resolution No. 603/24 (Jan) | 3,600 | ||
| Resolution No. 27/25 (Feb) | 3,744 | ||
| Resolution 113/2025 (Mar) | 3,800 | ||
| Resolution 143/2025 (Apr) | 3,857 |
Regarding remuneration for operated energy, generators will receive a monthly remuneration, represented by the integration of hourly powers in the period. The hourly volume of operated energy must correspond to the optimal dispatch for the fulfilment of energy and reservoirs assigned.
With respect to the remuneration for operated energy, in each hour, the price of the energy operated will be:
|
Operated energy |
|||
| (Ps./MWh) | |||
| Resolution 750/23 (Sep) | 401 | ||
| Resolution 869/23 (Nov) | 513 | ||
| Resolution No. 9/24 (Feb) | 892 | ||
| Resolution No. 99/24 (Jun) | 1,115 | ||
| Resolution No. 193/24 (Aug) | 1,148 | ||
| Resolution No. 233/24 (Sep) | 1,205 | ||
| Resolution No. 285/24 (Oct) | 1,238 | ||
| Resolution No. 20/24 (Nov) | 1,312 | ||
| Resolution No. 387/24 (Dec) | 1,378 | ||
| Resolution No. 603/24 (Jan) | 1,433 | ||
| Resolution No. 27/25 (Feb) | 1,490 | ||
| Resolution No. 113/25 (Mar) | 1,512 | ||
| Resolution 143/2025 (Apr) | 1,535 |
Peaking Hours Generation (valid for Resolution No. 826/22 and subsequent resolutions)
Peaking Hours Generation Remuneration applies to the generation achieved every day, during peak hours (6PM-11PM).
Peaking Hours Price would be two times the corresponding abovementioned energy price (CostoOYMxComb) in Winter and Summer months, and, once the energy price (CostoOYMxComb) for the rest of the months.
Other generating technologies in the spot market
Energy generated form non-conventional resources (solar, wind, biomass, biogas) will be priced:
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|
Generated energy |
|||
| (Ps./MWh) | |||
| Resolution No. 750/23 (Sep) | 8,050 | ||
| Resolution No. 869/23 (Nov) | 10,304 | ||
| Resolution No. 9/24 (Feb) | 17,919 | ||
| Resolution No. 99/24 (Jun) | 22,399 | ||
| Resolution No. 193/24 (Aug) | 23,071 | ||
| Resolution No. 233/24 (Sep) | 24,225 | ||
| Resolution No. 285/24 (Oct) | 24,879 | ||
| Resolution No. 20/24 (Nov) | 26,372 | ||
| Resolution No. 387/24 (Dec) | 27,691 | ||
| Resolution No. 603/24 (Jan) | 28,799 | ||
| Resolution No. 27/25 (Feb) | 29,951 | ||
| Resolution No. 113/25 (Mar) | 30,400 | ||
| Resolution No. 143/25 (Apr) | 30.856 |
Following this, the Non-Conventional Energy Remuneration will be calculated by the hourly integration in the month of the energy generated by generation unit “g” in each hour “h” (EGengh) by PENC in that hour:
REM ENC ($/month) = ∑h.month (pENC * EGengh)
Generation coming from units that are in a stage prior to commercial authorization will be granted 50% of the corresponding remuneration until reaching such authorization.
As a summary, recent developments in energy and power prices are as follows. In December 2022, Resolution No. 826/2022 was issued amending Resolution No. 238/22, increasing energy generation and capacity prices retroactively by 20.00% to September 2022 and by 10.00% to December 2022, while also establishing future increments at 25.00% as of February 2023 and at 28.00% as of August 2023.
In February 2023, through Resolution No. 59/2023 the Secretariat of Energy authorized generators with combined cycle units to adhere to an agreement aimed at encouraging investments for major and minor maintenance activities in connection with these facilities (the “Agreement on Availability of Power and Improvement of Efficiency”). Through the Agreement on Availability of Power and Improvement of Efficiency, the adhering generators undertake to achieve at least 85.00% availability of average monthly power in exchange for a new power and generation price in both U.S. dollars and Argentine pesos. In the case of power, the price was set at 2,000 US$/MW-month plus (i) 85.00% of the remuneration of power set forth in Resolution 826/22 (and subsequent amending resolutions) in Argentine pesos (during spring and autumn) or (ii) 65.00% of the remuneration of power set forth in Resolution No. 826/22 in Argentine pesos (during summer and winter). In the case of energy, the price was set at 3.5 US$/MWh for units that use gas and at 6.1 US$/MWh for units that use alternative fuels (i.e., diesel). On April 25, 2023, CAMMESA accepted the subscription to an agreement presented by us for all of our combined cycle units, except for the Buenos Aires unit belonging to CECO. Therefore, as from the transactions of March 2023 there was an increase in the remuneration of such units for their sales to the spot market, as described in the previous paragraph. In the case of the Buenos Aires combined cycle, CAMMESA accepted the subscription to the agreement on July 28, 2023 (effective as from the July 2023 transactions), once it had successfully requested the Energy Secretariat to instruct CAMMESA the following regarding the aforementioned thermal unit: a) the conversion to single fuel, i.e. operation only with natural gas, eliminating the possibility of using gas oil, and b) the adaptation of the installed power in line with the real technical possibility of electricity production of the combined cycle. During October 2023, the corrective maintenance tasks of this unit were concluded; therefore, the increases in the remuneration of this unit were applied as from the transactions of October 2023.
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In September 2023, the Secretariat of Energy issued Resolution 750/23, which updated the remuneration scheme set forth by Resolution 826/22, resulting in an increase as from September 2023 of 23%. In turn, Resolution 750/23 was later modified by means of Resolution No. 869/23, issued in October 2023 and applicable as from November of that same year including an increase of 28%.
Subsequent amending resolutions were issued during 2024 updating energy and capacity prices: Resolution No. 9/2024 (applicable as for May, setting a 74% price adjustment), 99/2024 (applicable as for June, setting a 25% price adjustment), 193/2024 (applicable as for August, setting a 3% price adjustment), 233/2024 (applicable as for September, setting a 5% price adjustment) and 285/2024 (applicable as for October, setting a 2,7% price adjustment), 20/2024 (applicable as for November, setting a 6% price adjustment) and 387/2024 (applicable as for December, setting a 5% price adjustment).
On October 1, 2024, Resolution No. 294/2024 of the Secretariat of Energy ("Resolution 294") was published in the Official Gazette. This resolution establishes a "Contingency and Forecast Plan for Critical Months of the 2024/2026 Period," defining measures that cover power generation, transmission, and distribution.
For power generation, the resolution proposes an additional, complementary, and exceptional remuneration subject to a commitment of availability for machines that are not engaged in contracts with the Wholesale Electricity Market (MEM) or that have not adhered to Secretariat of Energy Resolution No. 59/2023.
By adhering to this regulation, generators commit to ensuring power availability for each unit during certain hours of the day, characterized as critical, on business days during the summer months (December to March) and winter months (June to August). Remuneration prices are set in U.S. dollars, both for meeting power availability commitments (US$ 2,000/MW-month) and for the energy generated during the evaluation periods mentioned above, as shown below:
| US$/MWh | Natural Gas | Fuel Oil | Gas Oil | Biocomb | Coal |
| TG | 6.4 | 8.6 | 8.7 | ||
| TV | 3.4 | 6 | 8.7 | 10.4 | |
| Engines | 8.1 | 15.4 | 10.5 | 8.7 |
To determine the remuneration of each unit, the indicated power and energy prices will be affected by a criticality factor, which may vary between 0.75 and 1.25, depending on the nodes where the units are connected to the transmission system.
Central Puerto adhered to Resolution 294 with the steam turbine (TV) units located in Buenos Aires and Luján de Cuyo, as well as the gas turbine (TG) units located in Luján de Cuyo and at the Brigadier López thermal power plant.
So far in 2025, the remuneration scheme has been set forth by Resolutions 603/2024 (applicable as for January, setting a 4% price adjustment), 27/2025 (applicable as for February, setting a 4% price adjustment), 113/2025 (applicable as for March, setting a 1.5% price adjustment) and 143/2025 (applicable as for April, setting a 1.5% increase for energy and capacity prices).
Finally, it should be taken into account the impact that recently issued Resolution No. 21/2025 has on generators remuneration and costs. In particular, Resolution No. 21/25 set forth a series of measures including:
| · | It repealed Resolution SE No. 354/2020 as of February 1, 2025, which had established the parameters for CAMMESA’s involvement in the Gas.Ar Plan, determining firm gas volumes for thermal generation consumption based on a dispatch priority order. |
| · | It replaced Section 8 of Resolution SE No. 95/2013, and set forth the following: |
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| o | As of March 1, 2025, fuel costs will be acknowledged by valuing them at the corresponding reference price used and accepted in the 'Declaration of Variable Production Costs', including freight, transportation, natural gas distribution, taxes, and related fees. |
| o | With the purpose of supplying fuel for thermal generation PPAs without management obligations, fuel procurement and dispatch shall be centralized by CAMMESA. |
| o | Thermal generators operating in the spot market are authorized to acquire their own fuel, with CAMMESA remaining as supplier of last resort. |
| · | As from February 1, 2025, that the Cost of programmed Non-Supplied Energy shall be 1,500 US$/MWh, with the following percentages of failure steps with respect to the demand and its respective valuation: |
| o | a. Up to 5%: 350 US$/MWh |
| o | b. Up to 10%: 750 US$/MWh |
| o | c. More than 10%: 1,500 US$/MWh |
These transitory values shall be considered and applied until a socioeconomic evaluation of the valuation of the Cost of Non-Supplied Energy is made.
Puerto Energia S.A.U (Resolution 269/2024)
In 2024, through Resolution SE 269/2024 dated September 23, 2024, Puerto Energía S.A.U. was authorized to participate in the Wholesale Electricity Market (MEM). Sales started with the November transaction, reaching approximately 5.72 GWh of energy, with 13 contracted supply points.
During the year, Puerto Energía S.A.U. signed four agreements with major generators in the Wholesale Electricity Market, including YPF Energía Eléctrica, Pampa Energía, CAPEX, and Parque Solar Villa María de Río Seco, from NEUSS FUND Group. Additionally, the company signed Energía Plus agreements totaling 3.18 GWh and MATER agreements for 2.54 GWh.
Among its main clients are Casino Victoria, Salta Refrescos, Aceros Cuyanos, and Molino Panamericano. Looking ahead to 2025, the company expects to expand its client base and secure additional agreements with generators to strengthen its market position.
In 2024, through Resolution ENARGAS 107/2024 dated marzo 22, 2024, Puerto Energía S.A.U. was authorized to participate as a natural gas marketing company in Argentina. The current market includes more than 90 marketing companies in a very competitive market. By the end of the year, the company accounted included a firm contract volume of 200 dam3 per day with industries and others marketing companies. In addition, small volumes of purchase and sale transactions have been carried out on the daily spot market.
Our main clients are Rontaltex S.A and Ferroglobe Argentina SRL. (both industrial clients), as well as others natural gas marketing company.
Evolution of Supply and Demand in the Argentine Energy Sector Structure
Structural Characteristics of the Energy Sector
The evolution of demand and energy consumption in Argentina is correlated with the evolution of the GDP, which implies that the higher the economic growth, the higher the energy demand. For example, the historical compound annual growth rate (CAGR) of energy consumption was of 2.77% annually over the past 30 years, with an annual average of 2.35% since 2004, although between 2004 and 2024 the economic growth rose to an average of 2.18%annually (including exports and losses).
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The growth of energy consumption during the last decade is similar to the historical average, since it was not driven by a large increase in consumption of the industrial sector, but predominantly by that of the residential and commercial sectors, as noted in the consumption parameters of gas, gasoline and especially electric power.
The elasticity of energy consumption in relation to the GDP during the last two decades is lower than in earlier decades, so restrictions on energy demand or the need for energy imports, if domestic supply is insufficient, could increase if the industrial sector expands in the future.
The restrictions on the supply of certain energy products such as natural gas in the last cycle of high economic growth and the relatively moderate growth in energy demand in broad terms, are based primarily on problems related to the supply of these energy products and also on a significant growth of the demand of the residential and commercial segments in a context of weak industrial activity with few new expansions of greater productive capacity for large energy consumers.
The structure of electric energy consumption in Argentina is strongly dependent on hydrocarbons.
| Year |
Hydrocarbons Consumption (%) |
||
| 2019 | 61.06 | % | |
| 2020 | 61.36 | % | |
| 2021 | 63.52 | % | |
| 2022 | 58.92 | % | |
| 2023 | 51.64 | % | |
| 2024 | 53.01 | % |
Large amounts of natural gas liquefied natural gas and gas oil are imported in order to try to satisfy demand.
Although current energy consumption in Argentina signals a dependence on hydrocarbons, we believe that Argentina is currently undergoing an important shift to a more modern and diversified energy mix arising from the inclusion of renewable energy into the mix, in accordance with the requirements set forth in Law No. 27,191 of 2015.
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| __________________ |
Source: Secretariat of Energy.
Structure of the Electric Power Supply in Argentina.
The nominal installed capacity in Argentina was reported by CAMMESA to be 43,351 MW as of December 31, 2024. Availability estimated by CAMMESA for thermal units was approximately 73.33% on average for 2024 due to the lack of proper fuel supply, difficulties in achieving nominal efficiency and unavailability of several generating units under maintenance.
Over recent decades, the Argentine Government (spanning administrations with different ideological orientation) has favored the deployment of thermoelectric generating units. One reason for this is that these units require smaller capital investments and take less time to deploy compared to other types of generating units. The increased dependency on hydrocarbons for these new power plants was not considered a disadvantage since the required fuels have always been produced in Argentina and the production has always been predictable and growing. However, the constant deployment of thermoelectric generation has increased the demand for fossil fuels, particularly those based on natural gas, and has led to shortages and the imposition of certain restrictions on the provision to thermal generators of locally produced fuels.
During the 1990s, private sector investors also concentrated their investments in thermoelectric generation, almost without exception. The economic crisis of 2002 accelerated even more the tendency to invest in thermoelectric plants, given their lower cost of startup. After the crisis of 2002, investments in the electrical sector continued mainly with state intervention, expanding the installed capacity based on thermoelectric generation but without meeting the increasing demand. The financial constraints of the Argentine Government in the last decades, the high amount of capital needed and the long periods necessary to develop the projects have negatively impacted on the decision of the Argentine Government to invest and deploy hydroelectric and nuclear power plants. In addition, the recurrent fiscal crises of the recent past have forced the Argentine Government to delay or cancel major projects that would have increased and diversified Argentina’s generation capacity.
Nominal Power Generation Capacity
There are three main centers of electric power supply in Argentina:
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| · | Buenos Aires-Greater Buenos Aires-Coastline | |
| · | Comahue | |
| · | Northeast Argentina |
The following chart shows the development of electric power generation by type of source:
| __________________ |
Source: CAMMESA.
The following chart shows the development of electric power generation capacity by type of source:
| __________________ |
Source: CAMMESA.
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Renewable Energy Generation in Argentina
Certain regions of Argentina benefit from levels of wind or sunlight that provide a strong potential for renewable energy generation. The maps below show the mean wind speed at 80 meters of elevation and the average global horizontal irradiance in Argentina, respectively.
Average Wind Speeds
| __________________ |
Source: Vaisala - 3Tier.
Average Global Horizontal Solar Irradiance (GHI)
| __________________ |
Source: Vaisala - 3Tier.
The Structure of Electric Power Demand in Argentina
Electric power demand depends to a significant extent on economic and political conditions prevailing from time to time in Argentina, as well as seasonal factors. In general, the demand for electric power varies depending on the performance of the Argentine economy, as businesses and individuals generally consume more energy and are better able to pay their bills during periods of economic stability or growth.
As a result, electric power demand is affected by Argentine Governmental actions concerning the economy, including with respect to inflation, interest rates, price controls, foreign exchange controls, taxes and energy tariffs.
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The following chart shows the demand for electric power in 2024 by customer type:
| _________________ |
Source: CAMMESA.
The following chart shows the evolution of the demand for electric power over the last several years:
| __________________ |
Source: CAMMESA.
The following chart shows the power demand from November 2006 to November 2024:
| __________________ |
Source: CAMMESA.
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The correlation between the evolution of GDP and electric power demand is strong, although when there is a strong reduction of the GDP, electric power demand falls relatively little. It should also be noted that, in an environment of low economic growth, electric power demand grows at rates higher than the GDP, as shown below:
| __________________ |
Source: CAMMESA, INDEC.
CAMMESA divides Argentina into regions that have similar characteristics in terms of demand, socio-economic characteristics and electric subsystems. Such regions are: (i) the City of Buenos Aires and its suburbs, (ii) the Province of Buenos Aires, (iii) Santa Fe and Northwest Buenos Aires, (iv) the Center, (v) the Northwest, (vi) Cuyo, (vii) the Northeast, (viii) Comahue and (ix) Patagonia.
Demand is significantly concentrated in the areas of the City of Buenos Aires, the Province of Buenos Aires, Santa Fe and Northwest Buenos Aires, which comprises approximately 60.46% of the demand. Changes to the concentration of the demand structure are not substantial over the period of measurement. The chart below shows electricity demand by region for 2024:
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| __________________ |
Source: CAMMESA.
Seasonality also has a significant impact on the demand for electric power, with electric power consumption peaks in summer and winter. The impact of seasonal changes in demand is registered primarily among residential and small commercial customers. The seasonal changes in demand are attributable to the impact of various climatological factors, including weather and the amount of daylight time, on the usage of lights, heating systems and air conditioners.
The impact of seasonality on industrial demand for electric power is less pronounced than on the residential and commercial sectors for several reasons. First, different types of industrial activity by their nature have different seasonal peaks, such that the effect of climate factors on them is more varied. Second, industrial activity levels tend to be more significantly affected by the economy, and with different intensity levels depending on the industrial sector.
Between 2010 and early 2011, there were growth rates in energy demand followed by an abrupt slowdown (including negative values) in 2012. After the winter of 2012, energy demand increased once again during 2013. In December 2013 and January 2014, there was exponential growth in demand by residential and commercial consumers due to a heat wave that hit the central region of Argentina. In December 2014, the demand growth trend reversed with a sharp drop in demand as temperatures returned to normal. The demand for electric power in the residential sector resumed a high growth trend in 2015. In 2016, residential consumer demand increased by 4.5%, despite moderate rate increases for a small portion of consumers.
During 2017, 2018, 2019, and 2020, residential demand decreased by 2.03%, increased by 1.99%, decreased by 2.80%, and increased by 8.00%, respectively, compared to the same period the previous year. The decrease in 2019 was due to a GRP drop of 2.20%. In 2020, due to the COVID-19 pandemic, the quarantine that ensued and other restrictive measures taken by the Argentine Government, citizens had to work remotely and stay at home for longer periods. Schools and universities were closed for most of 2020. Additionally, there was no residential electricity tariff increase and service cuts due to non-payment were suspended, all of which may have contributed to increased electricity consumption by residential users.
In 2021, electricity demand recovered by 5.20% following the removal of COVID-19 restrictions. This recovery was driven by a 13.20% increase in industrial demand and a 4.40% rise in commercial demand. Residential demand saw a 9.50% increase compared to 2020, largely because there were no increases in residential electricity tariffs despite rising energy generation costs. In 2022, residential and commercial demand grew by 3.80% and 5.30%, respectively, compared to the previous year, due to stable residential tariffs. By 2023, residential and small commercial demand increased by 3.34% and 1.04%, respectively, continuing the trend of stable tariffs for residential consumers.
In 2024, residential demand increased by 0.43%, while small commercial demand decreased by 1.20% compared to the previous year. Gradually, 2024 was characterized by an increase in the electricity rate for end users together with a reduction in subsidies for residential demand.
On February 1 2024 a new peak of consumption was achieved reaching 29,653 MW/597,7 GWh, which represented a 1.88% increase from the previous record of 2023.
|
Power and energy consumption records |
||||||||||||
|
New records |
Previous records |
Variation |
Variation |
|||||||||
| Peak of electric power capacity (MW) | (%) | (MW) | ||||||||||
| Working day | Feb 1, 2024 | 29,653 | Mar 13, 2023 | 29,105 | 1.88% | 548 | ||||||
| Saturday | Mar 11, 2023 | 27,203 | Jan 15, 2022 | 26,719 | 1.81% | 484 | ||||||
| Sunday | Feb 12, 2023 | 25,739 | Dec 11, 2021 | 23,724 | 8.49% | 2,015 | ||||||
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|
Energy (GWh) |
Variation |
Variation (GWh) |
||||||||||
| Working day | Feb 1, 2024 | 597.7 | Mar 13, 2023 | 590.7 | 1.17% | 7.00 | ||||||
| Saturday | Mar 11, 2023 | 599.8 | Jan 15, 2022 | 559.0 | 7.30% | 40.80 | ||||||
| Sunday | Feb 12, 2023 | 543.6 | Jan 16, 2022 | 478.9 | 13.51% | 64.70 | ||||||
| __________________ |
Source: CAMMESA.
The peak demand of power on February 1, 2024, was covered with a thermal supply of 15,374 MW (including 10,897 MW from combined cycles, 839 MW from diesel engines, 2,506 MW from gas turbines, and 1,132 MW from steam turbines), a hydroelectric supply of 7,009 MW, a nuclear supply of 1,220 MW, a renewable energy supply of 2,804 MW (including 1,418 MW from wind, 1,033 MW from solar, 62 MW from biomass, and 53 MW from biogas), and imports of 2,282 MW. The total consumption for that day was 28,689 MWh.
As with the case of natural gas, the strong seasonality of electric power demand in Argentina—both in terms of energy and power—influences the needs for investment since investments are made to meet the maximum peak winter demand, which generates significant surpluses at other times of the year that cause lower costs and competition in those periods. The maximum demand for electric power is during the afternoon or evening hours in summer. In the case of winter, the maximum demand is generally during the evening, due to the high use of electric heaters that are preferred by consumers because of the differential cost and simplicity in comparison with natural gas heaters.
Not all the generation capacity is available at times of peak demand. Both in summer and especially in winter, there is an effective generation capacity to meet the demand. The effective capacity available (which means the capacity available) is significantly lower than the nominal installed capacity.
Despite all efforts, it is unlikely for there to be complete nominal capacity available at any given time. Instead, the power generation capacity industry generally anticipates and considers a percentage of unavailability that can range roughly 20.00%.
This critical variable is central to the efforts made by CAMMESA and the generators to invest in the proper maintenance of the units. Although the unavailability factor over the long-term in the thermal plants in Argentina has historically been approximately 30.00%, it fell below 20.00% for a period in the early 2000s. In general, the unavailability factor of the hydroelectric plants in Argentina is not significant. The Yacyretá hydropower plant capacity considers the available power for Argentina, 1,550 MW which means half of the total capacity of 3100 MW, achievable at maximum level and with the units at full capacity. In the nuclear sector, historical unavailability has been important because of the periodic maintenance that units have to go through. In particular, the Embalse nuclear plant had a seasonal maintenance from August to September 2024 for almost two months. Atucha I Nuclear Plant began lifetime extension maintenance since September 2024 with scheduled completion in 2027. Atucha II Nuclear Plant had major maintenance from September 2024 to December 2024.
In 2024, hydro generation decreased (15%) in comparison to 2023, which led to an overall increase in fossil fuels demand for power generation. However, the newer rounds of the Plan Gas.Ar, coupled with the enabling of additional natural gas transportation capacity through the first stage of the Perito Francisco Pascasio Moreno (former Presidente Nestor Kirchner) Gas Pipeline since July 2023, led to an overall increase in natural gas availability, which resulted in a significant decrease in fuel oil (59%) and gas oil consumption (7%) for power generation in comparison to 2023.
Energy generation may be influenced by the physical and economic capacity to provide fuel to thermoelectric generators. In recent years and until 2014 fuel prices increased the generating cost, although the fall in oil and fuel prices significantly reduced such cost in 2015 and 2016. The lack of local production of natural gas led to an increased use of fuel oil and gas oil in those generating plants with TS and TG units, in addition to imports of gas and LNG.
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Fuel availability is a factor that contributes to technical unavailability. The costs and logistics for importing and supplying fuel oil, gas oil, and coal instead of natural gas are key to the future availability of thermal units and will continue to be important if the current international conditions are maintained.
Fuel Consumption for Commercial Electric Power Generation
| __________________ |
Source: CAMMESA, Company analysis.
In 2024, 49% of the energy supply was generated with natural gas, which is higher than in most countries that have a large surplus production of natural gas.
Anti-Money Laundering
Anti-Money Laundering, Terrorism Financing and Proliferation of Weapons of Mass Destruction Financing Regime
The concept of money laundering is generally used to denote transactions aimed at introducing funds from illicit activities into the institutional system and thus transform gains from illegal activities into assets of a seemingly legitimate source.
Terrorist financing is the act of providing funds for terrorist activities. This may involve funds raised from legitimate sources, such as personal donations and profits from businesses and charitable organizations, as well as from criminal sources, such as drug trade, weapons and other goods smuggling, fraud, kidnapping and extortion.
Proliferation is the act of providing funds or financial services which are used, in whole or in part, for the acquisition, manufacture, production, development, possession, export, import, supply, transport, transfer, stockpiling or in any way use of nuclear, chemical or biological weapons and their means of delivery and related materials, in contravention of national laws or, where applicable, international obligations.
On April 13, 2000, the Argentine Congress passed Law No. 25,246, (subsequently amended and complemented, (the “AML/CFT/CPF Law”)), which created at the national level the Anti- Money Laundering, Terrorism Financing and Proliferation Financing Regime (“AML/CFT/CPF Regime”), criminalizing money laundering, creating and designating the Financial Reporting Unit (“UIF” for its acronym in Spanish) as the enforcement authority of the regime, and establishing the legal obligation for various public and private sector entities and professionals to provide information and cooperate with the UIF.
The UIF is a decentralized agency that operates with autonomy and financial independency under the Ministry of Justice, and its mission is to prevent and deter the crimes of ML, FT and PF.
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The following are certain provisions relating to the AML/CFT/CPF Regime established by the AML/CFT/CPF Law and its amending and complementary provisions, including regulations issued by the UIF, the CNV and the Central Bank. It is recommended that investors consult their own legal advisors and read the AML/CFT/CPF Law and its complementary regulations.
Money laundering and terrorist financing in the Argentine Criminal Code
| (a) | Money laundering | |||
| Section 303 of the Argentine Criminal Code (the “ACC”) defines money laundering as a crime committed whenever a person converts, transfers, manages, sells, encumbers, acquires, conceals or in any other way puts into circulation in the market, property derived from an unlawful act, with the possible consequence that the origin of the original property or the subordinate property acquires the appearance of a lawful origin, either in a single act or by the repetition of various acts linked to each other. Section 303 of the ACC establishes the following penalties: | ||||
| (i) | If the amount of the operation exceeds 150 Minimum Living and Mobile Wages, being each Minimum Living and Mobile Wage, as of March 1, 2025, equal to ARS 296,832, imprisonment for a term of three (3) to ten (10) years and fines of two (2) to ten (10) times the amount of the operation shall be imposed. This penalty will be increased by one third of the maximum and half of the minimum, when: | |||
| (a) | the person performs the act on a habitual basis or as a member of an association or gang constituted for the continuous commission of acts of this nature; | |||
| (b) | the person is a public official who committed the act in the exercise or on the occasion of his/her functions. In this case, he/she shall also be subject to a penalty of special disqualification of three (3) to ten (10) years. The same penalty shall be imposed to anyone who has acted in the exercise of a profession or occupation requiring special qualification. | |||
| (ii) | Anyone who receives property or other assets from a criminal offense for the purpose of applying them in an operation as described above, which gives them the possible appearance of a lawful origin, shall be punished with imprisonment for a term of six (6) months to three (3) years. | |||
| (iii) | If the value of the assets does not exceed 150 Minimum Living and Mobile Wages, the penalty shall be a fine of five (5) to twenty (20) times the amount of the transaction. | |||
| (iv) | These provisions shall apply even if the preceding criminal offense was committed outside the scope of applicability of the ACC, insofar as the criminal offense was also punishable in the place where it was committed. | |||
| (b) | Penalties for legal persons. | |||
| Furthermore, Section 304 of the ACC provides that when the criminal acts have been committed in the name of, or with the intervention of, or for the benefit of a legal person, the following sanctions shall be imposed to the entity jointly or alternatively: | ||||
| (i) | fine of two (2) to ten (10) times the value of the property subject to the offense; | |||
| (ii) | total or partial suspension of activities, which in no case shall exceed ten (10) years; | |||
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| (iii) | debarment for public tenders or bidding processes or any other State-related activities, which in no case shall exceed ten (10) years; | |||
| (iv) | dissolution and liquidation of the legal person when it was created for the sole purpose of committing the offense, or such acts constitute the main activity of the entity; | |||
| (v) | loss or suspension of any State benefit that it may have; | |||
| (vi) | publication of an extract of the condemnatory sentence at the expense of the legal entity. | |||
| In order to calibrate these sanctions, the Court will take into account the failure to comply with internal rules and procedures, the omission of vigilance over the activity of the authors and participants; the extent of the damage caused, the amount of money involved in the commission of the offense, the size, nature and economic capacity of the legal entity. In the cases in which it is essential to maintain the operational continuity of the entity, or of a public work, or particular service, the sanctions of suspension of activities or dissolution and liquidation of the legal person shall not be applicable. | ||||
| (c) | Terrorism financing and Proliferation financing | |||
| Section 306 of the ACC criminalizes the financing of terrorism and the proliferation financing. These offenses are committed by anyone who, directly or indirectly, collects or provides property or assets, from lawful or unlawful sources, with the intention of it being used, or in the knowledge that it will be used, in whole or in part: | ||||
| (i) | to finance the commission of acts which have the aim of terrorizing the population or compelling national public authorities or foreign governments or agents of an international organization to perform or refrain from performing an act (according to Section 41 of the ACC); | |||
| (ii) | by an organization committing or attempting to commit crimes for the purpose set out in (i); | |||
| (iii) | by an individual who commits, attempts to commit or participates in any way in the commission of offenses for the purpose set out in (i). | |||
| (iv) | to finance, for himself or for a third party, the travel or logistics of persons and/or things to a State other than that of his residence or nationality, or within the same national territory for the purpose of perpetrating, planning, preparing or participating in the purpose set out in (i). | |||
| (v) | to finance, for themselves or for third parties, the provision or receipt of training for the commission of offenses for the purpose set out in (i). | |||
| (vi) | to finance the acquisition, manufacture, development, possession, supply, export, import, stockpiling, transport, transfer, or in any way the use of nuclear, chemical, biological weapons of mass destruction, their means of delivery and related materials, including dual-use technology and goods to commit any of the offenses set forth in the ACC or in international conventions. Any person who elaborates, produces, manufactures, develops, possesses, supplies, exports, imports, stores, transports, transfers, uses, or in any way proliferates, increases, augments, reproduces or multiplies the above-mentioned weapons of mass destruction, their means of delivery and related materials intended for their preparation, shall also be punished by the same term of imprisonment and fine. | |||
| The penalty is imprisonment for a term of five (5) to fifteen (15) years and a fine of two (2) to ten (10) times the amount of the operation. Likewise, the same penalties shall apply to legal persons as described for the crime of money laundering. |
||||
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Reporting Subjects obliged to inform and collaborate with the UIF
The AML/CFT/CPF Law, in line with international AML/CFT/CPF standards, not only designates the UIF as the agency in charge of preventing money laundering and terrorism financing but also establishes certain obligations to various public and private sector entities and individuals, which are designated as Reporting Subjects (“Sujetos Obligados”), which are legally bound to inform and collaborate with the UIF.
In accordance with the AML/CFT/CPF Law and the regulations complementing it, the following persons, among others, are Reporting Subjects before the UIF:
| (i) | banks, financial entities, insurance companies, remittance companies and virtual asset service providers; | |
| (ii) | exchange agencies and natural and legal persons authorized by the Central Bank to intervene in the purchase and sale of foreign currency with funds in cash or checks issued in foreign currency or through the use of debit or credit cards or in the transfer of funds within or outside the national territory; individuals and/or legal entities registered or authorized by the CNV to operate in the capital markets as trading agents, settlement and clearing agents and other intermediaries performing equivalent functions; | |
| (iii) | settlement and clearing agents, trading agents; natural and/or legal persons registered with the CNV acting in the placement of investment funds or other collective investment products authorized by such agency; crowdfunding companies, global investment advisors, the legal persons in charge of opening the file and identifying the client's risk profile with regard to the prevention of ML/FT/PF and the legal persons acting as financial trustees whose trust securities are authorized for public offering by the CNV, and the agents registered by the above mentioned controlling agency that intervene in the placement of negotiable securities issued within the framework of the above mentioned financial trusts; | |
| (iv) | public registers, and the corresponding representative bodies for the supervision and control of legal persons, land registers, motor vehicle registers, shipping registers of all kinds and aircraft registers; government organizations such as the Central Bank, the Customs Collection and Enforcement Agency, the Superintendence of Insurance of the Nation (“SSN,” as per its acronym in Spanish), the CNV and the IGJ; and | |
| (v) | lawyers, public accountants and public notaries, only when, in the name of and/or on behalf of their clients, they prepare or carry out transactions concerning certain activities. |
The AML/CFT/CPF law establishes that agents registered with the CNV under the subcategory of Settlement and Clearing Agents -Direct Participant- shall not be considered Reporting Subjects, provided that their activities are limited exclusively to recording transactions in futures contracts and futures options contracts, traded on markets under the supervision of that commission, for their own account and with their own funds; and they do not offer brokerage services, nor open trading accounts for third parties to place orders and trade the aforementioned instruments, in accordance with the provisions of CNV General Resolution No. 816/2019 or those that amend, supplement or replace it.
The Reporting Subjects have the following duties (among others):
| (i) | obtaining from clients’ documents that indisputably prove their identity, legal status, domicile and other information, concerning their operations needed to accomplish the intended activity (know your customer policy) and identify the beneficial owner(s) and take reasonable steps to verify their identity; |
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| (ii) | conduct due diligence procedures on their clients and report to the UIF any suspicious operation or fact (which, in accordance with the usual practices of the area involved, as well as the experience and competence of the Reporting Subjects, are operations that are attempted or completed which were previously identified as unusual operations by the regulated entity, as well as any operation without economic or legal justification or of unusual or unjustified complexity, whether performed in isolated or repeated manner, regardless of the amount); and |
| (iii) | refraining from disclosing to the client or third parties the actions being conducted in compliance with the AML/CFT/CPF Law. Within the framework of suspicious operation report analysis, Reporting Subjects shall not object disclosure to UIF of any information required from them alleging that such information is subject to banking, stock market or professional secrecy or confidentiality agreements of a legal or contractual nature. |
| (iv) | document ML/FT/PF prevention procedures, establish internal manuals reflecting the tasks to be performed, assign the corresponding functional responsibilities, in accordance with the structure of the regulated entity, and take into account a risk-based approach; |
| (v) | register with the UIF and designate compliance officers who shall be responsible before the UIF for compliance with the obligations established by AML/CFT/CPF Law; |
| (vi) | obtain information and determine the purpose and nature of the customer relationship; determine the risk of ML/FT/PF associated with customers; the products, services, transactions, operations or distribution channels; the geographic areas involved; conduct a self-assessment of such risks and implement appropriate mitigation measures; |
| (vii) | conduct ongoing due diligence of the commercial, contractual, economic and/or financial relationship and establish monitoring rules to examine transactions throughout the course of the relationship to ensure that they are consistent with the Reported Subject’s knowledge of the customer, his activity and risk profile, including, where necessary, the source of funds; |
| (viii) | identify the individuals exercising administrative and representative functions of the client and those with powers of disposal; and |
| (ix) | retain, for a minimum period of ten (10) years, in physical or digital form, all necessary records on transactions, both domestic and international, to enable prompt and satisfactory compliance with requests for information made by the UIF and/or other competent authorities. |
Pursuant to Annex I of Resolution No. 61/2023 of the UIF (which establishes the supervision and inspection mechanism of the UIF), both the Central Bank and the CNV are considered “Specific Control Agencies” (“Órganos de Contralor Específico”). In such capacity, they must collaborate with the UIF in the evaluation of compliance with AML/CFT/CPF procedures by the Reporting Subjects subject to their control. For these purposes, they are entitled to supervise, monitor and inspect these entities. Denial or obstruction of inspections by the Reporting Subjects may result in administrative penalties by the UIF and criminal penalties.
The Central Bank and the CNV must also comply with the AML/CFT/CPF regulations established by the UIF, including the reporting of suspicious transactions. In turn, Reporting Subjects regulated by these agencies are subject to UIF Resolutions No. 14/2023 and 78/2023, respectively. Such regulations provide guidelines that such entities shall adopt and apply to manage, in accordance with their policies, procedures and controls, the risk of being used by third parties for criminal purposes of money laundering and financing of terrorism.
Essentially, the aforementioned regulations, change the formal regulatory compliance approach to a risk-based approach (“RBA”), based on the revised recommendations issued by the Financial Action Task Force (the “FATF”) in 2012, in order to ensure that the implemented measures are proportional to the identified risks. Therefore, the Reporting Subjects shall identify and evaluate their risks and, based on this, adopt measures for the management and mitigation of such risks, in order to more effectively prevent money laundering and terrorist financing. Likewise, the provisions of UIF Resolution No. 4/17 established the possibility of conducting special due diligence procedures with respect to clients supervised abroad (formerly called “international investors”) and local clients who are Reporting Subjects to the UIF.
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UIF Resolution N° 14/2023, which lays down specific rules for the financial sector, prohibits, inter alia, the keeping of anonymous accounts or accounts in fictitious names, while stressing the need for enhanced customer due diligence measures commensurate with the risks identified and providing for the possibility of using third parties to carry out certain due diligence measures.
Asset Freezing Regime
Decree No. 918/2012 (amended by Decree No. 278/2024) establishes the procedures for the freezing of assets linked to terrorism and proliferation financing, and the creation and maintenance procedures (including the inclusion and removal of suspected persons) for registries created in accordance with the relevant United Nations Security Council’s resolutions.
Additionally, UIF Resolution No. 29/2013, regulates the implementation of Decree No. 918/2012 and establishes: (i) the procedure to report suspicious transactions of terrorism financing and the persons obligated to do so, and (ii) the administrative freezing of assets procedure on natural or legal persons or entities designated by the United Nations Security Council pursuant to Resolution No. 1267 (1999) and subsequent, or linked to criminal actions under Section 306 of the Argentine Criminal Code, both prior to the report issued pursuant to UIF Resolutions No. 14/2023 and 78/2023, and as mandated by the UIF after receiving such report.
In order to help the Reporting Subjects to fulfill these duties, Executive Decree No. 489/2019 created the Public Registry of Persons and Entities linked to acts of Terrorism and its Financing (RePET, for its acronym in Spanish), which is an official database that includes the consolidated list of the United Nations Security Council.
Politically Exposed Persons
Resolution No. 35/2023 of the UIF (lastly amended by Resolution No. 192/2024) establishes the rules that Reporting Subjects must follow regarding clients that are Politically Exposed Persons (PEPs).
Following the aforementioned RBA, Resolution No. 35/2023 establishes that Reporting Subjects must determine the level of risk at the time of beginning or continuing the contractual relationship with a PEP, and must take due diligence measures, adequate and proportional to the associated risk and the operation or operations involved.
In addition, the UIF has issued the Guide for the management of risks of money laundering and financing of terrorism in relation to customers (and ultimate beneficiaries) that are PEPs.
CNV Regulations
The CNV regulations stipulate, among other provisions, that the Reporting Subjects under its control shall only perform the operations provided for under the public offering system when these operations are performed or ordered by persons constituted, domiciled or resident in countries, domains, jurisdictions, territories or associated states not considered to be non-cooperative or high risk by the FATF.
Similarly, they establish the payment modalities and control procedures for the reception and delivery of funds from and to clients.
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Central Bank Rule
Pursuant to Communication “A” 6399 of the Central Bank, as amended and supplemented, including without limitation, by Communication “A” 6709, Reporting Subjects must keep - for a period of 10 years - written records of the procedure applied in each case for the discontinuation of a client’s operations. Among these records, they shall keep a copy of any notification sent to the customer requesting further information and/or documentation, the corresponding notices of receipt and the documents identifying the officials who took part in the decision, in accordance with the respective procedural manuals.
Corporate Criminal Liability Law
The Corporate Criminal Liability Law No. 27,401 sets forth a criminal liability regime applicable to legal entities involved in certain corruption offenses directly or indirectly committed in their name, on their behalf or in their interest and from which a benefit may arise. The individual offenders may be employees or third parties — even unauthorized third parties, provided that the company ratified the act, even tacitly.
For an extensive analysis of the AML/CFT/CPF Regime in effect as of the date of this annual report, investors should consult legal counsel and read Title XIII, Book 2 of the Argentine Criminal Code and any regulations issued by the UIF, the CNV and the Central Bank in their entirety. For such purposes, interested parties may visit the websites of the Argentine Ministry of Economy, (www.argentina.gob.ar/economia), the Argentine Ministry of Justice (https://www.argentina.gob.ar/justicia), the UIF (www.argentina.gob.ar/uif), the CNV (www.argentina.gob.ar/cnv), or the Central Bank (www.bcra.gov.ar). The information found on such websites is not a part of this annual report.
Item 4.C Organizational structure
The following diagram illustrates our organizational structure as of the date of this annual report. Percentages indicate the ownership interest held.
(*) Reflects direct and/or indirect shareholdings in Distribuidora de Gas Cuyana S.A., Distribuidora de Gas del Centro S.A., Energía Sudamericana S.A., Geser S.A. and COYSERV S.A
| __________________ |
Source: CAMMESA, Company analysis.
| Notes:- |
| (1) | Percentages reflect our equity interests in the operating companies TJSM, TMB and CVO. For further information, see “Item 4.B. Business Overview—FONINVEMEM and Similar Programs”. |
| (2) | Percentages indicate direct and, through Ecogas Inversiones, indirect investments of ours in DGCU, DGCE. |
| (3) | See “Item 4.B. Business overview—Our Subsidiaries”. |
| (4) | See Item 4. Information of the Company—Simplification of Corporate Structure at Central Puerto S.A.” |
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Item 4.D Property, plants and equipment
Property, Plant and Equipment
Most of our property, plant and equipment is intended to be used in the generation of electric power and in our forestry business, and 100.00% of them are located in Argentina.
We successfully participated in CAMMESA’s auction for 10 MW of dispatch priority for our Parque Solar San Carlos Project under the MATER framework, located in San Carlos, Province of Salta. For more information "See Item 4. A History and development of the Company—Renewable energy projects"
As of the date of this annual report, works for the conversion of the Brigadier Lopez open cycle thermal plant into a combined cycle have started and are expected to be completed by the end of 2025. "See Item 4. A History and development of the Company—Purchase of the Brigadier Lopez Plant”.
We have no significant assets under capital lease or lease agreements.
The following table provides certain information regarding the operation of our power plants that we owned as of December 31, 2024:
|
Site |
Plant |
Unit |
Installed Capacity |
Type |
Fuel Type |
||||||||
| Puerto Complex | 1,747 | MW | |||||||||||
| Puerto Nuevo plant | 589 | MW | |||||||||||
| PNUETV07 | 145 | MW | Thermal | NG / FO | |||||||||
| PNUETV08 | 194 | MW | Thermal | NG / FO | |||||||||
| PNUETV09 | 250 | MW | Thermal | NG / FO | |||||||||
| Nuevo Puerto plant | 360 | MW | |||||||||||
| NPUETV05 | 110 | MW | Thermal | NG / FO | |||||||||
| NPUETV06 | 250 | MW | Thermal | NG / FO | |||||||||
| Puerto combined cycle plant | 798 | MW | |||||||||||
| CEPUCC GE | 798 | MW | Thermal | NG / GO | |||||||||
| Costanera Complex(1) | 1,799 | MW | |||||||||||
| Central Costanera Plant | 661 | MW | |||||||||||
| COSTTV01 | 123 | MW | Thermal | NG / FO | |||||||||
| COSTTV02 | 116 | MW | Thermal | NG / FO | |||||||||
| COSTTV03 | 112 | MW | Thermal | NG / FO | |||||||||
| COSTTV07 | 310 | MW | Thermal | NG / FO | |||||||||
| Central Costanera combined cycle plant | 851 | MW | |||||||||||
| COSTCC08 | 264 | MW | Thermal | NG / FO | |||||||||
| COSTCC09 | 264 | MW | Thermal | NG / FO | |||||||||
| COSTTV10 | 323 | MW | Thermal | NG / FO | |||||||||
| Buenos Aires combined cycle plant | 277 | MW | |||||||||||
| BSASTG01 | 190 | MW | Thermal | NG/FO | |||||||||
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|
Site |
Plant |
Unit |
Installed Capacity |
Type |
Fuel Type |
||||||||
| BSASTV01 | 87 | MW | Thermal | NG/FO | |||||||||
| Piedra del Águila | 1,440 | MW | |||||||||||
| Piedra del Águila plant | 1,440 | MW | |||||||||||
| PAGUHI | 1,440 | MW | Hydroelectric | ||||||||||
| Luján de Cuyo | MW | ||||||||||||
| Luján de Cuyo plant | 576 | MW | |||||||||||
| LDCUCC25 | 290 | MW | Thermal | NG | |||||||||
| LDCUTG23 | 23 | MW | Thermal | NG / GO | |||||||||
| LDCUTG24 | 23 | MW | Thermal | NG /GO | |||||||||
| LDCUTV11 | 60 | MW | Thermal | NG / FO | |||||||||
| LDCUTV12 | 60 | MW | Thermal | NG / FO | |||||||||
| LDCUTG22 | 24 | MW | Thermal | NG / GO | |||||||||
| LDCUTG26 | 47 | MW | Thermal | NG / GO | |||||||||
| LDCUTG27 | 48 | MW | Thermal | NG | |||||||||
| LDCUHI | 1 | MW | Hydroelectric | ||||||||||
| Brigadier Lopez | Brigadier Lopez plant | BLOPTG01 | 281 | MW | Thermal | NG / GO | |||||||
| San Lorenzo | San Lorenzo plant | TER6CC11 | 391 | MW | Thermal | NG / GO | |||||||
| La Genoveva | 130 | MW | |||||||||||
| La Genoveva II wind farm | GNVEO | 88 | MW | ||||||||||
| La Genoveva II wind farm | GNV2EO | 42 | MW | Wind | |||||||||
| La Castellana (2) | 116 | MW | Wind | ||||||||||
| La Castellana I wind farm | LCASEO | 101 | MW | Wind | |||||||||
| La Castellana II wind farm | LCA2EO | 15 | MW | Wind | |||||||||
| Achiras | Achiras wind farm | ACHIEO | 48 | MW | Wind | ||||||||
| Manque | Manque wind farm | MANQEO | 57 | MW | Wind | ||||||||
| Los Olivos | Los Olivos wind farm | OLIVEO | 23 | MW | Wind | ||||||||
| PS Guañizuil II (3) | Guañizuil II solar farm | GZ2AFV | 105 | MW | Solar | ||||||||
| __________________ |
| Notes:- |
Reference: NG: natural gas; FO: fuel oil; GO: gas oil
| (1) | Costanera complex is owned by Central Costanera S.A. which is 72.26% owned by Proener S.A.U., as of December 31, 2024. As of the date of this annual report, we own a 100% interest in Proener. See “Item 4.B. Business Overview—Our Subsidiaries”. |
| (2) | La Castellana I, La Castellana II, Achiras, Manque, Los Olivos, La Genoveva II and La Genoveva I wind farms are owned by CP La Castellana S.A.U., CPR Energy Solutions S.A.U., CP Achiras S.A.U., CP Manque S.A.U., CP Los Olivos S.A.U, Vientos La Genoveva II S.A.U, and Vientos La Genoveva I S.A.U. As of December 31, 2024 the first five facilities were fully owned subsidiaries of CP Renovables S.A. while the last two were fully owned subsidiaries of Central Puerto S.A. See “Item 4.B. Business Overview—Our Subsidiaries” and “Item 4. Information of the Company—Recent Developments – Simplification of Corporate Structure at Central Puerto S.A.”. |
| (3) | PS Guañizuil II solar farm is owned by CP Cordillera Solar S.A. which is a fully owned subsidiary of CP Renovables, as of December 31, 2024. See “Item 4.B. Business Overview—Our Subsidiaries” and “Item 4. Information of the Company—Recent Developments”. |
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We believe that all of our production facilities are in good operating condition. We believe that we have satisfactory title to our plants and that our facilities are in accordance with standards generally accepted in the electric power and forestry industry. As of December 31, 2024, the consolidated net book value of our property, plant and equipment was Ps. 1,617.87 billion.
The following table lists the value of our property, plant and equipment as of December 31, 2024:
|
Main Item |
As of December 31, 2024 |
||
| (in thousands of Ps.) | |||
| Lands and buildings | 351,542,976 | ||
| Electric power facilities and other equipment | 724,876,040 | ||
| Wind turbines | 316,228,757 | ||
| Gas turbines | 22,049,562 | ||
| Construction in progress | 173,901,256 | ||
| Other | 29,271,598 | ||
| Total | 1,617,870,189 |
For information on our forestry assets, see “Item 4.B. Business Overview—Forestry Assets” and Note 2 to our financial statements.
For information on our plants under construction, see “Item 5.A. Operating Results—Expansion of Our Generating Capacity”.
For information on environmental issues that may affect our utilization of assets, see “Item 3.D.—Risk Factors—Risks relating to Our Business—Climate change and energy transition could affect our business”, and “—Our ability to operate wind and solar farms profitably is highly dependent on suitable wind or sun and associated weather conditions, climate change and energy transition could affect our business”.
Item 4A. Unresolved Staff Comments
Not applicable.
Item 5. Operating and Financial Review and Prospects
Item 5.A Operating Results
This section contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including, without limitation, those set forth in “Forward-looking Statements,” “Item 3.D Risk Factors,” and the matters set forth in this annual report generally.
This discussion should be read in conjunction with our Audited Consolidated Financial Statements which are included elsewhere in this annual report.
Financial Presentation
We maintain our financial books and records and publish our consolidated financial statements in Argentine pesos, which is our functional currency. Our Audited Consolidated Financial Statements are prepared in Argentine pesos and in accordance with the IFRS Accounting Standards as issued by the IASB.
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Factors Affecting Our Results of Operations
Argentine Economic Conditions
We are an Argentine sociedad anónima (corporation). Substantially all of our assets and operations and our customers are located in Argentina. Accordingly, our financial condition and results of operations depend to a significant extent on macroeconomic and political conditions prevailing from time to time in Argentina.
As Central Puerto is affected by the conditions of Argentina’s economy, which have historically been volatile, and have negatively and materially affected the financial condition and prospects of multiple industries, including the electric power sector, the following discussion may not be indicative of our future results of operations, liquidity or capital resources.
The following table sets forth information about certain economic indicators in Argentina for the periods indicated:
|
2020 |
2021 |
2022 |
2023 |
2024 |
|||||||
| Economic activity | |||||||||||
| Nominal GDP in current US$(1) (in millions of US$) | 377,809 | 494,666 | 590,630 | 388,399 | 629,461 | ||||||
| Real gross GDP (% change) (2) | (9.90 | )% | 10.44 | % | 5.27 | % | (1.61 | )% | (1.72 | )% | |
| Domestic investment as % of GDP | 14.28 | % | 17.29 | % | 17.57 | % | 18.57 | % | 15.84 | % | |
| Price indexes and exchange rate information | |||||||||||
| INDEC CPI (% change) | 36.14 | % | 50.94 | % | 94.79 | % | 211.41 | % | 117.76 | % | |
| Economic activity | |||||||||||
| Wholesale price index (WPI) (% change) |
35.38 | % | 51.34 | % | 94.78 | % | 276.35 | % | 67.10 | % | |
| Nominal exchange rate(4) (in Ps./US$ at period end) | 84.15 | 102.72 | 177.16 | 808.45 | 1032.00 |
| __________________ |
Sources: Ministry of Public Works of Argentina, Banco de la Nación Argentina and Instituto Nacional de Censos y Estadísticas (INDEC).
| Notes:- |
| (1) | Calculations based on the nominal GDP in pesos as reported by INDEC, divided by the average nominal Ps./US$ exchange rate for each period as reported by the Banco de la Nación Argentina for wire transfers (divisas). |
| (2) | Base on GDP in pesos of 2004 (INDEC). |
| (3) | On January 8, 2016, based on its determination that the INDEC had failed to produce reliable statistical information, including with respect to CPI, the previous administration declared the national statistical system and the INDEC in a state of administrative emergency through December 31, 2016. The INDEC implemented certain methodological reforms and adjusted certain macroeconomic statistics on the basis of these reforms”. During the first six months of this reorganization period, the INDEC published official CPI figures published by the City of Buenos Aires and the Province of San Luis for reference, which we include here. |
| (4) | Pesos to U.S. dollars exchange rate as quoted by the Banco de la Nación Argentina for wire transfers (divisas). |
During 2020 as compared to 2019, Argentina’s GDP decreased 9.90%, primarily as the result of a 13.07% decrease in capital goods investments, a 12.17% decrease in private sector consumption, a 2.02% decrease in public consumption and a 17.30% decrease in exports. Aggregate domestic supply also decreased given the 17.21% decrease in imports. Aggregate economic activity was mainly affected by COVID-19 and the lock-down measures imposed causing a sharp drop in activity as many industries closed. In the third quarter of 2020 and due to more flexible lock-down measures, aggregate economic activity started to recover by with levels below the ones before que COVID-19 crisis.
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During 2021 as compared to 2020, Argentina’s GDP increased 10.72%, primarily as the result of a 33.80% increase in capital goods investments, a 10.35% increase in private sector consumption, a 6.31% increase in public consumption, and an 8.50% increase in exports. Aggregate domestic supply also rose given the 20.44% increase in imports. Aggregate economic activity was mainly affected by periods of volatility in exchange rates and financial indicators, a high rate of inflation and macroeconomic uncertainty, mainly explained by the lack of foreign exchange reserves in the Central Bank and by the need to reach an agreement with the IMF regarding payments to be made during 2022. Economic activity in Argentina in 2021 was also affected by the COVID-19 pandemic and the diverse measures adopted by the Argentine Government to address its consequences.
During 2022 as compared to 2021, Argentina’s GDP increased 4.96%, primarily as the result of a 11.06% increase in capital goods investments, a 9.67% increase in private sector consumption, a 1.90% increase in public consumption, and a 5.77% increase in exports. Aggregate domestic supply also rose given the 17.88% increase in imports. Along 2022, monthly inflation rate and its volatility increased considerably, as well as the instability of the foreign exchange and financial markets. The lack of foreign exchange reserves in the Central Bank prompted the government to offer a better exchange rate to agricultural exporters (an alternative to the official foreign exchange rate). Further, the government proposed an exchange offer to local bondholders in order to address the instability in the domestic bond market and the difficulties to cover the fiscal deficit. The Central Bank was forced to intervene in that market to counteract the volatility and price collapse. As a result, the macroeconomic environment became highly uncertain.
During 2023 as compared to 2022, Argentina’s GDP decreased 1.55 %, primarily as the result of a 1.88% decrease in capital goods investments, and a 6.69% decrease in exports. These performances were partially offset by a 1.12% rise in private sector consumption, and a 1.16 % growth in public consumption. Aggregate domestic supply also decreased despite the 2.16% rise in imports. The inflation rate increased steadily along the first quarter of the year, reaching an outstanding 8.40% in April. Concerns regarding inflation increased, with monthly rates reaching double-digits in August 2023 and persisting throughout the year. The volatility in the foreign exchange market also rose, as well as the spread between official and financial exchange rates. The volatility and uncertainty were reinforced by the presidential election, which took place in August (the primaries), October (general elections) and November (runoff). The government increased social expenditures and grants to utilities and transport companies and tightened price controls to counteract the inflation burden and sustain its image in the race for elections. While inflation slowed during the second quarter, after the primary election carried out on August 13 the government devaluated the Argentine Peso by 18%, which was almost instantly reflected in prices. Inflation rate was 12.44% in August and 12.75% in September and uncertainly increased in line with the primary election results, where the official candidate got the third position, the opposition the second and an outlier candidate the first position. Economic activity deteriorated by the end of year as inflation continued to rise, fueled by a new devaluation officialized by the new administration in December.
During 2024 as compared to 2023, Argentina’s GDP decreased 1.72%, marking the second consecutive year of recession following a 1.61% contraction in 2023. The decline in GDP in 2024 was driven by contractions in private consumption (-4.24%), public consumption (-3.18%) and gross fixed capital formation (17.38%). In contrast, exports registered a 23.16% increase as compared to 2023. On the supply side, the sectors that experienced the most significant downturns included construction (-17.7%), manufacturing (-9.2%), wholesale and retail trade, and repairs (-7.3%). Conversely, agriculture, livestock, hunting, and forestry grew by 31.3%, while mining and quarrying expanded by 7.4%. At current prices, private consumption remained the largest component of demand, accounting for 68.1% of GDP, followed by gross fixed capital formation (15.8% of GDP), exports (15.3% of GDP), and public consumption (15.0% of GDP). 2024 was characterized by the significant exchange rate and fiscal adjustments implemented by the government of Javier Milei upon taking office in December 2023, leading to a sharp contraction of economic activity in the first quarter of the year and a slow recovery in subsequent quarters, facilitated by exchange rate stability and gradual inflation reduction. A 34% rebound in agricultural activity, following the 2022-23 drought, helped mitigate the decline in GDP. Throughout 2024, Argentina experienced a significant deceleration in inflation, with monthly rates markedly lower than those recorded in 2023, reaching 2.7% by year-end. This trend is expected to persist in 2025. Unlike previous years, foreign exchange market volatility remained subdued, and the spread between official and informal exchange rates remained stable. The current administration successfully implemented a fiscal adjustment program, reducing public expenditures, phasing out subsidies, and easing or eliminating price controls. These measures resulted in a fiscal surplus and substantial progress in correcting relative price distortions. However, despite this pronounced disinflationary process, annual inflation for 2024 stood at 117.76%. The economic adjustment, while effective in addressing fiscal and external imbalances, contributed to a deepening contraction in economic activity throughout 2024. While inflation is expected to remain subdued, financial and exchange rate volatility could increase in the lead-up to the 2025 legislative elections, with potential implications for price dynamics. In March 2025, by virtue of Decree No. 179/2025, the Federal Government approved a new EFF to be entered into with the IMF for a 10-year term. On March 18, 2025, Decree No. 179/2025 was approved by the Permanent Bicameral Commission for Legislative Proceedings and, on March 19, 2025, the house of representatives of the Argentine Congress also approved it, enabling the National Executive Branch to enter into the EFF.
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As of the date of this annual report, Argentina continues to face significant economic challenges. The current administration has successfully eliminated the fiscal deficit, achieving a fiscal surplus of 0.3% of GDP in 2024—a historic milestone not seen in over a decade. This accomplishment is largely attributed to aggressive expenditure adjustments, including substantial reductions in economic subsidies to utilities and transportation enterprises. The Central Bank's balance sheet has improved markedly, but complete restructuring remains contingent upon the cessation of monetary financing of the fiscal deficit and the resolution of existing Central Bank debt obligations. The administration's economic policies aim to reduce inflationary pressures in the long term; however, these measures have contributed to a contraction in economic activity in the short term. Key objectives include promoting investment, renegotiating utility contracts, and establishing a new regulatory framework that encompasses tariff adjustments. These initiatives represent both critical goals and significant challenges for the near future.
See “Item 3.D. Risk Factors—Risks relating to our business— Factors beyond our control may affect or delay the completion of the awarded projects or alter our plans for the expansion of our existing plants”.
Inflation
Argentina has faced and continues to face inflationary pressures. From 2012 to date, Argentina experienced increases in inflation as measured by CPI and WPI that reflected the continued growth in the levels of private consumption and economic activity (including exports and public and private sector investment), which applied upward pressure on the demand for goods and services.
Despite the ongoing deceleration of inflation, inflationary risks persist, which can have adverse effects on the economy. During periods of high inflation, effective wages and salaries tend to fall and consumers adjust their consumption patterns to eliminate unnecessary expenses. The increase in inflationary risk may erode macroeconomic growth and further limit the availability of financing, causing a negative impact on our operations. See “Item 3.D. Risk Factors—Risks Relating to Argentina—Substantially all of our revenues are generated in Argentina and thus are highly dependent on economic and political conditions in Argentina”.
Inflation increases also have a negative impact on our cost of sales, selling expenses and administrative expenses, in particular our payroll and social security charges. We cannot give any assurance that increased costs as a result of inflation will be offset in whole or in part with increases in prices for the energy we produce.
IAS 29 requires that financial statements of any entity whose functional currency is the currency of a hyperinflationary economy, whether based on the historical cost method or on the current cost method, be stated in terms of the measuring unit current at the end of the reporting period. Even though the standard does not establish an absolute rate at which hyperinflation is deemed to arise, it is common practice to consider there is hyperinflation where changes in price levels are close to or exceed 100% on a cumulative basis over the last three years, along with other several macroeconomic-related qualitative factors.
Due to macroeconomic factors, the triennial inflation was above that figure in 2018 and Argentina has been considered hyperinflationary since July 1, 2018. Such conditions remained during 2022, 2023 and 2024. See “Risks Relating to Argentina—As of July 1, 2018, the Argentine Peso qualifies as a currency of a hyperinflationary economy and we are required to restate our historical financial statements to apply inflationary adjustments, which could adversely affect our results of operations and financial condition and those of our Argentine subsidiaries”.
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Therefore, our consolidated financial statements as of and for the year ended December 31, 2024, including the figures for the previous periods (this fact not affecting the decisions taken on the financial information for such periods), and unless otherwise stated, the financial information included elsewhere in this annual report, have been restated to consider the changes in the general purchasing power of our functional currency (Argentine peso) pursuant to IAS 29 and General Resolution no. 777/2018 of the CNV.
Furthermore, as a consequence of the application of IAS 29, maintaining net monetary assets generates loss of purchasing power, while maintaining net monetary liabilities generates improvement of purchasing power, provided that such items are not subject to an adjustment mechanism that compensates to some extent such loss or improvement. This loss or income is booked in the statement of comprehensive income.
Accordingly, we have recognized a loss regarding the effect of adjustment by inflation of Ps. 18.85 billion for 2024, a loss of Ps275.50 billion for 2023 and a loss of Ps.206.58 billion for 2022. See Note 2.1.2. to our consolidated financial statements.
On June 16, 2021, the Argentine Executive Power passed Law No. 27,630, which established changes in the corporate income tax rate for the fiscal periods commencing as from January 1, 2021. Such law establishes payment of corporate income tax based on a structure of staggered rates regarding the level of accumulated taxable net income. The current progressive rates, applicable for fiscal periods commencing on January 1, 2025, are as follows: (i) net taxable income accumulated up to Ps.101.679.575,26 will be subject to a rate of 25%; (ii) net taxable income accumulated over Ps.101.679.575,26 up to Ps.1.016.795.752,62 will incur a payment of Ps. 25.419.893,82 plus 30% on the excess over Ps.101.679.575,26; and (iii) net taxable income accumulated over Ps.1.016.795.752,62 will be subject to a payment of Ps.299.954.747,02 plus 35% on the excess over Ps. 1.016.795.752,62.
Foreign Currency Fluctuations
We are exposed to exchange rate risk in connection with the U.S. dollar to the Argentine peso exchange rate, as part of our capital expenditures, financial obligations and operating expenditures are denominated in U.S. dollars. See “Item 3.D. Risk Factors—Risks Relating to Argentina—Significant fluctuations in the value of the peso could adversely affect the Argentine economy and, in turn, adversely affect our results of operations” and “Item 10.D. Exchange Controls”.
Exchange rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in exchange rates. We are exposed to currency risk regarding the relationship between the Argentine peso and the US dollar, mainly due to our operating activities, the investment projects defined by us and our financial liabilities with banking entities.
The devaluation of the peso with respect to the U.S. dollar totaled 37.05% in 2019, 28.83% in 2020, 18.08% in 2021, 42.02% in 2022, 78.09% in 2023 and 21.70% in 2024.
As of December 31, 2024, we did not have derivatives that met the requirements established by IFRS Accounting Standards to be designated as an effective hedge for this particular risk. As of December 31, 2024, we had trade receivable, other financial assets, cash and short-term deposits denominated in foreign currency totaling US$412.17 million, while at the same time we had liabilities denominated in foreign currency totaling US$430.77.
Any significant depreciation of the peso would result in an increase in the cost of servicing our debt and in the cost of imported supplies or equipment and, therefore, may have a material adverse effect on our results of operations. With respect to fuel used in connection with the energy we sell under the Spot Sales (which represented around 77.27% of our energy sales in terms of output in 2024), the exposure to changes in fuel prices could now become relevant, considering that since the issuance of Resolution SE – MEC No. 21/2025, thermal generators operating in the spot market are authorized to acquire their own fuel, with CAMMESA remaining as supplier of last resort. As explained in Resolution SE – MEC No. 21/2025, the Executive Branch is seeking a gradual decentralization of fuel procurement by CAMMESA, with the purpose of allowing power generators to operate with greater autonomy, reduce costs and improve the system’s efficiency.
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The Argentine Government has taken measures to stabilize the foreign exchange situation, restrictions to the purchase of foreign currency, and in some cases, an additional tax. For further information, see “Item 10.D. Exchange Controls”.
Our Revenues
The following chart shows a breakdown of our revenues for the periods indicated:
| 2024 | 2023 | 2022 | ||||||||||
| (in thousands of Ps.) | Percentage of revenues | (in thousands of Ps.) | Percentage of revenues | (in thousands of Ps.) | Percentage of revenues | |||||||
| Spot Sales(1) | 356,845,619 | 48.34% | 338,674,044 | 49.60% | 272,413,513 | 39.62% | ||||||
| Sales under contracts(2) | 298,569,226 | 40.46% | 285,298,184 | 41.78% | 365,231,351 | 53.12% | ||||||
| Steam sales (3) | 39,511,074 | 5.35% | 32,206,896 | 4.72% | 33,282,307 | 4.84% | ||||||
| Resale of gas transport and distribution capacity | 6,086,260 | 0.82% | 4,046,251 | 0.59% | 4,765,637 | 0.69% | ||||||
| Forestry Segment | 21,849,750 | 2.96% | 12,663,419 | 1.85% | - | 0.00% | ||||||
| Revenues from CVO thermal plant management | 15,307,807 | 2.07% | 9,948,614 | 1.46% | 11,884,167 | 1.73% | ||||||
| Total revenues from ordinary activities | 738,169,736 | 100.00% | 682,837,408 | 100.00% | 687,576,975 | 100.00% | ||||||
_________________
| Notes:- |
| (1) | Includes sales of energy and power to CAMMESA remunerated under Resolution No. 440/21, Resolution No. 238/22, Resolution No. 826/22, Resolution No. 59/23, Resolution No. 750/23, Resolution 869/2023, Resolution No. 9/2024, Resolution No. 99/2024, Resolution No, 193/2024, Resolution No. 233/2024, Resolution No. 285/2024, Resolution No. 20/2024, Resolution No. 294/2024 and Resolution No. 387/2024 (See “Item 4.B. Business Overview—The Argentine Electric Power Sector—Remuneration Scheme”). |
| (2) | Includes (i) term market sales under contracts, (ii) energy sold under the Energía Plus, (iii) contracts under the MATER framework and (iv) RenovAr Program sales under contracts (for further information regarding term market sales under contract, see “Item 4.B. Business Overview—Our Customers”). |
| (3) | Includes steam sold under steam sale contract with YPF from the Luján de Cuyo Plant and with Terminal 6 Industrial S.A. from San Lorenzo site. |
During 2024, Spot Sales were regulated by Resolution 59/23, Res.869/2023, Res. 9/24, Res. 99/24, Res. 193/24, Res. 233/24, Res. 285/24, Res. 20/24, Res. 387/24 and Resolution No. 294/2024. During 2023, Spot Sales were regulated by Resolution 826/22, Resolution 750/23, Resolution 869/23 and Resolution 59/23. During 2022, Spot Sales were regulated by Resolution 440/21, Resolution 238/22 and Resolution 826/22. In the year ended December 31, 2022, we sold over 76.19% of the electric power we generated and derived 39.62% of our revenues under the Spot Sales. In the year ended December 31, 2023, we sold 79.12% of the electric power we generated and derived 49.60% of our revenues under the spot market. In the year ended December 31, 2024, we sold over 77.27% of the electric power we generated and derived 48.34% of our revenues under the spot market. We also continue to sell a portion of electric power in the spot market under the regulatory framework established prior to the Spot Sales which is Energía Plus. For further information see “Item 4.B. Business Overview—The Argentine Electric Power Sector—Remuneration Scheme—The Current Remuneration Scheme.
In addition, we sell generation capacity and electric power under negotiated contracts with private sector counterparties under Energía Plus and other outstanding contracts, as well as Purchase Power Agreements (PPAs) with CAMMESA (both shown under the line item “Sales under contracts”). Sales under contracts generally involve PPAs with customers and are contracted in U.S. dollars. For PPAs for thermal sources, prices in these contracts may include the price of fuel used for generation, the cost of which is assumed by the generator. For terms longer than one year, these contracts typically include electric power price updating mechanisms in the case of fuel price variations or if the generator is required to use liquid fuels in the event of a shortage of natural gas.
Below we summarize key aspects of our most significant sources of revenue, which include: (i) the Spot Sales, (ii) Sales under contracts (iii) steam supply contracts with YPF and Terminal 6 Industrial S.A., (iv) Resale of natural gas transportation capacity, (v) Forestry sales.
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Spot Sales (also known as Energía Base)
The Spot Sales accounts for our largest source of revenue. Resolution SE No. 95/13, which was enacted in February 2013, changed the manner in which electric power was remunerated in the spot market and established the Spot Sales.
Since the issuance of Resolution SE No. 95/13, the applicable regulatory entity (as of the date of this annual report, the Secretariat of Energy) set electric power prices and updated them annually until Resolution No. 238/22. Since this resolution, prices are updated multiple times throughout the year.
Amendments to Resolution SE No. 95/2013
Effective February 2014 and 2015, prices were increased by the enforcement authority through Resolution SE No. 529/14 and Resolution SE No. 482/15, respectively. These increases were intended to allow generators to cover, at least in part, increases in business costs resulting from inflation and the currency devaluation. However, in light of the fact that the resolutions failed to provide a pricing mechanism with a pre-established frequency, the adjustments were discretionary.
Within this framework, in March 2016, the former Secretariat of Electric Energy enacted Resolution No. 22/16, whereby it adjusted the electric power prices established through Resolution SE No. 95/13. These adjustments became effective as of February 2016. In reference to the rationale for this resolution, the former Secretariat of Electric Energy noted that it was enacted “for the sole purpose of supporting the operation and maintenance of affected equipment and power plants on a provisional basis, until the regulatory measures being considered by the Executive branch come into force progressively with the aim of returning the WEM to normal”.
In January 2025, Resolution No. 21/2025 was issued, which — among other provisions — amended Articles 8 and 9 of Resolution No. 95/2013. Among other measures, Resolution 21/2025 provides that, as of January 1, 2025, electricity generation, self-generation, or cogeneration projects using conventional thermal, hydroelectric, or nuclear sources that are commercially authorized are exempt from the suspension on the execution of new contracts in the term market, as originally established in Article 9 of Resolution No. 95/2013.
Furthermore, the resolution modifies the fuel supply regime set forth in Article 8 of Resolution No. 95/2013, effective March 1, 2025. For further details, please refer to section “Item 4.B. Business Overview—The Argentine Electric Power Sector—Remuneration Scheme—The Current Remuneration Scheme”.
Resolution 19/2017 (repealed by Resolution 1/19)
On January 27, 2017, the former Secretariat of Electric Energy issued Res. 19/17 (published in the Official Gazette on February 2, 2017).
Pursuant to this resolution, which was in effect until February 28, 2019 (included), the former Secretariat of Electric Energy established that electric power generators, co-generators and self-generators acting as agents in the WEM and which operate conventional thermal power plants, may make guaranteed availability offers (ofertas de disponibilidad garantizada) in the WEM. Pursuant to these offers, these generation companies may commit specific capacity and power output of the generation, provided that such capacity and energy had not been committed under PPAs entered into in accordance with (i) Resolutions Nos. 1193/05, 1281/06, 220/07, 1836/07 and 200/09 of the Secretariat of Energy, (ii) Resolution SEE No. 21/16 and (iii) Resolutions Nos. 136-E/16 and 213-E/16 of the former Ministry of Energy and Mining, as well as PPAs subject to a differential remuneration scheme established or authorized by the former Ministry of Energy and Mining. The offers must be accepted by CAMMESA (acting on behalf of the WEM agents demanding electric power), which entity will be the purchaser of the power under the guaranteed availability agreements (compromisos de disponibilidad garantizada). Resolution 19/17 established that such agreements may be assigned to electricity distribution companies and Large Users of the WEM once the state of emergency of the electric power sector in Argentina has ended (according to Decree No. 134/1995, such emergency was declared until December 31, 2017). Generator agents in which the Argentine Government has fully or major ownership were excluded from the scope of Resolution 19/17.
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The term of the guaranteed availability agreements in Resolution 19/17 was 3 years, and their general terms and conditions were established in Resolution 19/17.
The remuneration in favor of the generator was calculated in U.S. dollars pursuant to the formulas and values set forth in the aforementioned resolution and comprises of (i) a price for the monthly capacity availability and (ii) a price for the power generated and operated.
Resolution 19/17 also established that WEM agents that operate conventional hydroelectric power plants, pumped hydroelectric power plants and power plants using other energy resources shall be remunerated for the energy and capacity of their generation units in accordance with the values set forth in such resolution, and provided that such energy and capacity has not been committed under PPAs entered into in accordance to Resolutions SE No. 1193/05, 1281/06, 220/07, 1836/07 and 200/09, Resolution SEE No. 21/16, and Resolutions No. 136-E/16 and 213 E/16 of the former Ministry of Energy and Mining.
Fuel Purchases
On November 11, 2018, the Secretariat of Energy issued Resolution SGE No. 70/2018, which substitutes Art. 8 of Resolution 95/2013. This new resolution allows electric energy generators, self-generators, and cogenerators acting in the WEM to purchase their own fuel. However, prior commitments assumed by generators with CAMMESA for energy supply contracts are not altered by this new regulation. If generation companies opt to take this option, CAMMESA will value and pay the generators their respective fuel costs in accordance with the Variable Costs of Production (CVP) declared by each generator to CAMMESA. According to CAMMESA’s procedure, the machines with the lower CVPs are dispatched first, and consequently, may produce more electric energy. The Agency in Charge of Dispatch (Organismo Encargado del Despacho or “OED” using the Spanish acronym) -CAMMESA- will continue to supply the fuel for those generation companies that do not elect to take this option.
On December 27, 2019, the Ministry of Productive Development issued Resolution MDP No. 12/2019, repealing Resolution SGE No. 70/2018 and restoring Art. 8 of Resolution SE 95/2013. Beginning January 2020, CAMMESA became the only fuel supplier for generation companies, except for (i) thermal units that had prior commitments with CAMMESA for energy supply contracts with their own fuel management and (ii) thermal units under the Energía Plus regulatory framework, authorized under Resolution SE No.1281/06 to supply energy to large private users.
It is important to note that, pursuant to Resolution No. 21/2025, as of February 1, 2025, the provisions of Resolution No. 1281/2006 that implemented the so-called “Energía Plus Service” are repealed. Existing contracts under this scheme will continue to be transacted under the same conditions until their expiration. The execution of new contracts or the renewal of contracts in the MEM term market under the “Energía Plus Service” modality will be permitted only until October 31, 2025.
In addition, Resolution No. 21/2025 modified the fuel supply regime set forth in Article 8 of Resolution No. 95/2013, effective March 1, 2025. For further details, please refer to section “Item 4.B. Business Overview—The Argentine Electric Power Sector—Remuneration Scheme—The Current Remuneration Scheme”.
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During 2024, 2023 and 2022 Central Puerto purchased the necessary fuel (natural gas) for the operation of some of its thermal units, as shown below:
|
2024 |
2023 |
2022 |
|||||||||||
|
CTM m3 |
San Lorenzo m3 |
CTM m3 |
San Lorenzo m3 |
CTM m3 |
San Lorenzo m3 |
||||||||
| Jan | 15,875,447 | 5,270,000 | 14,881,340 | 5,201,755 | 15,819,284 | (5,144,019 | ) | ||||||
| Feb | 14,329,457 | 5,160,000 | 13,218,212 | 4,029,560 | 16,532,233 | 4,558,623 | |||||||
| Mar | 15,078,511 | 170,000 | 13,847,079 | 6,085,248 | 18,642,353 | 7,071,553 | |||||||
| Apr | 14,630,228 | 3,830,000 | 12,087,791 | 6,183,619 | 17,627,279 | 7,148,204 | |||||||
| May | 15,535,218 | 7,912,086 | 12,286,031 | 6,215,019 | 15,372,168 | 6,369,824 | |||||||
| Jun | 18,491,939 | 9,936,704 | 15,856,441 | 7,371,532 | 16,704,685 | 8,010,750 | |||||||
| Ju | 18,827,945 | 9,111,852 | 15,951,415 | 5,275,497 | 16,013,669 | 7,829,394 | |||||||
| Aug | 19,027,543 | 7,722,685 | 18,852,520 | 6,491,747 | 17,412,873 | 8,755,000 | |||||||
| Sep | 15,299,751 | 7,848,761 | 14,838,468 | 2,411,319 | 14,748,176 | 4,592,574 | |||||||
| Oct | 15,387,314 | 10,109,379 | 14,251,843 | 178,063 | 14,056,107 | 4,396,792 | |||||||
| Nov | 11,720,362 | 6,534,441 | 13,927,745 | 6,519,998 | 14,037,683 | 3,820,000 | |||||||
| Dec | 14,835,390 | 6,970,292 | 13,673,579 | 4,980,000 | 14,463,834 | 2,480,000 | |||||||
| Total |
189,039,107 |
80,576,200 |
173,672,464 |
60,943,357 |
191,430,344 |
70,176,733 |
|||||||
Prices for sales of energy under Resolution SE No. 95/13 framework were set and paid in pesos, while prices under Resolution 19/17 were set in U.S. dollars and paid in pesos at the exchange rate as of day prior to the due date of each monthly sale of energy under Resolution 19/17. In both cases, prices do not include the cost of fuel as, under these regulations, they are provided to the applicable generation company by CAMMESA free of charge.
Payments by CAMMESA to generators related to the sale of energy under the Spot Sales during each month are due 42 days following the end of such month. As a result of delays in payments from distributors due to frozen tariffs, since 2012 we have seen a delay in the full payment for the monthly transactions by CAMMESA, which completes their monthly payment up to 80 days following the end of the relevant month, and on occasion as many as 101 days following the end of the month. There are periods in which CAMMESA experienced delays in paying (for further information on the duration of these delays see “Item 11. Quantitative and Qualitative Disclosures about Market Risk—Credit Risk”).
Resolution 1/19, amended by Resolution 31/20 and subsequent regulations
On March 1, 2019, the former Secretariat of Renewable Resources and Electricity Market issued Resolution 1/19. This resolution repealed Resolution No. 19/17 in its entirety, although it maintained a remuneration scheme fixed in US Dollars.
From February 1, 2020, a new remuneration scheme for Spot Sales came into force with Resolution 31/20, the main changes were:
| · | Prices are set in Argentine pesos. | |
| · | Initial variable energy price although denominated in Argentine pesos, remained almost unchanged. The applicable exchange rate between the new price in Argentine pesos and the previous price in U.S. dollars was Ps.60 per U.S. dollar, similar to the average exchange rate during January 2020, of Ps.60.01 per U.S. dollar. | |
| · | Initial power price for energy from thermal units were approximately reduced by 16.00% and set in Argentine pesos. | |
| · | Generation units with less than 30% Utilization Factor in the last twelve months receive 60.00% of the price, compared to up to 70.00% before. Additionally, if the Utilization Factor is between the 30.00-70.00% threshold the generation units receive a linear proportion between 60.00% and 100.00% of the power price, and if the Utilization factor is 70.00% or greater, the generation units receive 100.00% of the price. |
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| · | Initial fixed power price for hydroelectric plants was approximately reduced by 45% and set in Argentine pesos. | |
| · | A new remuneration scheme for peak demand hours generation was established to partially mitigate the fixed power price, taking into consideration the equipment the generating company has. | |
| · | Since February 2021, remuneration prices described above, were updated by about 29.00% by Resolution 440/21. This new resolution also introduced other changes regarding generation revenues. | |
| · | Since February 2022, remuneration had another update, by means of Resolution No. 238/22, with a 30.00% increase since February and an additional 10.00% increase since June 2022. | |
| · | In December 2022, Resolution 826/22 adjusted the Spot Sales remunerations, providing for a retroactive 20.00% increase as of September 2022 and additional increases of 10.00%, 25.00% and 28.00% as of December 2022, February 2023 and August 2023, respectively, while also introducing changes in methodology. |
In February 2023, through Resolution No. 59/2023 the Secretariat of Energy authorized generators with combined cycle units to adhere to an agreement aimed at encouraging investments for major and minor maintenance activities in connection with these facilities (the “Agreement on Availability of Power and Improvement of Efficiency”). Through the Agreement on Availability of Power and Improvement of Efficiency, the adhering generators undertake to achieve at least 85.00% availability of average monthly power in exchange for a new power and generation price in both U.S. dollars and Argentine pesos.
In the case of power, the price was set at 2,000 US$/MW-month plus (i) 85.00% of the remuneration of power set forth in Resolution No. 826/22 in Argentine pesos (during spring and autumn) or (ii) 65.00% of the remuneration of power set forth in Resolution No. 826/22 in Argentine pesos (during summer and winter). In the case of energy, the price was set at 3.5 US$/MWh for units that use gas and at 6.1 US$/MWh for units that use alternative fuels (i.e. diesel).
On April 25, 2023, CAMMESA accepted the subscription to an agreement presented by us for all of our combined cycle units, except for the Buenos Aires unit belonging to CECO. Therefore, as from the transactions of March 2023 there was an increase in the remuneration of such units for their sales to the spot market, as described in the previous paragraph.
In the case of the Buenos Aires combined cycle, CAMMESA accepted the subscription to an agreement on July 28, 2023 (effective as from the July transactions), once it had successfully requested the Energy Secretariat to instruct CAMMESA the following regarding the aforementioned thermal unit: a) the conversion to single fuel, i.e. operation only with natural gas, eliminating the possibility of using gas oil, and b) the adaptation of the installed power in line with the real technical possibility of electricity production of the combined cycle. During October 2023, the corrective maintenance tasks of this unit were concluded; therefore, the increases in the remuneration of this unit were applied as from the transactions of October 2023.
In September 2023, the Secretariat of Energy issued Resolution 750/23, which updated the remuneration scheme set forth by Resolution 826/22 as from September 2023 of 23%.
In turn, Resolution 750/23 was later modified by means of Resolution No. 869/23, issued in October 2023 and applicable as from November of that same year including an increase of 28%.
Throughout 2024, the Secretariat of Energy issued several Resolutions, modifying the previously established value. More recently, in April 2025, the Secretariat of Energy issued Resolution No. 143/2025, modifying Resolution 113/2025, and setting forth a remuneration scheme applicable as from April 2025 including an increase of 1.5%
In short, in recent years, Spot Sales have been regulated by the following Resolutions:
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| · | Res. 19/17: from February 2017 to February 2019; |
| · | Res. 1/19: from March 2019 to January 2020; |
| · | Res. 31/2020: from February 2020 to January 2021; |
| · | Res. 440/21: from February 2021 to January 2022 (included); |
| · | Res. 238/22: from February 2022 to August 2022; |
| · | Res. 826/22: published in December 2022, which adjusted the Spot Sales remunerations, providing for a retroactive 20.00% increase as of September 2022 and additional increases of 10.00%, 25.00% and 28.00% for December 2022, February 2023 and August 2023, respectively; |
| · | Res. 59/23: issued in February 2023. This resolution partially dollarize the remuneration for combined cycle units and is still in place. |
| · | Res. 750/23: from September to October 2023, which entails a 23% increase if compared with Res. 826/22; |
| · | Res. 869/23: from November 2023 to January 2024, which entails a 28% increase if compared with Res.750/23; |
| · | Res. 9/24: as from January 2024, which entails a 74% increase if compared with Res. 869/23. |
| · | Res. 99/24: as from June 2024, which entails a 25% increase if compared with Res. 9/24. |
| · | Res. 193/24: as from August 2024, which entails a 3% increase if compared with Res. 99/24. |
| · | Res. 233/24: as from September 2024, which entails a 5% increase if compared with Res. 193/24. |
| · | Res. 285/24: as from October 2024, which entails a 3% increase if compared with Res. 233/24. |
| · | Res. 294/24: issued in October 2024. This resolution established a "Contingency and Forecast Plan for Critical Months of the 2024/2026 Period," defining measures that cover power generation, transmission, and distribution. For power generation, it includes an additional and exceptional remuneration for certain generating units. |
| · | Res. 20/24: as from November 2024, which entails a 6% increase if compared with Res. 285/24. |
| · | Res. 387/24: as from December 2024, which entails a 5% increase if compared with Res. 20/24. |
| · | Res. 603/24: as from January 2025, which entails a 4% increase if compared with Res. 387/24. |
| · | Res. 27/25: as from February 2025, which entails a 4% increase if compared with Res. 603/24. |
| · | Res. 113/25: as from March 2025, which entails a 1.5% increase if compared with Res. 27/25. |
| · | Res 143/25: as from April 2025, which entails a 1.5% increase if compared with Res. 113/25. |
For further information see “Item 4.B. Business Overview—The Argentine Electric Power Sector—Remuneration Scheme—The Current Remuneration Scheme” and “—The Previous Remuneration Schemes”.
Sales Under Contracts, Steam Sales and Others
Sales under contracts
We have sales under contracts, including (i) term market sales under contract, (ii) MATER sales under contracts, (iii) Energía Plus sales under contract; and (iv) sales of energy under the RenovAr Program. Term market sales under contract and Energía Plus sales under contract include power and energy sales from conventional sources under agreements signed with both private enterprises and government agencies. MATER sales under contracts and sales of energy under the RenovAr Program include sales of electricity generated exclusively from non-conventional sources under negotiated contracts with private and public sector counterparties, respectively. La Castellana II, Manque, Los Olivos and La Genoveva II have PPAs under the MATER framework and La Castellana I, Achiras, La Genoveva I and Guañizuil II A have PPAs under the RenovAr Program.
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Steam supply to YPF—Luján de Cuyo plant
On December 15, 2017, we signed a new steam supply contract with YPF for a period of 15 years. New cogeneration units were set in place, in order to provide YPF Lujan de Cuyo refinery with 180 tn/h of steam. Commercial operation started on October 5, 2019, this contract is denominated and invoiced in U.S. dollars. For further information on the steam supply agreements with YPF for the Luján de Cuyo plant, see “Item 5.A. Operating Results—Factors Affecting Our Results of Operations—Sales Under Contracts, Steam Sales and Others —Steam supply to YPF—Luján de Cuyo plant”.
Steam supply to T6 Industrial S.A.— San Lorenzo plant
On December 27, 2017, we entered into a 15-year steam supply agreement with T6 Industrial S.A. for the new co-generation unit at our San Lorenzo plant. The new cogeneration can supply up to 370 tn/h of steam to T6 Industrial S.A. Commercial operation started on October 31, 2021. On September 2, 2022, the parties entered into an amended and restated steam supply agreement, through which certain amendments and the purchase by Central Puerto of the real estate property in which the plant is located were agreed.
Resale of natural gas transportation capacity
The contract between us and TGS for the natural gas transportation capacity has remained effective after the La Plata Plant Sale in 2018. Pursuant to the terms of our agreement with YPF EE, we resell our gas transportation capacity to YPF EE through the resale system established by Resolution ENARGAS 419/97. The resale under such system is open to third parties and consequentially does not ensure that YPF EE will receive the gas transportation capacity needed to operate the La Plata plant. Therefore, on January 25, 2018, we requested to be registered with the Ministry of Energy and the ENARGAS as a natural gas seller to permit the resale of our gas transportation capacity to YPF EE without the risk of intervention from interested third parties. On July 20, 2018, we were effectively registered as natural gas sellers.
Forestry sales
As a result of our acquisitions in the forestry industry, carried out in December 2022 and May 2023, we have another source of revenues provided by five subsidiaries: Forestal Argentina S.A., Loma Alta Forestal S.A., EVASA, Estancia Celina S.A. and Las Misiones S.A. The year 2023 is the first one with forestry sales since Forestal Argentina S.A. and Loma Alta Forestal S.A. were acquired on December 27, 2022, and EVASA, Estancia Celina S.A. and Las Misiones S.A. were acquired on May 3, 2023. See “Item 4. Information of the Company—Recent Developments—Simplification of Corporate Structure at Central Puerto S.A.”
Electric Power Demand and Supply
Demand for electric power depends, to a significant extent, on economic and political conditions prevailing from time to time in Argentina, as well as seasonal factors. In general, the demand for electric power varies depending on weather conditions and the performance of the Argentine economy, as businesses and individuals generally consume more energy and are better able to pay their bills during periods of economic stability or growth. As a result, electric power demand is affected by Argentine Governmental actions concerning the economy, including with respect to inflation, interest rates, price controls, taxes and energy tariffs.
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The following chart shows the demand of energy for the year ended December 31, 2024:
| __________________ |
Source: CAMMESA’s seasonal programing.
| Notes:- |
| (1) | Generation by Central Puerto plants. |
During 2024, thermal generation continued to be the main source of electricity supply for Argentina, contributing 75,388 GWh (53.04%), followed by hydroelectric generation net of pumping, which contributed 33,425 GWh (23.52%), renewable generation, which contributed 22,875 GWh (16.09%) and nuclear generation, which contributed 10,449 GWh (7.35%). There were also imports to cover domestic demand, in the amount of 4,650 GWh (3.27% of the total energy supplied, 25.48% lower than in 2023) from Uruguay, Paraguay and Brazil. Hydroelectric generation in 2024 registered a 15.02% decrease when compared to 2023, mainly due to a combination of two factors: i) a change in the allocation of Yacyretá’s installed capacity and its energy generation upon Paraguay’s claim and ii) a reduction of river flows. Regarding the first factor, since August 2024, 50% of Yacyreta’s installed capacity is allocated to Argentina, whereas it used to be approximately 88% before then. Furthermore, Paraguay historically consumed a smaller portion of the energy produced at Yacyretá: while it took only 15% of the generated energy in 2023, in 2024 it started to take its full 50% share, leaving Argentina with a smaller portion of the generated energy. Thermal generation rose 3.24% mainly due to lower hydro dispatch and higher local demand during winter months. Nuclear generation registered a 16.58% increase when compared to 2023, driven by higher availability and generation of Atucha II, which had a full year of operation when compared to 2023 (the plant was re-commissioned in August 2023 after a maintenance shutdown); its generation in 2024 was 166.66% higher than 2023 levels. Finally, renewable energy generation increased 13.89% as compared to 2023, mainly due to the introduction of new wind and solar farms. In this sense, thermal generation continued to be the main source for the supply of electric power, fueled both by natural gas and by liquid fuels (diesel oil and fuel oil), as well as mineral coal, mainly during the winter months.
During 2024, generation facilities decreased their overall installed capacity from 43,773 MW in 2023 to 43,350 MW, a decrease of 1% or 423 MW. The variation results from the installation of new power facilities, a reduction in installed capacity and adjustments/repowering to power plants already in operations. The contraction of 423 MW is broken down as follows: (i) a rise of 925 MW of renewable sources, of which 614 MW corresponds to wind farms, 307 MW to solar plants and 4 MW to biogas power plants; (ii) a reduction of 1,195 MW in hydraulic sources and (iii) a net decrease of 153 MW in thermal sources, where a contraction was recorded in gas turbines (470 MW), steam turbines (470 MW) and diesel engines (101 MW), being all partially offset by an addition of 888 MW in combined cycles. The decline of 1,195 MW in hydro installed capacity is basically explained by the aforementioned reassessment of Yacyretá’s power availability between Argentina and Paraguay.
The State of Emergency of the Argentine Electric Power Sector
The electric power sector has been significantly affected by the Public Emergency Law and the measures adopted as a consequence thereof. The emergency has been subsequently declared by means of (i) Decree No. 134/2015, (ii) the Solidarity Law and (iii) Decree No. 55/2023, extended by Decree No. 1023/2024, that shall be effective until July 9, 2025. See “Item 4.B. Business Overview—The Argentine Electric Power Sector—Structure of the Industry—Emergency of the Electric Power Sector”.
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Public Bid Process for Thermal Energy Generation Units
Pursuant to Resolution SEE No. 21/16, the former Secretariat of Electric Energy called for bids to install new thermal generation units to become operational between Summer 2016/2017 (some of which are now operational) and Summer 2017/2018. The power generation companies awarded the bids entered into a PPA with CAMMESA, denominated in U.S. dollars, and electric power and capacity from these units will be remunerated at the price indicated in the bid and under the terms established in Resolution SEE 21/16. See “Item 4.B. Business Overview—The Argentine Electric Power Sector—Renewable Energy—Call for Bids for New Thermal Generation Capacity and Associated Electricity Generation”.
Pursuant to Resolution SEE No. 287-E/17, the Argentine Government called for proposals for the supply of electric power to be generated through existing units, the conversion of open combined cycle units into closed combined cycle units or the installation of co-generation units. The main objectives behind this process were to (i) increase the supply of electric power generation from thermal generation units and (ii) strengthen the reliability of the Argentine electric power system with efficient generation units that have their own permanent and guaranteed fuel supply thus reducing the need for electric transportation and lowering the costs of the Argentine Government and the WEM. See “Item 4.B. Business Overview—The Argentine Electric Power Sector—Renewable Energy—Thermal Power Tender Offer – SEE Resolution 287/2017”.
Public Bid Process for New Renewable Energy Generation Units
On March 22, 2016, the Secretariat of Electric Energy called for bids to install 1,000 MW of new renewable energy units (the “RenovAR Program”). This bid process is governed by Law No. 27,191 and Decree No. 531/16, which encouraged the increase of energy generation from renewable sources by providing, among other things, significant tax benefits. See “Item 4.B. Business Overview—The Argentine Electric Power Sector—Structure of the Industry—RenovAR (Round 1, Round 1.5 and Round 2): Bidding Process for Renewable Energy Generation Projects”.
During 2015, electric power generation from renewable sources was 0.40% of the total supply of electric power in Argentina. As established in Section 2 of the Law referenced above, the purpose of this law is to have these renewable energy sources account for, at least, 8.00% of Argentina’s electric power consumption by December 31, 2017. During the second stage of the “National System for the Promotion of the Use of Renewable Energy Sources for Electricity Production,” the goal is to have renewable energy sources account for 12.00% of Argentina’s electric power consumption by December 31, 2019, 16.00% by December 31, 2021, 18.00% by December 31, 2023, and 20.00% by December 31, 2025, pursuant to Law No. 27,191.
The above framework provides a significant growth opportunity in the field of clean and renewable energies, especially considering that Large Users will be required to purchase energy from renewable sources in the same percentages mentioned above and will be subject to penalties if they do not comply with these requirements.
Resolution No. 136-E/16, issued by the former Ministry of Energy and Mining and published in the Official Gazette on July 26, 2016, launched the public auction process for submitting bids for Round 1 of the RenovAR Program. On October 7, 2016, the former Ministry of Energy and Mining finalized the auction process for the installation of new renewable energy units and, under Resolution No. 136-E/16, granted awards in the amount of 1,108.65 MW, with an average price of US$59.58, including one biomass project, 12 wind energy projects and four solar energy projects. Of these, we were awarded one wind energy project for 99 MW of generating capacity at the price of US$61.50 per MWh, as further explained below in “Expansion of Our Generating Capacity”.
On October 31, 2016, the former Ministry of Energy and Mining, pursuant to Resolution No. 252/16, launched Round 1.5 of the RenovAR Program as a continuation of Round 1. On November 25, 2016, the former Ministry of Energy and Mining finalized the auction process for the installation of new renewable energy units and, under Resolution No.281-E/16, granted awards in the amount of 1,281.5 MW, with an average price of US$53.98 per MWh, including 10 wind energy projects and 20 solar energy projects. Of these, we were awarded one wind energy project for 48 MW of generating capacity at the price of US$59.38 per MWh, as further explained below in “Proposed Expansion of Our Generation Capacity”.
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Following Rounds 1 and 1.5 of the RenovAR Program, the former Ministry of Energy and Mining pursuant to Resolution No. 275-E/17, launched Round 2 of the programs on August 17, 2017, and granted awards in the amount of 2,043 MW of renewable power capacity.
We submitted bids for Round 2 of the RenovAR Program on October 19, 2017, and, on November 29, 2017, we were awarded a wind energy project called, “La Genoveva I,” which allowed us to add an additional capacity of 86.6 MW to our portfolio and to continue to build a presence in the renewable energies sector.
Expansion of Our Generating Capacity
The chart below shows the evolution of our power generating capacity since 2017:
| __________________ |
Source: CAMMESA’s seasonal programing.
| Notes:- |
| (1) | Effective as of January 5, 2018, we sold the La Plata plant to YPF EE. For further information, see “Item 4.A. History and development of the Company—La Plata Plant Sale”. |
| (2) | On June 14, 2019 we purchased the Brigadier Lopez plant. |
| (3) | On February 17, 2023, Proener acquired 75.68% of the capital and voting stock of Central Costanera. On April 26, 2024, the Secretariat of Energy requested CAMMESA to disconnect the steam turbines COSTTV04 and COSTTV06 (470 MW in total) of Central Costanera, following a request originally made by Enel, former owner of such power plant. In May 2024 units COSTTV04 (120 MW) and COSTTV06 (350 MW), were officially decommissioned through Resolution 57/2024. This decision had no impact on our revenues. |
| (4) | On October 18, 2023, our subsidiary Proener, acquired 100% of the capital stock and votes of Cordillera Solar and Scatec Equinor Solutions Argentina S.A. (currently, CP Servicios Renovables S.A.), owner and operator, respectively, of a photovoltaic plant located in the Province of San Juan. |
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As of December 31, 2024, we had an aggregate installed capacity of 6,703 MW. Our installed capacity increased over the last two years, mainly as a result of the acquisition of Central Costanera (in February 2023) and the Guañizuil II solar farm (in October 2023). Currently, although power capacity is considered to be enough to supply the demand, there is a need for the incorporation of new efficient capacity in Argentina, from both conventional and renewable sources, in order to replace old inefficient units.
In recent years, we acquired 130 hectares of land in the north of the Province of Buenos Aires, in a convenient location for fuel delivery and future potential connection to power transmission lines. However, we cannot predict if or when the Argentine Government will open new auctions of new capacity and because of the competition among generation companies in these auction processes, we cannot predict whether we will be awarded the projects and whether we will be able to utilize these assets as intended.
We are also currently exploring several other options to diversify our generation assets to include sustainable power generation sources, including the following:
| · | We successfully participated in CAMMESA’s auction for 10 MW of dispatch priority for our Parque Solar San Carlos Project under the MATER framework, located in San Carlos, Province of Salta. "See Item 4. A History and development of the Company—Renewable energy projects" |
| · | As of the date of this annual report, works for the conversion of the Brigadier Lopez open cycle thermal plant into a combined cycle have started and are expected to be completed by the end of 2025. In February 2024, the agreement with a constructor, SACDE, was formalized. Under such agreement, all the works and services necessary to complete the project were defined, and the “notice to proceed” was delivered on February 26, 2024. The works are expected to be completed by the end of 2025. The plant, which has a dual-fuel Siemens SGT5-4000 F gas turbine with a total nominal power of 280 MW, is expected to increase its capacity by 140 MW by virtue of this project. This means that the plant’s total power output will reach 420 MW. |
| · | On October 18, 2023, our subsidiary, Proener, acquired 100% of the capital stock and votes of Cordillera Solar and Scatec Equinor Solutions Argentina S.A. (currently, CP Servicios Renovables S.A.), owner and operator, respectively, of a photovoltaic plant located in the Province of San Juan. See Item 4. Information of the Company—Recent developments— Transfer of Cordillera Solar VIII S.A. and CP Servicios Renovables S.A.’ shares”. |
| · | On February 17, 2023, Proener acquired from Enel Argentina 75.68% of the capital and voting stock of Central Costanera. As of the date of this annual report, the Central Costanera thermal power plant located in the city of Buenos Aires consists of four turbo-steam units with an installed capacity of 661 MW and two combined cycle power plants with a capacity of 1,128 MW. |
We believe we are well-positioned to identify and execute new growth opportunities. However, we cannot assure you that the Argentine Government will open new auction processes or that our bids will be successful or that we will be able to enter into new PPAs in the future. See “Item 3D. Risk Factors—Risks Relating to our Business— Factors beyond our control may affect or delay the completion of the awarded projects or alter our plans for the expansion of our existing plants”.
Sale of the La Plata Plant
On December 20, 2017, YPF EE accepted our offer to sell the La Plata plant for a total sum of US$31.5 million (without VAT), subject to certain conditions. On February 8, 2018, after such conditions were met, the plant was transferred to YPF EE, including generation assets, personnel and agreements related to the operation and/or maintenance of La Plata plant’s assets, with effective date January 5, 2018. Consequently, as of December 31, 2017, the La Plata plant was classified as a disposal group held for sale and its respective results were classified for the years ended December 31, 2018, and 2017 as a discontinued operation.
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Presentation of Financial Statements in Pesos
Critical Accounting Policies
This discussion and analysis of our financial condition and results of operations is based upon our Audited Consolidated Financial Statements, which have been prepared in accordance with IFRS Accounting Standards. The preparation of our Audited Consolidated Financial Statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent liabilities.
Critical accounting policies are those that reflect significant judgments, estimates or uncertainties and could potentially lead to materially different results under different assumptions and conditions. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising beyond our control. Such changes are reflected in the assumptions when they occur. Therefore, actual results may differ from these estimates under different assumptions or conditions. These assumptions are reviewed at the end of each reporting period.
We have described below what we believe are our most critical accounting policies that involve a high degree of judgment and/or estimates and the methods of their application. For further information on the accounting policies and the methods used in the preparation of the Audited Consolidated Financial Statements, see Note 2.2 to our Audited Consolidated Financial Statements.
Business Combinations
Business combinations are accounted for using the acquisition method when the Group takes effective control of the acquired company.
The Group will recognize in its financial statements the acquired identifiable assets, the assumed liabilities, any non-controlling interest and, if any, goodwill according to IFRS 3.
The acquisition cost is measured as the aggregate of the transferred consideration, measured at fair value on that date, and the amount of any non-controlling interest in the acquiree. The Group will measure the noncontrolling interest in the acquiree at fair value or at the proportional interest in the identifiable net assets of the acquiree.
If the business combination is made in stages, the Group will measure again its previous holding at fair value at the acquisition date and will recognize income or loss in the consolidated statement of comprehensive income.
Goodwill is measured at cost, as the excess of the transferred consideration regarding the acquired identifiable assets and the net assumed liabilities of the Group. If this consideration is lower than the fair value of the identifiable assets and of the assumed liabilities, the difference is recognized in the consolidated statement of income. If the fair value of the net assets acquired is higher than the consideration paid, the Group reassesses whether it has properly identified all the assets acquired and all the liabilities assumed and reviews the procedures used to measure the amounts to be recognized at the acquisition date. If the reassessment still results in an excess of the fair value of the net assets acquired in comparison to the consideration paid, then the gain is recognized in the consolidated statement of income.
As described in Note 20.5 to our Audited Consolidated Financial Statements, on February 17, 2023, the Group acquired Central Costanera S.A. The business combination was accounted for using the "acquisition method" provided for in IFRS 3. As a result of the application of this method, the Group determined that the consideration transferred was lower than the fair value of the assets acquired and liabilities assumed at the acquisition date. Therefore, the Group recognized a gain from bargain purchase amounting to Ps.74.22 billion in the consolidated statement of income for the year ended December 31, 2023. During 2024, the Group has revised the preliminary allocation of the price and the valuation at fair value of the identifiable assets and liabilities assumed made in 2023 and no modifications have been identified.
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As described in Note 20.6 to our Audited Consolidated Financial Statements, on May 3, 2023, the Group acquired the companies Empresas Verdes Argentina S.A., Las Misiones S.A. and Estancia Celina S.A. The business combination was accounted for using the "acquisition method" provided for in IFRS 3. As a result of the application of this method, the Group determined that the consideration transferred was lower than the fair value of the assets acquired and liabilities assumed at the acquisition date. Therefore, the Group recognized a gain from bargain purchase amounting to Ps.83.97 billion in the consolidated statement of income for the year ended December 31, 2023. During 2024, the Group has revised the preliminary allocation of the price and the valuation at fair value of the identifiable assets and liabilities assumed made in 2023 and no modifications have been identified.
As described in Note 20.6 to our Audited Consolidated Financial Statements, on December 27, 2022, the Group acquired the companies Forestal Argentina S.A. and Loma Alta Forestal S.A. The business combination was accounted for using the “acquisition method” set forth in IFRS 3. As a result of the application of such method, the Group considered that the consideration transferred was lower than the fair value of the assets acquired and liabilities assumed at the acquisition date. Therefore, the Group recognized a gain from bargain purchase amounting to Ps. 82.56 billion in the consolidated statement of income for the year ended December 31, 2022. During 2023, the Group reviewed the preliminary allocation of the price and the valuation at fair value of identifiable assets and assumed liabilities made in 2022, and no modifications were identified.
Impairment of Property, Plant and Equipment and Intangible Assets
The Group assesses at each reporting period-end whether an existing event or one that took place after year end and provides additional evidence of conditions that existed at the end of the reporting period, indicates that an individual component or a group of property, plant and equipment and/or intangible assets with limited useful lives may be impaired. If any indication exists, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of the fair value less costs to sell, and the value-in-use. That amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets; in which case, the cash flows considered are the ones from the cash-generating unit (“CGU”) where such asset belongs.
Where the carrying amount of an individual asset or CGU exceeds its recoverable amount, the individual asset or CGU, as the case may be, is considered impaired and is written down to its recoverable amount.
In assessing value in use of an individual asset or CGU, the estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the individual asset or CGU, as the case may be.
In determining fair value less costs to sell, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used. These calculations are verified by valuation multiples, quoted values for similar assets on active markets and other available fair value indicators, if any.
The Group assesses if environmental risks, including physical and transition risks, could have a significant impact. In such a case, these risks are included in the cash flows when calculating the value-in-use. See Note 23 to our Audited Consolidated Financial Statements for more information regarding the impact of environmental risks.
The Group bases its impairment calculation on detailed budgets and forecast calculations which are prepared separately for each of the Group’s CGU to which the individual assets are allocated.
Impairment losses of continuing operations are recognized in a specific line of the consolidated statement of income.
In addition, regarding the assets for which an impairment loss had been booked, as of each reporting period-end, an assessment is made whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased.
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Should there be such triggering event, the Group makes an estimate of the recoverable amount of the individual asset or of the cash generating unit, as the case may be.
A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the individual assets or CGU’s recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount of the asset or CGU does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of the related depreciation or amortization, had no impairment loss been recognized for the asset or CGU in prior periods. Such reversal is recognized in the statement of income in the same line in which the related impairment charge was previously recognized, unless the asset is carried at a revalued amount, in which case, the reversal is treated as a revaluation increase.
The Group has identified a triggering of potential impairment of its property, plant and equipment and/or intangible assets with finite useful lives due to the uncertainty over the evolution of rates in relation to the evolution of the increase of costs.
In order to measure the recoverability of its conventional and renewable Electric Power Generation property, plant and equipment and its intangible assets with finite useful lives and with indicators of impairment, the Group has used the value in use of such assets, except for the generating group classified as “Gas turbines” and the land on which the Puerto Nuevo and Nuevo Puerto thermoelectric plants are located, for which the Group has used the fair value less cost of sale. As a result of the recoverability analysis, the Group has concluded that the net book value of the assets is recoverable, except for the assets comprising the cash generating unit corresponding to the Brigadier Lopez thermoelectric station, the Terminal 6 San Lorenzo cogeneration unit, the Luján de Cuyo combined cycle power plant, the Buenos Aires combined cycle power plant located in the Costanera plant and the Manque and La Genoveva wind farms, and the generator group classified under the "Turbines" category". During 2023, the Group recorded a Ps.36,220,872 million and Ps.4,811,296 million impairment loss on PP&E and intangible assets, respectively, related to the Brigadier Lopez thermoelectric plant. Also, the Company recorded a gain on the reversal of PP&E impairment of Ps.136,621,999 million related to the Luján de Cuyo combined cycle, the Terminal 6 San Lorenzo cogeneration unit, the Manque and La Genoveva wind farms, a gas turbine and land, and a gain of Ps.214,266 million on the reversal of intangible assets impairment related to the Manque and La Genoveva wind farms.
CGUs Thermoelectric Station Brigadier López, Luján de Cuyo Combined Cycle Power Plant, Terminal 6 San Lorenzo cogeneration unit, Buenos Aires Combined Cycle Power Plant and Manque and La Genoveva Wind Farms
The Group estimated that the book value of the assets related to the Terminal 6 San Lorenzo cogeneration unit exceeded its recoverable value by Ps.36.56 billion for which reason an impairment charge was determined in property, plant and equipment under the headings "Electric power facilities and other equipment", "Land and buildings" and "Others", which was charged to the heading "(Impairment) / reversal of impairment of property, plant and equipment and intangible assets " in the consolidated statement of income for the year ended December 31, 2024. After recognizing such impairment, the net book value of property, plant and equipment of the Terminal 6 San Lorenzo cogeneration unit is Ps.419.66 billion.
The Group estimated that the book value of the assets related to the Thermoelectrical Station Brigadier Lopez exceeded its recoverable value by Ps.16.99 billion for which reason an impairment charge was determined in property, plant and equipment for Ps.15.80 billion under the headings "Electric power facilities and other equipment", "Land and buildings", "Construction in progress" and "Others" and in intangible assets for Ps.1.19 billion, which was charged to the heading "Impairment / (Reversal) of property, plant and equipment and intangible assets" in the consolidated statement of income for the year ended December 31, 2024. After recognizing such impairment, the net book value of property, plant and equipment and intangible assets of the Brigadier Lopez thermoelectrical station is Ps.164.25 billion and Ps.12.36 billion, respectively.
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The Group estimated that the book value of the assets related to the combined cycle plant located in Luján de Cuyo exceeded its recoverable value by Ps.1.27 billion for which reason an impairment charge was determined in property, plant and equipment under the headings "Electric power facilities and other equipment", "Land and buildings" and "Others", which was charged to the heading "(Impairment) / reversal of impairment of property, plant and equipment and intangible assets " in the consolidated statement of income for the year ended December 31, 2024. After recognizing such impairment, the net book value of property, plant and equipment of the combined cycle plant located in Luján de Cuyo is Ps.49.98 billion.
The Group estimated that the book value of the assets related to the Buenos Aires combined cycle plant located at the Costanera plant exceeded its recoverable value by Ps.4.77 billion for which reason an impairment charge was determined in property, plant and equipment under the headings "Electric power facilities and other equipment", "Land and buildings" and "Others", which was charged to the heading "(Impairment) / reversal of impairment of property, plant and equipment and intangible assets " in the consolidated statement of income for the year ended December 31, 2024. After recognizing such impairment, the net book value of property, plant and equipment of the Buenos Aires combined cycle plant located at the Costanera plant is Ps.6.29 billion.
The Group estimated that the book value of the assets related to the Manque wind farm exceeded its recoverable value by Ps.4.49 billion for which reason an impairment charge was determined in property, plant and equipment for Ps.4.49 billion under the headings "Electric power facilities and other equipment", "Land and buildings", "Wind turbines" and "Others" and in intangible assets for Ps.1.93 million, which was charged to the heading "(Impairment) / reversal of impairment of property, plant and equipment and intangible assets" in the consolidated statement of income for the year ended December 31, 2024. After recognizing such impairment, the net book value of property, plant and equipment and intangible assets of the Manque wind farm is Ps.74.22 billion and Ps.31.83 million, respectively.
The Group estimated that the book value of the assets related to the La Genoveva wind farm exceeded its recoverable value by Ps. 25.43 billion for which reason an impairment charge was determined in property, plant and equipment for Ps. 25.28 billion under the headings "Electric power facilities and other equipment", "Land and buildings", "Wind turbines" and "Others" and in intangible assets for Ps.0.15 billion, which was charged to the heading "(Impairment) / reversal of impairment of property, plant and equipment and intangible assets" in the consolidated statement of income for the year ended December 31, 2024. After recognizing such impairment, the net book value of property, plant and equipment and intangible assets of the La Genoveva wind farm is Ps.103.48 billion and Ps.0.60 billion, respectively.
Key assumptions to estimate the value in use are the following:
– Sales price: the sale price has been determined for the budgeted period on the basis of the energy sales prices arising from the current resolutions issued by the Ministry of Energy adjusted for projections of price increases and on the basis of the power purchase agreements entered into. In this regard, the Group considered different weighted alternatives in relation to the evolution of energy and power prices that remunerate conventional thermoelectrical power generation units, which implied the development of different scenarios with different estimates of the expected cash flows and assigning probabilities of occurrence based on the Group's experience and expectations regarding the outcome of the uncertainties involved.
Other relevant assumptions are described below:
– Costs: costs have been determined on the basis of operating costs incurred in the past, the most significant cost being maintenance, which was estimated under the terms of the contracts in force with suppliers Siemens Energy and Vestas Argentina.
–Discount rate: it represents the current market assessment of the specific risks of the Company, taking into consideration the time-value of money. Discount rate calculation is based on the circumstances of the market participants and it is derived from the weighted average cost of capital (WACC). The WACC rate takes into consideration both debt and equity. The cost of equity is derived from the expected return on investment by market participant investors, whereas the cost of debt is based on the conditions of the debt which market participants could access to. The specific risks of the operational segment are incorporated by applying individual beta factors, which are annually assessed from the available public information of the market.
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Discount rates used to determine the value in use as of December 31, 2024 were 11.30% and 11.50% after income tax, depending on the term of the future cash flows.
Any increase in the discount rate would entail an additional impairment loss for the cash-generation units Thermoelectrical Station Brigadier López, Terminal 6 San Lorenzo cogeneration unit, Luján de Cuyo combined cycle plant, Buenos Aires combined cycle plant located at the Costanera plant and Manque and La Genoveva wind farms.
–Macroeconomic variables: estimated inflation and devaluation rates, as well as exchange rates, were obtained from external sources, which are well known consulting firms dedicated to the local and global economic analysis, widely experienced in the market.
The Luján de Cuyo combined cycle units, the Brigadier Lopez thermoelectric plant, the Buenos Aires combined cycle unit located at the Costanera plant and the Terminal 6 San Lorenzo cogeneration unit belong to the electric power generation from conventional sources operating segment while wind farms Manque and La Genoveva belong to the electric power generation from renewable sources operating segment.
Gas turbines
The Group has reviewed during the 2024 financial year the recoverability of the turbines as individual assets and has estimated that the book value of the General Electric generator group, which is stored in the facilities of the Nuevo Puerto plant, exceeds its recoverable value, for which a charge for impairment of property, plant and equipment was determined for Ps.12.57 billion within the heading "Turbines" and which was charged under the heading "(Impairment) / reversal of impairment of property, plant and equipment and intangible assets" of the consolidated statement of income for the year ended December 31, 2024.
To determine the recoverable value of this generating group, the Group has used the fair value less costs to sell.
After recognizing such impairment, the book value of the General Electric generator group amounts to Ps.22.05 billion.
New standards and interpretations adopted
As from the fiscal year beginning January 1, 2024, the Group has applied for the first time certain new and/or amended standards and interpretations as issued by the IASB. Below is a brief description of the new and/or amended standards and interpretations adopted by the Group and their impact on these consolidated financial statements.
Amendments to IAS 1: Classification of Liabilities as Current or Non-current
In January 2020 and October 2022, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the requirements for classifying liabilities as current or non-current. The amendments clarify: (i) the meaning of a right to defer settlement; (ii) that a right to defer must exist at the end of the reporting period; (iii) that classification is unaffected by the likelihood that an entity will exercise its deferral right and (iv) that only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a liability not impact its classification.
In addition, a requirement has been introduced to disclose when a liability arising from a loan agreement is classified as non-current and the entity’s right to defer settlement is contingent on compliance with future covenants within twelve months.
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These amendments have not had a significant impact on the Group's financial statements.
Supplier Finance Arrangements - Amendments to IAS 7 and IFRS 7
In May 2023, the IASB issued amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures to clarify the characteristics of supplier finance arrangements and require additional disclosure of such arrangements. The disclosure requirements in the amendments are intended to assist users of financial statements in understanding the effects of supplier finance arrangements on an entity’s liabilities, cash flows and exposure to liquidity risk.
These amendments have not had a significant impact on the Group's financial statements.
Amendments to IFRS 16: Lease liability in subsequent sale and leaseback
In September 2022, the IASB issued amendments to IFRS 16 to clarify the requirements a seller-lessee uses to measure liabilities in a leaseback from a subsequent sale and leaseback transaction to guarantee the seller-lessee does not recognize any amount of the gain or loss that relates to the right of use it retains.
These amendments have not had a significant impact on the Group's financial statements.
IFRS Accounting Standards as issued by the International Accounting Standards Board (IASB) issued but not yet effective
The following new and/or amended standards and interpretations have been issued but were not effective as of the date of issuance of these consolidated financial statements of the Group. In this sense, only the new and/or amended standards and interpretations that the Group expects to be applicable in the future are indicated. In general, the Group intends to adopt these standards, as applicable when they become effective.
Lack of interchangeability - Amendments to IAS 21
In August 2023, the IASB issued amendments to IAS 21 Effects of Changes in Foreign Currency Exchange Rates to clarify when entities should assess whether a currency is interchangeable with another currency and when it is not, and how an entity determines the exchange rate to be applied when a currency is not interchangeable. In addition, the amendments require information that allows users of their financial statements to assess how the lack of interchangeability of a currency affects or is expected to affect its financial performance, financial position and cash flows.
The amendments will take effect for annual periods beginning on or after January 1, 2025. Early application is allowed as long as this fact is disclosed. When applying the modifications, the entities will not be able to re-express the comparative information.
The amendments are not expected to have a material impact on the Group's financial statements.
IFRS 18 Presentation and disclosure in the financial statements
In April 2024, the IASB issued IFRS 18, which replaces IAS 1 Presentation of Financial Statements. IFRS 18 introduces new requirements for the presentation of information within the statement of income, including specific totals and subtotals. Additionally, entities must classify all income and expenses within the statement of income into one of five categories: operating activities, investing activities, financing activities, income tax, and discontinued operations, with the first three categories being new.
It also requires entities to disclose newly defined performance measures by management, subtotals of income and expenses, and includes new requirements to aggregate and disaggregate financial information based on the “functions” identified from the primary financial statements and notes.
Limited scope amendments to IAS 7 Statement of Cash Flows were issued, which include changing the starting point for determining cash flows generated by operations using the indirect method, from “net profit or loss” to “operating profit or loss” and removing the optionality around the classification of cash flows from dividends and interest. Consequently, new amendments to many other standards were made.
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IFRS 18 and the amendments to other standards are effective for periods beginning on or after January 1, 2027; however, early application is allowed as long as this fact is disclosed. IFRS 18 will be applied retrospectively.
The Group is currently working to identify all the effects that the amendments will have on the primary financial statements and notes to the financial statements.
IFRS 19 Subsidiaries without Public Accountability: Disclosures
In May 2024, the IASB issued IFRS 19, which allows eligible entities to opt for reduced disclosure requirements while still applying the recognition, measurement, and presentation requirements of other IFRS Accounting Standards as issued by the International Accounting Standards Board (IASB). To be eligible, at the end of the reporting period, the entity:
(i) must be a subsidiary as defined by IFRS 10, (ii) must not have public accountability, and (iii) must have a parent entity (either ultimate or intermediate) that prepares consolidated financial statements that are available for public use and comply with IFRS Accounting Standards as issued by the International Accounting Standards Board (IASB).
IFRS 19 is effective for periods beginning on or after January 1, 2027, with early application permitted.
Since the Group's equity instruments are publicly traded, the Group cannot opt to apply IFRS 19.
Segment Reporting
As of December 31, 2024, we divided our business into four segments: electric power generation from conventional sources, electric power generation from renewable sources, natural gas transport and distribution, and forest activity. Management and operations of thermal plants are not included in these segments given that such information is not material for our business operations.
Results of Operations for the Years Ended December 31, 2024, 2023 and 2022
We discuss below: (i) our results of operations for the year ended December 31, 2024, as compared with our results of operations for the year ended December 31, 2023; and (ii) our results of operations for the year ended December 31, 2023, as compared with our results of operations for the year ended December 31, 2022.
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| Year ended December 31, | Change December 31, | |||||||||
| 2024 | 2023 | 2022 | 2024/2023 | 2023/2022 | ||||||
| (in thousands of Ps.) | (in percentages) | |||||||||
| Revenues | 738,169,736 | 682,837,408 | 687,576,975 | 8.10% | (0.69%) | |||||
| Cost of sales | (446,527,758) | (457,666,072) | (361,599,896) | (2.43%) | 26.57% | |||||
| Gross income | 291,641,978 | 225,171,336 | 325,977,079 | 29.52% | (30.92%) | |||||
| Administrative and selling expenses | (76,842,415) | (69,147,996) | (50,637,116) | 11.13% | 36.56% | |||||
| Other operating income | 125,660,284 | 517,637,711 | 243,541,206 | (75.72%) | 112.55% | |||||
| Other operating expenses. | (41,174,929) | (32,945,002) | (4,083,382) | 24.98% | 706.81% | |||||
| Impairment reversal / (Impairment) of property, plant and equipment and intangible assets | (102,081,470) | 95,804,097 | (95,098,378) | (206.55%) | (200.74%) | |||||
| Operating income | 197,203,448 | 736,520,146 | 419,699,409 | (73.22%) | 75.49% | |||||
| (Loss) Gain on net monetary position | (18,847,725) | (275,496,226) | (206,580,239) | (93.16%) | 33.36% | |||||
| Finance income | 117,323,311 | 501,300,202 | 173,182,862 | (76.60%) | 189.46% | |||||
| Finance expenses | (171,609,857) | (776,924,832) | (294,669,527) | (77.91%) | 163.66% | |||||
| Share of the profit of associates | 16,129,657 | 13,317,944 | 756,348 | 21.11% | 1660.82% | |||||
| Gain from bargain purchase | 2,513,240 | - | - | 100.00% | 0.00% | |||||
| Results from acquisition of shareholdings in companies.. | - | 158,195,167 | 82,557,007 | (100.00%) | 91.62% | |||||
| Income before income tax | 142,712,074 | 356,912,401 | 174,945,860 | (60.01%) | 104.01% | |||||
| Income tax for the year | (81,457,995) | (39,062,716) | (45,571,893) | 108.53% | (14.28%) | |||||
| Net (loss) income for the year | 61,254,079 | 317,849,685 | 129,373,967 | (80.73%) | 145.68% | |||||
Revenues
from Ordinary Activities
| Year ended December 31, | Change December 31, | |||||||||
| 2024 | 2023 | 2022 | 2024/2023 | 2023/2022 | ||||||
| (in thousands of Ps.) | (in percentages) | |||||||||
| Revenues from Spot Sales(1) | 356,845,619 | 338,674,044 | 272,413,513 | 5.37% | 24.32% | |||||
| Sales under contracts(2) | 298,569,226 | 285,298,184 | 365,231,351 | 4.65% | (21.89%) | |||||
| Steam sales(3) | 39,511,074 | 32,206,896 | 33,282,307 | 22.68% | (3.23%) | |||||
| Resale of gas transport and distribution capacity | 6,086,260 | 4,046,251 | 4,765,637 | 50.42% | (15.10%) | |||||
| Forestry Segment | 21,849,750 | 12,663,419 | - | 72.54% | 100.00% | |||||
| Revenues from CVO thermal plant management | 15,307,807 | 9,948,614 | 11,884,167 | 53.87% | (16.29%) | |||||
| Total revenues from ordinary activities | 738,169,736 | 682,837,408 | 687,576,975 | 8.10% | (0.69%) | |||||
| __________________ |
| Notes:- |
| (1) | Includes sales of energy and power to CAMMESA remunerated under Resolution No. 440/21, Resolution No. 238/22, Resolution No. 826/22, Resolution No. 59/23, Resolution No. 750/23, Resolution 869/2023, Resolution No. 9/2024, Resolution No. 99/2024, Resolution No, 193/2024, Resolution No. 233/2024, Resolution No. 285/2024, Resolution No. 20/2024, Resolution No. 294/2024 and Resolution No. 387/2024 (See “Item 4.B. Business Overview—The Argentine Electric Power Sector—Remuneration Scheme”). |
| (2) | Includes (i) term market sales under contracts and, (ii) energy sold under the Energía Plus, (iii) contracts under the MATER framework and (iv) RenovAr Program sales under contracts (for further information regarding term market sales under contract, see “Item 4.B. Business Overview—Our Customers”). |
| (3) | Includes steam sold under steam sale contract with YPF from the Luján de Cuyo Plant and Terminal 6 Industrial S.A. from San Lorenzo cogeneration plant. |
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Revenues
from Segments
| Year ended December 31, | Change December 31, | |||||||||
| 2024 | 2023 | 2022 | 2024/2023 | 2023/2022 | ||||||
| (in thousands of Ps.) | (in percentages) | |||||||||
| Electric power generation from conventional sources | 571,076,945 | 535,915,417 | 547,092,042 | 6.56% | (2.04%) | |||||
| Electric power generation from renewable sources | 123,848,974 | 120,263,707 | 123,835,132 | 2.98% | (2.88%) | |||||
| Resale of gas transport and distribution capacity | 497,630,020 | 322,627,136 | 359,587,647 | 54.24% | (10.28%) | |||||
| Forestry Segment | 21,849,750 | 12,663,419 | - | 72.54% | 100.00% | |||||
| Others net of adjustments and eliminations | (476,235,953) | (308,632,271) | (342,937,846) | 54.31% | (10.00%) | |||||
|
Total revenues |
738,169,736 | 682,837,408 | 687,576,975 | 8.10% | (0.69%) | |||||
2024 Compared to 2023
Revenues in 2024 totaled Ps. 738.17 billion, an 8.10% increase from Ps. 682.84 billion in 2023. This increase was primarily attributable to:
| · | A 5.37% increase in spot sales, primarily driven by i) higher thermal generation and ii) higher spot prices. Thermal generation was particularly higher in some steam turbines located in Puerto Site, Luján de Cuyo and Costanera sites, where also the Siemens combined cycle recorded higher generation. |
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| · | A 4.65% rise in sales under contracts, mainly explained by higher solar generation, provided that 2024 was the first full year of operations of the Guañizuil farm. Also higher solar resource availability was registered. |
| · | A 22.68% growth in steam sales, mostly explained by higher demand from clients in both Luján de Cuyo and San Lorenzo facilities. |
| · | A 50.42% increase in resale of gas transport and distribution capacity, primarily driven by tariff adjustments in distribution and transportation segments. |
| · | A 53.87% rise in CVO management fees, driven by higher generation of CVO plant as well as higher spot prices. |
| · | Finally, there was a 72.54% increment in forestry sales. |
Revenues broken down by segment reflect that sales of electric power generation from conventional sources in the year ended December 31, 2024, totaled Ps.571.08 billion, a 6.56% increase from Ps.535.92 billion in the year ended December 31, 2023. This increase is mainly attributable to higher thermal generation and higher spot prices, which increments were higher than inflation during the period.
Revenues attributable to electric power generation from renewable sources in the year ended December 31, 2024, totaled Ps. 123.85 billion, a 2.98% rise from Ps.120.26 billion in the year ended December 31, 2023. This increase is mainly attributable to higher solar generation, provided that 2024 was the first full year of operations of the Guañizuil solar farm. Also, higher solar resource availability was registered. This was partially offset by a negative effect on the gap between inflation and currency depreciation during the period under analysis.
Revenues attributable to resale of gas transport and distribution capacity sources in the year ended December 31, 2024, totaled Ps.497.63 billion, a 54.24% increase from Ps.322.63 billion in the year ended December 31, 2023. As mentioned above, these revenues were primarily driven by tariff adjustments in distribution and transportation segments.
Finally, revenues attributable to the forestry segment in the year ended December 31, 2024, totaled Ps.21.85 billion, a 72.54% increase from Ps.12.66 billion in the year ended December 31, 2023. The growth is mainly explained by higher prices and production levels as well as by the fact that EVASA sales for 2023 only accounted for the period May to December.
2023 Compared to 2022
Revenues in 2023 totaled Ps. 682.84 billion, a 0.69% decrease from Ps. 687.58 billion in 2022. This decrease was primarily attributable to:
| · | a 21.89% decrease in Sales under contracts, which amounted to Ps. 285.30 billion during 2023, as compared to Ps. 365.23 billion in 2022, mainly due to the ending of Brigadier Lopez PPA, and to a lesser extent a lower generation from our wind farms on the back of a lesser generation due to lower wind resource, being partially offset by the recent acquisition of the solar farm Guañizuil II A which contributed with sales of Ps. 3.9 billion in the fourth quarter of 2023. | |
| · | a 16.29% decrease in revenues from CVO thermal plant management fees, which amounted to Ps. 9.95 billion during 2023, as compared to Ps. 11.88 billion in 2022. |
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| · | a 15.10% decrease in resales of gas transport and distribution capacity, which totaled Ps. 4.05 billion in 2023, compared to Ps. 4.77 billion in 2022. The decrease in sales is merely an accounting matter. Prices and quantities were stable during 2023, the decrease is primarily explained by the dynamics of inflation and currency devaluation. During 2023, inflation was greater than currency devaluation, so when 2022 revenues are adjusted by inflation to be restated in Pesos as of December 2023, the final amount is greater than the 2023 revenues. |
| · | a 3.23% decrease in steam sales, which totaled Ps. 32.21 billion in 2023, compared to Ps. 33.28 billion in 2022, despite a 2.95% increase in volumes, which is primarily explained by a non-cash effect prompted by the aforementioned special combination of inflation and currency devaluation. |
The decrease in revenues in 2023 was partially offset by a 24.32% increase in Spot Sales, which amounted to Ps. 338.67 billion during 2023, as compared to Ps. 272.41 billion in 2022, driven by a combination of (i) the consolidation of Central Costanera’s figures, (ii) the ending of Brigadier Lopez’s PPA contract, which began to be remunerated in the spot market and (iii) a higher energy dispatch from Piedra del Aguila hydro power plant. Spot sales were negatively impacted by the above-mentioned effect, prompted by the combination of inflation and currency devaluation, a lower remuneration measured in US dollars and a lower generation from thermal units on the back of the lower demand of the period and the higher availability of hydro resource.
Revenues attributable to forestry activities in the year ended December 31, 2023, totaled Ps. 12.66 billion. There were no forestry revenues during the year ended on December 31, 2022, since Forestal Argentina S.A. and Loma Alta Forestal S.A. were acquired on December 27, 2022, and EVASA, Estancia Celina S.A. and Las Misiones S.A. were acquired on May 3, 2023 and financial results are applicable starting on January 1, 2023.
When we break revenues by segment, we can see that sales of electric power generation from conventional sources in the year ended December 31, 2023, totaled Ps. 535.92 billion, a 2.04% decrease from Ps. 547.09 billion in the year ended December 31, 2022. This decrease is mainly attributable to the fact that the remuneration increases for spot energy sales during 2023 were not enough to compensate the increase in the inflation adjustment for 2022 sales.
Revenues attributable to electric power generation from renewable sources in the year ended December 31, 2023, totaled Ps. 120.26 billion, a 2.88% decrease from Ps. 123.84 billion in the year ended December 31, 2022. This decrease is mainly attributable to the effect prompted by the combination of inflation and currency devaluation and to a lower generation from our wind farms on the back of a lesser wind resource.
Revenues attributable to resale of gas transport and distribution capacity sources in the year ended December 31, 2023, totaled Ps. 322.63 billion, a 10.28% decrease from Ps. 359.59 billion in the year ended December 31, 2022. As mentioned above, the decrease in sales is merely an accounting matter, prompted by the aforementioned special combination of inflation and currency devaluation.
Revenues from the forestry segment were previously explained.
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Cost of Sales
| Year ended December 31, | Change December 31, | |||||||||
| 2024 | 2023 | 2022 | 2024/2023 | 2023/2022 | ||||||
| (in thousands of Ps.) | (in percentages) | |||||||||
| Inventories and biological assets at beginning of each year | 241,548,673 | 161,093,553 | 24,158,860 | 49.94% | 566.81% | |||||
| Acquisition of biological assets | - | 86,714,635 | 104,747,489 | (100.00%) | (17.22%) | |||||
| Purchases for each period | 81,004,676 | 67,461,183 | 106,636,722 | 20.08% | (36.74%) | |||||
| Employee compensation expense | 85,889,408 | 90,807,779 | 57,467,009 | (5.42%) | 58.02% | |||||
| Other long-term employee benefits | 9,373,422 | 6,302,399 | 2,336,262 | 48.73% | 169.76% | |||||
| Depreciation of property, plant and equipment | 108,888,336 | 138,508,684 | 105,046,156 | (21.39%) | 31.86% | |||||
| Amortization of intangible assets | 2,691,283 | 13,382,366 | 26,859,312 | (79.89%) | (50.18%) | |||||
| Energy and power purchase | 3,672,856 | 3,192,861 | 2,065,863 | 15.03% | 54.55% | |||||
| Fees and remuneration for services | 21,860,551 | 20,194,260 | 20,657,844 | 8.25% | (2.24%) | |||||
| Maintenance expenses | 49,230,935 | 47,050,066 | 37,490,689 | 4.64% | 25.50% | |||||
| Consumption of materials and spare parts | 25,853,911 | 28,686,406 | 16,557,801 | (9.87%) | 73.25% | |||||
| Insurance | 21,208,292 | 20,104,744 | 12,251,190 | 5.49% | 64.10% | |||||
| Fees and royalties | 6,932,243 | 8,789,811 | 5,016,547 | (21.13%) | 75.22% | |||||
| Taxes and contributions | 1,458,056 | 941,908 | 861,024 | 54.80% | 9.39% | |||||
| Taxes on bank credits and debits | 104,705 | 99,394 | 126,133 | 5.34% | (21.20%) | |||||
| Forestry and forestry production expenses | - | - | - | - | - | |||||
| Miscellaneous | 1,679,198 | 1,722,472 | 414,550 | (2.51%) | 315.50% | |||||
| Transfers to property, plant and equipment | - | (28,782,422) | - | - | - | |||||
| Forestry and forestry production expenses | 11,420,674 | 5,378,125 | - | 112.35% | - | |||||
| Forestry growth and revaluation of biological assets | 21,749,076 | 27,566,521 | - | (21.10%) | - | |||||
| Change in inventories | - | (914,594) | 32,187,211 | (100.00%) | (102.84%) | |||||
| Inventories and biological assets at the end of year | (248,038,537) | (241,548,670) | (161,093,555) | 2.69% | 49.94% | |||||
| Total cost of sales | 446,527,758 | 457,666,072 | 361,599,896 | (2.43%) | 26.57% | |||||
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| Year ended December 31, | Change December 31, | |||||||||
| 2024 | 2023 | 2022 | 2024/2023 | 2023/2022 | ||||||
| (in thousands of Ps.) | (in percentages) | |||||||||
| Electric power generation from conventional sources | (361,573,842) | (390,792,073) | (304,731,776) | (7.48%) | 28.24% | |||||
| Electric power generation from renewable sources | (48,550,990) | (42,266,320) | (43,987,471) | 14.87% | (3.91%) | |||||
| Resale of gas transport and distribution capacity | (321,354,542) | (262,471,005) | (292,007,416) | 22.43% | (10.11%) | |||||
| Forestry Segment | (21,216,126) | (11,748,742) | - | 80.58% | 100.00% | |||||
| Others net of adjustments and eliminations | 306,167,742 | 249,612,068 | 279,126,767 | 22.66% | (10.57%) | |||||
|
Total cost of sales |
(446,527,758) | (457,666,072) | (361,599,896) | (2.43%) | 26.57% | |||||
2024 Compared to 2023
Cost of sales during the year ended December 31, 2024, totaled Ps.446.53 billion, a 2.43% decrease from Ps.457.67 billion in 2023. This decrease was mainly the result of a 10.78% contraction in costs of production, primarily explained by: (i) depreciation and amortizations; (ii) royalties; (iii) revaluation of biological assets; (iv) consumption of material and spare parts and, to a lesser extent, a decrease in employee compensation expense. These effects were partially offset by higher (i) energy and power purchases; (ii) taxes and contributions and (iii) forestry and forestry production expenses.
Cost of sales attributable to electric power generation from conventional sources in the year ended December 31, 2024, totaled Ps.361.57 billion, a 7.48% decrease from Ps.390.79 billion in the year ended December 31, 2023. This decrease is mainly explained by lower (i) depreciation and amortizations; (ii) royalties; (iii) consumption of material and spare parts and, to a lesser extent, a contraction in employee compensation expense. These effects were partially offset by higher (i) energy and power purchases and (ii) taxes and contributions.
Cost of sales attributable to electric power generation from renewable sources in the year ended December 31, 2024, totaled Ps.48.55 billion, a 14.87% rise from Ps.42.27 billion in the year ended December 31, 2023. This increase is mainly attributable to higher (i) energy and power purchases and (ii) taxes and contributions.
Cost of sales attributable to resale of gas, transport and distribution capacity in the year ended December 31, 2024, totaled Ps.321.35 billion, an increase of 22.43% from Ps.262.47 billion in the year ended December 31, 2023. The increase is mostly driven by tariff adjustments in distribution and transportation segments.
Cost of sales attributable to the forestry segment in the year ended December 31, 2024, totaled Ps.21.22 billion, a rise of 80.58% from Ps.11.75 billion in the year ended December 31, 2023. The growth is mainly explained by higher prices and production levels as well as by the fact that EVASA sales for 2023 only accounted for the period May to December.
2023 Compared to 2022
Cost of sales during the year ended December 31, 2023, totaled Ps. 457.67 billion, a 26.57% increase from Ps. 361.60 billion in 2022. This increase was mainly the result of a 32.26% increase in costs of production, mainly due to the acquisition of companies made during the year and to the maintenance performed at the Lujan de Cuyo and Costanera power plants, resulting in higher (i) Employee compensation expenses and Other long-term employee benefits, (ii) Depreciations of property, plant and equipment (iii) Consumption of materials and spare parts, (iv) Maintenance expenses and, (v) Insurance; being partially offset by lower Amortization of intangible assets.
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Cost of sales attributable to electric power generation from conventional sources in the year ended December 31, 2023, totaled Ps. 390.79 billion, a 28.24% increase from Ps. 304.73 billion in the year ended December 31, 2022. This increase is mainly explained by the cost consolidation from the acquisition of Central Costanera, which increased employee compensation expenses.
Cost of sales attributable to electric power generation from renewable sources in the year ended December 31, 2023, totaled Ps. 42.27 billion, a 3.91% decrease from Ps. 43.99 billion in the year ended December 31, 2022. This decrease is mainly attributable to lower (i) energy and power purchases, (ii) raw materials and spare parts consumption and (iii) taxes and contributions, all partially offset by higher employee compensation expenses.
Cost of sales attributable to resale of gas, transport and distribution capacity in the year ended December 31, 2023, totaled Ps. 262.47 billion, a 10.11% decrease from Ps. 292.01 billion in the year ended December 31, 2022. The decrease is merely an accounting matter, prompted by a special combination of inflation and currency devaluation. During 2023, inflation was greater than currency devaluation, so when 2022 costs are adjusted by inflation to be restated in Pesos as of December 2023, the final amount is greater than the 2023 costs.
Cost of sales attributable to the forestry segment in the year ended December 31, 2023, totaled Ps. 11.75 billion. There were no Cost of Sales attributable to the forestry segment during the year ended on December 31, 2022, since the Forestry Segment was acquired on December 27, 2022, and financial results are applicable starting on January 1, 2023.
Gross Income
2024 Compared to 2023
Gross income during the year ended December 31, 2024, totaled Ps.291.64 billion, a 29.52% increase from Ps.225.17 billion during the year ended December 31, 2023, due to the above-mentioned reasons. The gross margin for the year ended December 31, 2024, was 39.51% compared to a gross margin of 32.98% during the same period of 2023.
2023 Compared to 2022
Gross income during the year ended December 31, 2023, totaled Ps. 225.17 billion, a 30.92% decrease from Ps. 325.98 billion during the year ended December 31, 2022, due to the above-mentioned reasons. The gross margin for the year ended December 31, 2023, was 32.98% compared to a gross margin of 47.41% during the same period of 2022.
Administrative and Selling Expenses
| Year ended December 31, | Change December 31, | |||||||||
| 2024 | 2023 | 2022 | 2024/2023 | 2023/2022 | ||||||
| (in thousands of Ps.) | (in percentages) | |||||||||
| Electric power generation from conventional sources | 63,541,027 | 61,458,083 | 45,871,058 | 3.39% | 33.98% | |||||
| Electric power generation from renewable sources | 4,989,018 | 4,184,317 | 4,766,058 | 19.23% | (12.21%) | |||||
| Resale of gas transport and distribution capacity | 73,905,939 | 67,781,359 | 63,136,768 | 9.04% | 7.36% | |||||
| Forestry Segment | 8,312,370 | 3,505,596 | - | 137.12% | 100.00% | |||||
| Others net of adjustments and eliminations | (73,905,939) | (67,781,359) | (63,136,768) | 9.04% | 7.36% | |||||
| Total administrative and selling expenses | 76,842,415 | 69,147,996 | 50,637,116 | 11.13% | 36.56% | |||||
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2024 Compared to 2023
Administrative and selling expenses during the year ended December 31, 2024, totaled Ps.76.84 billion, an 11.13% increase from Ps.69.15 billion during the year ended December 31, 2023. This increase was primarily driven by: (i) employee compensation expenses (ii) fees and compensation for services, and (iii) depreciation of property, plant and equipment.
2023 Compared to 2022
Administrative and selling expenses during the year ended December 31, 2023, totaled Ps. 69.15 billion, a 36.56% increase from Ps. 50.64 billion during the year ended December 31, 2022. This increase was primarily driven by the consolidation of administrative cost from the acquired companies, resulting in an increase in (i) Maintenance expenses (ii) Employee compensation expenses, and (iii) Fees and remuneration for services, being partially offset by a decrease in Insurance expenses.
Other Operating Income
| Year ended December 31, | Change December 31, | |||||||||
| 2024 | 2023 | 2022 | 2024/2023 | 2023/2022 | ||||||
| (in thousands of Ps.) | (in percentages) | |||||||||
| Electric power generation from conventional sources | 93,338,141 | 461,051,839 | 231,224,574 | (79.76%) | 99.40% | |||||
| Electric power generation from renewable sources | 8,803,238 | 23,582,978 | 12,016,456 | (62.67%) | 96.26% | |||||
| Resale of gas transport and distribution capacity | 7,490,050 | 13,683,755 | 9,267,447 | (45.26%) | 47.65% | |||||
| Forestry Segment | 23,399,563 | 32,710,355 | - | (28.46%) | 100.00% | |||||
| Others net of adjustments and eliminations | (7,370,708) | (13,391,216) | (8,967,271) | (44.96%) | 49.33% | |||||
| Total other operating income | 125,660,284 | 517,637,711 | 243,541,206 | (75.72%) | 112.55% | |||||
2024 Compared to 2023
Other operating income in the year ended December 31, 2024, totaled Ps.125.66 billion, a 75.72% contraction from Ps.517.64 billion in the year ended December 31, 2023. This decrease was primarily the result of: (i) lower interest from clients due to lower CAMMESA delays; (ii) lower foreign exchange differences, which had an impact on the CVOSA credit and (iii) lower revaluation of biological assets related to the forestry business segment.
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2023 Compared to 2022
Other operating income in the year ended December 31, 2023, totaled Ps. 517.64 billion, a 112.55% increase from Ps. 243.54 billion in the year ended December 31, 2022. This increase was primarily the result of an increase in foreign exchange rates mainly due to a 78.09% devaluation of the peso with respect to the U.S. dollar in 2023 where the gain in the exchange rate difference is mainly associated with the CVOSA credit.
Other Operating Expenses
| Year ended December 31, | Change December 31, | |||||||||
| 2024 | 2023 | 2022 | 2024/2023 | 2023/2022 | ||||||
| (in thousands of Ps.) | (in percentages) | |||||||||
| Electric power generation from conventional sources | 25,682,954 | 23,866,675 | 4,029,317 | 7.61% | 492.33% | |||||
| Electric power generation from renewable sources | 12,866,404 | 484,276 | 52,982 | 2556.83% | 814.04% | |||||
| Resale of gas transport and distribution capacity | 4,542,842 | 3,866,580 | 3,194,621 | 17.49% | 21.03% | |||||
| Forestry Segment | 2,621,083 | 8,555,881 | - | (69.37%) | 100.00% | |||||
| Others net of adjustments and eliminations | (4,538,354) | (3,828,410) | (3,193,538) | 18.54% | 19.88% | |||||
| Total other operating expenses | 41,174,929 | 32,945,002 | 4,083,382 | 24.98% | 706.81% | |||||
2024 Compared to 2023
Other operating expenses in the year ended December 31, 2024, totaled Ps.41.17 billion, a 24.98% increase from Ps. 32.95 billion in the year ended December 31, 2023. This increase was primarily the result of (i) Resolutions 58/2024 and 66/2024 (see “Item 3.D. Risk Factors—Risks Relating to the Electric Power Sector in Argentina—We have, in the recent past, been unable to collect payments, or to collect them in a timely manner, from CAMMESA and other customers in the electric power sector”) and (ii) expenses due to an incident in a wind farm.
2023 Compared to 2022
Other operating expenses in the year ended December 31, 2023, totaled Ps. 32.95 billion, a 706.81% increase from Ps. 4.08 billion in the year ended December 31, 2022. This increase was primarily the result of an increase in (i) asset retirement and (ii) Forestry expenses.
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Impairment of property, plant and equipment and intangible assets
| Year ended December 31, | Change December 31, | |||||||||
| 2024 | 2023 | 2022 | 2024/2023 | 2023/2022 | ||||||
| (in thousands of Ps.) | (in percentages) | |||||||||
| Electric power generation from conventional sources | (72,160,515) | 44,338,349 | (40,487,933) | (262.75%) | (209.51%) | |||||
| Electric power generation from renewable sources | (29,920,955) | 51,465,748 | (54,610,445) | (158.14%) | (194.24%) | |||||
| Total impairment of property, plant and equipment and intangible assets | (102,081,470) | 95,804,097 | (95,098,378) | (206.55%) | (200.74%) | |||||
2024 Compared to 2023
In 2024, we recorded a Ps.102.08 billion impairment of property, plant and equipment and intangible assets charge related to a reduction in the assessed value-in-use of the following assets that exceeded their previously recorded book value: the Brigadier Lopez thermoelectric power plant; the San Lorenzo cogeneration unit; the Lujan de Cuyo combined cycle; the Buenos Aires combined cycle, located in the Costanera site; La Genoveva and Manque wind farms and the turbines stored in Nuevo Puerto. For further information, see “Item 5.A. Operating Results—Critical Accounting Policies—Impairment of property, plant and equipment and intangible assets”.
2023 Compared to 2022
In 2023, we recorded a Ps. 95.80 billion recovery gain related to the impairment reversal for the following assets: the Luján de Cuyo combined cycle power plant, the San Lorenzo cogeneration unit, the Manque and La Genoveva wind farms, the turbine stored in Nuevo Puerto and Other Land and Buildings, partially offset by the Brigadier Lopez thermoelectric power plant impairment. For further information, see “Item 5.A. Operating Results—Critical Accounting Policies—Impairment of property, plant and equipment and intangible assets”.
In 2022, we recorded a Ps. 95.10 billion impairment of property, plant and equipment and intangible assets charge, related to a reduction in the assessed value-in-use of the following assets that exceeded their previously recorded book value: San Lorenzo cogeneration unit and La Genoveva and Manque wind farms.
Operating Income
| Year ended December 31, | Change December 31, | |||||||||
| 2024 | 2023 | 2022 | 2024/2023 | 2023/2022 | ||||||
| (in thousands of Ps.) | (in percentages) | |||||||||
| Electric power generation from conventional sources | 141,456,748 | 565,188,774 | 383,196,532 | (74.97%) | 47.49% | |||||
| Electric power generation from renewable sources | 36,324,845 | 148,377,520 | 32,434,632 | (75.52%) | 357.47% | |||||
| Resale of gas transport and distribution capacity | 105,316,747 | 2,191,947 | 10,516,289 | 4704.71% | (79.16%) | |||||
| Forestry Segment | 13,099,734 | 21,563,555 | - | (39.25%) | 100.00% | |||||
| Others net of adjustments and eliminations(1) | (98,994,626) | (801,650) | (6,448,044) | 12248.86% | (87.57%) | |||||
| Total operating income | 197,203,448 | 736,520,146 | 419,699,409 | (73.22%) | 75.49% | |||||
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2024 Compared to 2023
Operating income in the year ended December 31, 2024, totaled Ps.197.20 billion, a 73.22% decrease from Ps.736.52 billion in the year ended December 31, 2023. This result is a combination of (i) higher aggregate sales as previously explained and (ii) lower operating costs, being both fully offset by (i) higher administrative and selling expenses, (ii) lower other operating income and expenses, net and (iii) the impairment recorded for the year.
2023 Compared to 2022
Operating income in the year ended December 31, 2023, totaled Ps. 736.52 billion, a 75.49% increase from Ps. 419.70 billion in the year ended December 31, 2022. This results as a combination of (i) lower sales as previously explained and (ii) higher operating cost related to the consolidation of acquired companies, being fully offset by (i) the impairment reversal recorded in the year, and (ii) the positive exchange differences of the CVOSA credit.
(Loss) Gain on net monetary position
2024 Compared to 2023
Loss on net monetary position in the year ended December 31, 2024, totaled Ps.18.85 billion, a 93.16% decrease from Ps.275.50 billion in the year ended December 31, 2023. This was the result of lower inflation rates.
2023 Compared to 2022
Loss on net monetary position in the year ended December 31, 2023, totaled Ps. 275.50 billion, a 33.36% increase from Ps. 206.58 billion in the year ended December 31, 2022.
Finance Income
2024 Compared to 2023
Finance income in the year ended December 31, 2024, totaled Ps.117.32 billion, a 76.60% contraction from Ps.501.30 billion in the year ended December 31, 2023. The decrease was primarily the result of: (i) a 67.54% lower interest earned from Ps. 12.62 billion in 2023 to Ps. 4.10 billion in 2024, (ii) a 79.03% lower net income on financial assets which decreased from Ps. 477.98 billion in 2023 to Ps. 100.23 billion in 2024 and (iii) an 80.10%lower income from swap contracts, which decreased from Ps. 10.70 billion in 2023 to Ps. 2.13 billion in 2024.
2023 Compared to 2022
Finance income in the year ended December 31, 2023, totaled Ps. 501.30 billion, a 189.46% increase from Ps. 173.18 billion in the year ended December 31, 2022. This increase was primarily the result of (i) a 237.34% increase in earned interest from Ps. 3.74 billion in 2022 to Ps. 12.62 billion in 2023, (ii) a 213.71% increase in net income on financial assets at fair value through profit or loss, which increased from Ps. 152.36 billion in 2022 to Ps. 477.98 billion in 2023 and partially offset by (iii) a 37.37% decrease in results of interest rates swaps, which decreased from Ps. 17.08 billion in 2022 to Ps. 10.70 billion in 2023.
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Finance Expenses
2024 Compared to 2023
Finance expenses in the year ended December 31, 2024, totaled Ps.171.61 billion, a 77.91% decrease from Ps.776.92 billion in the year ended December 31, 2023. This contraction is primarily the result of: (i) lower foreign exchange differences on financial liabilities which decreased from Ps. 714.81 billion in 2023 to Ps. 110.28 billion in 2024 and (ii) lower bank fees, which decreased from Ps. 6.12 billion in 2023 to Ps. 4.66 billion in 2024.
2023 Compared to 2022
Finance expenses in the year ended December 31, 2023, totaled Ps. 776.92 billion, a 163.66% increase from Ps. 294.67 billion in the year ended December 31, 2022. This increase was primarily the result of a higher foreign exchange difference, which increased from Ps. 246.44 billion in 2022 to Ps. 714.81 billion in 2023, mainly due to a higher depreciation of the Argentine peso.
Share of the Profit of Associates
2024 Compared to 2023
Share of the profit of associates in the year ended December 31, 2024, totaled a gain of Ps.16.13 billion compared to a gain of Ps.13.32 billion in 2023, mainly due to the gains resulting from the operations of Ecogas in 2024.
2023 Compared to 2022
Share of the profit of associates in the year ended December 31, 2023, totaled a gain of Ps. 13.32 billion compared to a gain of Ps. 0.76 billion in 2022, mainly due to the gains resulting from the operations of Ecogas in 2023.
Gain from bargain purchase
2024 Compared to 2023
No gain from bargain purchase was generated in 2024.
2023 Compared to 2022
In the year ended December 31, 2023, results from bargain purchases amounted to Ps.158.20 billion, compared to Ps.82.56 billion in 2022, reflecting a 91.62% increase. This result is primarily explained by the acquisitions of Central Costanera, Empresas Verdes Argentinas S.A., Las Misiones S.A. and Estancia Celina S.A.
Income Tax
2024 Compared to 2023
Income tax in the year ended December 31, 2024, totaled Ps.81.46 billion, a 108.53% increase from Ps.39.06 billion in the year ended December 31, 2023. Our effective tax rate for the year ended December 31, 2024, and 2023 was 57.08% and 10.94%, respectively.
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2023 Compared to 2022
Income tax in the year ended December 31, 2023, totaled Ps. 39.06 billion, a 14.28% decrease from Ps. 45.57 billion in the year ended December 31, 2022. Our effective tax rate for the year ended December 31, 2023, and 2022 was 10.94% and 26.05%, respectively. This decrease was mainly due to accounting positive results, mainly explained by the fact that the result from the acquisition of participation in companies does not generate income tax charge and, in turn, due to a decrease in the balance of deferred liabilities resulting from tax losses recognized during the year.
Net Income (loss) for the Year
2024 Compared to 2023
For the reasons described above, net income for the year ended December 31, 2024, totaled Ps.61.25 billion, compared to a net income of Ps.317.85 billion in the year ended December 31, 2023.
2023 Compared to 2022
For the reasons described above, net income for the year ended December 31, 2023, totaled Ps. 317.85 billion, compared to a net income of Ps. 129.37 billion in the year ended December 31, 2022.
Significant balance sheet variations discussion
Property, plant & equipment
Our PP&E balance at the end of the year 2023 amounted to Ps.1,652.68 billion, increasing 23.14% compared to the Ps.1,314.12 billion at the end of the year 2022, mainly as a result of the acquisitions carried out during 2023, which include the purchase of Central Costanera S.A., the forestry companies Empresas Verdes Argentina S.A (EVASA), Estancia Celina S.A. and Las Misiones S.A. and Cordillera Solar VIII S.A. For the year ended December 31, 2024, no significant variations were registered.
Biological assets
The company's biological assets increased by 102.21% to Ps.209.06 billion in 2023 from Ps.103.39 billion in 2022, primarily as a result of the acquisitions of Empresas Verdes Argentina S.A. (EVASA), Las Misiones S.A. and Estancia Celina S.A. and the revaluation of the biological assets of the companies Forestal Argentina S.A. and Loma Alta Forestal S.A. For the year ended December 31, 2024, no significant variations were registered.
Trade and other receivables
Trade and other receivables during the year ended December 31, 2023, totaled Ps.687.87 billion, a 17.66% increase from Ps.584.62 billion in 2022. This increase was primary the result of higher foreign exchange rates due to the peso depreciation during 2023, that have a direct impact on those receivables denominated in US$, mainly on those related to the CVOSA credit, the consolidation of receivables from Central Costanera and longer delays in CAMMESA's collections. During the year ended December 31, 2024, trade and other receivables decreased by 48.47% to Ps.354.45. This is mostly explained by: i) lower foreign exchange rate variation, that has a direct impact on those receivables denominated in US$, and ii) higher inflation vis-à-vis local currency depreciation during the year, which resulted in higher inflation-adjusted values of 2023 than US$-denominated amounts converted into Pesos at the end of 2024. Moreover, CAMMESA delays decreased along the year.
Loans and borrowings
Loans and borrowings jumped by 69.70% during the year 2023, reaching Ps.729.91 billion, from Ps.430.12 billion in 2022. This increase was mainly the result of a combination of the consolidation of the financial debt from the acquisition of Central Costanera and Cordillera Solar VIII S.A., the issuance of the senior notes series A and B and the depreciation of the Peso, being all partially offset by the maturity of the Manque and Olivos dollar-linked notes and the precancellation of the Brigadier Lopez syndicated loan (fully amortized in January 2024). During the year ended December 31, 2024, loans and borrowings decreased 47.83% to Ps.380.79. This is mostly explained by: i) lower foreign exchange rate variation, that has a direct impact on US$-denominated debt, and ii) higher inflation vis-à-vis local currency depreciation during the year, which resulted in higher inflation-adjusted values of 2023 than US$-denominated amounts converted into Pesos at the end of 2024. Also, the Company cancelled debt along the year.
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Item 5.B Liquidity and Capital Resources
As of December 31, 2024, we had cash and cash equivalents of Ps. 3.84 billion, and other current financial assets of Ps. 240.18 billion. See Notes 13 and 10.5 to our Audited Consolidated Financial Statements.
Our primary sources of liquidity have been cash flows from operating activities.
Our receivables from CAMMESA also are an important source of liquidity for us. As of December 31, 2024, our current trade and other receivables from CAMMESA totaled Ps. 114.06 billion.
Our primary cash requirements have been in connection with payments under loans and other financing agreements, employees’ salaries, operating and maintenance expenses and fixed assets investments, taxes, overhead expenses and contributions to affiliates (used in acquisitions of subsidiaries and associates). See “Item 5.A.—The State of Emergency of the Argentine Electricity Sector—Expansion of our Generating Capacity”.
Over the last years we have used part of our surplus funds for dividend payments. During 2024, we also approved and distributed dividends to our shareholders. See “Item 8— Financial Information — Dividends and Dividend Policy”.
Our loans and other borrowings contain customary covenants for facilities of each type, including (i) certain limitations on consolidations, mergers, and sales of assets; (ii) restrictions on incurring additional indebtedness; (iii) restrictions on paying dividends; (iv)limitations on making capital expenditures; and (v) restrictions on the incurrence of liens. Certain events of default and covenants are subject to certain thresholds and exceptions. We do not expect these restrictions to have a material impact on our ability to meet our cash obligations. As of the date of this annual report, we are in compliance with all of our debt covenants.
We do not discard the option to pursue potential financing alternatives, if the conditions are favorable.
On July 31, 2020, our special shareholders’ meeting approved the creation of the Program. Moreover, the Board of Directors was granted the powers to determine and establish the conditions of the Program and of the corporate bonds to be issued under it provided they had not been expressly determined at the shareholders’ meeting. On October 29, 2020, CNV approved the creation of such program, which shall expire on October 29, 2025, in accordance with the regulations in force.
Within this Program’s framework, we issued two types of corporate bonds. On the one hand, the integration and settlement of the Class A Corporate Bond (CB) denominated, integrated and payable in US dollars abroad took place on September 17, 2023. The characteristics of this CB are the following: (i) face value issued: US$37,232,818, (ii) interest rate, determined by bidding: 7%, (iii) periodicity of the interest coupon: six months, (iv) amortization: bullet, (v) term: 30 months to be counted as from September 17, 2023, and (vi) applicable law and deposit place: Argentina, Caja de Valores S.A. On the other hand, the integration and settlement of the international bond denominated “10% Senior Notes due 2025” (Class B CB) took place on October 17, 2023. Such bond is denominated, integrated and payable in US dollars abroad, under the Reg S scheme. The characteristics of this bond are the following: (i) face value issued: US$50,000,000, (ii) interest rate, determined by bidding: 10%, (iii) periodicity of the interest coupon: six months, (iv) amortization: bullet, (v) term: 24 months to be counted as from October 17, 2023, and (vi) applicable law and deposit place: New York, Euroclear.
Finally, on October 20, 2023, we decided to reopen the Class A CB. This procedure allows to offer in the market a security which replicates the conditions of the security already offered, incorporating the interest rate determined in the original offer (7%) and to bid the price. As a result of this process, we issued additional US$10,000,000 for the Class A CB, with an issuance price of 102.9%.
On October 19, 2023, we made a prepayment to the syndicated loan celebrated with Citibank N.A., JP Morgan Chase Bank N.A. and Morgan Stanley Senior Funding INC for an amount of US$49,043,078. This prepayment allowed Central Puerto to make dividend payments that were restricted by this loan. As of the date of this annual report, the Company has no restrictions associated with this loan to pay dividends. After such payment, the principal due amounted to US$6,056,922,which was fully paid on January 12, 2024.
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As for CP Manque S.AU. and CP Los Olivos S.A.U. Corporate Bonds Class I were fully paid on September 2, 2023.
We believe that our sources of liquidity, which are mainly the result of operations, will be sufficient to meet our debt service and working capital requirements for the foreseeable future. We do not expect to have any material requirements regarding capital expenditures except for the capital expenditures requirements for the Brigadier Lopez close cycle and the San Carlos and Guañizuil II A debt repayments to solar farm projects and the above mentioned payments.
For the year 2025, our debt repayment flows are of about US$ 132 million.
However, any further deterioration of the current economic situation may result in a deterioration of our finances, in a context of lack of access or substantial reduction of credit availability in the financial markets, which could affect our financial condition and results of operation.
Receivables from CAMMESA
We hold receivables in the form of LVFVD for the unpaid balances from CAMMESA relating to the sale of electric power to CAMMESA from 2008 to 2011. For further information, see “Item 4.B. Business Overview—FONINVEMEM and Similar Programs”. Under the FONINVEMEM and similar arrangements, we are entitled to collect our receivables, including interest, in monthly installments over ten years starting from, the commercial launch date of the CVOSA combined cycle. For further information, see “Item 4.B. Business Overview—FONINVEMEM and Similar Programs”.
Following the commercial authorizations granted to the Manuel Belgrano power plant (on January 7, 2010) and the San Martín power plant (on February 2, 2010), we started to collect monthly payments of the receivables relating to the sale of electric power to CAMMESA from January 2004 through December 2007.
As of March 20, 2018, CAMMESA granted the CVO Commercial Approval in the WEM, as a combined cycle, of the thermal plant Central Vuelta de Obligado, which entitled us to receive the collection of the trade receivables under the CVO Agreement. A PPA between the CVO Trust and CAMMESA, through which the CVO Trust makes energy sales and, consequently, receives the cash flow to pay the trade receivables, had to be signed in order to start the collections. The PPA agreement was signed on February 7, 2019, with retroactive effect to March 20, 2018. As a result, the original amortization schedule from the CVO Agreement is in full force and effect. As of December 31, 2024, the CVO “LVFVD 2008-2011 receivables” totaled Ps. 201.57 billion.
After the CVOSA power plant became operational, in the case of receivables accrued between 2008 and September 2010, the amount due was converted into U.S. dollars at the exchange rate effective at the date of the CVO Agreement (i.e., November 25, 2010), which was Ps.3.97 per U.S. dollar. Additionally, certain receivables that accrued after September 2010 and that were also included in the CVO Agreement, were converted into U.S. dollars at the exchange rate effective at the due date of each monthly sale transaction. The total estimated amount due was US$548.0 million plus accrued interests after the CVO Commercial Approval. The U.S. denominated monthly payments under the CVO Agreement are payable in pesos, converted at the applicable exchange rate in place at the time of each monthly payment.
Credits under the framework of the CVO Agreement are included in the CAMMESA Trade Debtors line. CVO Credits are denominated in US dollars and bear a one-month TERM SOFR + Credit Adjustment Spread (CAS) of 0.11448% interest rate plus 5%.
As a result of the Central Costanera acquisition, we have incorporated the portion of the CVO agreement that this company was entitled to receive for the LVFVD 2008-2011 receivables. Starting on February 17,2023 the total estimated amount due to us was US$17.86 million.
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During 2024, we collected Ps.83.66 billion in CVO receivables, measured in Pesos as of December 31, 2024. During 2023, we collected Ps.83.78 billion in CVO receivables, measured in Pesos as of December 31, 2024
On May 24, 2024, we reached an agreement with CAMMESA to settle outstanding debts for electricity provided in December 2023, January 2024, and February 2024. The debts for December and January were paid using Argentine Republic Bonds in US Dollars Step Up 2038 within ten (10) business days from the date of signing the agreement. The debt for February was paid in cash with the funds available in the bank accounts enabled in CAMMESA within 48 hours from the signing of the agreement. Due to the lower market value of the above-mentioned bonds, we incurred a consolidated loss of approximately Ps. 24,783 million. Despite this, the agreement did not impact our normal business operations, payment capacity or ability to secure financing.
Additionally, we held receivables in the form of LVFVD for the unpaid balances from CAMMESA relating to the sale of electric power to CAMMESA under the additional trust remuneration concept since 2012. On September 3, 2019, CAMMESA and Central Puerto (in accordance with a general offer made to all generators) entered into a final agreement to settle the LVFVD receivables balance. As a result, an 18% reduction of principal amount and accrued interest as of such date was achieved. Moreover, we waived any complaint related to such receivables.
For further information regarding sales relating to additional trust remuneration and non-recurring maintenance, see “Item 5.A. Operating Results—Our Revenues—The Spot Sales” and “Item 4.B. Business Overview—The Argentine Electric Power Sector—Remuneration Scheme—The Previous Remuneration Schemes”.
Cash Flows
The following table sets forth our cash flows from our operating, investing and financing activities for the periods indicated:
| Year ended December 31, | ||||||
| (in thousands of Ps.) | ||||||
| 2024 | 2023 | 2022 | ||||
| Net cash flows provided by operating activities | 258,223,038 | 273,543,294 | 377,300,678 | |||
| Net cash flows used in investing activities | (164,908,031) | (138,448,696) | (211,983,181) | |||
| Net cash used in financing activities | (109,805,318) | (173,675,159) | (110,581,437) | |||
| (Decrease) Increase in cash and cash equivalents, net | (16,490,311) | (38,580,561) | 54,736,060 | |||
Net Cash Provided by Operating Activities
2024 Compared to 2023
Net cash provided by operating activities decreased 5.60% to Ps.258.22 billion for the year ended December 31, 2024, from Ps.273.54 billion for the year ended December 31, 2023. Net cash provided by operating activities is mainly explained by (i) Ps.142.71 of net income for the period before income tax; (ii) Ps.36.83 billion in collection of interest from clients; (iii) adjustments to reconcile profit for the period before income tax with net cash flows of Ps.113.71 billion; and (iv) Ps.6.55 billion in insurance recovery; partially offset by (v) Ps.26.72 billion in working capital variations (accounts payables, accounts receivables, inventory, and other non-financial assets and liabilities); and (vi) Ps.14.86 million in income tax and other taxes payments.
2023 Compared to 2022
Net cash provided by operating activities decreased by 27.50% to Ps. 273.54 billion for the year ended December 31, 2023, from Ps. 377.30 billion for the year ended December 31, 2022. The result was primarily driven by (i) an income for the year before income tax of Ps. 356.91 billion, and (ii) Ps. 63.85 billion in interest received from clients, including the ones from the FONI program, being partially offset by (iii) Ps. 74.79 billion in income tax paid in the period, (iv) non-cash adjustments in the operating income of Ps. 55.63 billion, and (v) Ps. 14.99 billion in negative working capital variations.
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Net Cash Used in Investing Activities
2024 Compared to 2023
Net cash used in investing activities increased by 19.11% to Ps.164.91 billion for the year ended December 31, 2024, from Ps.138.45 billion for the year ended December 31, 2023. Net cash used in investing activities is mainly explained by (i) Ps.142.50 billion in acquisitions of property, plant and equipment and inventory and (ii) Ps.31.67 billion in acquisitions of other financial assets, net, being all partially offset by (iii) Ps.8.14 billion generated by dividends collected and (iv) Ps.1.12 billion from the sale of property, plant, and equipment.
2023 Compared to 2022
Net cash used in investing activities decreased by 34.69% to Ps. 138.45 billion for the year ended December 31, 2023, from Ps. 211.98 billion for the year ended December 31, 2022. The result was primarily driven by (i) Ps. 49.64 billion from the acquisition of short-term financial assets, net, that were lower than during 2022 and 2021, (ii) Ps. 78.43 billion in payments for the acquisition of subsidiaries and associates, net of cash acquired, mainly related to the acquisition of CECO, Empresas Verdes Argentina S.A., Las Misiones S.A. and Estancia Celina S.A. companies, (iii) Ps. 21.42 billion in purchase of property, plant and equipment and inventories, (iv) Ps. 3.61 billion in the Share Buyback program, which was partially offset by (v) Ps. 14.65 billion in dividends collected.
Net Cash Used in Financing Activities
2024 Compared to 2023
Net cash used in financing activities decreased 36.78% to Ps.109.80 billion for the year ended December 31, 2024, compared to Ps.173.68 billion for the year ended December 31, 2023. Net cash used in financing activities is basically the result of (i) Ps.130.85 billion in loans and other financial debts; (ii) Ps.44.85 billion in interest and other financial costs and bank fees paid; and (iii) Ps.16.66 billion in dividends paid, being all partially offset by (iv) Ps.64.60 billion in loans and other financial debts received and (v) Ps.17.93 billion in net overdrafts received.
2023 Compared to 2022
Net cash used in financing activities increased by 57.06% to Ps. 173.68 billion for the year ended December 31, 2023, compared to Ps. 110.58 billion for the year ended December 31, 2022. The result was primarily driven by (i) long-term loans payments, which totaled Ps. 202.73 billion, (ii) interest and financial costs payments, mainly related to long-term loans, which totaled Ps. 51.50 billion, (iii) dividends paid, which totaled Ps. 47.72 billion, and (iv) Ps. 10.48 billion in bank and investment accounts overdrafts received, net. (v) Ps. 14.10 billion in payments for Manque and Los Olivos bond repurchase, which was partially offset by (vi) loans received by Ps. 156.59 billion.
Capital Expenditures
The following table sets forth our capital expenditures for the years ended December 31, 2024, 2023 and 2022.
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| Year ended December 31, | ||||||
| (in thousands of Ps.) | ||||||
| 2024 | 2023 | 2022 | ||||
| Land and buildings | 3,518,873 | 147,145,200 | 78,949,437 | |||
| Electric power facilities and other equipment | 63,364,412 | 153,448,719 | 24,568 | |||
| Wind turbines | - | 438,537 | - | |||
| Turbines | - | - | - | |||
| Construction in progress | 93,981,012 | 33,639,949 | 6,871,457 | |||
| Other | 17,386,900 | 4,654,552 | 1,628,251 | |||
| Total | 178,251,197 | 339,326,957 | 87,473,713 | |||
In the year ended December 31, 2024, we made total capital expenditures of Ps. 178.25 billion, compared to Ps. 339.33 billion in 2023. This amount is basically explained by capital expenditures applied to our projects under execution: the construction of San Carlos solar farm and the Brigadier Lopez conversion into a combined cycle.
During 2023, the main additions to fixed assets and land were in connection with the acquisition of Central Costanera S.A., Empresas Verdes Argentina S.A., Las Misiones S.A., Estancia Celina S.A., Cordillera Solar VIII and CP Servicios Renovables S.A. The Cordillera Solar VIII and CP Servicios Renovables S.A. acquisitions have been accounted for as an asset acquisition in accordance with IFRS 3, and the Central Costanera S.A., Empresas Verdes Argentina S.A., Las Misiones S.A., and Estancia Celina S.A. acquisitions have been accounted for as business combinations. We have funded our capital expenditures with proceeds from debt issuances and cash generated from our operations.
Depending on the timing for the construction of the Brigadier Lopez closing and the San Carlos solar farm project, we may finance these capital expenditures using cash flows from our operations and/or using external financing sources. See “Item 3D. Risk Factors—Risks Relating to our Business— Factors beyond our control may affect or delay the completion of the awarded projects or alter our plans for the expansion of our existing plants”.
Equity interests in DGCU and DGCE
In addition to the expenditures on physical assets, on July 23, 2014, we executed agreements to purchase, directly and indirectly, subject to certain conditions, equity interests in DGCU and DGCE, jointly with an investment consortium. On January 7, 2015, all acquisition-related conditions established in the agreement were met, and the shares were transferred to us.
Taking into account both direct and indirect interests involved, we acquired (i) an interest equivalent to 21.60% of DGCU’s capital stock and (ii) an interest equivalent to 40.60% of DGCE’s capital stock. As of the date of this annual report these holdings have changed, as described in “Item 4. Information of the Company—Recent Developments—ECOGAS Inversiones S.A. – Initial Public Offering through a Voluntary Exchange of Shares of Distribuidora de Gas Cuyana S.A. and Distribuidora de Gas del Centro S.A.”.
Indebtedness
As of December 31, 2024, our total indebtedness was Ps.380.79 billion of which 99% was denominated in U.S. dollars. The following table shows our indebtedness as of such date:
| December 31, 2024 | ||||
| (in thousands of US$) | (in thousands of Ps.) | |||
| Non-Current debt | 222,880 | 230,012,557 | ||
| Current debt | 146,103 | 150,777,810 | ||
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Borrowing from Kreditanstalt für Wiederaufbau (“KfW”)
On March 26, 2019 we entered into a loan agreement with KfW for an amount of US$56 million in relation to the acquisition of two gas turbines, equipment and related services relating to the Luján de Cuyo project. In accordance with the terms of the agreement, the loan accrues an interest equal to LIBOR plus 1.15%. As a consequence of the suspension of LIBO rate, occurred on June 30, 2023, we amended the loan agreement – together with KfW – on June 30, 2023, replacing LIBO rate with the Secured Overnight Financing Rate (SOFR) plus a fixed Credit Adjustment Spread (CAS) of 0.26161%. The loan is amortizable quarterly in 47 equal and consecutive installments as from the day falling six months after the commissioning of the gas turbines and equipment.
Pursuant to the loan agreement, among other obligations, Central Puerto has agreed to maintain a debt ratio of (a) as of December 31, 2019, of no more than 4.00:1.00 and (b) as from that date, no more than 3.5:1.00. As of December 31, 2024, we have complied with that requirement.
During fiscal year 2019, the planned disbursements for this loan were completed for a total of US$55.2 million.
As of December 31, 2024, the balance of this loan amounts to US$22.79 million, approximately equivalent to Ps.23.52 billion, net of transaction costs.
Loan from Citibank N.A., JP Morgan Chase Bank N.A. and Morgan Stanley Senior Funding INC.
On September 12, 2019, we entered into a loan agreement with Citibank N.A., JP Morgan Chase Bank N.A. and Morgan Stanley Senior Funding INC. for US$180.0 million to fund the acquisition of the Thermal Plant Brigadier (the “Brigadier Lopez Loan”).
According to the terms of the agreement, this loan accrues at a variable interest rate based on the LIBOR rate plus a margin. Due to the suspension of the LIBO rate on June 30, 2023, we amended – together with Citibank N.A., JP Morgan Chase Bank N.A. and Morgan Stanley Senior Funding INC – the loan agreement on August 16, 2023, replacing the LIBO rate with the Secured Overnight Financing Rate (SOFR) plus a Credit Adjustment Spread (CAS) of 0.26161% applicable as from September 12, 2023.
Pursuant to the loan agreement, among other obligations, Central Puerto has agreed to maintain (i) a debt ratio of no more than 2.25:1.00, (ii) an interest coverage ratio of no more than 3.50:1.00 and (iii) and a minimum equity of US$500.0 million.
As of June 14, 2019, the loan proceeds had been fully disbursed.
On September 15, 2020, BCRA issued Communication “A” 7106 (“Foreign Exchange Regulatory Restrictions 7106”) pursuant to which any Argentine debtor that has scheduled principal payments of indebtedness due between October 15, 2020 and March 31, 2021 and payable in foreign currency (subject to certain exceptions), is required, in order to access to the official exchange market, to file with the BCRA a refinancing plan in respect of such indebtedness, which shall fulfill certain conditions established in the regulation, such as the following (i) the net amount for which the debtor shall have access to the official foreign exchange market to meet its foreign currency denominated payments of principal shall not exceed 40.00% of the aggregate principal amount due between October 15, 2020 and March 31, 2021 and (ii) the remaining principal amount is required to be deferred such that the repayment of the deferred principal amounts is due on average two years later than the originally scheduled principal amortization payments. The installments under Brigadier Lopez Loan becoming due between December 2020 and March 2021 were under the scope of such regulation.
In compliance with Foreign Exchange Regulatory Restrictions 7106, we presented to the BCRA a new repayment schedule for the Brigadier Lopez Loan, which included the refinancing of the first two principal installments, each for a sum of US$36 million, which were payable on December 14, 2020, and March 12, 2021. On December 14, 2020, we entered into a forbearance agreement with the creditors of the Brigadier Lopez Loan by means of which the creditors agreed not to take any judicial or extrajudicial action to claim their rights of collection under such loan and to negotiate in good faith certain modifications. On December 22, 2020, we signed a waiver and amendment to the Brigadier Lopez Loan, modifying, among others, the amortization schedule so as to comply with the requirements established by Communication “A” 7106, partially postponing installments becoming due in December 2020 and March 2021, extending the final payment term to June 2023, including monthly amortizations as from January 2021 until January 2022, and keeping the amortizations in the initial schedule for June, September and December 2021, each of them equal to 20.00% of capital. In December 2020, 40% of the installment for such month was paid, complying with the regulations in force and the abovementioned amendment. Amongst others, the amendment involves a 200 basis points increase in the interest rates as from December 12, 2020.
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The amendment of the Brigadier Lopez Loan contains a more restrictive covenant package than under the original loan, which includes a prohibition to make dividends payment during 2021 and a US$25.0 million maximum allowed for dividends payment in 2022. Moreover, a collateral agreement was signed, which includes the pledge on turbines of Brigadier Lopez Thermal Station, a mortgage on the land in which such power station is located and a LVFDV passive collection collateral assignment.
Foreign Exchange Regulatory Restrictions 7106 were extended until December 31, 2021, by Communication “A” 7230. The installments under the Brigadier Lopez Loan due in June, September and December 2021 were under the scope of the provisions of such regulation. As a consequence, we signed a new amendment, which changed the amortization schedule, rescheduling 60.00% of installments, whose original maturity date operated in June, September and December 2021, and extending the loan’s final term up to January 2024. The schedule in force, which includes this amendment and the one dated December 22, 2020, foresees monthly amortizations until January 2022, one amortization in June 2023 for the amount of US$34,128 million and the last amortization in January 2024 for the amount of US$55.1 million. Moreover, the financial commitments and obligations undertaken in the first amendment remained unchanged.
This new amendment also implied a 125 basis points increase in the applicable interest rate as from June 12, 2021, and the dividend payment restriction was maintained until 2021, as well as the US$25.0 million limitation for 2022. During 2023, the maximum dividend payment allowed is US$20.0 million.
On October 19, 2023, we made a prepayment to the syndicated loan celebrated with Citibank N.A., JP Morgan Chase Bank N.A. and Morgan Stanley Senior Funding INC for an amount of US$49,043,078. This prepayment allowed Central Puerto to make dividend payments that were restricted by this loan. As of the date of this annual report, the Company has no restrictions associated with this loan to pay dividends After such payment, the principal due amounted to US$6,056,922, which was fully paid on January 12, 2024.
On December 23, 2022 and May 3, 2023 we subscribed two limited consents, by means of which the creditor financial entities agreed to the acquisition by Proener of the companies Forestal Argentina S.A., Loma Alta Forestal S.A., Empresas Verdes Argentina S.A., Las Misiones S.A. and Estancia Celina S.A. In addition, it was established that CPSA and Proener should keep a minimum amount of “Cash and short-term investments” corresponding to the established payment in the next maturity of principal and interest.
As of the date of this annual report, all payments provided in the amendments have been made, and the financing has been fully paid.
Loans from the IIC—IFC Facilities
CP La Castellana
On October 20, 2017, CP La Castellana entered into a common terms agreement with (i) the Inter-American Investment Corporation, (ii) the Inter-American Investment Corporation, acting as agent for the Inter-American Development Bank, (iii) the Inter-American Investment Corporation, as agent of the Inter-American Development Bank, in its capacity as administrator of the Canadian Climate Fund for the Private Sector of the Americas, and (iv) the International Finance Corporation (collectively, the “senior lenders”) to provide loans for a total amount of up to US$100,050,000 (the “IIC—IFC Facility I”), from which US$5 million will accrue interest at an annual rate equal to LIBOR plus 3.50% and the rest at LIBOR plus 5.25%. As a consequence of the suspension of LIBO rate, occurred on June 30, 2023, CP La Castellana S.A.U., together with IDB Group and IFC amended loan agreements on June 29, 2023, replacing LIBO rate with the Secured Overnight Financing Rate (SOFR) plus a fixed Credit Adjustment Spread (CAS) of 0.26161% applicable as from August 15, 2023. The loan is amortizable quarterly in 52 equal and consecutive installments as from February 15, 2019. Several other agreements and related documents, such as the guarantee and sponsor support agreement, where we will fully, unconditionally and irrevocably guarantee, as primary obligor, all payment obligations assumed and/or to be assumed by CP La Castellana until the project reaches the commercial operation date (the “Guarantee and Sponsor Support Agreement I”), hedge agreements, guarantee trust agreements, a share pledge agreement, an asset pledge agreement over the wind turbines, direct agreements and promissory notes have been executed.
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The Company also agreed to maintain, unless otherwise consented to in writing by each senior lender, ownership and control of the CP La Castellana as follows: (i) until the La Castellana project completion date, (a) we shall maintain (x) directly or indirectly, at least seventy percent (70.00%) beneficial ownership of CP La Castellana; and (y) control of CP La Castellana; and (b) CP Renovables shall maintain (x) directly, ninety-five percent (95.00%) beneficial ownership of CP La Castellana; and (y) control of CP La Castellana. In addition, (ii) after La Castellana project completion date, (a) we shall maintain (x) directly or indirectly, at least fifty and one tenth percent (50.10%) beneficial ownership of each of CP La Castellana and CP Renovables; and (y) control of each of CP La Castellana and CP Renovables; (b) CP Renovables shall maintain control of CP La Castellana; and (c) we have a restriction on cash excess withdrawal, to perform cash withdrawals that could be used for dividend payments we must have a Restricted Payment Debt Service Coverage Ratio of at least 1.25:1.00, also the request of excess withdrawal must be 30 days prior the interest payment date and the amount to be withdrawn must not be larger than the balance of the Restricted Payment Account as of the next Interest Payment Date.
Under the common terms agreement, CP La Castellana has committed to maintain a Historical Senior Debt Service Coverage Ratio of at least 1.20:1.00 until the wind farm project’s termination date. Such ratio is calculated by dividing the aggregate EBITDA for the most recent four financial quarters ended prior to the calculation date by the amount of all scheduled debt payments due in those four quarters.
On August 18, 2018, La Castellana I wind farm reached the commercial operation date.
On February 16, 2023, CP La Castellana met all the requirements and conditions required to achieve the project completion date, as a result of which the guarantee granted by CPSA was released. La Castellana “project completion date” is defined in the common terms agreement as the date in which the commercial operation date has occurred and certain other conditions have been met. For further information on La Castellana project see “Item 5.A. Operating Results—Factors Affecting Our Results of Operations—Expansion of Our Generating Capacity”.
As of the date of this annual report, the IIC-IFC Facility disbursements have been fully received. Our loans under the IIC—IFC Facilities (see “Item 5.B.—Loans from the IIC—IFC Facilities”) contain customary covenants for facilities of this type, including: (i) certain limitations on consolidations, mergers and sales of assets; (ii) restrictions on incurring additional indebtedness; (iii) limitations on paying dividends; (iv) limitations on making capital expenditures and (v) restrictions on the incurrence of liens. Certain events of default and covenants in the IIC—IFC Facilities are subject to certain thresholds and exceptions described in the agreements relating to the IIC—IFC Facilities. We do not expect these restrictions to have a material impact on our ability to meet our cash obligations. As of the date of this annual report, we are in compliance with all of our debt covenants.
CP Achiras
On January 17, 2018, CP Achiras entered into a common terms agreement with (i) the Inter-American Investment Corporation, (ii) the Inter-American Investment Corporation, acting as agent for the Inter-American Development Bank, (iii) the Inter-American Investment Corporation, as agent of the Inter-American Development Bank, in its capacity as administrator of the Canadian Climate Fund for the Private Sector of the Americas, and (iv) the International Finance Corporation (collectively, the “senior lenders”) to provide loans for a total amount of up to US$50,700,000 (the “IIC—IFC Facility II” and together with the IIC—IFC Facility I, the “IIC—IFC Facilities”). In accordance with the terms of the agreement entered into by CP Achiras, US$40.7 million accrue a fixed annual interest rate equal to 8.05%, and the rest accrue a 6.77% fixed annual interest rate. The loan is amortizable quarterly in 52 equal and consecutive installments as from May 15, 2019. Several other agreements and related documents, such as the guarantee and sponsor support agreement, where we will fully, unconditionally and irrevocably guarantee, as primary obligor, all payment obligations assumed and/or to be assumed by CP Achiras until the project reaches the commercial operation date (the “Guarantee and Sponsor Support Agreement II” and together with Guarantee and Sponsor Support Agreement I, the “Guarantor and Sponsor Support Agreements”), guarantee trust agreements, a share pledge agreement, a mortgage, an asset pledge agreement over the wind turbines, direct agreements and promissory notes have been executed.
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The Company also agreed to maintain, unless otherwise consented to in writing by each senior lender, ownership and control of the CP Achiras as follows: (i) until the Achiras project completion date, (a) we shall maintain (x) directly or indirectly, at least seventy percent (70%) beneficial ownership of CP Achiras; and (y) control of CP Achiras; and (b) CP Renovables shall maintain (x) directly, ninety-five percent (95%) beneficial ownership of CP Achiras; and (y) control of CP Achiras. In addition, (ii) after Achiras project completion date, (a) we shall maintain (x) directly or indirectly, at least fifty and one tenth percent (50.1%) beneficial ownership of each of CP Achiras and CP Renovables; and (y) control of each of CP Achiras and CP Renovables; and (b) CP Renovables shall maintain control of CP Achiras. Finally, the common terms agreement sets forth certain requirements to be fulfilled before CP Achiras distributes dividends.
Under the common terms agreement, CP Achiras has committed to maintain a Historical Senior Debt Service Coverage Ratio of at least 1.20:1.00 until the project’s termination date. Such ratio is calculated by dividing the aggregate EBITDA for the most recent four financial quarters ended prior to the calculation date by the amount of all scheduled debt payments due in those four quarters.
On September 20, 2018, the Achiras wind farm reached the commercial operation date.
On February 16, 2023, CP Achiras met all the requirements and conditions required to achieve the project completion date, for which the Guarantee Agreement granted by CPSA was released. The Achiras “project completion date” is defined in the common terms agreement as the date in which the commercial operation date has occurred and certain other conditions have been met. For further information on the Achiras project see “Item 5.A. Operating Results—Factors Affecting Our Results of Operations—Expansion of Our Generating Capacity”.
As of the date of this annual report, the IIC-IFC Facility disbursements have been fully received. Our loans under the IIC—IFC Facilities (see “Item 5.B.—Loans from the IIC—IFC Facilities”) contain customary covenants for facilities of this type, including: (i) certain limitations on consolidations, mergers and sales of assets; (ii) restrictions on incurring additional indebtedness; (iii) limitations on paying dividends; (iv) limitations on making capital expenditures and (v) restrictions on the incurrence of liens. Certain events of default and covenants in the IIC—IFC Facilities are subject to certain thresholds and exceptions described in the agreements relating to the IIC—IFC Facilities. We do not expect these restrictions to have a material impact on our ability to meet our cash obligations. As of the date of this annual report, we are in compliance with all of our debt covenants.
Under the subscribed trust guarantee agreement, as of December 31, 2024 there are trade receivables with specific assignment amounting to Ps.4,40 billion.
As of December 31, 2024, the balance under the CP Achiras and CP La Castellana Loans from the IIC—IFC Facilities, was US$79.93 million, approximately equivalent to Ps.82.49 billion, net of transaction costs.
Loan from the IFC to the subsidiary Vientos La Genoveva S.A.U.
On June 21, 2019, Vientos La Genoveva S.A.U., a subsidiary of ours, entered into a loan agreement with IFC on its own behalf, as Eligible Hedge Provider and as an implementation entity of the Managed Co-Lending Portfolio Program (MCPP) administered by IFC, for the construction of the wind Farm La Genoveva I, for a principal amount of US$76.1 million.
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Pursuant to the terms of the agreement subscribed with Vientos La Genoveva S.A.U., this loan accrues an interest rate equal to LIBOR plus 6.50%. As a consequence of the suspension of LIBO rate, occurred on June 30, 2023, Vientos La Genoveva S.A.U. together with IFC amended this agreement on June 14, 2023, replacing LIBO rate with the Secured Overnight Financing Rate (SOFR) plus a fixed Credit Adjustment Spread (CAS) of 0.26161% applicable as from August 15, 2023. The loan is amortizable quarterly in 55 installments as from November 15, 2020.
Other related agreements and documents, such as the Guarantee and Sponsor Support Agreement (the “Guarantee Agreement” under which Central Puerto completely, unconditionally and irrevocably guarantees, as the main debtor, all payment obligations undertaken by Vientos La Genoveva S.A.U until the project reaches the project completion date) hedging agreements, guarantee trusts, guarantee agreements on shares, guarantee agreements on wind turbines, direct agreements and promissory notes have been signed.
Pursuant to the Guarantee Agreement, among other customary covenants for this type of facilities, Central Puerto has committed, until the project completion date, to maintain: (i) a leverage ratio of not more than 3.5:1.00; and (ii) an interest coverage ratio of not less than 2.00:1.00. In addition, Central Puerto, upon certain conditions, agreed to make certain equity contributions to Vientos La Genoveva S.A.U. As of December 31, 2024, we have met the requirements described in (i) and (ii) above. Finally, there are certain requirements to be fulfilled in order to distribute dividends from Vientos La Genoveva S.A.U.
On November 22, 2019, Vientos La Genoveva S.A.U. received a disbursement of US$76.1 million for the total amount of the loan.
Under the common terms agreement, Vientos La Genoveva S.A.U. has committed to maintain a Historical Senior Debt Service Coverage Ratio of at least 1.20:1.00 until the project’s termination date. Such ratio is calculated by dividing the aggregate EBITDA for the most recent four financial quarters ended prior to the calculation date by the amount of all scheduled debt payments due in those four quarters.
On November 29, 2024, Vientos La Genoveva S.A.U. has fulfilled all the requirements and conditions necessary to certify the occurrence of the project’s completion date, as a result of which the Guarantee Agreement provided by CPSA was released.
As of December 31, 2024, the Company has fulfilled all the requirements detailed previously established in the loan agreement.
Under the signed trust guarantee agreement, as of December 31, 2024 there are trade receivables with specific assignments amounting to Ps.2.29 billion.
As of December 31, 2024, balance of this loan, was US$56.70 million, approximately equivalent to Ps.58.52 billion, net of transaction costs.
Loan from Banco de Galicia y Buenos Aires S.A.U. to CPR Energy Solutions S.A.U. (wind farm La Castellana II)
On May 24, 2019, CPR Energy Solutions S.A.U. (a subsidiary of ours) entered into a loan agreement with Banco de Galicia y Buenos Aires S.A.U. to fund the construction of the wind farm “La Castellana II” for a principal amount of US$12.5 million.
According to the agreement, the loan accrues interest at an annual fixed rate equal to 8.5% during the first twelve months, and has a 0.5% step-up each year, up to 11% on the 61st monthly interest payment date, where it remains until maturity, and it is amortizable in 25 quarterly installments as from May 24, 2020. Other agreements and related documents (in which Central Puerto totally, unconditionally and irrevocably guarantees, as main debtor, all the payment obligations assumed by CPR Energy Solutions S.A.U. until total fulfillment of the guaranteed obligations or until the project reaches the commercial operation date, whichever happens first), guarantee agreements on shares, guarantee agreements on wind turbines and promissory notes have been executed.
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As security for the obligations undertaken, the subsidiary CPR Energy Solutions S.A.U. has granted Banco de Galicia y Buenos Aires S.A. a pledge, which is registered as a first-degree charge against the financed assets.
Pursuant to the collateral agreement, among other obligations, Central Puerto has agreed to maintain a debt ratio of no more than 3.75:1.00 until the date of completion of the project. In addition, Central Puerto, under certain conditions, agreed to make capital contributions, directly or indirectly, to subsidiary CPR Energy Solutions S.A.U. Moreover, Central Puerto has agreed to maintain, unless otherwise consented to in writing by the lender, the ownership (directly or indirectly) and control over CPR Energy Solutions S.A.U. As of September 3, 2021, CPR Energy Solutions S.A.U. has fulfilled all the requirements and conditions to achieve project’s completion date. As a result, the collateral posted by the Company was released and CPSA is no longer subject to the obligations previously described.
As per the loan agreement, the subsidiary CPR Energy Solutions S.A.U. has committed to maintain: (i) a financial debt-to-EBITDA ratio below 2.25, and (ii) an EBITDA-to-financial debt service ratio above 1.10, both until the full payment of the owed amounts. As of June 29, 2024, the subsidiary received waivers to comply with these ratios and other contractual obligations concerning expenses related to the wind farm accident, which are included under Other operating expenses in the income statement for the year ended December 31, 2024. Finally, there are certain requirements the subsidiary must fulfill regarding dividend payments.
On May 24, 2019, the loan was fully disbursed. As of December 31, 2024, the balance of this loan was US$3.51 million, approximately equivalent to Ps.3.62 billion, net of transaction costs.
Loan from Banco Galicia y Buenos Aires S.A.U. to subsidiary Vientos La Genoveva II S.A.
On July 23, 2019, subsidiary Vientos La Genoveva II S.A. entered into a loan agreement with Banco de Galicia y Buenos Aires S.A.U. for the construction of the La Genoveva II wind farm for a principal amount of US$37.5 million.
According to the executed agreement, this loan accrues LIBOR plus 5.95%. As a consequence of the suspension of LIBO rate, occurred on June 30, 2023, Vientos La Genoveva II S.A. and Banco de Galicia y Buenos Aires S.A.U. entered into an amendment agreement on July 21, 2023, whereby the interest rate changed to the Secured Overnight Financing Rate (SOFR) plus a fixed Credit Adjustment Spread (CAS) of 0.42826% applicable as from the next interest payment. The loan is amortizable quarterly in 26 installments starting on the ninth calendar month counted from the disbursement date.
As per the loan agreement, the subsidiary Vientos La Genoveva II S.A.U. has committed to maintain: (i) a financial debt-to-EBITDA ratio lower than 3.75 until the end of June 2025 and lower than 2.25 thereafter; and (ii) an EBITDA-to-financial debt service ratio higher than 1.00 until late June 2025 and higher than 1.10 thereafter, both until the total payment of the owed amounts. Finally, there are certain requirements the subsidiary must fulfill concerning dividend payments. As of December 31, 2024, the subsidiary has complied with these obligations.
In addition, the subsidiary Vientos La Genoveva II S.A.U. has granted Banco de Galicia y Buenos Aires S.A. a pledge, registered as a first-degree charge against the financed assets.
Other agreements and related documents, like the collateral agreement (in which Central Puerto totally, unconditionally and irrevocably guarantees, as main debtor, all the payment obligations assumed by Vientos La Genoveva II S.A. until total fulfillment of the guaranteed obligations or until the project reaches the commercial operation date, whichever happens first), guarantee agreements on shares, on wind turbines, direct agreements and promissory notes have been signed.
Pursuant to the collateral agreement, among other obligations, Central Puerto has agreed, until the project termination date, to maintain a debt ratio of no more than 3.75:1.00. Moreover, Central Puerto, under certain conditions, agreed to make capital contributions to subsidiary Vientos La Genoveva II S.A. Moreover, Central Puerto has agreed to maintain, unless otherwise consented to in writing by the lender, the ownership (directly or indirectly) and control over Vientos La Genoveva II S.A. As of September 3, 2021, Vientos La Genoveva II S.A. has fulfilled all the requirements and conditions to achieve the project’s completion date. As a result, the collateral posted by us was released and CPSA is no longer subject to the obligations previously described.
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On July 23, 2019, the loan was fully disbursed. As of December 31, 2024, the balance of this loan, was US$10.86 million, approximately equivalent to Ps.11.20 billion, net of transaction costs.
Loan from Mitsubishi Corporation to subsidiary Central Costanera S.A.
On November 29, 1996, the company CECO entered into an Agreement with Mitsubishi Corporation for the installation of a combined cycle power station. The original agreement includes a US$192.5 million financing in 12 years counted as from the provisional reception of the project, with an annual 7.42 % fixed rate and a semester capital and interest amortization.
On October 27, 2014, Central Costanera S.A. and Mitsubishi Corporation agreed on the restructuring of such liabilities. Among the main restructuring conditions, the following stand out: accrued and accumulated interest remission as of September 30, 2014 for the amount of US$66,061,897; the rescheduling of capital due date for the amount of US$120,605,058 for an 18-year term, with a 12-month grace period, which must be totally paid before December 15, 2032; a minimum annual payment of US$3,000,000 in concept for capital, in quarterly installments; an annual 0.25% fixed rate; and certain dividend payment restrictions were agreed on.
Considering the restrictions imposed by the Argentine Central Bank described on Note 20 of our consolidated financial statements, several amendments to the loan agreement were entered into as from September 30, 2020.
The loan considers certain financial restrictions, which as of December 31, 2024 have been completely fulfilled by CECO. Moreover, as guarantee of the obligations undertaken, CECO has a pledge in favor of Mitsubishi Corporation with a first degree recording on the financed asset.
As of December 31, 2024, the balance of this loan was US$33.41 million, approximately equivalent to Ps.34.48 billion, net of transaction costs.
Loan from Equinor Wind Power AS to subsidiary Cordillera Solar VIII S.A.
As a result of the solar farm acquisition described in Note 20.7, the Company consolidated the liabilities corresponding to the loan granted to the subsidiary Cordillera Solar by its previous shareholder Equinor Wind Power AS for a capital amount of US$ 62,199,879 and interest for US$ 8,983,951. As a guarantee for such loan, Cordillera Solar gave a first-grade pledge over certain properties, plant, and equipment of such company in favor of Equinor Wind power AS.
On October 18, 2023, Proener and the previous shareholder Equinor Wind Power AS agreed on a refinancing plan for a 24-month term counted as from the refinancing date at a 9% annual rate. In addition, on such date, Cordillera Solar paid an amount of US$ 40 million with funds obtained through the loan described on Note 13.3.13 to our Consolidated Financial Statements.
Moreover, as a result of the acquisition, the Company has also consolidated the liabilities for the Junior Shareholder Loan Agreement granted to Cordillera Solar for a US$ 1,768,897 balance, which on October 18, 2023, was also refinanced at a 9% annual rate to be paid 24 months after the refinancing date.
On September 6 and October 7, 2024, both loans were fully repaid.
Loan from Banco Santander International to subsidiary Cordillera Solar S.A.
On October 18, 2023, our subsidiary Cordillera Solar agreed to enter, as borrower, into a financing with Banco Santander International for an amount of US$40 million at an annual rate of 6.5%, with a 24-month maturity. As of December 31, 2024, the outstanding amount under this loan is US$40 million, equivalent to approximately Ps.41.83 billion, which is guaranteed with financial securities.
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Central Puerto S.A. Program of Corporate Bonds
On July 31, 2020, our special shareholders’ meeting approved the creation of the Program. Moreover, the Board of Directors was granted the powers to determine and establish the conditions of the Program and of the corporate bonds to be issued under it provided they had not been expressly determined at the shareholders’ meeting. On October 29, 2020, CNV approved the creation of such program, which shall expire on October 29, 2025, in accordance with the regulations in force.
Within this program framework, we issued two types of corporate bonds. On the one hand, on September 17, 2023, the paying in and liquidation of the Class A Corporate Bond (CB) took place, denominated, paid-in and payable in US dollars abroad. The characteristics of this CB are the following: (i) face value issued: US$37,232,818, (ii) interest rate, determined by bidding: 7%, (iii) periodicity of the interest coupon: six months, (iv) amortization: bullet, (v) term: 30 months to be counted as from September 17, 2023 and (vi) applicable law and deposit place: Argentina, Caja de Valores S.A. On the other hand, on October 17, 2023, the paying in and liquidation of the international bond denominated “10% Senior Notes due 2025” (Class B CB) took place. Such bond is denominated, paid-in and payable in US dollars abroad, under the Reg S scheme. The characteristics of this bond are the following: (i) face value issued: US$50,000,000, (ii) interest rate, determined by bidding: 10%, (iii) periodicity of the interest coupon: six months, (iv) amortization: bullet, (v) term: 24 months to be counted as from October 17, 2023 and (vi) applicable law and deposit place: New York, Euroclear.
Finally, on October 20, 2023, we decided to reopen the Class A CB. This procedure allows to offer in the market a security which replicates the conditions of the security already offered, incorporating the interest rate determined in the original offer (7%) and to bid the price. As a result of this process, we issued additional US$10,000,000 for the Class A CB, with an issuance price of 102.9%.
CP Manque S.AU. and CP Los Olivos S.A.U. Program of Corporate Bond
On August 26, 2020, under Resolution No. RESFC-2020 – 20767 – APN.DIR#CNVM, the public offering of the Global Program for the Co-Issuance of Simple Corporate Bonds (not convertible into shares) by CP Manque S.A.U. and CP Los Olivos S.A.U. (both subsidiaries of CPR, and together the “Co-Issuers”) for the amount of up to US$80,000,000 was authorized. By virtue of such program, the Co-Issuers may issue corporate bonds, of different class and/or series, that may qualify as social, green and sustainable marketable securities under the criteria established by CNV in that regard.
Within the framework of the mentioned program, dated September 2, 2020, Corporate Bonds Class I were issued for an amount of US$35,160,000 at a fix 0% interest rate expiring on September 2, 2023. Such bonds were fully repaid at maturity; and Corporate Bonds Class II were issued for 1,109,925 at a variable interest rate equivalent to BADLAR rate, plus an applicable margin of 0.97% expiring on September 2, 2021, which was fully cancelled on that date.
Finally, on June 26, 2024, and in line with the decisions made at the special shareholders' meetings of the Co-Issuers on May 13, 2024, CNV decided to revoke the authorization previously granted to the Co-Issuers for the public offering of their corporate bonds, proceed with the early cancellation of the global co-issuance programme mentioned, and terminate CNV corporate control over the Co-Issuers.
Short term loans for import financing
As of December 31, 2024, the subsidiary Vientos La Genoveva II S.A.U. has several outstanding short-term loans with Banco Santander S.A. (Uruguay) for a total amount of US$ 1,353,776. These loans accrue interest at an effective annual rate of 7% with maturities between January 28, 2025, and March 9, 2025. As of the date of this annual report, these loans have been fully repaid.
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The proceeds of the loans were applied to finance the acquisition of trackers, panels and inverters and transformation centers to be installed in the San Carlos solar farm (see Note 18.10).
As of December 31, 2024, CPSA has several outstanding short-term loans with Banco Santander S.A. (Uruguay) for a total of US$ 252,899 to finance the acquisition of equipment to be used in the Brigadier Lopez project, aiming to convert a thermal open cycle power station into a combined cycle power plant. These loans accrue interest at an effective annual rate of between 7% and 8%, with maturities between January 9, 2025, and April 30, 2025.
On November 4, 2024, the subsidiary company Central Costanera S.A. signed a short-term loan with Banco Santander S.A. (Uruguay) for a total of US$ 36,318 to finance the import of materials and equipment. This loan accrues interest at an effective annual rate of 7%, with a scheduled maturity date of May 5, 2025.
See “Item 3.D. Risk Factors—Risks Relating to Argentina—Exchange controls and restrictions on capital inflows and outflows could limit the availability of international credit and could threaten the financial system, adversely affecting the Argentine economy and, as a result, our business” and “ —Risks Relating to Our Business—We may be unable to refinance our outstanding indebtedness, or the refinancing terms may be materially less favorable than their current terms, which would have a material adverse effect on our business, financial condition and results of operations”.
Item 5.C Research and Development, patents and licenses, etc.
We do not have any significant policies or projects relating to research and development, and we own no patents or licenses.
Item 5.D Trend Information
The following discussion includes forward-looking statements based on our management’s current beliefs, expectations and estimations. Forward-looking statements involve inherent risks and uncertainties. Our future operating and financial performance may differ materially from these forward-looking statements, including due to many factors outside of our control. We do not undertake any obligation to update forward-looking statements in the event of changed circumstances or otherwise. For further information, see “Forward-Looking Statements” and “Item 3.D.—Risk Factors” in this annual report.
We expect our operating and financial performance in the future to benefit from the increase of our power generation capacity.
As of the date of this annual report, works for the conversion of the Brigadier Lopez open cycle thermal plant into a combined cycle facility have started and are expected to be completed by the end of 2025. "See Item 4. A History and development of the Company—Purchase of the Brigadier Lopez Plant”.
We successfully participated in CAMMESA’s auction for 10 MW of dispatch priority for our Parque Solar San Carlos Project under the MATER framework, located in San Carlos, Province of Salta. "See Item 4. A History and development of the Company—Renewable energy projects".
Several factors have affected our plans for our prospect projects: (a) the economic recession in Argentina, (b) the decrease in demand of electric energy, and (c) the lack of available financing. These circumstances have affected and may continue to affect not only the Brigadier Lopez project but also the possibility of new expansion projects and opportunities. We purchased one General Electric gas turbine with a capacity of 373 MW and 130 hectares of land in the north of the Province of Buenos Aires, the new General Electric gas turbine could either be applied to new or existing projects. See “Item 5.A Operating Results—Factors Affecting our Results from Operations—Expansion of Our Generating Capacity”.
The changes made to the Spot Sales Regulatory Framework may help the Argentine Government’s fiscal deficit reduction, since it may reduce the subsidies needed for the sector. We have no control over price and tariffs. See “Item 3.D. Risk Factors—Risks Relating to the Electric Power Sector in Argentina—The Argentine Government has intervened in the electric power sector in the past and is likely to continue intervening” and “Item 3.D.—Risk Factors—Risks Relating to Our Business—Our results depend largely on the compensation established by the Secretariat of Energy and received from CAMMESA”.
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In terms of the performance of our plants, we estimate that our existing plants will achieve availability factors consistent with their average historical performances over the past ten years and in the case of our combined cycle units that the plants will achieve availability factors consistent with the assurances provided by our vendors.
A substantial portion of our remuneration is currently based on fixed capacity and not generation levels. Our power plants are subject to the risk of mechanical or electrical failures and any resulting unavailability may affect our ability to fulfill our contractual and other commitments and thus adversely affect our business and financial performance”.
The HPDA Concession Agreement executed between us and the Argentine Government, pursuant to which we were permitted to operate our Piedra del Águila plant, expired on December 28, 2023, and did not provide for an automatic renewal. Resolution No. 574/2023, published on July 11, 2023, extended for 60 days (extendable for another 60 days) the termination date of the HPDA Concession Agreement, among other national hydroelectric power plants whose concession term expired during 2023. Another renewal of such period was established by Resolution 02/24, issued by the Secretariat of Energy, which was set to expire on April 27, 2024. In addition, on March 15, 2024, Resolution 33/24, issued by the Secretariat of Energy, extended once again the transition period for 60 days setting the expiration date on June 28, 2024. On August 14, by virtue of Decree No. 718/2024 issued by the current administration, the concession was extended until December 28, 2025. This decree also called for a tender process, to be conducted during 2025, for purposes of offering certain hydro assets (including HPDA) to private investors for a new concession term. On April 9, 2025, Decree No. 263/2025 was issued, setting a period of 15 days to launch the National and International Public Tender provided for under Decree No. 718/2024 (as amended by Decree No. 895/2024). We will carefully evaluate the terms and conditions of this process to decide whether we participate in it. Any governmental decision regarding the future of hydroelectric concessions may adversely affect our results of operations. See “Item 3.D.—Risk Factors—Risks Relating to Our Business”.
Regarding the collections from CAMMESA, from September 2016 to November 2017 CAMMESA has paid without delays, and since then, there were periods in which CAMMESA experienced certain delays in paying up to 90 days (for further information on the duration of these delays see “Item 11. Quantitative and Qualitative Disclosures about Market Risk—Credit Risk”). For these delays, we are entitled to receive interests from CAMMESA. Payments related to PPAs under the Renovar Regulatory Framework have not suffered delays. CAMMESA may once again be unable to make payments to generators both in respect of energy dispatched and generation capacity availability on a timely basis or in full, which may substantially and adversely affect our financial position and the results of our operations.
It is important to highlight that the CAMMESA payments corresponding to December 2023, and January and February 2024 experienced significant delays. Such delays not only affected our immediate liquidity but also created uncertainty in short-term financial planning. Despite these challenges, we managed to reach an agreement on May 24, 2024, to settle the debts, although this resulted in a considerable consolidated loss due to the lower market value of the bonds used for payment. See "Item 5.B. - Liquidity and Capital Resources - Receivables from CAMMESA".
We intend to continue focusing on improving our efficiency, not only with regards to the management of the generation units, but also in the administration of our resources, in order to continue working towards positioning ourselves as one of the leading companies in the electrical and forestry sectors in Argentina. In the past years, we have also assumed an increase in our number of employees related to our recent acquisitions and expansion projects, but we believe that wages will remain in line with current levels; additionally, we are currently merging several of our subsidiaries to streamline operations and enhance efficiency. We cannot assure you that our operating or other costs will not increase at higher rates. See “Item 3.D. Risk Factors—Risks Relating to Argentina—Government measures, as well as pressure from labor unions, could require salary increases or added benefits, all of which could increase companies’ operating costs,” “Item 3.D.—Risk Factors Relating to Our Business—We could be affected by material actions taken by the trade unions,” “Item 3.D.—Risk Factors—Risks Relating to the Electric Power Sector in Argentina—We operate in a heavily regulated sector that imposes significant costs on our business, and we could be subject to fines and liabilities that could have a material adverse effect on our results of operations” and “Item 3.D.—Risk Factors—Risks Relating to Our Business—Our ability to generate electricity at our thermal generation plants partially depends on the availability of natural gas and, to a lesser extent, liquid fuel”.
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With the aim of diversifying our risk and sources of revenues, we acquired an equity stake in AbraSilver. As of the date of this annual report, we have a 9.9% participation in such company (See “Item 4 - Recent Developments - Acquisition of interest in AbraSilver”). Moreover, in December 2024 we acquired a 27.5% stake in the '3 Cruces' lithium mining project in Catamarca (See “Item 4 - Recent Developments - Acquisition of interest in 3 Cruces lithium mining project”).
Currently, we are also assessing the feasibility of a high voltage power transmission line, which would supply clean energy to mining projects in northern Argentina. In December 2024, we entered into an agreement with IFC to jointly finance such feasibility studies. Moreover, in January 2025, we signed another agreement with YPF Luz to further the feasibility analyses. This last agreement marks an important milestone, as it is the first time that two major electricity generation companies are jointly evaluating the technical and regulatory aspects of an infrastructure project seeking to provide a supply solution to the mining industry. The prospective project would involve constructing a 140 km-long electric power transmission line, with the possibility of extending it to as much as 350 km. (See “Item 4 - Recent Developments - Central Puerto and IFC Partner to Enhance Sustainable Mining in Argentina”, and “Item 4 - Recent Developments - Central Puerto celebrated an agreement with YPF Luz to evaluate the possibility to develop a high voltage power transmission line in Northern Argentina”).
Item 5.E Critical Accounting Estimates
See Item 17 - Financial Statements - Note 2.3 - Significant accounting estimates and assumptions.
Item 6 Directors, Senior Management and Employees
Item 6.A Directors and senior management
Board of Directors
We are managed by our Board of Directors in accordance with the Argentine Corporate Law. Our Board of Directors makes management decisions, as well as those expressly set forth in the Argentine Corporate Law, our bylaws and other applicable regulations. In addition, our Board of Directors is responsible for carrying out shareholders’ resolutions and fulfilling particular tasks expressly delegated by the shareholders.
According to our bylaws, our Board of Directors must be composed of nine directors for three-year periods and its composition shall be renewed by one-third of the members. Our shareholders may also appoint an equal or lesser number of alternate directors. As of the date of this annual report, and until the shareholders’ meeting approving our consolidated financial statements for the fiscal year ended December 31, 2024, is held, our Board of Directors is composed of nine directors and eight alternate directors. All of our directors reside in Argentina.
In the above-mentioned shareholders’ meeting, the appointment of the members of our Board of Directors will proceed in such a way that it is integrated in accordance with article 17 of our bylaws and the directors will be appointed with differentiated terms of office. Directors and their alternates are appointed for a term of one year by our shareholders during our annual shareholders’ meetings. Directors may be reelected. Shareholders are entitled to elect up to one-third of the vacant seats by cumulative voting pursuant to Section 263 of the Argentine Corporate Law. Pursuant to Section 257 of the Argentine Corporate Law, the directors maintain their positions until the following annual ordinary shareholders’ meeting where directors are appointed.
The latest election relating to our Board of Directors took place at the ordinary shareholders’ meeting held on April 30, 2024, and the latest version of our bylaws was approved on June 30, 2022, and registered with the Public Registry of the City of Buenos Aires on December 29, 2022. See “Item 10.B. Memorandum and articles of association—Statutory Provisions concerning our Board of Directors”.
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During the first board meeting after directors have been appointed, they must appoint a chairman and vice-chairman of the board. The vice-chairman would automatically and temporarily replace the chairman in the event that the chairman is absent, resigns, dies, is incapacitated or disabled, removed or faces any other impediment to serve as chairman. A new chairman must be elected within ten days from the seat becoming vacant. The election of a new chairman must take place only if the situation that gives rise to the re-election is expected to be irreversible during the remaining term of office.
According to Section 26 of our bylaws, our Board of Directors has the broadest powers and authorities in connection with our direction, organization and administration, with no limitations other than those set forth by the applicable laws and regulations. The chairman is our legal representative.
The following table sets forth the current composition of our Board of Directors:
|
Name |
Title |
Date of first appointment to the board |
Date of expiration of current term |
Date of birth |
||||
| Osvaldo Arturo Reca | Chairman of the Board | April 30, 2024 | December 31, 2026 | December 14, 1951 | ||||
| Miguel Dodero | Director | September 21. 2015 | December 31, 2025 | February 16, 1955 | ||||
| José Luis Morea* | Director | April 30, 2019 | December 31, 2025 | October 9, 1954 | ||||
| Tomás José White* | Director | April 27, 2018 | December 31, 2025 | May 18, 1957 | ||||
| Marcelo Atilio Suva | Director | July 22, 2008 | December 31, 2024 | July 27, 1948 | ||||
| Jorge Eduardo Villegas* | Director | April 28, 2017 | December 31, 2024 | January 9, 1949 | ||||
| Martina Blanco | Director | April 29, 2022 | December 31, 2024 | October 18, 1987 | ||||
| Martín Lhez* | Director | April 29, 2022 | December 31, 2026 | April 21, 1968 | ||||
| Diego Gustavo Petracchi | Director | April 27, 2018 | December 31, 2026 | July 17, 1972 | ||||
| José Manuel Ortiz | Alternate Director | April 15, 2009 | December 31, 2025 | August 6, 1960 | ||||
| Adrián Gustavo Salvatore | Alternate Director | April 27, 2018 | December 31, 2025 | April 26, 1967 | ||||
| Martín Orozco* | Alternate Director | April 28, 2023 | December 31, 2025 | October 1, 1965 | ||||
| Mario Elizalde | Alternate Director | July 11, 2007 | December 31, 2024 | July 26, 1954 | ||||
| José Manuel Pazos | Alternate Director | April 30, 2019 | December 31, 2024 | September 14, 1971 | ||||
| Alejo Villegas* | Alternate Director | April 30, 2021 | December 31, 2024 | February 16, 1980 | ||||
| Ramón Nazareno Ulloa* | Alternate Director | April 29, 2022 | December 31, 2026 | August 13, 1960 | ||||
| Fernando Roberto Bonnet | Alternate Director | April 30, 2024 | December 31, 2026 | March 23, 1977 |
| __________________ |
| Notes:- |
| * | Independent directors according to CNV rules, which differ from NYSE requirements for U.S. issuers. Note: Notwithstanding expiration of current term, under the company, bylaws, directors continue to serve in their capacity until the next shareholders’ meeting. |
The following are the academic and professional backgrounds of the members of our Board of Directors. The business address of each of the members of our Board of Directors is Avda. Thomas Edison 2701, Buenos Aires, Argentina.
Osvaldo Arturo Reca holds a degree in Engineering from Universidad Católica Argentina. He also received an advanced degree in 1977 from North Carolina State University in the United States. He has been a member of our Board of Directors since 2011. From 1980 to 1984, he was a shareholder and director of Ingeniería de Avanzada S.A., a company dedicated to the installation of sanitary and gas systems for residential developments. From 1984 to 1989, he served as general manager of Dufalp S.A., a leading company in the garment industry (“Dufour” was its main brand). From 1989 to 2002, Mr. Reca worked as commercial, operational, and planning manager at Alpargatas S.A., a leading company in the garment and footwear industry. He then developed an agricultural project for the production of cereals and oilseeds. He also served as vice president of HPDA from 2012 to 2015 and as a director of Transportadora de Gas del Norte S.A., Edesur S.A., and PB Distribución S.A. In addition, he currently serves as chairman of the board of Central Puerto S.A., Central Costanera S.A., Inversora de Gas del Centro S.A., Distribuidora de Gas del Centro S.A., Energía Sudamericana S.A., and is a director of RPS Consultores S.A. and Distrilec S.A.
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Miguel Dodero holds a degree in Business Administration from the Universidad de Buenos Aires. He has been a member of our Board of Directors since 2015. He has previous work experience at Agencia Marítima Dodero S.A. and Compañía Argentina de Navegación Intercontinental S.A. He served as chairman of Dodero Inmobiliaria y Mandataria S.A. from 1990 to September 2014. Mr. Dodero has been chairman of M. Dodero Compañía de Servicios S.A. since 1989 and of Full Logistics S.A. since 2008, as well as a shareholder of both companies. In addition, he currently serves as a director of Ecogas Inversiones, DGCU and DGCE.
Martina Blanco holds a degree in Business Administration and a postgraduate degree in Marketing from the Universidad Católica Argentina. She has worked as marketing manager in the food industry for 10 years and currently serves as a creative strategist at a digital agency.
José Luis Morea holds a degree in Political Science from the Universidad Católica Argentina. He completed postgraduate studies in SME Management at IAE. Between 1980 and 1990 he held executive positions in communication companies, mainly in Editorial Atlántida and Videomega. From 1990 to 1995 he served as Executive Director in San Ciriaco, with operations in the agricultural sector, and later as General Manager of Espro S.A., a company dedicated to the production and export of agriculture products. From 1999 to 2001 he became General Manager of Tecnovital S.A., a fruit export company. In 2001, he founded North Bay Argentina S.A., a company in which he serves as Chairman and General Manager. North Bay S.A. has become one of the main blueberry exporters and producers in Argentina. Together with other partners, he created Servifrío Ezeiza SA, a logistics and cold storage company in which he serves as Director. He is also Director of North Bay Peru S.A. and of North Bay Produce Inc. in the United States. He served in this group until 2013. In 2014 he joins La Gloriosa SA as Blueberries Project Manager, developing a high-tech enterprise in Virasoro, Corrientes, until December 2018. Between 2016 and 2018 he served as Director of Transportadora de Gas Cuyana. He has been a member of our Board of Directors since 2019. Since 2020, he has been a consultor in projects and high-tech agricultural developments for Adblick Hidroponia S.A. and Club Agtech S.A. and as Project Leader in Vegetable Proteins.
Martin Lhez holds a degree in Architecture from the Universidad de Buenos Aires. He is an independent contractor with more than 25 years of experience in the architecture and construction sector. He is currently a partner at Brick Studio Buenos Aires, architecture and design.
Diego Gustavo Petracchi holds a degree in Economics from the Universidad Católica Argentina and a master’s degree in Science of Management (Sloan Program) from Stanford University. He is the founder and currently serves as Chief Executive Officer of Yugen S.A. (We Care), a premium Senior Living company. From 2006 to 2015, he was a director of NDM Holding (Valle de las Leñas S.A.), a Company engaged in tourism, real state and agribusiness. He has also served as a director of Nieves de Mendoza S.A., Santa Rosa del Monte S.A., Rio Lobo S.A., Valles Mendocinos S.A. In addition, from 1995 to 2006, he worked in different positions, including Vice President, in Prefinex S.A., a company that provides financial advisory services.
Tomás José White holds a degree in Accounting from the Universidad Católica Argentina. From 1977 to 1984 he served as director in several private companies in the construction industry, such as Bemba S.A., Sumarge S.A. and Din S.A. From 1996 to 1998 he also served as a director of Empresa Amanco SA. Since 2000 he is the chairman of Celestal SAIC. Since 2019 he owns interests and is the chairman of BEP SRL, a company involved in the plastic industry.
Jorge Eduardo Villegas holds a degree in Law from the Universidad de Buenos Aires. Since his graduation, he has worked as a lawyer in the private sector, independently through his own law firm, Estudio Jorge Villegas & Asociados. Mr. Villegas also currently serves as the chairman of Agropecuaria Los Potros S.A.
Marcelo Suvá holds a degree in Economics from the Universidad Católica Argentina. He has served as alternate director of our Board of Directors since 2008. Since 2020 he has served as vice president of CPSA. He was shareholder of Coinvest SA, a private equity company, as well as of MBA Banco de Inversiones S.A. (currently known as Lazard Argentina SA), a leading Argentine investment bank, where he was also member of its Board of Directors and took part in various M&A transactions. He also served as Director of HNQ. Distrilec Inversora S.A. He also serves as director of Distrilec Inversora S.A. and alternate Director of Ecogas Inversiones, DGCU, DGCE and RPS Consultores S.A. He currently serves as chairman of the Governing Board at Universidad Austral.
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Mario Elizalde is an Agricultural Production Engineer, graduated from the Argentine Catholic University, holds a Master of Science degree from Texas A&M University and in 2018 graduated as a Secondary and University Professor at the Austral University. Between 1995 and 1999, Mr. Elizalde served as General Manager of Call Center S.A., a Citicorp Equity Investments (CEI) Value Added Telecommunications Services company. From 1982 to 2010, he was Manager and Agricultural Advisor of Sociedad Lanz, for the Administration of Agribusiness in the provinces of Buenos Aires and La Pampa. In addition, from 2000 to 2007, he served as Executive Director of Telinver S.A., a Telefónica Group company. Subsequently and after the merger by absorption of Telinver S.A. in 2008, he served as Executive Director and Property Manager of the company’s operations in Chile, Peru and Argentina until 2015. From July 2007 to September 2015, he held the position of Director of Central Puerto S.A., as well as Member of the Audit Committee and President of the same during the years 2012 and 2013. During 2017 and 2018 he was Alternate Director of Compañías Central Puerto S.A. and Distribuidora de Gas Cuyana. Since 2019 he has been teaching History of Economic Thought classes at the Faculty of Business Sciences of the Austral University. As of May 2022, he is the Independent Principal Director of Central Puerto S.A.
Martín Orozco is a public auctioneer, he previously graduated from the high school Escuela Argentina Modelo. He currently works as an Agricultural and forestry producer. In the past he founded Fundación ZORBA which is an organization for the purpose of Environmentalism and Animal Rescue and is a columnist for the newspaper LA NACION since 2022.
Ramon Ulloa is an engineer graduated from the Universidad Tecnológica Nacional Argentina, with an MBA from the Instituto de Altos Estudios Empresariales (IAE). He is also an insurance producer registered in the National Superintendence of Insurance -Mat 47.816. He is a businessman, Vice President of La Suerte Rural SA, an agricultural and livestock company and partner of Triptico 2021 SRL, a company dedicated to real estate projects. He is also a founding partner of Xtreme RU Broker de seguros SRL. He is an insurance advisor, with more than 40 years of experience in the market, where he has worked in insurance companies as well as in international insurance brokers. He is currently working with Aon Broker as a business advisor.
Adrián Gustavo Salvatore holds a degree in law from the Universidad de Buenos Aires and an MBA in a joint degree from the Universidad del Salvador (Argentina) and the Universidad de Deusto (Spain). From 1993 to 1997 he worked at the legal and regulatory department of ESEBA, where he was in charge of the process of privatizing the company. From 1997 to 2003, he worked as legal manager at COMESA, Comercializadora de Energía, and in 2003 he joined the law firm Bruchou, Fernández Madero, Lombardi & Mitrani, as part of their regulatory and public services department. He has worked in the regulatory department of Central Puerto since 2008, he served as a Director in CAMMESA (Compañía Administradora del Mercado Mayorista Eléctrico) from 2008 to 2014 and he currently serves as Institutional Relations Director. He has served as President in CP Renovables S.A., Proener S.A.U., Forestal Argentina S.A., Loma Alta S.A., Empresas Verdes Argentinas S.A., Estancia Celina S.A., Las Misiones S.A., Cordillera Solar S.A., and CP Servicios Renovables S.A. since 2024. He has also served as Vicepresident in CP Manque S.A.U., and CP Olivos S.A.U., and in Vuelta de Obligado S.A. since 2023. He has served as Director in CP Achiras S.A.U., CP Energy Solutions S.A.U., Vientos La Genoveva S.A.U., Vientos La Genoveva II S.A., CP La Castellana S.A.U., and Puerto Energia S.A.U. since 2024, and in Termoelectrica Jose de San Martin S.A. since 2023.
José Manuel Pazos holds a degree in law from the Universidad Católica Argentina. He also holds a postgraduate degree in Utilities’ Economic Regulation from the Universidad Austral. He has served as General Counsel, Head of Legal Area and alternate director of our Board of Directors since 2015. From 1997 to 2002, he served as lawyer of the Argentine Secretariat of Energy and Emprendimientos Binacionales S.A. (EBISA), and, from 2003 to 2014, he worked for the law firm, Bruchou, Fernández Madero & Lombardi. Between 2007 and 2008, he worked for Simpson Thacher & Bartlett LLP in New York. Currently he serves as alternate director of Central Puerto S.A., Distrilec Inversora S.A., CP Renovables S.A., CP Achiras S.A.U., CP La Castellana S.A.U., Puerto Energía S.A.U. and Vientos La Genoveva S.A.U.
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José Manuel Ortiz holds a degree in Industrial Engineering from Universidad Católica Argentina and holds a Master of Business Administration from the University of Michigan at Ann Arbor. Mr. Ortiz is a co-founder of Cono Sur Capital, a private equity firm with investments in transportation and logistics in Uruguay and in the pharmaceutical sector in Argentina. Since 2016 he serves as Principal of Cono Sur Inversiones, a commercial bank regulated by Argentina’s CNV. In 2000, he co-founded Coinvest Argentina, a private equity firm that invested in power distribution and generation, consumer retail, and telecommunication companies. From mid-1992, soon after its incorporation, and until December 1999, Mr. Ortiz acted as Managing Director of The Exxel Group. At Exxel, he had responsibility of analyzing, negotiating and closing acquisitions in diverse business sectors, as well as monitoring investments, including the design and execution of roll-up strategies. From 1984 to 1992, Mr. Ortiz held operations, planning and financial management positions, including the development and subsequent negotiation of steel supply, logistics and transportation agreements with U.S., European and Brazilian companies, for the Techint Group, one of the largest corporations in Argentina.
Alejo Villegas is a lawyer graduated from the Universidad Católica Argentina in 2006. Since then, he has worked as an independent professional advising clients in the private sector. He has been part of the Jorge Eduardo Villegas Law Firm since 2002, specializing in advising on Civil and Commercial Law. He is registered with the Federal Capital Bar Association and with the San Isidro Bar Association. He is currently a member of the Directory of commercial companies that develop activities related to agriculture and tourism.
Fernando Roberto Bonnet is a Public Accountant from the Universidad Nacional de Buenos Aires. Additionally, between 2009 and 2010, he completed a postgraduate course in Executive Business Administration at IAE Business School of Universidad Austral. Since April 1, 2021, he has served as Executive Director of the Company, having held the position of Chief Operations Officer from March 2020 to March 2021, Chief Financial Officer from 2010 to March 2020, and Tax Manager from 2008 to 2010. Previously, he also held the position of Tax Director at Ernst & Young Argentina. Currently, Mr. Bonnet is an alternate director of CP Achiras S.A.U., Puerto Energía S.A.U., Vientos La Genoveva S.A.U., Vientos La Genoveva II S.A.U.
Family Relationships
Mr. Juan Antonio Nicholson is the father of Lucas Nicholson, and serve as Syndic and Alternate Syndic, respectively, on our Supervisory Committee
Duties and Liabilities of Directors
Directors have the obligation to perform their duties with the loyalty and the diligence of a prudent businessperson. Under Section 274 of the Argentine Corporate Law, directors are jointly and severally liable to the company, the shareholders and third parties for the improper performance of their duties, for violating any law or the bylaws or regulations, if any, and for any damage to these parties caused by fraud, abuse of authority or gross negligence. The following are considered integral to a director’s duty of loyalty: (i) the prohibition on using corporate assets and confidential information for private purposes; (ii) the prohibition on taking advantage, or allowing another to take advantage, by action or omission, of the business opportunities of the corporation; (iii) the obligation to exercise board powers only for the purposes for which the law, the corporation’s bylaws or the shareholders’ or the board of directors’ resolutions were intended; and (iv) the obligation to take strict care so that acts of the board do not go, directly or indirectly, against the corporation’s interests. A director must inform the board of directors and the Supervisory Committee of any conflicting interest he or she may have in a proposed transaction and must abstain from voting thereon.
In general, a director will not be held liable for a decision of the board of directors, even if that director participated in the decision or had knowledge of the decision, if (i) there is written evidence of the director’s opposition to the decision and (ii) the director notifies the Supervisory Committee of that opposition. However, both conditions must be satisfied before the liability of the director can be contested before the board of directors, the Supervisory Committee or the shareholders or relevant authority or the commercial courts.
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Section 271 of the Argentine Corporate Law allows directors to enter into agreements with the company that relate to such director’s activity and under arms’ length conditions. Agreements that do not satisfy any of the foregoing conditions must have prior approval of the board of directors (or the Supervisory Committee in the absence of board quorum) and must be notified to the shareholders at a shareholders’ meeting. If the shareholders reject the agreement, the directors or the members of the supervisory committee, as the case may be, shall be jointly and severally liable for any damages to the company that may result from such agreement. Agreements that do not satisfy the conditions described above and are rejected by the shareholders are null and void, without prejudice to the liability of the directors or members of the Supervisory Committee for any damages to the company.
The acts or agreements that a company enters into with a related party involving a relevant amount shall fulfill the requirements set forth in Section 72 and 73 of Argentine Capital Markets Law. Under Section 72, the directors and syndics (as well as their ascendants, descendants, spouses, brothers or sisters and the companies in which any of such persons may have a direct or indirect ownership interest) are deemed to be a related party. A relevant amount is considered to be that which exceeds 1.00% of the net worth of the company as per the latest balance sheet. The board of directors or any of its members shall require from the audit committee a report stating if the terms of the transaction may be reasonably considered adequate in relation to normal market conditions. The company may proceed with the report of two independent evaluating firms that shall have informed them about the same matter and about the other terms of the transaction. The board of directors shall make available to the shareholders the report of the audit committee or of the independent evaluating firms, as the case may be, at the main office on the business day after the board’s resolution was adopted and shall communicate such fact to the shareholders of the company in the respective market bulletin. The vote of each director shall be stated in the minutes of the board of directors approving the transaction. The transaction shall be submitted to the approval of the shareholders of the company when the audit committee or both evaluating firms have not considered the terms of the transaction to be reasonably adequate in relation to normal market conditions. In the case where a shareholder demands compensation for damages caused by a violation of Section 73, the burden of proof shall be placed on the defendant to prove that the act or agreement was in accordance market conditions or that the transaction did not cause any damage to the company. The transfer of the burden of proof shall not be applicable when the transaction has been approved by the board of directors with the favorable opinion of the audit committee or the two evaluating firms.
We may initiate causes of action against directors if so decided at a meeting of the shareholders. If a cause of action has not been initiated within three months of a shareholders’ resolution approving its initiation, any shareholder may start the action on behalf of and on the company’s account. A cause of action against the directors may be also initiated by shareholders who object to the approval of the performance of such directors if such shareholders represent, individually or in the aggregate, at least 5.00% of the company’s capital stock.
Except in the event of our mandatory liquidation or bankruptcy, shareholder approval of a director’s performance, or express waiver or settlement approved by the shareholders’ meeting, terminates any liability of a director vis-à-vis the company, provided that shareholders representing at least 5.00% of the company’s capital stock do not object and provided further that such liability does not result from a violation of law or the company’s bylaws.
Under Argentine law, the board of directors is in charge of the company’s management and administration and, therefore, makes any and all decisions in connection therewith, as well as those decisions expressly provided for in the Argentine Corporate Law, the company’s bylaws and other applicable regulations. Furthermore, the board of directors is responsible for the execution of the resolutions passed in shareholders’ meetings and for the performance of any particular task expressly delegated by the shareholders.
Meetings, Quorum, Majorities
Pursuant to Section 23 of our bylaws, our Board of Directors’ meetings require a quorum of an absolute majority of its members. Our Board of Directors functions and acts upon the majority vote of its members present at its meetings either physically or via videoconferencing.
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Our Board of Directors’ minutes must be drafted and signed by directors and syndics who are present at the meeting within five days from the date on which it was held. Members of our Supervisory Committee must register in the minutes the names of the directors who have participated in the meeting remotely and that the decisions made therein were made in accordance with the law. The minutes must include the statements from directors participating in person and remotely and must state their respective votes on each decision made.
The chairman, or the individual acting in lieu of the chairman pursuant to applicable law, may call meetings when deemed convenient, or when so required by any director or the supervisory committee. The meeting must be called within five days from the request; otherwise, the meeting may be called by any of the directors. Our Board of Directors’ meetings must be called in writing and notice thereof must be given to the address reported by each director. The notice must indicate the date, time and place of the meeting and the meeting agenda. Business that is not included in the notice may be discussed at the meeting only to the extent all permanent directors are present and have cast their unanimous vote.
Independence Criteria of Directors
In accordance with the provisions of Section 4, Chapter I, Title XII “Transparencia en el Ámbito de la Oferta Pública” and Section 11, Chapter III, Title II “Órganos de Administración y Fiscalización, Auditoría Externa” of the CNV rules, we are required to report to the shareholders’ meeting, prior to vote the appointment of any director, the status of such director as either “independent” or “non-independent”. At present José Luis Morea, Tomas José White, Jorge Eduardo Villegas, Alejo Villegas, Martín Lhez, Martín Orozco and Ramón Nazareno Ulloa are independent members of our Board of Directors according to the criteria established by the CNV, which may differ from the independence criteria of the NYSE and NASDAQ. See “Item 6. —Audit Committee” for further details about independence requirements of the members of our Audit Committee at the time of the offering.
Corporate Governance
We have adopted a corporate governance code to put into effect corporate governance best practices, which are based on strict standards regarding transparency, efficiency, ethics, investor protection and equal treatment of investors. The corporate governance code follows the guidelines established by the CNV. We have also adopted a Code of Business Conduct designed to establish guidelines with respect to professional conduct, morals and employee performance.
Senior Officers
The following table sets forth the current composition of our management team:
|
Name |
Title |
Date of first appointment to position |
Date of birth |
|||
| Fernando Roberto Bonnet | CEO | 2021 | March 23, 1977 | |||
| Enrique Terraneo | CFO | 2021 | October 13, 1974 | |||
| Alberto Francisco Minnici | Production and Combined Cycle Plant Manager | 2015 | April 14, 1965 | |||
| José María Saldungaray | Fuel Supply Planning Manager | 2014 | February 18, 1967 | |||
| Justo Pedro Sáenz | Administration Manager | 2007 | May 2, 1958 | |||
| José Manuel Pazos | General Counsel, Head of Legal Area | 2015 | September 14, 1971 | |||
| Gabriel Omar Ures | Commercial Director | 2018 | December 31, 1978 | |||
| Leonardo Marinaro | Legal Affairs Manager | 2007 | April 25, 1963 | |||
| Javier Alejandro Torre | Human Resources Manager | 2016 | April 19, 1967 | |||
| Adrián Gustavo Salvatore | Institutional Relations Director | 2019 | April 26, 1967 | |||
| Martín Fernández Barbiero | Compliance and Internal Audit Manager | 2009 | April 28, 1971 | |||
| Leonardo Katz | Strategic Planning Director | 2020 | March 24, 1970 |
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The following are the academic and professional backgrounds of our senior management. The business address of each of the members of our senior management team is Avda. Thomas Edison 2701, Buenos Aires, Argentina.
Enrique Terraneo holds a degree in Accounting from the Universidad Nacional de Buenos Aires. In addition, from 2009 to 2010, he completed a graduate level course in Executive Business Administration in IAE Business School, Universidad Austral. Since April 2021, he serves as our Chief Financial Officer. Previously, he served as new business manager in Lartirigoyen y Cia. From 2019 to 2020, he served as CFO of Banco de Inversion y Comercio Exterior. Between 2006 and 2019, he served as our finance manager. Previously he also served as audit manager of Ernst & Young Argentina.
Alberto Francisco Minnici holds a degree in Electrical Engineering from the Universidad Tecnológica Nacional. Mr. Minnici has 37 years of experience in the electric power industry. He has served as Central Puerto’s Production and Combined Cycle Plant Manager since 2015. Previously, he served as Plant Operations Manager of the Puerto Complex from 2012 to 2015 and as Plant Operations Manager of the combined cycle plant of the Puerto Complex located in the City of Buenos Aires from 2008 to 2012, among other positions within Central Puerto.
José María Saldungaray holds a degree in Electrical Engineering from the Universidad Nacional del Sur, Bahía Blanca, Argentina. He has been our planning manager since 2014. He currently serves as alternate director of Proener S.A.U., Vientos la Genoveva S.A.U. and Vientos La Genoveva II S.A. He also served as commercial manager of HPDA and was a member of the board of directors of Centrales Térmicas Mendoza S.A. and LPC.
Justo Pedro Sáenz completed the “Advanced Management Program” at The Wharton School, University of Pennsylvania in the United States. He has served as alternate director of Central Puerto’s Board of Directors since 2008. From 2007 to 2016, he served as administration and human resources manager of Central Puerto, and since 2016 he serves as administration manager of Central Puerto. From 2005 to 2007, he worked at Cima Investments in the new business area. From 2003 to 2005, he served as Chief Financial Officer of Banco de Servicios y Transacciones S.A. In 2002, he co-founded Idun Inversiones S.A. From 2000 to 2001, he held the position of partner and finance manager of Softbank Latin America Ventures, Venture Capital Fund. From 1984 to 2000, he worked at Merchant Bankers Asociados, MBA Banco de Inversiones and MBA Sociedad de Bolsa. He has been a partner of Merchant Bankers Asociados since 1992, which was affiliated with Salomon Brothers and the investment company of Nicholas Brady, former U.S. Secretary of Treasury. In addition, he currently serves as a director of Proener S.A.U., Vientos La Genoveva S.A.U. y Vientos La Genoveva II S.A., and as an alternate director of Ecogas Inversiones, DGCU, DGCE, CP Renovables S.A., CP Patagones S.A.U., CP Achiras S.A.U., CP La Castellana S.A.U., CPR Energy Solutions S.A.U., CP Manque S.A.U. and CP Los Olivos S.A.U.
Gabriel Omar Ures holds a degree in Systems Engineering from the Universidad Abierta Interamericana. He also holds a Postgraduate degree in Gas and Electricity Administration in Instituto Tecnológico de Buenos Aires (ITBA) and a Management Program from the Darden Business School of the University of Virginia, United States. He started his professional career in 1997 and has over 24 years of experience working in the Argentine power sector. Among other positions, he held managerial positions in Hidroeléctrica Alicura, was commercial director of AES Argentina Generación, General Manager of Termoeléctrica Manuel Belgrano (from 2013 to 2018), Commercial Manager in Central Dock Sud (YPF EE). Additionally, he was a director of various companies and industry chambers, including AGEERA (Asociación de Generadores de Energía Eléctrica de la República Argentina) where he has been elected as President for 5 consecutive terms (2012/2017) after holding the Vice Presidency. He currently serves as director of CAMMESA and Termoeléctrica Manuel Belgrano S.A.
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Leonardo Marinaro holds a degree in law from the Universidad Católica Argentina. He has been our legal affairs manager since 2007. Mr. Marinaro has served as director of LPC, CTM and Edesur S.A. He is currently a director of CP Renovables S.A., Vientos La Genoveva S.A.U. and Vientos La Genoveva II S.A., and alternate director of Proener S.A.U., Central Vuelta de Obligado S.A., TMB, TJSM, Distrilec Inversora S.A., DGCE, Ecogas Inversiones, and Energía Sudamericana S.A.
Javier Alejandro Torre holds a degree in Human Resources from the University of Buenos Aires and a Master in Business Administration from the University of Buenos Aires. From 2011 to 2016, he was human resources manager of Argentine operations in LyondellBasell. He has been our human resources manager since 2016. He previously worked at ExxonMobil for almost 20 years, where he held different positions in the commercial and human resources areas.
Martín Fernández Barbiero holds a degree in Accounting from the Universidad Nacional de Buenos Aires and a master’s degree in Business Administration (MBA) from Universidad de San Andrés. He also completed an international certification program in Compliance from the Universidad Austral (IAE). He has served as Internal Auditor Manager of Central Puerto since 2008 and since 2018, he was also appointed as Compliance Officer. Before Central Puerto he worked for CMS Energy as Internal Auditor Manager and SOX Compliance Manager among other positions between 1999 and 2007.
Leonardo Katz holds a degree in Industrial Engineering from the Universidad Nacional de Salta. He also received an MBA degree in 2001 from Universidad del CEMA. He has more than 20 years of experience in the Generation sector. He has been the General Manager of Central Vuelta de Obligado S.A., in charge of the completion of the project and the closing of commercial litigation, currently remain as a Chairman. Previously Mr. Katz served in Central Puerto as Planning and Investments Manager (Dec’15 to Dec’19), Head of Internal Investment Planning (Apr’07-Dec’15). He served as Latam Senior Market Analyst since Set’97 in CMS Energy an American company who used to have assets in Argentina and Latam. He is a Director in the FONINVEMEN Projects since its completion.
For the biography of Mr., José Manuel Pazos, Fernando Bonnet, and Adrián Salvatore see “Item 6. —Board of Directors”.
Item 6.B Compensation
Compensation of our Board of Directors
Our shareholders fix our directors’ compensation, including their salaries and any additional wages arising from the directors’ permanent performance of any administrative or technical activity. Compensation of our directors is regulated by the Argentine Corporate Law and the CNV regulations. Any compensation paid to our directors must have been previously approved at an ordinary shareholders’ meeting. Article 261 of the Argentine Corporate Law provides that the compensation paid to all directors and syndics in a year may not exceed 5.00% of net income for such year, if the company is not paying dividends in respect of such net income. The Argentine Corporate Law increases the annual limitation on director compensation to up to 25.00% of net income based on the amount of dividends, if any, that are paid. In the case of directors that perform duties at special commissions or perform administrative or technical tasks, the aforementioned limits may be exceeded if a shareholders’ meeting so approves, such issue is included in the agenda, and is in accordance with the regulations of the CNV. In any case, the compensation of all directors and members of the Supervisory Committee requires shareholders’ ratification at an ordinary shareholders’ meeting. Certain of our directors perform managerial, technical and administrative functions. We compensate directors who perform such functions for their roles both as directors and as executive officers.
During the annual ordinary shareholders’ meeting convened for April 30, 2025, the shareholders will consider the approval of the directors’ fees that amounted to a total of Ps.156,721,000 for services rendered in 2024. As of the date of this annual report, neither we, nor any of our affiliates, have entered into any agreement that provides for any benefit or compensation to any director after expiration of his or her term.
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Compensation of our Senior Officers
In 2024, our management received compensation and fees totaling Ps.3.73 billion (in nominal values), of which Ps.958.54 million consisted of an annual bonus. The annual bonus to management is normally between three and four times their salaries and is based on certain performance thresholds related to the amount of work performed and the importance of such work to our business. We also compensate directors who perform managerial, technical and administrative functions for their roles both as directors and as executive officers.
Senior Officers are entitled to the revenue sharing staff participation bonus described on article 33 of our By-laws.
Compensation of our Supervisory Committee
During the annual ordinary shareholders’ meeting convened for April 30, 2025, the shareholders will consider the approval of the Supervisory Committee’s fees of Ps. 20,393,500 (in nominal terms) for services rendered in 2024.
Executive Remuneration Clawback Policy
On November 30, 2023, our Board of Directors approved a new clawback policy (the “Clawback Policy”) in accordance with the listing requirements of the NYSE. The Clawback Policy, which became effective immediately, provides for the recovery of erroneously awarded incentive-based compensation received by current and former executive officers in connection with a financial restatement. A copy of our Clawback Policy is attached hereto as Exhibit No. 6.1.
Item 6.C Board practices
As of the date of this annual report, we do not have contracts with our directors providing benefits upon termination of employment.
Audit Committee
Under the SEC rules applicable to corporate governance, we are required to maintain an audit committee.
Pursuant to Argentine Capital Markets Law and its implementing regulations, we are required to have an audit committee consisting of at least three members of our Board of Directors with experience in business, finance, accounting, banking and audit matters. Under CNV regulations, at least a majority of the members of the audit committee must be independent directors under CNV standards.
On April 16, 2017, CNV issued Resolution No. 730/2018, which modified the criteria and requirements applicable for directors of companies admitted to the public offering regime of its shares. The main changes introduced by Resolution No. 730/2018 are as follows:
| · | Independent directors will cease to be independent after 10 years of holding a position of director but will be eligible to return to their independent status three years after leaving office. | |
| · | The threshold constituting a “significant participation” has been reduced from a 15% holding of capital stock to a 5.00% holding of capital stock. |
The following criteria preclude a person from being considered “independent”: (i) being connected with the company or the company’s shareholders that have (direct or indirect) significant participations, or being connected with companies in which the aforementioned shareholders have (direct or indirect) significant participations; (ii) maintaining a frequent professional relation, of relevant nature and volume, with, or receiving remuneration or fees from, the company, its shareholders who have a (direct or indirect) significant participation, or companies in which the aforementioned shareholders have (direct or indirect) significant participations; (iii) maintaining a significant participation, through the possession of shares of the capital stock and/or the votes, in the company and/or in another company in which the company has a significant participation; (iv) on a regular basis, selling and/or providing goods and/or services of relevant nature and volume (directly or indirectly) to the company or to shareholders that have (direct or indirect) significant participations; (v) being the director, CEO, administrator or principal executive for a non-profit organization which has received funds in amounts exceeding those established by Resolution No. 30/2011 of the UIF (currently equivalent to 150 Minimum Living and Mobile Wages) from the company or its parent company; (vi) receiving any payments from the company or companies of the same group other than fees as a director or dividends as shareholder; and (vii) being a member of the administrative or supervisory committee and/or holding a significant participation (directly or indirectly) with respect to one or more companies that are registered as Agente de Negociación, Agente de Liquidación y Compensación y/o Agente de Corretaje de Valores Negociables.
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It is necessary to comply with all the conditions of independence set forth above for at least three years before the appointment. Our Audit Committee is composed of three members designated by our Board of Directors. Mr. Tomás José White, Mr. José Luis Morea and Mr. Jorge Eduardo Villegas are independent under Rule 10A-3 of the Exchange Act (“Rule 10A-3”) and applicable NYSE standards, which are different from the general test for independence of board and committee members. Our Board of Directors has determined that Mr. Tomas White qualifies as a financial expert within the meaning of the rules adopted by the Commission relating to the disclosure of financial experts on audit committees in periodic filings pursuant to the Exchange Act.
Independence Requirements under Commission Rule 10-A3
Pursuant to NYSE Rule 303A.06, we are required to have an audit committee that complies with Rule 10-A3. Under rule 10-A3, we are required to comply with certain independent standards. Each member of the audit committee must be independent and a member of the board of directors. Pursuant to Rule 10-A3, in order to be considered “independent,” a member of an audit committee of a listed issuer may not, other than in his or her capacity as a member of the audit committee, the board of directors, or any other board committee:
| · | accept directly or indirectly any consulting, advisory, or other compensatory fee from the issuer or any subsidiary thereof. Compensatory fees do not include the receipt of fixed amounts of compensation under a retirement plan (including deferred compensation) for prior service with the listed issuer (provided that such compensation is not contingent in any way on continued service); or | |
| · | be an affiliated person of the issuer or any subsidiary thereof. |
Additionally, as of the date of this annual report, all members of our Audit Committee satisfy the independence requirements of the Commission and NYSE applicable to the audit committees of foreign private issuers. The members of our Audit Committee are entitled to annual compensation in the form of a fixed salary. Our Audit Committee also has two alternate members, and both are independent under Rule 10A-3 and applicable NYSE standards.
A quorum for a decision by the Audit Committee will require the presence of a majority of its members and matters will be decided by the vote of a majority of those present at the meeting. A chairman of the committee must be appointed during the first meeting after members of the committee have been appointed. The chairman of the committee may cast two votes in the case of a tie. Pursuant to our bylaws, the committee will pass resolutions by the affirmative vote of the majority of members present. Decisions of the Audit Committee will be recorded in a special corporate book and will be signed by all members of the committee who were present at the meeting. Pursuant to Section 17 Chapter III Title II of the CNV rules, the Audit Committee must hold at least one regularly scheduled meeting every three months.
Pursuant to Argentine Capital Markets Law, the Audit Committee, among other things:
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| · | advises on the Board of Directors’ proposal for the designation of external independent accountants and ensure their independence; | |
| · | oversees our internal control mechanisms and administrative and accounting procedures and assesses the reliability of all financial and other relevant information filed with the CNV and other entities to which we report; | |
| · | oversees our information policies concerning risk management; | |
| · | provides the market with complete information on transactions in which there may be a conflict of interest with members of our various corporate bodies or controlling shareholders; | |
| · | advises on the reasonableness of fees or stock option plans for our directors and managers proposed by the Board of Directors; | |
| · | advises on our fulfillment of legal requirements and the reasonableness of the terms of the issuance of shares or other instruments that are convertible into shares in cases of capital increase in which pre-emptive rights are excluded or limited; | |
| · | verifies the fulfillment of any applicable rules of conduct; and | |
| · | issues opinions on related-party transactions under certain circumstances and files such opinions with regulatory agencies as required by the CNV in the case of possible conflicts of interest. |
Additionally, the Audit Committee is required to prepare an annual working plan and present it to the Board of Directors and the Supervisory Committee. Members of the Board of Directors, members of the Supervisory Committee and external independent accountants are required to attend the meetings of the Audit Committee if the Audit Committee so requests it and are required to grant the Audit Committee full cooperation and information. The Audit Committee is entitled to hire experts and counsel to assist it in its tasks and has full access to all of our information and documentation.
The following chart shows the members of our Audit Committee according to the resolution passed at the Board of Directors’ meeting held on April 30, 2024:
|
Name |
Title |
Date of first appointment to position |
Date of birth |
Status(1) |
||||
| Tomás José White | Member | May 14, 2018 | May 18, 1957 | Independent | ||||
| Jorge Eduardo Villegas | Member | May 11, 2017 | January 9, 1949 | Independent | ||||
| José Luis Morea | Member | May 13, 2019 | October 19, 1954 | Independent | ||||
| Mario Elizalde | Alternate Director | July 11, 2007 | July 26, 1954 | Independent | ||||
| José Manuel Ortíz | Alternate Director | April 29, 2022 | August 6, 1960 | Independent |
| __________________ |
| Notes:- |
| (1) | Status based on rules of the CNV and the Commission. |
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For the biographies of the members of our Audit Committee, see “Item 6. —Board of Directors”.
Supervisory Committee
We have a monitoring body called the supervisory committee (“Supervisory Committee”). Our Supervisory Committee consists of three syndics and three alternate syndics appointed by shareholders at our annual ordinary shareholders’ meeting. The syndics and their alternates are elected for a period of one year, and are vested with the powers set forth by the Argentine Corporate Law and other applicable legal provisions. Any compensation paid to our syndics must have been previously approved at an ordinary shareholders’ meeting. The term of office of the members of the Supervisory Committee expired on December 31, 2024, the election of the new members will be held on April 30, 2025.
Members of our Supervisory Committee are also authorized to attend Board of Directors’ and shareholders’ meetings, call extraordinary shareholders’ meetings and investigate claims brought in writing by shareholders who own more than 2.00% of our outstanding shares. Pursuant to the Argentine Corporate Law, only lawyers and accountants admitted to practice in Argentina and domiciled in Argentina or civil partnerships composed of such persons may serve as syndics in an Argentine sociedad anónima, or limited liability corporation. Following the registration of the 2016 Merger, members of our Supervisory Committee may call for an ordinary shareholders’ meeting, in the specific cases provided by law, as deemed necessary by any of them, or otherwise when so required by shareholders representing no less than 5.00% of our capital stock. Pursuant to Section 294 of the Argentine Corporate Law, our Supervisory Committee must review our books and records, when deemed convenient and at a minimum on a quarterly basis.
Following the registration of the amendment to our bylaws dated June 3, 2015, our Supervisory Committee holds meetings and makes decisions with the presence and affirmative vote of at least two of its members, notwithstanding the rights granted by law to the dissenting syndic. Before the registration of the 2016 Merger, meetings of the Supervisory Committee could be called by any of its members, its meetings were held with the attendance of all of its members and decisions were adopted by a majority of votes, notwithstanding the rights granted by law to the dissenting syndic.
Our Supervisory Committee must hold meetings at least once a month. Meetings may also be called at the request of any of its members within five days from the date the request is submitted to the chairman of our Supervisory Committee or our Board of Directors, as the case may be. Notice of all meetings must be given in writing to the address indicated by each syndic at the time of holding office.
Our Supervisory Committee must be presided over by one of its members, elected by a majority of votes, at the first meeting held every year. At that time, the member who will act in lieu of the chairman in his or her absence shall also be elected. The chairman represents our Supervisory Committee before our Board of Directors.
The following chart shows the members of our Supervisory Committee according to the resolution passed at the annual ordinary shareholders’ meeting held on April 30, 2021. According to Technical Resolution No. 15 of the Argentine Federation of Professional Counsel of Economic Sciences and Section III, Chapter III of Title II of the CNV rules, all of our syndics and alternate syndics are independent.
|
Name |
Office |
Date of first appointment to position |
Profession |
Date of birth |
||||
| Carlos C. Adolfo Halladjian | Syndic | April 16, 2013 | Public Accountant | March 8, 1977 | ||||
| Eduardo Antonio Erosa | Syndic | April 16, 2013 | Public Accountant | October 6, 1958 | ||||
| Juan Antonio Nicholson | Syndic | April 27, 2018 | Lawyer | July 21, 1947 | ||||
| Cristina Margarita De Giorgio | Alternate Syndic | April 30, 2021 | Public Accountant | March 7, 1961 | ||||
| Carlos Adolfo Zlotnitzky | Alternate Syndic | September 21, 2015 | Public Accountant | April 4, 1981 | ||||
| Lucas Nicholson | Alternate Syndic | April 27, 2018 | Lawyer | October 9, 1985 |
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The following are the academic and professional backgrounds of our Supervisory Committee members:
Carlos C. Adolfo Halladjian holds a degree in Accounting, magna cum laude, from the Universidad de Buenos Aires. He has served as a syndic of our Supervisory Committee since 2013. He has been a partner of the Halladjian y Asociados accounting firm since 2010. He serves as syndic of the following companies: Proener S.A.U., CVOSA, TJSM, Empresa Distribuidora Sur Sociedad Anónima (EDESUR S.A), CP Renovables, CP La Castellana S.A.U., CP Achiras S.A.U., CPR Energy Solutions S.A.U., Distrilec Inversora S.A., Hidrodistribución S.A., PB Distribución S.A., RPE Distribución S.A., Puerto Energía S.A.U., Estudio Halladjian SRL, Vientos La Genoveva S.A.U. and Vientos La Genoveva II S.A., as well as an alternate syndic of the following companies: DGCU, CP Manque S.A.U. and CP Los Olivos S.A.U.
.Eduardo Antonio Erosa holds a degree in Accounting from the Universidad Católica Argentina in 1985. He has served as a syndic of our Supervisory Committee since 2013. He currently is President of the Board of Directors of Compañía Argentina de Navegación de Ultramar S.A. In addition, he is an alternate syndic of LE Capital S.R.L
Juan Antonio Nicholson holds a degree in law from the Universidad de Buenos Aires, where he also was adjunct professor of Commercial Law. He is partner at the law firm Nicholson y Cano Abogados. He served as a director and syndic of several companies. Since 2005 he has been a syndic of HSBC Bank Argentina. He is also president of el Tunalito S.A. Since 2018 he serves as a member of our Supervisory Committee
Cristina Margarita De Giorgio holds a degree in Accounting from the Universidad Católica Argentina in 1985. She also holds postgraduate degrees in Management of Small and Medium Enterprises, Ontological Coaching, Human Resources and Leadership from Universidad Católica Argentina, Universidad de Belgrano, Universidad del Salvador and IAE, respectively. She worked as Head of Accounting in a private firm, and from 1983 to 1988 she worked at Balzarotti and Associates Studio (Touch Ross International) Small and Medium Enterprises Subdivision. From 1985 to 2005 she served as Professor of Accounting I and II at Universidad Católica Argentina, and, from 1985 to 1990, as Professor of Ethics at Universidad Católica Argentina.
Carlos Adolfo Zlotnitzky holds a degree in Accounting from the Universidad de Buenos Aires. He has served as an alternate syndic of our Supervisory Committee since 2015. He works as an independent accountant and tax and accounting advisor for both legal entities and individuals. He currently serves as alternate syndic of DGCE, DGCU, Ecogas Inversiones, ESSA, CP Manque S.A.U. and CP Los Olivos S.A.U.
Lucas Nicholson holds a degree in law from the Universidad del Salvador. In addition, he took a graduate level course in legal framework of agribusiness in the Universidad Austral. From 2011 to 2016, he worked at the law firm Nicholson & Cano in their corporate and competition law departments. In 2016, together with Santiago Williams and Agustín Ibarzábal, he founded WIN Abogados. In addition, he currently serves as syndic of Ecogas Inversiones, Energía Sudamericana S.A., DGCE, COyServ S.A., and, since 2018, alternate syndic of Central Puerto S.A.
Item 6.D Employees
We had 1,324 employees as of December 31, 2024, 1,291 employees as of December 31, 2023, and 865 employees as of December 31, 2022. The number of our employees has increased due to our recent acquisitions and growth strategy. For more information see “Item 4. Information on the Company—Recent Developments”. The following table breaks down the number of our employees and their affiliation with unions for the periods indicated:
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| Puerto Complex | Luján de Cuyo plant | Piedra del Águila plant | Brigadier Lopez plant | San Lorenzo plant | Costanera Complex | CP La Castellana | CP Achiras | Vientos La Genoveva | Vientos La Genoveva II | CP Manque | Forestry Segment | Cordillera Solar VIII | CVOSA | ||
| 2021 | Subtotal outside CBA | 116 | 9 | 4 | 1 | 11 | — | 1 | 1 | 1 | — | 2 | — | — | 31 |
| APJAE | — | — | — | — | 6 | — | — | — | — | — | — | — | — | 6 | |
| APSEE | 89 | — | — | — | — | — | — | — | — | — | — | — | — | — | |
| LYF | 302 | — | — | — | — | — | — | — | — | — | — | — | — | — | |
| FATLYF | — | 82 | 43 | 67 | 25 | — | — | — | — | — | — | — | — | 34 | |
| APUAYE | — | 16 | 5 | — | 2 | — | — | — | — | — | — | — | — | 7 | |
| Subtotal under CBA | 391 | 98 | 48 | 67 | 33 | — | — | — | — | — | — | — | — | 47 | |
| Total | 507 | 107 | 52 | 68 | 44 | — | 1 | 1 | 1 | — | 2 | — | — | 78 | |
| 2022 | Subtotal outside CBA | 136 | 8 | 5 | 5 | 7 | — | 1 | 1 | 1 | — | 1 | — | — | 34 |
| APJAE | — | — | — | — | 6 | — | — | — | — | — | — | — | — | 6 | |
| APSEE | 89 | — | — | — | — | — | — | — | — | — | — | — | — | — | |
| LYF | 286 | — | — | — | — | — | — | — | — | — | — | — | — | — | |
| FATLYF | — | 80 | 38 | 67 | 25 | — | — | — | — | — | — | — | — | 35 | |
| APUAYE | — | 16 | 5 | — | 3 | — | — | — | — | — | — | — | — | 10 | |
| Subtotal under CBA | 375 | 96 | 43 | 67 | 34 | — | — | — | — | — | — | — | — | 51 | |
| Total | 511 | 104 | 48 | 72 | 41 | — | 1 | 1 | 1 | — | 1 | — | — | 85 |
| Puerto Complex | Luján de Cuyo plant | Piedra del Águila plant | Brigadier Lopez plant | San Lorenzo plant | Costanera Complex | CP La Castellana | CP Achiras | Vientos La Genoveva | Vientos La Genoveva II | CP Manque | Forestry Segment | Cordillera Solar VIII | CVOSA | ||
| 2023 | Subtotal outside CBA | 161 | 11 | 14 | 13 | 7 | 19 | 1 | 1 | 1 | 1 | 1 | 22 | 5 | 31 |
| APJAE | — | — | — | — | 6 | — | — | — | — | — | — | — | — | 7 | |
| APSEE | 93 | — | — | — | — | 73 | — | — | — | — | — | — | — | — | |
| LYF | 291 | — | — | — | — | 263 | — | — | — | — | — | — | — | — | |
| FATLYF | — | 82 | 30 | 64 | 23 | — | — | — | — | — | — | — | — | 36 | |
| APUAYE | — | 17 | 5 | — | 4 | — | — | — | — | — | — | — | — | 9 | |
| Subtotal under CBA | 384 | 99 | 45 | 64 | 33 | 336 | — | — | — | — | — | — | — | 52 | |
| Total | 545 | 110 | 49 | 77 | 40 | 355 | 1 | 1 | 1 | 1 | 1 | 22 | 5 | 83 |
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| Puerto Complex | Luján de Cuyo plant | Piedra del Águila plant | Brigadier Lopez plant | San Lorenzo plant | Costanera Complex | CP La Castellana | CP Achiras | Vientos La Genoveva | Vientos La Genoveva II | CP Manque | Forestry Segment | Cordillera Solar VIII | CVOSA | ||
| 2024 | Subtotal outside CBA | 190 | 10 | 16 | 15 | 7 |
34 |
1 | 1 | 2 | 1 | 1 | 21 | 7 | 32 |
| APJAE | — | — | — | — | 6 | — | — | — | — | — | — | — | — | 7 | |
| APSEE | 89 | — | — | — | — | 74 | — | — | — | — | — | — | — | ||
| LYF | 284 | — | — | — | — | 261 | — | — | — | — | — | — | — | ||
| FATLYF | — | 80 | 28 | 63 | 24 | — | — | — | — | — | — | — | — | 36 | |
| APUAYE | — | 16 | 5 | — | 4 | — | — | — | — | — | — | — | — | 9 | |
| Subtotal under CBA | 373 | 96 | 33 | 63 | 34 | 335 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 52 | |
| Total | 545 | 110 | 49 | 77 | 40 | 355 | 1 | 1 | 1 | 1 | 1 | 22 | 5 | 83 |
| _________________ |
| Notes:- |
APSEE: Asociación del Personal Superior de Empresas de Energía.
LYF: Luz y Fuerza.
FATLYF: Federación Argentina de Trabajadores de Luz y Fuerza.
APUAYE: Asociación de Profesionales del Agua y la Energía Eléctrica.
The CBA entered into with the several unions that have members working at our sites include the terms and conditions that govern the employment contracts of the workers affiliated with each of these unions. Some of the most relevant terms and conditions of these agreements include the positions that are included in and excluded from bargaining, work schedules, salary levels and additional amounts payable on the basis of the worker’s job, working days and leaves, among other things.
Matters that are not specifically agreed upon in collective bargaining are governed by the applicable labor laws in Argentina.
The CBAs are entered into for a specific term and may be renewed by the parties. If not renewed, they may remain in place under the principle of survival of repealed laws set forth in the CBA Law No. 14,250.
Item 6.E Share Ownership
Share Ownership
The table below sets forth information concerning the share ownership of our directors and members of our administrative, supervisory or management bodies as of April 25, 2025:
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|
Name |
Title |
Shares |
% of shares |
||||
| Marcelo Suvá | Director | 1,500,000 | 0.10 | % | |||
| Fernández Barbiero, Martín | Compliance and Internal Audit Manager | 285 | 0.00 | % | |||
| Enrique Terraneo | CFO | 4,000 | 0.00 | % |
Item 6.F Disclosure of a registrant’s action to recover erroneously awarded compensation
Not Applicable
Item 7. Major Shareholders and Related Party Transactions
Item 7.A. Major Shareholders
As of April 29, 2025, we had 1,514,022,256 outstanding shares of common stock with a par value of Ps.1.00 per share. Each share of common stock is entitled to one vote. We do not have any preferred shares outstanding and only have one class of common shares outstanding. Of the 11,403,875 common shares held by Central Puerto and subsidiaries, 8,851,848 are held by Proener S.A.U., 252,034 are held by CP Renovables S.A., and 2,299,993 are held by Central Puerto S.A. See “Item 4. Information of the Company—Recent Developments—Simplification of Corporate Structure at Central Puerto S.A.”.
The following table sets forth certain information known to us concerning the beneficial ownership over 5.00% or more of our common shares as of April 25, 2025 (except as set forth below).
|
Beneficial Owner |
Shares |
% of shares |
|||
| Plusener S.A.(1) | 158,073,984 | 10.44 | % | ||
| Argentine Government | 124,949,112 | 8.25 | % | ||
| Guillermo Pablo Reca(2) | 172,737,169 | 11.41 | % | ||
| Eduardo José Escasany(3) | 78,837,913 | 5.12 | % | ||
| Senior Management and Directors** | 1,535,560 | 0.10 | % | ||
| Other Shareholders(4) | 977,888,518 | 64.68 | % | ||
| Total | 1,514,022,256 | 100.00 | % |
| __________________ |
| Notes:- |
| ** | Marcelo Suvá, Enrique Terraneo and Martín Fernández Barbiero each own less than 1.00% of the outstanding common stock. |
| (1) | According to Schedules 13G filed with the Commission by Plusener S.A. on February 6, 2020. |
| (2) | According to Schedules 13G filed with the Commission by Guillermo Pablo Reca on February 9, 2022. |
| (3) | According to Schedules 13G filed with the Commission by Eduardo José Escasany on February 14, 2021. |
| (4) | No other shareholder has beneficial ownership of more than 5.00% of our common shares. None of our senior officers own any of our common shares. |
As of April 14, 2025, we had approximately 27,492,704 ADSs outstanding.
We are not able to determine the number of record holders of our ADSs as of such date, as we are only aware of the Depositary Trust Company and its nominee as record holders. In addition, it is not practicable for us to determine the number of our ADSs, or common shares beneficially owned in the United States. Likewise, we cannot readily ascertain the domicile of the final beneficial holders represented by ADS record holders in the United States or the domicile of any of our foreign shareholders who hold our common shares, either directly or indirectly.
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As of the date of this annual report, there are no agreements in place which, if enforced on a subsequent date, may result in a change of control.
On December 16, 2016, at a meeting of our shareholders, our shareholders decided to reduce the voluntary reserve by Ps. 1,324,769,474 and capitalize such funds through the payment of a dividend in shares of seven new shares of common stock with a par value of Ps. 1.00 per share for each outstanding share of common stock. Following such capitalization and dividend of shares, and as of the date of this annual report, we have 1,514,022,256 outstanding shares of common stock with a par value of Ps.1.00 per share.
The table below represents the evolution of our capital stock since January 1, 2015:
|
Date |
Capital stock (Ps.) |
Event |
Controlling shareholders |
|||
| March 11, 2016 | 189,252,782 | 2016 Merger (and related capital decrease) | N/A | |||
| December 16, 2016 | 1,514,022,256 | Capital Increase and Share Dividend Distribution | N/A |
Item 7.B Related Party Transactions
Argentine corporate law permits directors of a corporation to enter into transactions with such corporation provided that any such transactions are consistent with prevailing market practice. The Argentine Securities Law provides that corporations whose shares are publicly listed in Argentina must submit to their respective audit committees for approval of any transaction with a related party involving an amount that exceeds 1.00% of the corporation’s net worth.
Except as set forth below and as otherwise permitted under applicable law, we are currently not party to any transactions with, and have not made any significant loans to, any of our directors, key management personnel or other related persons, and have not provided any guarantees for the benefit of such persons, nor are there any such transactions contemplated with any such persons.
Management Assistance Agreement
RMPE provides certain administrative, financial, commercial, human resources, Strategic planning and general management services to us under the terms of the management assistance proposal as amended and assigned (the “Assistance Proposal”). Guillermo Pablo Reca currently serves as regular director and holds equity in RMPE. The Assistance Proposal was formally extended in 2022 for a five-year term, with this agreement now terminating in December 2027. We must pay a fee equal to one and a half percent (1.50%) of our consolidated annual gross sales revenues. The amount accrued under this agreement in year ended December 31, 2024, was Ps.6.99 billion. Other than the management assistance services, we receive from RMPE, a lease between us, as lessor, and RMPE, as lessee, involving a monthly payment of Ps.108,000.
For more information on the related party transactions, see Note 18 to our Audited Consolidated Financial Statements.
Redemption of CPR shares
On January 7, 2025, the Shareholders' Meeting of our subsidiary CP Renovables approved the redemption of all the shares owned by CP Renovables’ minority shareholders (except for one share retained by Vientos la Genoveva II S.A.U.) pursuant to article 220 paragraph 1 of the Argentine Corporate Law, and voluntarily reduced CP Renovables’ capital stock pursuant to article 203 of the Argentine Corporate Law. Subsequently, on March 31, 2025, we acquired the share that had been retained by Vientos La Genoveva II S.A.U.
| 220 |
CP Renovables Stock Option Agreement
On January 18, 2017, CP Renovables entered into a stock option agreement with its then chairman and general manager (or CEO), Guillermo Pablo Reca (“the minority shareholder”), pursuant to a stock option plan approved by CP Renovables’ shareholders on April 28, 2016. Under the stock option agreement, the minority shareholder had the obligation, for a three-year term, to (i) develop the CP Renovables business by, among other things, facilitating investments, proposing acquisitions and business opportunities for the expansion of renewable energy projects, and (ii) lead the development of the existing projects of CP Renovables. In addition, the minority shareholder has the right to purchase up to 10% of the fully diluted capital stock of CP Renovables, in whole or in part, in one or more acquisitions, at any time prior to the seventh anniversary of the date of execution of the stock option agreement. This latter right to purchase up to 10% of the fully diluted capital stock of CP Renovables is composed by the right to acquire (a) 63,058,342 class B shares of CP Renovables (the “Initial Option Shares”), and (b) an additional number of class B shares which, in the aggregate with the Initial Option Shares, should be equal to 10% of any capital stock increase made since the execution of the stock option agreement (the “Additional Option Shares”). The aggregate price for the Initial Option Shares (assuming all are purchased) has been agreed in US$3,963,690, while the purchase price of any Additional Option Shares will be the U.S. dollar equivalent (based on the exchange rate at the time of the relevant capital increase) of the subscription price per share paid for the shares of CP Renovables issued pursuant to such capital increases. The stock option agreement includes adjustments and anti-dilution protections, including with respect to in-kind capital increases and dividend distributions by CP Renovables, and other transactions such as stock splits and redenomination of par value. In addition, the minority shareholder can assign his rights under the stock option agreement without the consent of CP Renovables.
On November 15, 2023, the minority shareholder exercised the option and acquired the Initial Option Shares and the Additional Option Shares which, in the aggregate, amount to 3,216,342,299 class B shares, representing 10% of the capital stock of CP Renovables. The stock option was exercised within the term established in the contract.
Item 7.C Interests of experts and counsel
Not applicable.
Item 8. Financial Information
Item 8.A. Consolidated Statements and Other Financial Information
See Item 18 and our Audited Consolidated Financial Statements as of December 31, 2024, and for the years ended December 31, 2024, 2023, and 2022 included in this annual report.
Legal Proceedings
Income Tax Return for Fiscal Year 2014
In February 2015 we filed income tax returns for the nine-month period ended September 30, 2014, applying the adjustment for inflation mechanism established by the Argentine Income Tax Law. In addition, we filed our income tax return for the three-month period ended December 31, 2014, applying the same adjustment for inflation mechanism.
Later on, on July 27, 2021, the Argentine Tax Authorities issued a resolution through which it implemented an infringement investigation in relation to the income tax for the irregular fiscal periods ended September 30, 2014, and December 31, 2014, for the alleged omission included in Section 45, Law No. 11,683. On September 8, 2021, we submitted the corresponding deposition and the corresponding evidence. Based on the Tax Determination issued by AFIP on April 28, 2022, we appealed before the Argentine Fiscal Court (TFN) on May 23, 2022. By virtue of this appeal, the TFN declared the admittance of evidence through the resolution dated March 29, 2023; and to that effect, on October 26, 2023, the accounting expert’s report was furnished as evidence.
| 221 |
Action for Recovery—Income Tax Refund for Fiscal Period 2010
In December 2014, we, as merging company and continuing company of HPDA, raised a recourse action before fiscal authorities regarding the income tax for the fiscal period 2010,. This recourse action seeks to recover the income tax entered by HPDA in accordance with the lack of application of the inflation- adjustment mechanism established by the Income Tax Law. In December 2015, since the term stated by Law No. 11,683 elapsed, we brought a contentious-administrative claim before the National Court to ask for its right to obtain the income tax recovery.
In October 2018, the Company was served notice of the judgment issued by the Federal Contentious- Administrative Court No. 5, which granted the right to recourse. The judgment ordered tax authorities to return the amount of 67,612 (at historical values) to the Company plus the interest stated in the BCRA Communication 14290 and ordered that legal cost must be borne by the defendant. Such judgment was appealed by the National Tax Administration, and on September 9, 2019, Division I of the National Court of Appeals of the Federal Contentious- Administrative Court (“CNACAF”) confirmed the appealed judgment. On September 24, 2019, the National Tax Administration raised Federal Extraordinary Appeal (“REF”) against CNACAF judgment, which was replied by the Company. On October 29, 2019, CNACAF granted the REF and sent the file to the Argentine Supreme Court. On October 25, 2022, the Argentine Supreme Court (CSJN) confirmed the appealed decision. On March 21, 2024, CPSA collected the amount claimed plus the corresponding interest.
Action for recovery–Income Tax Refund for Fiscal Years 2009, 2011 and 2012
In December 2015, the Company filed a petition with the Argentine Tax Authorities for the recovery of income tax for the fiscal year 2009, in the amount of 20,395 at historical values which had been incorrectly paid by the Company in excess of our income tax liability. By filling such action, the Company seeks to recover the excess income tax paid by CPSA due to the failure to apply the adjustment for inflation set forth in the Argentine Income Tax Law.
On April 22, 2016, after the term required by Law No. 11,683 expired, the Company filed an action for recovery for the amount claimed with the Argentinean Court. On September 27, 2019, the judge entered judgment rejecting the complaint filed by the Company. Such judgment was appealed by the Company last October 4, 2019. Room I of CNACAF (Argentine Appeal Court for Federal Contentious Administrative Matters) granted the appeal presented by the Company on March 11, 2020. Against this resolution, the Argentine Tax Authorities raised an Extraordinary Appeal. On October 25, 2022, the Argentine Supreme Court confirmed the decision made by the CNACAF and on November 27, 2023, CPSA collected the amount claimed plus the corresponding interest.
In December 2017, the Company, as merging company and continuing company of HPDA, filed a petition with the Argentine Tax Authorities for the recovery of 52,783 at historical values paid in excess by HPDA for payment of Income Tax for 2011 fiscal period. The purpose of such action is to recover the income tax paid by HPDA due to the failure to apply the adjustment for inflation mechanism aforementioned. On April 1, 2019 such claim was rejected by national fiscal authorities. Therefore, the Company filed an administrative and legal action on April 25, 2019. On September 13, 2022, the Company obtained a favorable first-instance judgment. This judgment was appealed by AFIP and it is still pending resolution.
In December 2018, the Company brought two administrative complaints of recovery before the Argentine Tax Authorities: the first one was filed by the Company, as merging company and continuing company of HPDA, regarding the income tax for the fiscal period 2012 that amounted to 62,331 at historical values, which was entered in excess by HPDA. The second complaint was filed by the Company regarding the income tax for the same fiscal period that amounted to 33,265 at historical values, which was entered in excess by the Company.
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These recovery actions aim to reclaim the income tax paid by HPDA and the Company as a result of not applying the inflation adjustment mechanism mentioned earlier. On September 12, 2019, the Company initiated both recovery actions in the Federal Contentious-Administrative Court against ARCA, pursuant to Section 82, paragraph “c” of Law no. 11,683 (restated text 1998 as amended), following the expiry of the term outlined in the second paragraph of Section 81 of the law. Regarding the first claim, the Company received a favourable ruling at the first instance, and following ARCA's appeal of this ruling, the Court of Appeals confirmed the first instance decision on November 14, 2024.
Action for recovery–Income Tax for the fiscal year 2015
On December 23, 2020, we submitted before the fiscal authorities an action for recovery of the income tax for the fiscal year 2015 for the amount of Ps. 129,231 thousand (at historical values) unduly paid by us. The purpose of the action for recovery is to obtain reimbursement of the income tax paid by us based on the lack of application of the inflation adjustment mechanism set forth in the Argentine Income Tax Law. On April 22, 2021, we filed a recovery lawsuit before the Court for Contentious Administrative Matters against the Argentine Tax Authorities pursuant to the provisions of Section 82, subsection c of Law No. 11,683 (restated and amended 1998), on the grounds that the term established in the second paragraph of Section 81 of that body of rules had elapsed.
Action for recovery–Income Tax for the fiscal year 2016
On January 24, 2022, the Company filed before the tax authorities a recovery action of the income tax for the fiscal year 2016, for the amount of 189,376 (at historical values) unduly paid by CPSA. Such recovery action is aimed at obtaining the reimbursement of the income tax paid by CPSA based on the lack of application of the inflation adjustment mechanism set for by the Argentine Income Tax Act.
The Group considered the following, based on the opinion of its legal advisors and on the IFRIC 23 accounting guidelines:
| 1) | that regarding the income tax 2014 determination stated in a) that it is probable that tax authorities will accept the position and, therefore, it is not required to register a liability under such item, and | |
| 2) | regarding recovery actions for income tax, except for the case of recovery action by HPDA for the fiscal period 2011, that it is also probable that the positions adopted by the Company will be accepted in court; therefore, an asset has been recognized for such recovery actions. | |
| The corresponding asset is included in the item “Other non-financial assets” of Non-Current Assets under “Income Tax Credits” and it amounts to Ps. 0.60 billion and Ps. 0.34 billion as of December 31, 2024 and 2023, respectively. |
Other taxes related to sales and to bank account transactions
Revenues from recurring activities, expenses incurred, and assets are recognized excluding the amount of sales tax, as in the case of value-added tax or turnover tax, or the tax on bank account transactions, except:
– where the tax incurred on a sale or on a purchase of assets or services is not recoverable from the taxation authority, in which case the sales tax is recognized as part of the cost of acquisition of the asset or as part of the expense item as the case may be.
– receivables and payables are stated including value-added tax.
The charge for the tax on bank account transactions is presented in the administrative and selling expenses line within the consolidated statement of income.
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The net amount of the tax related to sales and to bank account transactions recoverable from, or payable to, the taxation authority is included as a non-financial asset or liability, as the case may be.
Dividends and Dividend Policy
The holders of ADSs are entitled to receive dividends to the same extent as the owners of our common shares. The information below describes the latest dividend distributions. Please bear in mind that the pesos informed are equivalent to the pesos distributed in that moment in time and are not adjusted by inflation as of December 31, 2024.
| · | On December 23, 2022, we approved and made available dividends for Ps. 2.88 in cash per ordinary share which were paid on December 30, 2022. For ADR holders, dividends were paid on January 3, 2023. | |
| · | On November 2, 2023, we announced the payment of dividends equivalent to Ps. 29.72 per share payable 93% in sovereign bonds and 7% in cash in Ps., distributed on November 16, 2023. | |
| · | On December 1, 2023, we announced the payment of dividends equivalent to Ps. 32.43 per share payable 91.68% in sovereign bonds, 7% in cash in Ps. and 1.32% in cash in US$ distributed on December 18, 2023. | |
| · | On December 15, 2023, we announced the payment of dividends equivalent to Ps. 11.00 per share payable 93% in cash in US$ and 7% in cash in Ps. distributed on December 27, 2023. | |
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On January 2, 2024, we announced the payment of dividends equivalent to Ps. 5.75 per share payable 93% in cash in US$ and 7% in cash in Ps. distributed on January 11, 2024. On November 7, 2024, we announced the payment of dividends equivalent to $39.47 per share, payable 89.50% in Global Bonds of the Argentine Republic and Bopreal Series Bonds, and 10.50% in cash, which was distributed on November 22, 2024. |
In the future, we could decide to pay dividends in accordance with applicable law and based on various factors then existing, including:
| · | our financial condition, operating results and current and anticipated cash needs; | |
| · | our strategic plans, business prospects and expansion capital expenditures; | |
| · | general economic and business conditions; | |
| · | our strategic plans and business prospects; | |
| · | legal, contractual and regulatory restrictions on our ability to pay dividends; and | |
| · | other factors that our Board of Directors may consider to be relevant. |
Under the Argentine Corporate Law, the declaration and payment of annual dividends, to the extent that the company presents retained earnings in accordance with IFRS Accounting Standards and CNV regulations, are determined by shareholders at the annual ordinary shareholders’ meeting. In addition, under the Argentine Corporate Law, 5.00% of the net income for the fiscal year calculated in accordance with IFRS Accounting Standards and CNV regulations must be appropriated by resolution adopted at shareholders’ meetings to a legal reserve until such reserve equals 20.00% of the capital stock. This legal reserve is not available for distribution.
According to the amendments introduced to the Income Tax Law by means of the current laws and regulations, the taxation applicable on the distribution of dividends from Argentine companies would be as follows:
1. Dividends originated in profits obtained during fiscal years initiated on or after January 1, 2018, and up to December 31, 2020: dividends on Argentine shares paid to Argentine resident individuals and/or non-Argentine residents would be subject to a 7.00% income tax withholding on the amount of such dividends (“Dividend Tax”). Note that according to Section 48 of Law No. 27,541, the application of the corporate 25.00% rate was suspended for one tax period; thus the 7.00% rate would also apply for dividend distributions involving profits obtained during fiscal years initiated on or after January 1, 2018, and up to December 31, 2021. However, if dividends are distributed to Argentine Entities (in general, entities organized or incorporated under Argentine law, certain traders and intermediaries, local branches of non-Argentine entities, sole proprietorships and individuals carrying on certain commercial activities in Argentina), no Dividend Tax should apply. Equalization Tax (as defined below) is not applicable.
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Argentine individuals and undivided estates located in Argentina are not allowed to offset income arising from the distribution of dividends on Argentine shares with other losses arisen in other type of operations.
2. Dividends originated in profits obtained during fiscal years initiated on or after January 1, 2021, onward: due to the amendments introduced by Law 27,630; dividends on Argentine shares paid to Argentine resident individuals and/or non-Argentine residents would be subject to a 7.00% income tax withholding on the amount of such dividends. However, if dividends are distributed to Argentine Entities, no Dividend Tax should apply. Equalization Tax is not applicable.
3. Dividends originated in profits obtained during tax periods before those contemplated above: no Argentine income tax withholding would apply on dividend distributions except for the application of the Equalization Tax.
The equalization tax (the “Equalization Tax”) is applicable when the dividends distributed are higher than the “net accumulated taxable income” of the immediate previous fiscal period from when the distribution is made. In order to assess the “net accumulated taxable income” from the income calculated by the Income Tax Law, the income tax paid in the same fiscal period should be subtracted and the local dividends received in the previous fiscal period should be added to such income. The Equalization Tax would be imposed as a 35.00% withholding tax on the shareholder receiving the dividend. Dividend distributions made in property (other than cash) would be subject to the same tax rules as cash dividends. Stock dividends on fully paid shares (“acciones liberadas”) are not subject to Equalization Tax.
For Argentine individuals and undivided estates not registered before the Argentine tax authorities as taxpayers for income tax purposes as well as for non-Argentine residents, the Dividend Tax withholding will be considered a final payment. Argentine individuals and undivided estates are not allowed to offset income arising from the distribution of dividends on Argentine shares with losses from other types of operations.
Pursuant to the terms of the amendment to the Brigadier Lopez Loan between us and Citibank N.A., JP Morgan Chase Bank N.A. and Morgan Stanley Senior Funding INC. dated December 22, 2020, we were precluded from making dividend payments during 2021 and limited to a maximum of US$25.0 million and US$20.0 million in dividends payment for 2022 and 2023, respectively.
On October 19, 2023, we made a prepayment to the syndicated loan celebrated with Citibank N.A., JP Morgan Chase Bank N.A. and Morgan Stanley Senior Funding INC for an amount of US$49,043,078. This prepayment allowed Central Puerto to make dividend payments that were restricted by this loan. As of the date of this annual report, the Company has no restrictions associated with this loan to pay dividends. After such payment, the principal due amounted to US$6,056,922,which was fully paid on January 12, 2024.
As of the date of this report, in accordance with the Central Bank regulations, we are required to obtain prior authorization in order to have access to the Foreign Exchange Market to purchase the foreign currency (a step necessary to make international transfers) to pay dividends. However, as of the date of this annual report, there are no restriction from Central Bank to use the cash and equivalents in foreign currency that the company may hold in order to pay dividends to its shareholders.
Furthermore, as from January 17, 2020, in accordance with Central Bank regulations, access is granted to the Foreign Exchange Market to pay dividends to non-resident shareholders, subject to the requirement that the total amount of transfers executed through the Foreign Exchange Market for payment of dividends to non-resident shareholders may not exceed 30.00% of the total value of any new capital contributions made in the company that had been entered and settled through such exchange market. The total amount paid to non-resident shareholders may not exceed the corresponding amount denominated in Argentine Pesos that was determined by the related shareholders’ meeting.
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Amount Available for Distribution
Dividends may be lawfully declared and paid only out of our earnings stated in our annual consolidated financial statements approved by the annual ordinary shareholders’ meeting. Under the Argentine Corporate Law, listed companies (such as ourselves) may distribute provisional dividends or dividends in advance resulting from interim financial statements.
Under the Argentine Corporate Law and our bylaws, our annual net income (as adjusted to reflect changes in prior years’ results) is allocated in the following order: (i) to comply with our legal reserve requirement of 5.00% of our net income until such reserve equals 20.00% of the capital stock; (ii) for voluntary or contingent reserves, as may be resolved from time to time by our shareholders at the annual ordinary shareholders’ meeting; (iii) the remainder of the net income for the year may be distributed as dividends on common shares; and/or (iv) as otherwise decided by our shareholders at the annual ordinary shareholders’ meeting.
Our Board of Directors submits our consolidated financial statements for the preceding fiscal year, together with reports thereon by our Supervisory Committee and the independent accountants, at the annual ordinary shareholders’ meeting for approval. Within four months of the end of each fiscal year, an ordinary shareholders’ meeting must be held to approve our annual consolidated financial statements and determine the appropriation of our net income for such year.
Under applicable CNV regulations, cash dividends must be paid to shareholders within 30 days of the shareholders’ meeting approving such dividends. In the case of stock dividends, shares are required to be delivered within three months of our receipt of notice of the authorization by the CNV for the public offering of the shares relating to such dividends. The statute of limitations in respect of the right of any shareholder to receive dividends declared by the shareholders’ meeting is three years from the date on which it has been made available to the shareholder.
Item 8.B Significant Changes
The main subsequent events occurred after the closing date of the annual consolidated financial statements (December 31, 2024) are the following:
| · | On January 1, 2025, the effective merger of Vientos La Genoveva II S.A. (VLGII), a wholly controlled subsidiary of Central Puerto S.A., with CP Manque S.A.U. (CPM), CP Los Olivos (CPLO), and CPR Energy Solutions S.A.U. (CPRES), took place. |
| · | On January 6, 2025, Central Puerto and YPF Luz signed a strategic agreement outlining the prospective development of a high-voltage transmission line that would supply clean energy to mining projects in the Argentine Puna region. As part of such agreement, the parties expect to create a joint venture responsible for developing and selling energy transport capacity to entities individually owned by Central Puerto and YPF Luz. The project aims to boost the mining industry and local communities by providing efficient and sustainable energy solutions. |
| · | On January 7, 2025, the shareholders of our subsidiary CP Renovables S.A. approved the redemption of 11,881,781,610 shares owned by a minority shareholder and our subsidiaries CPR Energy Solutions S.A.U. and Vientos la Genoveva II S.A. |
| · | On January 31, 2025, our subsidiary Proener signed a subscription agreement for additional shares of AbraSilver Resource Corp. Our shareholding in AbraSilver through Proener thus increased to 9.9%. |
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| · | On March 31, 2025, our Board of Directors approved a corporate reorganization whereby, subject to approval by the relevant Shareholders’ Meetings convened for May 22, 2025, we will absorb the entirety of CP Renovables’ assets and liabilities as of the effective date of the merger. |
| · | On March 31, 2025, the Board of Directors of Empresas Verdes Argentina S.A. (EVASA), Forestal Argentina S.A. (FASA), Estancia Celina S.A. (ECSA) and Las Misiones S.A. (LMSA) approved the corporate reorganization whereby, subject to approval by the shareholders’ meetings of the companies involved, convened for May 22, 2025, EVASA will absorb the assets and liabilities of all the above-mentioned companies, with the merger becoming effective as of June 30, 2025. |
| · | On April 9, 2025, the Executive Branch issued Decree No. 263/2025 ordering, after a period of fifteen (15) days from the publication of the Decree, a call for the National and International Public Tender, in order to proceed with the sale of the majority or controlling share package of each of the following hydroelectric companies: Alicurá Hidroeléctrica Argentina S.A., Chocón Hidroeléctrica Argentina S. A., Cerros Colorados Hidroeléctrica Argentina S. A., and Piedra del Águila Hidroeléctrica Argentina S. A. |
Item 9. The Offer and Listing
Item 9.A. Offer and listing details
Our shares are listed on the BYMA and, since February 2, 2018, have been listed on the NYSE under the symbol “CEPU”.
Item 9.B. Plan of Distribution
Not applicable.
Item 9.C. Markets
Our common shares are listed on the BYMA under the symbol “CEPU”. During 2024, the volume traded on the BYMA amounted to 275,351,700 shares. The total number of shares subscribed and integrated on December 31, 2024, was 1,514,022,256 , of which 100% were listed and available to trade on the Buenos Ares Stock Exchange.
On February 1, 2018, we completed our IPO and on February 2, 2018, our ADSs representing our common shares began to trade on the NYSE under the symbol “CEPU”. From January 1, 2024, to December 31, 2024, the volume of ADRs traded on the NYSE amounted to 82,826,158, equivalent to 828,261,580 common shares.
Consequently, the total trading volume of our common shares during 2024 was 1,203,413,280.
Item 9.D. Selling Shareholders
Not applicable.
Item 9.E. Dilution
Not applicable.
Item 9.F. Expenses of the issue
Not applicable.
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Item 10. Additional Information
Item 10.A. Share capital
Not applicable.
Item 10.B. Memorandum and articles of association
Below we provide certain information on our capital stock and a brief summary of certain significant provisions of our bylaws and the applicable laws and regulations in Argentina. This summary is not intended to be comprehensive and is qualified in its entirety by our bylaws and the applicable laws and regulations in force in Argentina.
Capital Stock
As of the date of this annual report, our capital stock amounts to Ps.1,514,022,256 and is represented by 1,514,022,256 common shares with a par value of Ps. 1.00 and one voting right each, all of them having been fully paid in and admitted to public offering.
As of the date of this annual report, two of our subsidiaries hold 9,103,882 of our common stock.
As of the date of this annual report, we are not aware of any individuals who hold, or who have agreed to hold, conditionally or otherwise, stock options, with respect to our common shares.
Articles of Incorporation and Bylaws
We are a corporation (sociedad anónima) organized and existing pursuant to the laws of Argentina. Our registered offices are domiciled in the City of Buenos Aires, Argentina. Central Puerto was created through Executive Decree No. 1222/92 dated February 26, 1992, in connection with the privatization process of SEGBA, and was registered with the Public Registry of Commerce on March 13, 1992, under No. 1,855 of Book 110, Volume A (Sociedades Anónimas). Central Puerto was created for a term of 99 years as from its registration with the Public Registry of Commerce.
Corporate Purpose
Pursuant to Section 4 of our bylaws, Central Puerto was created to be engaged in any of the following activities, either on its own account, or through or in association with third parties, in Argentina or abroad:
| (a) | producing, transforming, carrying, distributing and selling electric power in any of its forms, including, but not limited to, thermoelectric power from non-renewable sources (coal, oil derivatives, natural gas, uranium) and renewable sources, or from usable waste, hydroelectric power (including mini and micro power plants), thermonuclear power, wind power, geothermal power, offshore energy (tidal power, wave power, ocean currents, ocean-thermal energy, osmosis energy), solar energy (photovoltaic and thermal power) and bioenergy (plant and animal biomass); | |
| (b) | preparing, developing, planning and executing projects related to the capture and/or reduction of carbon emissions, including the issuance, negotiation, purchase and sale, among others, of certificates and any related activity; | |
| (c) | producing, storing and using hydrogen technologies in any of its available forms of energy; | |
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| (d) | engaging in the exploration, exploitation, processing, purification, transformation, refining, industrialization, storage, sale, transportation, distribution, import and export of liquid (such as oil) and/or gaseous hydrocarbons (such as natural gas), minerals (such as mineral coal) and metals (such as uranium and lithium, among others) and their respective direct or indirect derivatives; | |
| (e) | engaging in the production and exploitation of raw materials for biofuel production (biodiesel and bioethanol), including their manufacturing, storage, sale, distribution and transportation; | |
| (f) | engaging in the processing, storage, sale, distribution and transportation and/or use of: (i) agricultural waste and urban solid waste as a renewable energy source and (ii) ordinary and special waste (solid, semisolid and liquid) as a source of energy; | |
| (g) | obtaining, storing, selling, distributing, carrying and/or using biogas as a renewable energy source; | |
| (h) | processing raw materials from fossil fuels (natural gas, raw gasoline) to obtain basic (synthesis gas, benzene, toluene, etc.), intermediate (ammoniac, ethanol, methanol, ethylbenzene, etc.) and final petrochemicals (fertilizers, resins, polyurethanes, detergents, PET, etc.); | |
| (i) | engaging in the research and development of energy technologies; | |
| (j) | developing, investing and exploiting all kinds of undertakings and direct, related and complementary activities, related to agricultural and forestry production and its direct and indirect derivatives; and | |
| (k) | the acquisition and administration of shares and investments in companies incorporated both in the country and abroad. |
With respect to the activities described above, and within the limitations set forth in our corporate purpose, we have full legal capacity to (i) acquire rights, assume obligations, and carry out any kind of acts that are not otherwise prohibited by the applicable laws or by our bylaws; (ii) establish, incorporate, partner with, or hold interests in legal entities of whatsoever nature incorporated in Argentina or abroad by any available means, including but not limited to, capital contributions, purchase of shares, bonds, debentures, notes or other debt or equity securities, whether publicly or privately held; and (iii) render services and/or undertake representations, commissions, consignments, services and/or agencies for our benefit or for the benefit of third parties.
Statutory Provisions concerning our Board of Directors
According to our bylaws, which were amended in September 2022, our Board of Directors is comprised by 9 directors that will hold office for three fiscal years and a third of its members shall be renewed annually. Our shareholders may also appoint an equal or lower number of alternate directors. As of the date of this annual report, and until the shareholders’ meeting approving the consolidated financial statements for the fiscal year ended December 31, 2024, our Board of Directors is comprised by 9 directors and 8 alternate directors. In the above-mentioned shareholders’ meeting, the directors will be appointed with different terms of office to enable the implementation of the system of staggered terms of office set forth in Article 17 of our bylaws. Shareholders are entitled to elect up to one third of vacant seats on the board of directors by cumulative voting as set forth in Section 263 of the Argentine Corporate Law. The outcome of such voting will be computed per candidate, specifying the number of votes for each of them.
At the first meeting held following the shareholders’ meeting at which the members of the Board of Directors are renewed, the Board of Directors will elect a chairman and a vice-chairman from among its members. The vice-chairman will act in lieu of the chairman upon the latter’s resignation, death, incapacity, disability, removal or temporary or definitive absence, with a new chairman having to be elected within ten days from the seat becoming vacant. The election of a new chairman will take place only if the situation that gives rise to the reelection is expected to be irreversible during the remaining term of office. Pursuant to Section 23 of our bylaws, Board of Directors’ meetings will be held with the presence of an absolute majority of its members and decisions will be made by majority of present votes. Board of Directors’ meetings may also be held by videoconferencing, in which case directors participating in person and remotely will be computed in the calculation of the required quorum. Minutes of Board of Director’s meetings will be drafted and signed by directors and statutory auditors who were present at the meeting within five days from the date in which it was held. Members of our Supervisory Committee will register in the minutes the names of the directors who have participated in the meeting remotely, and that the decisions made therein were passed in accordance with the law. The minutes will include the statements from directors participating in person and remotely and will state their respective votes on each decision made. If a Board of Director’s meeting cannot be validly held because of the number of vacant seats, even with the attendance of all deputy directors of the same class, the Supervisory Committee will designate substitutes to hold office until the election of permanent members takes place, to which end an ordinary or class shareholders’ meeting will be called for, as the case may be, within ten days from the Supervisory Committee having made the designations.
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There are no requirements as to the minimum number of meetings to be held by the Board of Directors.
The chairman, or the individual acting in lieu of the chairman pursuant to the law, may call for meetings when so deemed convenient, or when so required by any director or the supervisory committee. The meeting will be called for within five days from the request; otherwise, the meeting may be called for by any of the directors. The Board of Director’s meetings will be called for in writing and notice thereof must be given to the address reported by each director. The notice will indicate the date, time and place of the meeting and the meeting agenda. Business that is not included in the notice may be discussed at the meeting only to the extent all permanent directors are present and have cast their unanimous vote.
Our Board of Directors may hold meetings with the attendance of its members in person or by videoconference or other simultaneous sound, imaging or voice broadcasting media. The Board of Directors may hold meetings with the attendance of its chairman or its substitute. Our Board of Directors’ meetings will be held with the presence of an absolute majority of its members and decisions will be made by majority of present votes.
According to Section 26 of our bylaws, our Board of Directors has the broadest powers and authority in connection with our direction, organization and administration, with no limitations other than those set forth in the applicable laws and regulations. The chairman of the board is our legal representative.
Statutory Provisions concerning our Supervisory Committee
The Company’s oversight shall be in charge of a Supervisory Committee to be comprised by three (3) permanent and three (3) alternate statutory auditors. Statutory auditors will be elected for one (1) fiscal year and will be vested with the powers set forth by Argentine Corporate Law and other applicable legal provisions.
Our Supervisory Committee holds meetings and adopts decisions with the presence and favorable vote of, at least, two of its members, notwithstanding the rights granted by law to the dissenting statutory auditor. Meetings of our Supervisory Committee may be called for by any of its members. Prior to the registration of the amendments to the bylaws of June 3, 2015, meetings of our Supervisory Committee were held with the attendance of all of its members, and decisions were adopted by majority of votes, notwithstanding the rights granted by law to the dissenting statutory auditor.
Members of our Supervisory Committee are also authorized to attend Board of Director’s and shareholders’ meetings, call for extraordinary shareholders’ meetings and investigate written claims brought by shareholders who own more than two percent (2%) of our outstanding shares. In accordance with the applicable laws, members of the Supervisory Committee are required to be certified public accountants or lawyers. Members of our Supervisory Committee may call for an ordinary shareholders’ meeting, in the specific cases provided by law, at any time at their discretion, or otherwise when so required by shareholders representing no less than five percent (5%) of our capital stock.
Members of our Supervisory Committee are designated at the annual ordinary shareholders’ meeting and will remain in office for one (1) year. Pursuant to Section 294 of the Argentine Corporate Law, our Supervisory Committee is required to review our books and records, when deemed convenient and, at least, on a quarterly basis.
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Our Supervisory Committee will hold meetings at least once a month; meetings may be also called for at the request of any of its members, within five days from the date the request is submitted to the Chairman of the Supervisory Committee or the Board of Directors, as the case may be. Notice of all meetings shall be given in writing to the address indicated by each Statutory Auditor at the time of holding office.
Our Supervisory Committee shall be presided over by one of its members, elected by majority of votes, at the first meeting held every year. At that time, the member who will act in lieu of the chairman in his/her absence will also be elected. The chairman represents our Supervisory Committee before the Board of Directors.
Rights, Preferences and Restrictions attached to our Shares
According to our bylaws, realized and liquid profits will be allocated in the following order: (i) 5.00% to the legal reserve until reaching at least 20% of our subscribed capital; (ii) Directors’ fees, within the amounts set forth by Section 261 of the Argentine Corporate Law, which may not be exceeded, and Statutory Auditors’ fees; (iii) payment of dividends in connection with the employee stock ownership plan; (iv) optional reserves and provisions, at the discretion of the shareholders’ meeting; and (v) the remaining balance shall be distributed as dividends among shareholders, regardless of their class.
Shareholders’ Meetings
Shareholders’ meetings will be called for by publishing notices in the Official Gazette and in one of Argentina’s major newspapers for five days, no less than 20 and no more than forty-five (45) days in advance of the scheduled date for the meeting. The notice will include the type of meeting, as well as the date, time and place where it will be held and the agenda. Ordinary and extraordinary shareholders’ meetings are subject to the quorum and majorities required by Section 79 of the Capital Market Law and Sections 243 and 244 of the Argentine Corporate Law.
Shareholders’ Liability
In conformity with Argentine law, shareholders’ liability for a company’s losses is limited to the payment of their subscribed equity holdings. However, shareholders who voted for a decision that was then rendered null by a court for its being inconsistent with the Argentine laws or the corporate bylaws (or operating agreement, if any) might be held personally and jointly and severally liable for the damages that may arise from such decision.
Conflicts of Interest
Under the Argentine laws, if a shareholder casts a vote in connection with a matter in which it may have, directly or indirectly, interests that are contrary to ours, such shareholder will be liable for damages, but only to the extent such matter had not been approved but for the vote of such shareholder. The Argentine laws also set forth that if a member of our Board of Directors has interests in a business operation that are contrary to our interests, such director will report so to the Board of Directors and the Supervisory Committee and will refrain from engaging in the discussion of that issue. If that director acts in a manner that is contrary to the law, it will be held personally and jointly and severally liable for the damages that may arise from such director’s acts or omissions.
Preemptive and Accretion Rights
Pursuant to Section 194 of the Argentine Corporate Law, upon a potential capital increase, each holder of common shares will be entitled to preemptive rights in respect of the newly issued common shares on a proportional basis to the number of shares already held. Preemptive rights can be exercised beginning on the last notice posted in the Official Gazette and in a major Argentine newspaper 30 days; provided, however, that such 30-day period may be reduced to no less than ten (10) days, if so approved at an extraordinary shareholders’ meeting.
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Liquidation
Pursuant to our bylaws, liquidation will be carried out by our Board of Directors or the liquidators appointed at the shareholders’ meeting, under the oversight of the Supervisory Committee.
Once liabilities have been settled, including the expenses incurred in the liquidation, the remaining balance will be distributed among shareholders on a proportional basis to their respective holdings, without regard to classes or categories.
Neither Argentine law, our bylaws nor other corporate documents provide limitations as to share ownership that might apply to us.
Term
According to our bylaws, our company was created for a term of 99 years since the registration date with the Public Registry of Commerce. Such term may be extended by a decision made at an extraordinary shareholders’ meeting.
Mandatory Tender Offer Regime
We are subject to the mandatory tender offer rules set forth in Argentine Capital Markets Law, which provide that in certain circumstances a mandatory tender offer (“OPA”) must be launched at an equitable price with respect to some or all of a company’s outstanding shares. Such circumstances giving rise to an OPA include instances where a person individually or through concerted action, has effectively acquired a controlling interest in a company whose shares are admitted to the public offering regime. The Argentine Capital Markets Law also provides that a person acquires a controlling interest, individually or in concert with other persons when (i) directly or indirectly reaches a percentage of voting rights equal to or greater than 50.00% of the company, excluding from the basis of calculation the shares that belong, directly or indirectly, to the offeree company; or (ii) has reached a shareholding of less than 50.00% of the voting rights of a company, but acts as a controlling shareholder (a controlling shareholder being understood as one that directly or indirectly, individually or jointly, holds a shareholding that grants it the necessary votes to form the corporate will in ordinary meetings or to elect or revoke the majority of the directors or supervisory directors).
In line with the above CNV regulations set forth that an OPA applies in case of a person effectively acquiring, individually or in concert with other persons, a controlling interest in a listed company whether:
| · | through the acquisition of shares or subscription rights or options granted by the issuing company itself on those shares, convertible securities or other similar securities which, directly or indirectly, may give the right to the subscription and/or acquisition of securities, or conversion of those shares with voting rights in that company; | |
| · | through agreements with other holders of securities that, in a concerted manner, grant the necessary votes to form the corporate will in ordinary meetings or to elect or revoke the majority of the directors or members of the supervisory committee, as well as any other agreement that, for the same purpose, regulates the exercise of voting rights in the administrative organ or to whom the latter delegates the management. The CNV regulations clarifies that (a) this assumption will be applicable when (i) the parties to the agreement have acquired the voting shares of the company, acting individually or in concert within the 12 months prior to the signing of the agreement; or (ii) when a new shareholder promotes and subscribes an agreement with others in order to establish joint control of the affected company by reason of its entry as a shareholder; and (b) this situation shall not apply when a shareholding of less than 50.00% is acquired in a controlling company of a listed company and there is a prior agreement to which the new shareholder adheres, occupying the position held by the selling shareholder, without any change in the controlling company’s shareholding in the target company; or | |
| · | in an indirect or supervening manner, including the cases of mergers or other corporate reorganizations. |
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| In accordance with the above, CNV regulations further provide that once the controlling interest is reached such situation must be immediately disclosed to the market by the affected company. | ||
| · | The Argentine Capital Markets Law provides that the OPA procedure must be carried out after the takeover and the deadline for submitting the tender offer documents is one month from the moment the controlling interest is reached. Accordingly the OPA must be made within 90 calendar days from the date it becomes mandatory | |
Determination of the OPA Price
For an OPA in the case of a change in control, the Argentine Capital Markets Law and CNV regulations establish that the “equitable price” to be offered will be determined as the higher of the following:
| (a) | the highest price that the offeror has paid or agreed for the marketable securities subject to the offer during the 12 months prior to the date of the agreement or payment that allowed reaching the controlling interest, without considering acquisitions of not significant volumes ─5.00% or less of the total trading volume on the trading floor of the day of arrangement─, made at the quoted price, and including any other additional consideration paid or agreed in relation to such securities. For this assumption, the CNV regulations clarify that, in case the final price is increased by subsequent adjustments, the offered price must be recalculated and adjusted if it yields a higher value. When such adjustment occurs after the end of the offer period, the difference must be paid to those who accepted the offer within ten calendar days from the effective payment of the increase and the average price of the marketable securities must be adjusted. | |
| (b) | the average price of the marketable securities subject to the offer during the six-month period immediately prior to the date on which the offeror is obliged to publish the announcement of the OPA by which the change in the controlling interest is agreed. This last guideline will not apply when the percentage of shares listed in a market authorized by the CNV represents at least 25.00% of the issuer’s capital stock and the liquidity conditions set forth in CNV regulations are met. |
In the event of a public offer for residual shareholdings due to near total control or withdrawal of the public offer, the Argentine Capital Markets Law establishes that the following price criteria must be considered:
| (a) | the highest price that the offeror has paid or agreed to pay for the marketable securities subject to the offer during the 12 months prior to the intimation of the minority shareholder or the unilateral declaration of acquisition in the cases of companies subject to near-total control or since the agreement to withdraw the public offer; | |
| (b) | the average price of the marketable securities subject to the offer during the six-month period immediately preceding the intimation of the minority shareholder or the unilateral declaration of acquisition in the case of companies subject to near-total control or since the agreement to withdraw the public offer; | |
| (c) | the equity value of the shares, considering a special delisting balance sheet, as the case may be; | |
| (d) | the value of the company valued according to discounted cash flow criteria and/or indicators applicable to comparable companies or businesses; and | |
| (e) | the liquidation value of the company. |
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In these cases, the “equitable price” offered may not be lower than the highest of those indicated in points (a) and (b) of this paragraph.
The CNV has a period of 20 business days to decide on the request for authorization of the OPA and to object to the price offered. This period will be counted from the date all the documentation is gathered and no new observations and requests for information are made. The refusal of authorization and/or objection to the offered price by the CNV may be challenged by the offeror by means of a direct appeal before the Federal Courts of Appeals with jurisdiction over commercial matters within 30 business days of notification of the refusal. Minority shareholders may also object to the price from the date of the announcement of the offer or the filing of the withdrawal request and until the CNV’s objection period described above.
The offeror must publish the OPA prospectus within five calendar days after the CNV’s formal approval of the tender offer. The period granted to investors to accept or not the offer will be set between a minimum of 10 business days and a maximum of 20 business days. In addition, the offeror may grant an additional term of not less than 5 business days to the general closing date of the offer.
In order to comply with the provisions of the Capital Markets Law and the CNV Rules, on March 17, 2023, Proener made a mandatory tender offer to all the holders of voting shares of CECO (the “Tender Offer”). The Tender Offer commenced on May 30, 2023, and expired on June 12, 2023. On June 13, 2023, Proener published a notice of results of the Tender Offer, reporting that 65,100 shares of CECO were tendered in the Tender Offer, representing approximately 0.0093% of the issued and outstanding shares of CECO, which were acquired by Proener at a price of Ps. 94,189 per share. As a result of the Tender Offer, Proener’s shareholding in CECO increased from 531,273,928 shares to 531,344,028 shares, representing 75.69% of CECO’s share capital.
Penalties for Breach
The Argentine Capital Markets Law provides that purchases in violation of such regime will be declared irregular and ineffective for administrative purposes by the CNV and cause the auction of the shares acquired in violation of the applicable regulation, without prejudice to the penalties that may correspond under CNV regulations, such as restriction in the use of political rights derived from its shares in the company.
Tender Offer Regime in the Case of a Voluntary Withdrawal from the Public Offering and Listing System in Argentina
Argentine Capital Markets Law and CNV regulations also established that when a company whose shares are publicly offered and listed in Argentina agrees to withdraw voluntarily from the public offering and listing system in Argentina, it must follow the procedures provided for in the CNV’s regulations and it must likewise launch an OPA for its aggregate shares or subscription rights or securities convertible into shares of stock options under the terms provided for in such regulation. It is not necessary to extend the public offering to those shareholders that voted for the withdrawal at the shareholders’ meeting.
The acquisition of one’s own shares must be made with liquid and realized profits or with free reserves, whenever paid up in full, and for the amortization or disposition thereof, within the term set forth in Section 221 of the Argentine Corporate Law and the company must present the CNV with evidence that it has the necessary solvency to effect such purchase and that the payment for the shares will not affect its solvency.
According to Section 98 of Argentine Capital Markets Law the price offered in the case of a voluntary withdrawal from the public offering and listing system in Argentina should be “equitable value” as described above and take into account the relevant criteria of Section 88 of Argentine Capital Markets Law.
Mandatory or Voluntary Tender Offer in the Case of Near-total Control
When a publicly traded Argentine company becomes subject to near-total control any minority shareholder may, at any time, request the controlling person to make a tender offer to all the minority shareholders at an “equitable price” under the terms of Section 88 of this Argentine Capital Markets Law for near-total control scenarios. In addition, within six months from the date on which the company has come under the near-total control of another person, the latter may issue a unilateral declaration of willingness to acquire all the remaining capital stock held by third parties.
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For the purposes of the above, “near-total control” shall mean a shareholder (or group of shareholders) becomes holder, directly or indirectly, of 95% or more of the outstanding capital stock of a publicly traded Argentine company, and “minority shareholder” shall mean the holders of shares of any kind or class, as well as the holders of all other securities convertible into shares other than those of the controlling person(s). For voluntary offers the price offered may be set by the offeror at its discretion, but the guidelines and criteria applied for its determination must be disclosed and, in such case, the valuation report(s) taken into account must be published. The CNV shall not issue an opinion in relation to the offered price, but shall only formally approve the offer if it complies with the requirements established by CNV regulations.
Item 10.C Material contracts
For information concerning our material contracts, see “Item 4. Information on the Company,” “Item 7.B. Related Party Transactions” and “Item 5. B. Liquidity and Capital Resources”.
Item 10.D Exchange Controls
On September 1, 2019, after the market disruptions caused by the results of the primary elections, with the purpose of strengthening the normal functioning of the economy, fostering a prudent administration of the exchange market, reducing the volatility of financial variables and containing the impact of the variations of financial flows on the real economy, the Argentine Government issued Decree No. 609/2019 (“Decree No. 609”) whereby foreign exchange controls were temporarily reinstated. The decree: (i) reinstated, originally until December 31, 2019, the exporters’ obligation to repatriate the proceeds from exports of goods and services in the terms and conditions set forth by the Central Bank’s implementing regulations and settle for pesos through the foreign exchange market (the “Foreign Exchange Market”); and (ii) authorized the Central Bank to (a) regulate access to the Foreign Exchange Market for the purchase of foreign currency and outward remittances; and (b) set forth regulations to avoid practices and transactions aimed to circumvent, through the use of securities and other instruments, the measures adopted through the decree. On the same date, the Central Bank issued Communication “A” 6770, which was subsequently amended and supplemented by further Central Bank communications.
For the purposes of this section, (i) “foreign currency” means any currency other than the Argentine peso; and (ii) “Foreign Exchange Regulations” means the foreign exchange regulations issued by the Central Bank pursuant to Communication “A” 8191, as subsequently amended and supplemented from time to time by Central Bank’s communications.
Pursuant to Communication “A” 8226 issued by the Central Bank on April 11, 2025, and effective as of April 14, 2025, certain measures were implemented to ease foreign exchange restrictions and introduce greater flexibility to the Foreign Exchange Regulations. As a result, as of the date of this annual report, the restrictions for the payment of imports in place since December 13, 2023, have been eased. However, certain BCRA restrictions on the access to the Foreign Exchange Market remain in force. Below is a description of the main Foreign Exchange Regulations:
Specific provisions for income from the foreign exchange market
Entry and settlement of the proceeds from the export of goods through the Foreign Exchange Market
The Foreign Exchange Regulations require that proceeds from the export of goods be entered into the country and settled in pesos through the Foreign Exchange Market within a specific timeframe, depending on the type of good. Regardless of these maximum settlement periods, export proceeds must be entered into the country and settled in pesos in the Foreign Exchange Market within twenty (20) business days from the date of collection. However, the ability to use this period is subject in all cases to compliance with the deadlines established in the Foreign Exchange Regulations for each type of good.
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Decree No. 28/2023, published on December 13, 2023, established that in connection with: (i) the export countervalue of the services included in Subsection c) of paragraph 2 of Section 10 of Law No. 22,415 (Código Aduanero) and its amendments (which refers to services rendered in Argentina, with effective use or exploitation carried out abroad); and (ii) the countervalue of the export of goods included in the Common Nomenclature of MERCOSUR (“NCM”), including pre-financing and/or post-financing of exports from abroad or a liquidation advance; 80% of such countervalue must be brought into the country in foreign currency and/or negotiated through the Foreign Exchange Market, and the remaining 20% must be carried out through purchase and sale transactions with negotiable securities acquired with liquidation in foreign currency and sold with settlement in local currency in Argentina. Effective April 11, 2025, Decree No. 269/2025 repealed Decree No. 28/2023 and established that the proceeds from the exports falling under its provisions shall be governed by the general provisions set forth in Decree No. 609 (as amended and supplemented from time to time). Exporters of goods classified under the NCM shall be subject to the applicable export duties, taxes, and related charges in accordance with the terms, deadlines, and conditions established under the current legal framework, applying the relevant export duty rate to the corresponding foreign currency value as described above.
If the client is a Special Purpose Vehicle (“VPU”, as per its acronym in Spanish) adhering to the Incentive Regime for Large Investments (“RIGI”, as per its acronym in Spanish) that has declared to the Ministry of Economy its intention to claim the benefits established in Section 198 of Law 27,742, regarding the collection of export proceeds from goods and services, the repatriation and settlement percentages set forth in sections 14.1.1 and 14.1.2 of the Foreign Exchange Regulations shall apply, as appropriate.
Amounts received in foreign currency as compensation for losses related to exported goods must also be entered into the country and settled in pesos through the Foreign Exchange Market, up to the value of the insured exported goods.
Advances, pre-financing, and post-financing from abroad must be entered into the country and settled in the Foreign Exchange Market within twenty (20) business days from the date of collection or disbursement abroad, subject to the requirements and exceptions established in section 7.1.3 of the Foreign Exchange Regulations.
There are some exceptions to the obligation to settle through the Foreign Exchange Market, including, but not limited to, collections from exporters under the Regime for the Promotion of Knowledge Economy Exports (established by Decree No. 679/2022, also known as Régimen De Fomento De Inversiones Para Exportaciones De Las Actividades De La Economía Del Conocimiento), provided that the funds have been entered into the country within the regulatory timeframes and all other conditions set forth in the Foreign Exchange Regulations are met.
The exporter must designate a financial entity to follow up each export transaction. The obligation to enter and settle foreign currency through the Foreign Exchange Market corresponding to a shipment permit will be considered satisfied when the financial entity designated to follow up the relevant transaction certifies that the entry and settlement have taken place.
Application of Foreign Currency from Export Proceeds
The application of foreign currency from export proceeds of goods occurs when it has been certified that the exported goods themselves or the foreign currency received for them have been used to settle principal, interest, and/or issuance costs of financing transactions, pay profits and dividends, and/or carry out the repatriation of a direct investment by a non-resident shareholder in the cases detailed below, all in accordance with section 7.3 of the Foreign Exchange Regulations:
| (i) | Settled export advances of goods; |
| (ii) | Settled export pre-financing of goods; |
| (iii) | Settled export post-financing of goods; |
| (iv) | Settlements related to exports financed by foreign importers through local financial institutions; |
| (v) | Financial loans with contracts in force as of August 31, 2019, whose terms provide for servicing obligations through the application of export proceeds abroad; |
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| (vi) | Export pre-financing and financing granted or guaranteed by local financial institutions pending as of August 31, 2019, that were not settled through the Foreign Exchange Market; |
| (vii) | Export advances and pre-financing from abroad pending as of August 31, 2019, that were not settled through the Foreign Exchange Market, provided that prior approval has been obtained or the mechanism described in section 9.3.3.2 of the Foreign Exchange Regulations is applied; |
| (viii) | Financial transactions authorized for the application of export proceeds from goods and services; |
| (ix) | Transactions authorized for the application of export proceeds from goods under the Investment Promotion Regime for Exports (Decree No. 234/21); |
| (x) | Financing related to goods imports authorized for the application of export proceeds from goods; |
| (xi) | Export advances, pre-financing, and post-financing from abroad with partial settlement pursuant to the provisions of Decrees No. 492/23, 549/23, 597/23, and 28/23. |
Obligation to settle foreign currency from exports of services
As a general rule, payments received for the provision of services by residents to non-residents must be entered and settled through the Foreign Exchange Market within twenty business days from the date of their collection abroad or in Argentina or their crediting to foreign accounts.
In the case of funds received or credited abroad, the collection and liquidation may be considered completed for the amount equivalent to the usual expenses debited by the financial entities abroad for the transfer of funds to the country.
The aforementioned provisions of Decree No. 28/2023 were also applicable to the export of services until April 14, 2025, when they ceased to be in force. (see “—Entry and settlement of the proceeds from the export of goods through the Foreign Exchange Market”).
If the client is a VPU under the RIGI and has notified the Ministry of Economy, the enforcement authority for the RIGI, of its intention to avail itself of the benefits set out in Article 198 of the Ley de Bases (which states that VPUs are not required to enter or settle in the Foreign Exchange Market the foreign currency obtained from activities other than the export of goods, including services), the exception provided in Section 14.1.3 of the Foreign Exchange Regulations will apply. This section specifies that payments for services provided to non-residents by a VPU with a RIGI-backed project will be exempt from the requirement to enter and/or settle the foreign currency value, as long as the service was provided or accrued from the start-up date of the VPU, as reported by the Ministry of Economy to the Central Bank.
Certain situations outlined in section 2.2.2 of the Foreign Exchange Regulations are exempt from the settlement obligation for proceeds from the export of services, as long as these are entered into Argentina within the established deadlines.
Disposal of non-financial, unproduced Assets
The consideration received by residents from the disposal of non-financial, unproduced assets to non-residents must be entered into the country in foreign currency and settled through the Foreign Exchange Market within twenty (20) business days from the date of receipt abroad or in Argentina, or from the date of crediting to foreign accounts.
In the case of funds received or credited abroad, the entry and settlement requirement may be considered fulfilled for the amount equivalent to the usual charges debited by foreign financial institutions for transferring the funds to the country.
Debt securities subscribed abroad and external financial indebtedness
Debt securities publicly registered abroad, other external financial indebtedness, and foreign currency-denominated debt securities publicly registered in Argentina fully subscribed abroad ("External Financial Indebtedness"), disbursed as from September 1, 2019, must be entered into Argentina and settled in the Foreign Exchange Market as a requirement for subsequent access to it in order to service their capital and interest payments. Consequently, although the settlement of the proceeds from such transactions is not mandatory, failing to settle it will prevent future access to the Foreign Exchange Market for reimbursement purposes.
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Additionally, as further conditions for such access to the Foreign Exchange Market, the transaction must have been declared in the External Assets and Liabilities Survey, and access to the Foreign Exchange Market must occur no more than 3 (three) business days prior to the due date of the capital or interest service to be paid.
In the case of a capital payment of debt securities issued as from November 8, 2024 made through a transfer abroad, access to the Foreign Exchange Market must occur at least 365 (three hundred sixty-five) calendar days after their issuance date. This minimum term will be reduced to 180 calendar days for securities issued on or after April 21, 2025.
Access to the Foreign Exchange Market to make payments more than three (3) days in advance of the due date is, as a general rule, subject to prior authorization from the Central Bank. The following cases of early repayment may be exempt from such prior authorization, provided they meet several requirements outlined in Section 3.5 of the Foreign Exchange Regulations: (i) early repayment of principal and interest with the settlement of funds entered into the country by the issuance of a new debt security that qualifies as External Financial Indebtedness; (ii) early repayment of principal and interest with the simultaneous settlement of other External Financial Indebtedness; (iii) early repayment of interest in the context of a debt exchange process involving debt securities that qualify as External Financial Indebtedness; (iv) early repayment of principal and interest simultaneously with the settlement of new External Financial Indebtedness granted by a local financial institution through a foreign credit line; and (v) early repayment of principal and interest by a VPU adhering to the RIGI.
Furthermore, prior approval from the Central Bank is required for local residents to access the Foreign Exchange Market for the payment of principal and interest related to External Financial Indebtedness with related parties. Certain specific exceptions apply, as detailed in Section 3.5.6 of the Foreign Exchange Regulations. See "- Payments Related to Debts with Related Parties."
Additionally, under Section 3.11.2 of the Foreign Exchange Regulations, entities may grant access to the Foreign Exchange Market to residents in order to make payments for services related to External Financial Indebtedness or debt securities registered in Argentina, in accordance with Section 3.6.1.3 of the Foreign Exchange Regulations, to purchase foreign currency before the deadline permitted by the regulations, under the following conditions:
| (i) | The funds acquired are deposited in foreign currency accounts held by the client in local financial institutions; |
| (ii) | The intervening entity has verified that the indebtedness, the service of which will be paid with these funds, complies with the applicable Foreign Exchange Regulations that allow such access; and |
| (iii) | The client's access falls within one of the following situations: |
| a. | It is made within the 60 (sixty) calendar days prior to the due date, with a daily amount not exceeding 10% (ten percent) of the amount to be paid; or |
| b. | It is made within 5 (five) business days prior to the regulatory deadline allowed in each case, with a daily amount not exceeding 20% (twenty percent) of the amount to be paid. |
Specific provisions on access to the foreign exchange market
General requirements
As a general rule, and in addition to the specific rules of each transaction for access, certain general requirements must be complied with by a local company or individual to access the Foreign Exchange Market for the purchase of foreign currency or its transfer abroad (i.e., payments of imports and other purchases of goods abroad; payment of services rendered by non-residents; distribution of profits and dividends; payment of debt securities subscribed abroad and external financial indebtedness; interest payments on debts for the import of goods and services, among others) without requiring prior approval from the Central Bank. In this regard, the local company or individual must file an affidavit stating that:
| (a) | At the time of access to the Foreign Exchange Market, all of its foreign currency holdings in Argentina are deposited in accounts in financial institutions, and (ii) at the beginning of the day on which it requests access to the Foreign Exchange Market, it does not hold Argentine certificates of deposit (for its acronym in Spanish, “CEDEARs”) representing foreign shares and/or available liquid foreign assets that together have a value greater than US$ 100,000. For these purposes, “foreign liquid assets” are considered to be holdings of banknotes and coins in foreign currency, cash in gold coins or bars of good delivery, demand deposits in financial institutions abroad and other investments that allow immediate availability of foreign currency. On the other hand, funds deposited abroad that cannot be used by the client because they are reserve or guarantee funds created by virtue of the requirements set forth in foreign debt contracts or funds created as guarantee for derivative transactions arranged abroad should not be considered as liquid foreign assets available. In the event that the client is a local government and exceeds the established limit, the institution may also accept an affidavit from the client stating that the excess was used to make payments for the Foreign Exchange Market through swap and/or arbitrage transactions with the deposited funds. |
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In the event that the client holds foreign liquid assets and/or CEDEARs in an amount greater than that established in the preceding paragraph, the financial institution may also accept an affidavit from the client confirming that such amount has not been exceeded, considering that, partially or fully, the foreign liquid assets:
| (i) | have been used during that day for payments that would have had access to the Foreign Exchange Market; |
| (ii) | have been transferred to the client’s favor to a correspondent account of a local entity authorized to operate in foreign exchange; |
| (iii) | are funds deposited in foreign bank accounts in the client's name, originating from proceeds of exports of goods and/or services, or advances, prefinancing, or post financing of exports of goods granted by non-residents, or from the sale of non-produced non-financial assets, for which the 20 (twenty) business day period from their receipt has not elapsed; |
| (iv) | are funds deposited in foreign bank accounts in the client's name, originating from External Financial Indebtedness, and the amount does not exceed the equivalent required to pay capital and interest in the next 365 (three hundred sixty-five) calendar days; |
| (v) | are funds deposited in foreign bank accounts in the client's name, originating from disbursements received abroad after November 29, 2024 from External Financial Indebtedness, within the last 180 (one hundred eighty) calendar days; |
| (vi) | are funds deposited in foreign bank accounts in the client's name, originating from the sale of securities settled in foreign currency as outlined in section 3.16.3.6.iii) of the Foreign Exchange Regulations; |
| (vii) | are funds deposited in foreign bank accounts in the client's name, originating from debt securities issued in the last 120 (one hundred twenty) calendar days, and falling under the provisions of sections 7.11.1.5. and 7.11.1.6 of the Foreign Exchange Regulations. |
Entities may also accept an affidavit from the client stating that their holdings in excess of the contemplated amount correspond to funds deposited in bank accounts abroad originating from the subscription abroad of a new debt security in the last 60 calendar days and that will be used to carry out a refinancing, repurchase, and/or early redemption transaction of debt securities or external financial debts that qualify as External Financial Indebtedness.
| (b) | It undertakes the obligation to settle in the Foreign Exchange Market, within five business days of its availability, the funds received abroad from the collection of loans granted to third parties, time deposits, or the sale of any type of asset, to the extent that the asset subject to the sale was acquired, the deposit constituted or the loan granted after May 28, 2020. |
| (c) | On the date of access to the Foreign Exchange Market and in the previous 90 calendar days, either directly nor indirectly, nor on behalf or for the account of third parties: |
| (i) | did not arrange sales in Argentina of securities with settlement in foreign currency, |
| (ii) | did not exchange securities issued by residents for foreign assets, |
| (iii) | did not transfer securities to depository entities abroad, |
| (iv) | did not acquire in Argentina securities issued by non-residents with settlement in Argentine pesos, |
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| (v) | did not acquire CEDEARs representing foreign shares, |
| (vi) | did not acquire securities representing private debt issued in foreign jurisdiction, and |
| (vii) | did not deliver funds in local currency or other local assets (except funds in foreign currency deposited in local financial institutions) to any entity (whether physical or legal, resident or non-resident, related or not), receiving as prior or subsequent consideration, directly or indirectly, by itself or through a related, controlled or controlling entity, foreign assets, crypto-assets or securities deposited abroad. |
Pursuant to Communication “A” 8226 issued by the Central Bank on April 11, 2025, outflows through the Foreign Exchange Market carried out by resident individuals are not subject to the requirement set forth in this Section (c), and transactions executed up to and including that date shall not be taken into account for the purposes of the affidavit required in this Section (c).
| (d) | It undertakes the obligation not to enter into any of the transactions described in paragraph (c) above from the time it requests access to the Foreign Exchange Market and for 90 calendar days thereafter, neither directly nor indirectly, nor on behalf or for the account of third parties. |
Pursuant to the aforementioned Communication “A” 8226, outflows through the Foreign Exchange Market carried out by resident individuals are not subject to the requirement set forth in this Section (d).
Section 3.16.3.6 of the Foreign Exchange Regulations sets forth several transactions that should not be considered in the affidavits prepared to comply with items (c) and (d) above.
| (e) | Section 3.16.3 of the Foreign Exchange Regulations adds that, in the event that the customer requesting access to the exchange market is a legal entity, in order for the transaction not to be covered by the requirement of prior approval by the Central Bank must be submitted to the corresponding financial institution an affidavit stating: |
| (i) | details of the physical or legal persons exercising a direct control relationship over the client and of other legal persons with which it is part of the same economic group. In determining the existence of a direct control relationship, the types of relationships described in Section 1.2.2.1 of the Large Exposures Regulation should be considered. Companies sharing a control relationship of the type defined in Sections 1.2.1.1 and 1.2.2.1 of the Large Exposures Regulations should be considered as members of the same “economic group”; |
| (ii) | that on the day on which it requests access to the Foreign Exchange Market and in the 90 days prior to that date, it has not delivered in Argentina any funds in local currency or other liquid local assets, except funds in foreign currency deposited in local financial institutions, to any individual or legal entity that exercises a direct control relationship over it, or to other companies with which it is part of the same economic group, except those directly associated with regular transactions between residents for the acquisition of goods and/or services. Pursuant to Communication “A” 8226, transactions carried out up to and including April 11, 2025, shall not be taken into account for purposes of the affidavit described herein. |
| (iii) | The requirements set forth in items (i) and (ii) above may be deemed fulfilled if the client seeking access has submitted: |
| (1) | An affidavit confirming that, within the period established in item (e)(ii), except for transactions directly related to routine transactions in the course of its business activities, it has not transferred local currency funds or other liquid local assets—excluding foreign currency funds deposited in local financial institutions—to any individual or legal entity within Argentina. |
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| (2) | An affidavit signed by each individual or legal entity identified in item (e)(i) to whom the client has transferred funds under the terms of item (e)(ii), confirming compliance with the requirements set forth in items (c), (d), and (e)(ii). |
| (3) | An affidavit signed by each individual or legal entity identified in item (e)(i), confirming either: (x) compliance with the requirements set forth in items (c) and (d), or (y) that, within the period established in item (e)(ii), except for transactions directly related to routine purchases of goods and/or services between residents, it has not received local currency funds or other liquid local assets—excluding foreign currency funds deposited in local financial institutions—originating from the client or from any entity identified in item (e)(i) to whom the client has transferred funds under the terms of item (e)(ii). |
Communication “A” 8108, enacted on September 19, 2024, states that transfers to foreign depositary entities of securities made in connection with a repurchase of debt securities by Argentine residents should not be considered in the affidavits prepared to comply with items (c) and (d) above.
Clients who have acquired BOPREAL bonds in primary bidding under the provisions of “Transactions with BOPREAL” shall not be required to consider, for the purposes of preparing the affidavits set forth in items (c) and (d) above, sales of BOPREAL bonds settled in foreign currency in Argentina or abroad, or transfers of these bonds to custodians abroad, provided such transactions do not exceed the amount acquired in primary bidding. Likewise, they shall not be required to consider, in the aforementioned affidavits, sales of securities settled in foreign currency abroad or transfers of securities to custodians abroad, both executed on or after April 1, 2024, when the market value of such transactions does not exceed the difference between the value obtained from selling BOPREAL bonds settled in foreign currency abroad—acquired in primary bidding for eligible import-related debt for goods and services pursuant to the provisions of “Transactions with BOPREAL”—and their nominal value, if the former is lower.
Finally, Section 3.16.4 of the Foreign Exchange Regulations establishes that financial institutions must obtain prior approval from the Central Bank to grant access to the Foreign Exchange Market to individuals or legal entities listed by the Tax Collection and Customs Control Agency (Agencia de Recaudación y Control Aduanero or “ARCA”, as per its acronym in Spanish) in its database of invoices or equivalent documents classified as fraudulent by said authority. This requirement shall not apply to market access for the repayment of foreign currency financing granted by local financial institutions, including payments for foreign currency transactions made via credit or purchase cards.
Imports payments
Section 3.1 of the Foreign Exchange Regulations allows access to the Foreign Exchange Market for the payment of imports of goods, establishing different conditions depending on whether they are payments of imports of goods with customs entry registration, or payments of imports of goods with pending customs entry registration, and based on the due date of the interest that such commercial debts accrue.
It also provides for the reestablishment of the “SEPAIMPO”, the import payment tracking system, for the purpose of monitoring import payments, import financing and the demonstration of the entry of goods into the country.
In addition, the local importer must designate a local financial entity to act as a monitoring bank, which will be responsible for verifying compliance with applicable regulations, including, among others, the settlement of import financing and the entry of imported goods.
With respect to access to the Foreign Exchange Market for the payment of imports of goods, the following provisions apply:
Payments for imports of goods with customs entry registration as from December 13, 2023
Entities could provide access to the Foreign Exchange Market without prior Central Bank approval to make deferred payments for imports of goods with customs entry registration as from December 13, 2023, when in addition to the other applicable regulatory requirements, it is verified that the payment complies with the following schedule, according to the type of goods:
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| (i) | from its customs entry registration, the payment corresponding to the following goods may be made: (i) petroleum or bituminous mineral oils, their preparations and residues (subchapters 2709, 2710 and 2713 of the NCM); (ii) petroleum gases and other gaseous hydrocarbons (subchapter 2711 of the NCM); (iii) bituminous coal without agglomeration (subchapters 2701.12.00 of the NCM), when the import is carried out by an electricity generation plant; (iv) electricity (subchapters 2716.00.00 of the NCM) and (v) imports formalized from April 15, 2024 of natural uranium, enriched uranium and their compounds (subchapters 2844.10.00 and 2844.20.00 of the NCM), heavy water (subchapter 2845.10.00 of the NCM), or zirconium and its manufactures when corresponding to subchapter 8109.91.00 of the NCM, that are intended for the production of energy or fuels. |
| (ii) | For all other goods, payment may be made starting 30 (thirty) calendar days from the date of customs clearance of the goods. |
Pursuant to Communication “A” 8226, for imports of all types of goods formalized as of April 14, 2025, the timeframe set forth in the previous paragraph shall be reduced to zero (0) calendar days from the date of customs entry registration.
Entities may also grant access to the Foreign Exchange Market without the prior approval of the Central Bank to make deferred payments for imports of goods with customs entry registration as from December 13, 2023 before the terms set forth in this Section when, in addition to the other applicable regulatory requirements, the payment falls within the situations set forth in Section 10.10.2 of the Foreign Exchange Regulations.
Access to the Foreign Exchange Market to make payments with pending customs registration shall require the prior approval of the Central Bank except when, in addition to the other applicable requirements, the payment falls within the situations foreseen in Section 10.10.2 of the Foreign Exchange Regulations.
Stock of debt. Imports of Goods:
Access to the Foreign Exchange Market to make import payments for goods whose customs entry registration occurred up to December 12, 2023, in addition to the remaining applicable requirements, shall require the prior conformity of the Central Bank except when they are transactions financed by financial entities or official credit agencies or international organizations; among other situations set forth in Section 10.11 of the Foreign Exchange Regulations.
Payment for services rendered by non-residents
Pursuant to Section 3.2 of the Foreign Exchange Regulations, entities may access the Foreign Exchange Market to make payments for services rendered by non-residents as long as they have documentation to support the existence of the service.
In the case of commercial debts for services, access is granted as from the expiration date, provided that it is verified that the transaction is declared, if applicable, in the last due presentation of the External Assets and Liabilities Survey.
Regarding access to the Foreign Exchange Market for the payment of service imports, the following provisions apply:
Payments for services that were or will be rendered or accrued on or after December 13, 2023.
Entities may give access to the Foreign Exchange Market to make payments for non-residents services that were or will be rendered as of December 13, 2023, when, in addition to the other applicable regulatory requirements, the transaction falls within one of the situations detailed below:
| i. | The payment corresponds to a transaction that falls under the following concept codes: |
S03. Passenger Transportation Services.
S06. Travel (excluding transactions associated with withdrawals and/or consumption with resident cards with non-resident suppliers or non-resident cards with Argentine suppliers).
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S23. Audiovisual services.
S25. Government services.
S26. Health services by travel assistance companies.
S27. Other health services.
S29. Transactions associated with withdrawals and/or consumptions with resident cards with non-resident suppliers or non-resident cards with Argentine suppliers.
| ii. | Expenses paid to foreign financial entities for their usual transactions. |
| iii. | The payment corresponds to a transaction classified under the concept “S31. Freight services for export of goods,” where the freight costs are included as part of the sales terms agreed upon with the buyer of the goods. The payment is executed once the export has been granted the shipment clearance by customs. |
| iv. | The payment corresponds to a transaction classified under the concept “S30. Freight services for import transactions of goods” and is executed once a period has passed, starting from the date the service was provided, equivalent to the time at which payment for the transported goods could begin to be deferred, as stipulated in Section 10.10.1 of the Exchange Regulations. |
| v. | The payment corresponds to a transaction classified under the concept “S24. Other personal, cultural, and recreational services” and is executed once a period of 90 (ninety) calendar days has passed since the service was provided or earned. This period will be reduced to 30 (thirty) calendar days when the services are provided or earned from November 29, 2024, by a non-related counterparty to the resident. |
| vi. | The payment corresponds to a transaction corresponding to a service not included in Sections 13.2.1. to 13.2.5. of the Foreign Exchange Regulations provided by a non-related counterparty to the resident and is made after 30 calendar days from the date of rendering or accrual of the service. This deadline will also apply to transfers abroad by local agents for their collection in Argentina of funds corresponding to services provided by non-residents to residents. |
| vii. | The payment corresponds to a transaction corresponding for a service not included in items 13.2.1. to 13.2.5. of the Foreign Exchange Regulations provided by a related counterparty to the resident and is made after 180 calendar days have elapsed from the date of rendering or accrual of the service. Transactions originating from the provision of services by related counterparties will continue to be subject to this requirement even if there is a change in the creditor or debtor that results in no longer having a relationship between the creditor and the resident debtor. |
Pursuant to Communication “A” 8226, all services rendered or accrued from April 14, 2025, that do not fall within the purview of items (i) to (iii) above and are provided by an unrelated counterparty to the resident, may be paid upon the date of service provision or accrual, provided that the other applicable regulatory requirements are met. In contrast, services rendered or accrued from the same date and provided by a related counterparty to the resident may only be paid after a period of ninety (90) calendar days from the service date, subject to compliance with the other applicable regulatory requirements.
Stock of debt of imports of services
Access to the Foreign Exchange Market for payments for services provided and/or accrued by non-residents from December 13, 2023, will be admissible prior to the deadlines set forth in Sections 13.2.3 to 13.2.7. of the Foreign Exchange Regulations, when, in addition to the other applicable requirements, the following situations are verified:
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| i. | The customer accesses the Foreign Exchange Market with funds originating from foreign currency financing for service imports granted by a local financial entity, provided that the maturity dates and the principal amounts to be paid of the granted financing are compatible with those provided in Section 13.2. of the Foreign Exchange Regulations. |
If the granting of the financing is prior to the date of provision or accrual of the service, the deadlines provided in Section 13.2 of the Foreign Exchange Regulations will be calculated from the estimated date of provision or accrual plus 15 calendar days. If the granting of the financing takes place after the date of provision or accrual of the service, said deadlines will be calculated from this latter date.
| ii. | The customer has access to the Foreign Exchange Market simultaneously with the settlement of funds for advances or pre-financing of exports from abroad or pre-financing of exports granted by local financial entities with funding in foreign credit lines, to the extent that the stipulations of Section 13.3.1 of the Foreign Exchange Regulations regarding maturity dates and the amounts of principal to be paid for the financing are complied with. |
| iii. | The customer accesses the Foreign Exchange Market simultaneously with the settlement of funds originated in an External Financial Indebtedness, to the extent that the provisions of Section 13.3.1 of the Foreign Exchange Regulations regarding maturity dates and principal amounts payable on the financing are complied with. |
The portion of the financial indebtedness that is used by virtue of the provisions of this Section may not be computed for the purposes of other specific mechanisms that enable access to the Foreign Exchange Market as from the entry and/or settlement of this type of transactions.
| iv. | In the case that the payment for imports of services is performed within the framework of the mechanism provided for in Section 7.11 of the Foreign Exchange Regulations. |
| v. | The customer has a “Certification for the regimes of access to foreign currency for the incremental production of oil and/or natural gas (Decree No. 277/22) issued within the framework of the provisions of Section 3.17 of the Foreign Exchange Regulations. |
| vi. | The payment corresponds to the cancellation of transactions financed or guaranteed prior to December 13, 2023, by local or foreign financial entities. |
| vii. | The payment corresponds to the cancellation of transactions financed or guaranteed prior to December 13, 2023, by international organizations and/or official credit agencies. Entities may also consider as a transaction guaranteed by an official credit agency those covered by a guarantee issued by a private insurer on behalf of a national government of another country. In all cases, the intervening entity must have documentation explicitly confirming this situation. |
| viii. | The payment is made on the closing date of a repurchase and/or debt redemption transaction under Sections 3.5.3.1. or 3.6.4.4. of the Foreign Exchange Regulations and relates to services provided by non-residents arising from the issuance of the new debt securities and/or the repurchase and/or redemption transaction. |
| ix. | The payment is to a counterparty not related to the client and is completed through an exchange and/or arbitration with the funds deposited in a foreign currency account in a local financial entity. |
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Payments for services provided or accrued by non-residents until December 12, 2023.
The Central Bank’s prior approval shall be required to access the Foreign Exchange Market to make payments for non-resident services rendered or accrued up to December 12, 2023, except when in addition to the other applicable requirements, the entity verifies compliance with the requirements set forth in Section 13.5. of the Foreign Exchange Regulations.
Payments for debt securities subscribed abroad and external financial indebtedness with foreign entities
As previously mentioned, for resident debtors to access the Foreign Exchange Market to make capital or interest payments on External Financial Indebtedness, it is required that an amount equivalent to the nominal value of the External Financial Indebtedness has been entered into Argentina and settled through the Foreign Exchange Market, and that the transaction has been declared in the External Assets and Liabilities Survey. See "- Debt securities subscribed abroad and external financial indebtedness."
This requirement for entry and settlement will be considered fulfilled in the following cases:
| (1) | Indebtedness disbursed before September 1, 2019. |
| (2) | Indebtedness originating from September 1, 2019, which does not generate disbursements due to refinancing of capital and/or interest on external financial indebtedness that had access under the applicable regulations, as long as the refinancing does not bring forward the maturity of the original debt. |
| (3) | For the amount of the applicable origination and/or issuance expenses and other expenses debited abroad for the banking transactions involved. |
| (4) | For the difference between the effective value and the nominal value in publicly registered debt securities issued below par. |
| (5) | For the portion corresponding to a capitalized interest in accordance with the financing agreement. |
| (6) | For the portion of publicly registered debt securities issued between October 9, 2020, and December 31, 2023, with an average duration not less than 2 (two) years, which were delivered to creditors of external financial indebtedness and/or foreign currency-denominated public debt securities with maturities between October 15, 2020, and December 31, 2023, as part of the refinancing plan required under item 7 of Communication A 7106 and related provisions (as included in item 3.17 of Annex of Communication A 7914), based on the parameters defined in the Foreign Exchange Regulations. |
| (7) | For the portion of public debt securities issued from January 7, 2021, which were delivered to creditors to refinance preexisting financial debts with an extension of the average duration, corresponding to the refinanced capital amount, accrued interest up to the refinancing date, and, to the extent that the new debt securities do not have capital maturities during the first 2 (two) years, the amount equivalent to the interest that would accrue in the first 2 (two) years on the debt being refinanced in advance and/or the deferral of the refinanced capital and/or the interest that would accrue on the amounts so refinanced. |
| (8) | For the portion subscribed in foreign currency in Argentina for public debt securities issued abroad starting from February 5, 2021, provided that all conditions outlined in the Foreign Exchange Regulations are met. |
| (9) | For external indebtedness originating from September 1, 2019 in a refinancing of the capital and/or interest on commercial debts with the foreign creditor, provided that the new financial debt does not anticipate maturity dates concerning the refinanced commercial debt nor involve payments before the date the client could have accessed for the commercial debt under the applicable regulations. |
| (10) | For External Financial Indebtedness falling under sections 7.11.1.3 and 7.11.1.5 of the Foreign Exchange Regulations, provided that evidence of customs entry registration of goods with a value equivalent to the received financing is presented. The value of freight expenses stated in the transportation documentation associated with the customs entry registration of the goods may also be counted, provided that the funds from the transactions outlined in the mentioned sections were used for direct payment to the freight service provider of imports not included in the agreed purchase condition. |
| (11) | External Financial Indebtedness that falls under Section 7.10.2.2.ii) of the Foreign Exchange Regulations, provided that evidence of customs entry registration of goods with a value equivalent to the received financing is presented. |
| (12) | For the portion of new debt securities delivered by a resident to their creditors as participation premium, repurchase, early redemption, or similar, in the framework of a debt exchange, repurchase, and/or early redemption transaction of External Financial Indebtedness, provided that: |
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| a. | The nominal value of the new securities delivered, in the concept of participation premium, repurchase or early redemption or similar, does not exceed the equivalent of 5% (five percent) of the capital value of the debt effectively exchanged or repurchased; and |
| b. | The new debt securities provide at least 1 (one) year of grace for capital repayment and imply a minimum extension of 2 (two) years regarding the average duration of the remaining capital of the exchanged or repurchased debt. |
Section 3.5.4 of the Foreign Exchange Regulations establishes that, as long as the prior approval requirement for access to the Foreign Exchange Market for paying capital and interest on External Financial Indebtedness remains in force, this requirement will not be applicable when all of the following conditions are met:
| (a) | The funds were used to finance projects within the "Argentine Natural Gas Production Promotion Plan – 2020-2024 Supply and Demand Scheme" established in Article 2 of Decree No. 892/20 ("Plan GasAr"); |
| (b) | The funds have been entered and settled through the Foreign Exchange Market as from November 16, 2020; and |
| (c) | The indebtedness has an average duration of no less than 2 (two) years. |
Payments Related to Debts with Related Parties
Prior approval from the Central Bank is required to access the Foreign Exchange Market for the cancellation of principal and interest of External Financial Indebtedness when the creditor is a related counterparty to the resident debtor, pursuant to section 3.5.6 of the Foreign Exchange Regulations. Additionally, debts covered by this section will continue to be subject to prior approval even if there is a modification of the creditor or debtor that results in no longer having a relationship between the creditor and the resident debtor.
Prior approval from the Central Bank will not be required when:
| (i) | it is related to transactions specific to local financial institutions; |
| (ii) | it is an External Financial Indebtedness with an average maturity of no less than 2 (two) years, and the funds have been entered and settled through the Foreign Exchange Market from October 2, 2020; |
| (iii) | it is a payment of compensatory interest accruing from January 1, 2025, on the remaining original value of financial debts with related foreign counterparties. Penalty or other equivalent interest that accrues from January 1, 2025, will still be subject to the prior approval requirement; |
| (iv) | it is a payment of interest that is made simultaneously with the settlement for at least an equivalent amount of: |
| a. | new External Financial Indebtedness with an average maturity of no less than 2 (two) years and providing at least 1 (one) year of grace for principal payments, both counted from the date access to the market is granted. |
| b. | new direct investment contributions from non-residents. |
The financial debts and/or direct foreign investment contributions, which cannot be considered for other mechanisms under the Foreign Exchange Regulations, may be entered and settled by the debtor making the interest payment or by another resident company belonging to the same economic group.
| (v) | it is an External Financial Indebtedness with an average maturity of no less than 2 (two) years settled between August 27, 2021, and December 12, 2023, and was used to pay commercial debts for the import of goods and services, based on the issuance of a "Certification of entry of new financial indebtedness with the exterior" under item 1 of Communication A 7348 and related provisions (provisions received in item 3.19 of the Annex to Communication A 7914). |
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| (vi) | it is an External Financial Indebtedness with an average maturity of no less than 2 (two) years originating between August 27, 2021, and December 12, 2023, from a refinancing of commercial debts for the import of goods and services with the same creditor, under item 20 of Communication A 7626 and related provisions (provisions received in item 3.20 of the Annex to Communication A 7914). |
| (vii) | the client has a "Certification for foreign exchange access regimes for incremental oil and/or natural gas production (Decree 277/22)" issued in the framework of Section 3.17 of the Foreign Exchange Regulations, for the equivalent of the principal amount being paid. |
| (viii) | it is an External Financial Indebtedness under the mechanism of Section 7.11 of the Foreign Exchange Regulations, and the access date is consistent with the conditions required to fit within that mechanism. |
| (ix) | the client has a "Certification of increased goods exports" for the years 2021 to 2023 issued under Section 3.18 of the Foreign Exchange Regulations for the equivalent of the principal amount being paid. |
| (x) | the client is a VPU participant under RIGI that settles principal or interest of External Financial Indebtedness as provided in section 14.2.1 of the Foreign Exchange Regulations. |
| (xi) | It is the payment of principal on External Financial Indebtedness owed to related parties of the debtor, provided that such indebtedness has an average life of no less than 180 days and the funds have been duly transferred into and settled through the Foreign Exchange Market on or after April 21, 2025. |
Payments of debt securities or other debt instruments denominated and payable in foreign currency in Argentina
Pursuant to Section 2.5 of the Foreign Exchange Regulations, issuances by residents of publicly registered debt securities in Argentina that do not constitute External Financial Indebtedness and/or promissory notes with a public offering issued under General Resolution No. 1003/24 of the CNV and related regulations, and/or fiduciary debt securities issued by trustees of fiduciary trusts with a public offering carried out in accordance with CNV provisions in the matter, denominated and subscribed in foreign currency, must be settled in the Foreign Exchange Market as a requirement for subsequent access to said market to address their capital and/or interest services in foreign currency in Argentina under the provisions of this section.
Access to the Foreign Exchange Market for the repayment of debts and other obligations in foreign currency between residents, incurred after September 1, 2019, is prohibited.
However, exceptions are made for the cancellation in Argentina of principal and interest upon maturity of:
| (i) | Foreign currency financing granted by local financial institutions (including payments for foreign currency consumption through credit or purchase cards). |
| (ii) | Debt securities issued as from September 1, 2019, for the purpose of refinancing debts covered in item (1) of the following paragraph and which involve an increase in the average maturity of the obligations. |
| (iii) | Debt securities issued as from November 29, 2019, with public registration in Argentina that do not qualify as External Financial Indebtedness, denominated and subscribed in foreign currency, and whose capital and interest services are payable in foreign currency, provided that all funds obtained have been settled in the Foreign Exchange Market. |
| (iv) | Promissory notes with public offering issued under General Resolution 1003/24 of the CNV and related regulations, denominated and subscribed in foreign currency, and whose capital and interest services are payable in foreign currency in Argentina, provided that all funds obtained have been settled in the Foreign Exchange Market. |
| (v) | Fiduciary debt securities issued by trustees of financial trusts with a public offering conducted in accordance with the provisions of the CNV, denominated and subscribed in foreign currency, and whose capital and interest services are payable in foreign currency in Argentina, provided that all funds obtained have been settled in the Foreign Exchange Market. |
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Entities may also grant access to the Foreign Exchange Market for the cancellation upon maturity of:
| (1) | Foreign currency obligations between residents formalized through public records or deeds as of August 30, 2019. |
| (2) | Foreign currency financing granted by local financial institutions pending as of August 30, 2019. |
Access to the Foreign Exchange Market before maturity will require prior approval from the Central Bank, except when the transaction falls under one of the following situations and all conditions established in each case are met:
| (i) | When the debt originates from foreign currency financing granted by local financial institutions for foreign currency consumption made through credit or purchase cards. |
| (ii) | In case of other foreign currency financing from local financial institutions being paid off simultaneously with the settlement of funds from abroad for new borrowings: |
| a. | The early payment is made simultaneously with funds settled from new External Financial Indebtedness and/or new prefinancing of exports from abroad; |
| b. | The average maturity of the new indebtedness is longer than the remaining average maturity of the debt being paid off; |
| c. | The accumulated amount of principal payments of the new indebtedness, at any time until the maturity date of the debt being canceled, may not exceed the accumulated principal payments of the financing being paid off; and |
| d. | If the new indebtedness is a prefinancing of exports from abroad, the entity must have an affidavit from the client stating that prior approval from the Central Bank will be required for the application of export currency collections to the early repayment of principal before the maturities counted for compliance with the conditions mentioned. |
If the pre-canceled financing by the client was granted as part of a credit line obtained abroad, the financial institution may also pre-cancel the principal and accrued interest from the credit line for the proportion of the debt repaid early.
| (iii) | In case of early cancellation of interest within a debt exchange process: |
| a. | The early cancellation of interest is made within a debt exchange process of securities issued by the client, in which the creditor is delivered a new security with public registration in Argentina that does not qualify as External Financial Indebtedness; |
| b. | The amount paid before maturity corresponds to interest accrued up to the closing date of the exchange; |
| c. | The average duration of the new debt securities is longer than the remaining average duration of the exchanged securities; and |
| d. | The accumulated amount of principal payments of the new securities, at no time until the maturity date of the debt being canceled, may exceed the amount accumulated by the principal payments of the exchanged securities. |
| (iv) | In case of early cancellation of principal and interest from a debt security covered in this section with the settlement of funds entered from abroad through the issuance of a new debt security that qualifies as External Financial Indebtedness: |
| a. | The early cancellation of principal is made simultaneously with the settlement of funds from abroad through the issuance of a new debt security that qualifies as External Financial Indebtedness issued within a refinancing, repurchase, and/or early redemption transaction; |
| i. | The new debt security includes a one (1) year grace period for capital repayment, and its average duration is at least two (2) years longer than the remaining average duration of the debt security being canceled; and |
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| ii. | The accumulated amount of principal payments of the new indebtedness may not exceed, until the maturity date of the canceled debt, the amount accumulated by the principal payments of the debt being canceled. |
| b. | The early cancellation of interest corresponds to the interest accrued on the refinanced debt until the closing date of the repurchase and/or redemption transaction, without the need for an equivalent funds settlement. |
Additionally, the entity may grant the client access to the Foreign Exchange Market to:
| c. | Pay for a repurchase premium, early redemption, or similar, up to the equivalent of 5% (five percent) of the principal amount of the repurchased and/or redeemed debt security, provided that the payment is made simultaneously with the settlement of funds entered from abroad by the new debt security exceeding the principal amount being pre-canceled, by at least an amount equivalent to the premium paid. |
| d. | Pay, at the closing date of the repurchase and/or redemption transaction, without the need for an equivalent funds settlement, the issuance costs or other services provided by non-residents in the context of the issuance of the new debt securities and/or the repurchase and/or redemption transaction. |
| (v) | In case of early cancellation of principal and interest from a debt security covered in this section simultaneously with the settlement of other External Financial Indebtedness: |
| a. | The early cancellation of principal and interest is made simultaneously with funds settled from new External Financial Indebtedness; |
| b. | The average duration of the new indebtedness is longer than the remaining average duration of the debt security being canceled; and |
| c. | The accumulated amount of principal payments of the new indebtedness, at no time until the maturity date of the debt being canceled, may exceed the amount accumulated by the principal payments of the debt security being canceled. |
| (vi) | In the case of early cancellation of principal and interest from a debt security covered in this section simultaneously with the settlement of a new debt security of the same type: |
| a. | The early cancellation of principal and interest from a debt security covered in this section is made simultaneously with the funds settled by the issuance of a new debt security with public registration in Argentina that does not qualify as External Financial Indebtedness, denominated and subscribed in foreign currency, and whose services are payable in foreign currency; and |
| b. | The average duration of the new security is longer than the remaining average duration of the debt security being canceled; and |
| c. | The accumulated amount of principal payments of the new debt security, at no time until the maturity date of the debt being canceled, may exceed the amount accumulated by the principal payments of the debt security being canceled. |
| (vii) | The client is a VPU adhered to the RIGI that early cancels principal or accrued interest from debts covered in this section in accordance with the provisions of Section 14.2.1 of the Foreign Exchange Regulations. |
Issuances of debt securities with public registration in Argentina that meet the conditions set forth in this section for access to the Foreign Exchange Market will be allowed to cancel their capital and interest services upon maturity through the application of export collections of goods and services in Argentina, provided that the requirements set forth in Section 7.9 of the Foreign Exchange Regulations are met.
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Transactions with BOPREAL
The BOPREAL are securities issued by the Central Bank for importers of goods and services with pending payment obligations for imports of goods with customs registration and/or services effectively provided prior to December 12, 2023.
a) For Importers of Goods:
Importers of goods can subscribe BOPREAL for up to the amount of the pending debt for their imports of goods with customs entry registration before December 12, 2023. The entity making the subscription offer on behalf of the client must have the respective certifications on the outstanding debt amount issued by the entity/entities responsible for monitoring the officializations involved in the SEPAIMPO, in order to verify that all of the following conditions are met:
| (i) | The obligation qualifies as a debt for goods imports as indicated in Section 10.2.4 of the Foreign Exchange Regulations. |
| (ii) | The transaction is declared, if applicable, in the last overdue submission of the External Assets and Liabilities Survey. |
| (iii) | The conditions set forth in Section 10.3.2.1 of the Foreign Exchange Regulations for access to the Foreign Exchange Market are met, except for the condition specified in item (viii). |
| (iv) | The client meets the supplementary requirements outlined in Sections 3.16.2 to 3.16.5 of the Foreign Exchange Regulations. |
| (v) | The client provides an affidavit stating that the debt for which they are requesting subscription is pending payment. |
In certain cases, the entity making the subscription offer on behalf of the client must have an affidavit from the client confirming that they have not requested the use of this mechanism through another entity for that debt.
b) For Importers of Services:
Importers of services can subscribe BOPREAL for up to the amount of the pending debt for their imports of services in which the provision or accrual of the service by the non-resident took place before December 12, 2023.
The entity making the subscription offer on behalf of the client must have the documentation that supports the existence of the service, the amount owed as of the subscription date, and verify that all of the following conditions are met:
| (i) | The obligation qualifies as a debt for service imports as indicated in the second paragraph of Section 13.1.2 of the Foreign Exchange Regulations. |
| (ii) | The transaction is declared, if applicable, in the last overdue submission of the External Assets and Liabilities Survey. |
| (iii) | The client meets the supplementary requirements outlined in Sections 3.16.2 to 3.16.5 of the Foreign Exchange Regulations. |
| (iv) | The client provides an affidavit stating that the debt for which they are requesting subscription is pending payment and that they have not requested the use of this mechanism through another entity for this debt. |
c) For Profits and Dividends of Non-Resident Shareholders Pending Payment or Already Received in Argentina:
When it comes to profits and dividends pending payment to non-residents as determined by the shareholders' meeting, clients can subscribe BOPREAL for up to the equivalent amount in local currency of the profits and dividends pending payment to non-resident shareholders as determined by the shareholders' meeting.
The entity that makes the subscription offer on behalf of the client must verify compliance with the following requirements:
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| (i) | The entity has documentation to support that the outstanding debt corresponds to profits and dividends from closed and audited financial statements. |
| (ii) | The transaction is declared, if applicable, in the latest overdue submission of the External Assets and Liabilities Survey. |
| (iii) | The client meets the supplementary requirements outlined in Sections 3.16.2 to 3.16.5 of the Foreign Exchange Regulations. |
| (iv) | The client provides an affidavit stating that: |
| a. | The profits and dividends for which they are requesting subscription are pending payment; |
| b. | They have not requested the use of this mechanism from another entity for this debt, and |
| c. | They acknowledge that they will not have access to the Foreign Exchange Market to pay the equivalent of the debt for which they subscribed unless the payment is made via exchange and arbitrage with funds deposited in a local account, originating from the collection of capital and interest in foreign currency from the BOPREAL bonds. |
Non-resident clients, for profits and dividends received since September 1, 2019, may subscribe BOPREAL for up to the equivalent amount in local currency of the profits and dividends received from that date, adjusted by the most recent Consumer Price Index ("CPI") available at the time of subscription. The entity making the subscription offer on behalf of the client must verify compliance with the requirements outlined in Section 4.6.2 of the Foreign Exchange Regulations.
d) Complementary Provisions on BOPREAL:
Clients may, provided that the applicable requirements are met, access the Foreign Exchange Market through the execution of an exchange and/or arbitration with funds deposited in a local account, originating from the collection of capital and interest in foreign currency from BOPREAL bonds, to carry out the following transactions:
| (i) | Payment of commercial debts for imports of goods with customs entry registration up to December 12, 2023, which were eligible according to the provisions of section (a) above. Payments made through the Local Currency System (the "LCS") from the sale of funds deposited in a local account, originating from the collection of capital and interest in foreign currency from BOPREAL bonds, may also be considered under this section. |
| (ii) | Payment of commercial debts for imports of services rendered or accrued up to December 12, 2023, which were eligible according to the provisions of section (b) above. Payments made through the LCS from the sale of funds deposited in a local account, originating from the collection of capital and interest in foreign currency from BOPREAL bonds, may also be considered under this section. |
| (iii) | Payment of debts to non-resident shareholders for profits and dividends, which were eligible according to the provisions of the first paragraph of section (c) above. |
| (iv) | The repatriation of portfolio investments of non-residents originating from profits and dividends collected in Argentina since September 1, 2019, as determined by the shareholders' meeting based on closed and audited financial statements, which were eligible according to the provisions of the second paragraph of section (c) above. |
Clients who have acquired BOPREAL bonds in primary bidding under the provisions of sections (a), (b), and the first paragraph of section (c) may execute sales of securities against a wire transfer to a third-party account abroad, provided that the requirements outlined in Section 4.3.2.3. of the Foreign Exchange Regulations are met, when selling the BOPREAL bonds acquired by the seller in the aforementioned primary biddings.
They may also liquidate, under the conditions outlined in the previous paragraph, other sales of securities made from April 1, 2024, provided that the market value of these transactions does not exceed the difference between the amount obtained from the sale with settlement in foreign currency abroad of BOPREAL bonds acquired in primary bidding for eligible import debts of goods and services and their nominal value, should the former be lower.
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Section 4.7 of the Foreign Exchange Regulations sets forth a series of transactions that may be carried out by clients who acquired BOPREAL in primary bidding.
In the event that a client has executed a sale with a repurchase obligation using BOPREAL bonds acquired in primary bidding, the following will apply:
| 1) | The sale of the bonds at the origin of the transaction shall not be taken into account for the preparation of the affidavits stipulated in sections (c) and (d) of "General Requirements"; |
| 2) | The aforementioned sale will not entitle the client to carry out securities transactions based on the difference between the amount obtained from the sale and the nominal value of the BOPREAL bonds acquired in primary bidding for eligible import debts of goods and services. |
| 3) | Once the client has regained possession of the BOPREAL bonds, the securities will be subject to the same treatment as bonds acquired in primary bidding. |
Repatriations of direct investments and other foreign currency purchases by non-residents
Pursuant to Section 3.13 of the Foreign Exchange Regulations, prior approval from the Central Bank will be required for access to the Foreign Exchange Market for the repatriation of investments by non-residents and other foreign currency purchases by non-resident clients, except for the following transactions:
| (i) | International organizations and institutions performing the functions of official credit agencies; |
| (ii) | Diplomatic and consular representations, and accredited diplomatic personnel in Argentina for transfers made in the exercise of their functions; |
| (iii) | Representations in Argentina of Courts, Authorities or Offices, Special Missions, Commissions, or Bilateral Bodies established by International Treaties or Agreements, in which Argentina is a party, to the extent that transfers are made in the exercise of their functions; |
| (iv) | Transfers abroad on behalf of individuals who are beneficiaries of pensions and/or retirements paid by the National Social Security Administration (Administración Nacional de la Seguridad Social or “ANSES”, as per its acronym in Spanish) or other pension agencies and/or pension annuities as provided by Section 101 of Law No. 24,241, for up to the amount received for such concepts in the last 30 calendar days, provided that the transfer is made to a bank account in the beneficiary's registered country of residence |
| (v) | Purchase of foreign currency in cash by non-residents for tourism and travel expenses, up to a maximum amount of US$ 100, to the extent that the financial institution can verify in the online system implemented by the Central Bank that the customer has settled an amount equal to or greater than the amount to be purchased within the 90 days prior to the transaction; |
This transaction will become effective upon the registration of the client’s foreign currency sale with the Central Bank by the intermediary entity, in accordance with the established guidelines. It should be noted that transactions involving the framing of settlements during their validity, specifically those pertaining to securities on behalf of and for the account of non-resident tourists, will not be considered for the purposes of this section.
| (vi) | Transfers to bank accounts abroad of individuals for funds received in Argentina related to benefits granted by the Federal Government under Laws 24,043, 24,411, and 25,914 and related legislation; |
| (vii) | Repatriations of direct investments by non-residents in companies that are not controlling entities of local financial institutions, provided that the capital contribution was entered and settled through the Foreign Exchange Market as from October 2, 2020, and the repatriation occurs at least 2 (two) years after the contribution. |
| (viii) | Repatriations of direct investments by non-residents in companies that are not controlling entities of local financial institutions, provided that the capital contribution was entered and settled through the Foreign Exchange Market as from April 21, 2025, and the repatriation occurs at least 180 days after the settlement of the contribution funds |
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| (ix) | Repatriation of direct investments by non-residents is permitted up to the amount of investment contributions entered and settled through the Foreign Exchange Market as of November 16, 2020, provided that all of the following conditions are met: (a) the funds have been applied to the financing of projects framed within the Plan GasAr 2020-2024; (b) the entity has documentation proving the effective entry of the direct investment into the resident company; and (c) access occurs no earlier than two calendar years from the date of settlement in the Foreign Exchange Market of the transaction that allows for compliance with this section. |
| (x) | Repatriation of direct investments by non-residents in companies that are not controlling companies of local financial entities is permitted, provided that the relevant entity has obtained a “Certification for the Foreign Exchange Access Regimes for Incremental Oil and/or Natural Gas Production (Decree No. 277/22),” issued in accordance with the provisions of Section 3.17 of the Foreign Exchange Regulations. The repatriated amount must be equivalent to the original investment. |
| (xi) | Repatriations of portfolio investments by non-residents originating from profits and dividends collected in Argentina since September 1, 2019, from distributions determined by the shareholders’ meeting for closed and audited balances are permitted, provided that the transaction is carried out through an exchange and/or arbitration with funds deposited in a local account and originating from collections in foreign currency of principal or interest on BOPREAL bonds. |
| (xii) | Repatriations of direct investments by non-residents in companies through access by the resident who acquired their stake in a resident company, provided that: |
| (a) | The access occurs simultaneously with the settlement of funds entered from abroad through External Financial Indebtedness or funds from a financial loan in foreign currency granted by a local financial institution from a credit line of a foreign financial institution, with a minimum average duration of 4 (four) years and at least 3 (three) years of grace for capital repayment; |
| (b) | The resident company whose capital is being transferred is in one of the following sectors: forestry industry, tourism, infrastructure, mining, technology, steel industry, energy, oil, and gas; and |
| (c) | The transaction involves the transfer of at least 10% (ten percent) of the resident company's capital. |
If, at the time of access, the client does not have the documentation proving their possession of the capital stake being paid, they must submit an affidavit committing to present the documentation within 60 (sixty) calendar days of access to the Foreign Exchange Market.
| (xiii) | Repatriations of direct investment contributions by non-residents in a VPU adhered to the RIGI under Section 14.2.3 of the Foreign Exchange Regulations. |
| (xiv) | Repatriation by non-residents of principal, returns, and proceeds from the sale of portfolio investments in instruments traded on local markets authorized by the CNV, as long as: (i) a local financial institution certifies that the investment was made with funds transferred into and settled through the Foreign Exchange Market on or after April 21, 2025; (ii) documentation is available evidencing that the amount for which access to the Foreign Exchange Market is sought does not exceed the income received and/or the actual proceeds from the sale of the investment; and (iii) the repatriation takes place no less than 180 days after the settlement of the relevant funds. If the income from services or the proceeds from the sale of the investment are received in foreign currency, the repatriation may be carried out for up to the equivalent amount received. |
Access to the Foreign Exchange Market by individuals
Financial institutions may grant resident individuals access to the foreign exchange market, without prior authorization from the Central Bank, for the purchase of foreign currency in cash for holding purposes or for the establishment of deposits, provided that all of the following requirements are met:
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| (i) | The transaction must be processed through a debit from the customer's account at local financial institutions, or if the customer uses local currency in cash, the total amount in local currency may not exceed the equivalent of US$ 100 per calendar month, across all financial institutions and for all specified concepts. |
If the customer opts to use cash in local currency, the institution must obtain an affidavit from the customer affirming compliance with the aforementioned requirement.
| (ii) | The selling institution must either deliver the foreign currency in cash to the customer or credit the funds to a foreign currency account held by the customer at a local financial institution or to a bank account held by the customer abroad, as applicable. |
| (iii) | The institution must have recorded the transaction in the online system implemented for this purpose by the Central Bank. |
| (iv) | In all cases, the institution must obtain evidence that the customer has income and/or assets consistent with savings in foreign currency. |
Access to the Foreign Exchange Market by guarantee trusts for the payment of principal and interest
Pursuant to Section 3.7 of the Foreign Exchange Regulations, Argentine guarantee trusts created to guarantee principal and interest payments of resident debtors may access the Foreign Exchange Market to make such payments at their scheduled maturity, to the extent that, in accordance with the applicable regulations in force, the debtor would have had access to the Foreign Exchange Market to make such payments directly.
Access to the Foreign Exchange Market by other residents -excluding entities- for the formation of foreign assets and for derivative transactions
Pursuant to Section 3.10 of the Foreign Exchange Regulations, access to the Foreign Exchange Market for the constitution of foreign assets and for derivative transactions by legal entities that are not authorized to operate in the foreign exchange market, local governments, mutual funds, or other entities established in Argentina, requires prior authorization from the Central Bank.
Financial derivative transactions
Entities may grant access to the Foreign Exchange Market for the payment of premiums, the establishment of guarantees, and the settlement of obligations arising from interest rate hedge contracts for residents’ obligations with foreign parties, which have been declared and validated, where applicable, in the External Assets and Liabilities Survey, provided that the risks covered do not exceed the external liabilities actually registered by the debtor in the interest rate whose risk is being hedged through the contracts.
The client accessing the Foreign Exchange Market through this mechanism must designate an entity to monitor the transaction and provide an affidavit committing to deposit and settle any funds due to the local client as a result of the transaction or the release of the funds from the established guarantees, within five (5) business days.
Other financial derivative transactions for residents that are not entities authorized to operate in the foreign exchange market shall be governed by the provisions of Sections 3.8 and 3.10 of the Foreign Exchange Regulations, as applicable.
All settlements of futures transactions on regulated markets, forwards, options, and any other type of derivative contracts entered into within Argentina by entities from September 11, 2019, onwards must be conducted in local currency.
Profit and dividend payment
Pursuant to Section 3.4 of the Foreign Exchange Regulations, access to the Foreign Exchange Market for the transfer of foreign currency abroad for the payment of dividends and profits to non-resident shareholders is subject to the prior approval of the Central Bank, unless the following requirements are met:
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| 1) | The profits and dividends must correspond to closed and audited balance sheets. |
| 2) | The total amount paid to non-resident shareholders shall not exceed the amount in Argentine pesos that correspond according to the distribution determined by the shareholders’ meeting. |
| 3) | If applicable, the External Assets and Liabilities Survey must have been complied with for the transactions involved. |
| 4) | The company falls within one of the following situations and fulfills all the conditions stipulated in each case: |
| (a) | Records direct investment contributions settled as of January 17, 2020. In which case, (i) the total amount of transfers made in the Foreign Exchange Market for the payment of dividends to non-resident shareholders may not exceed 30% of the total value of the capital contributions made in the relevant local company that have entered and been settled through the Foreign Exchange Market as of January 17, 2020, (ii) access will only be granted after the expiration of a term of not less than 30 calendar days as from the settlement date of the last capital contribution taken into account to determine the aforementioned 30% capital cap, and (iii) the definitive capitalization of the capital contributions must be accredited or, failing that, the filing of the registration procedure of the capital contribution with the Public Registry must be evidenced. In this case, the accreditation of the definitive capitalization must be made within 365 calendar days following the date of the initial filing with the Public Registry. |
| (b) | Profits generated in projects under the Plan GasAr 2020-2024. In this case, (i) the profits generated by the foreign direct investment contributions entered and settled through the Foreign Exchange Market as from November 16, 2020, applied to the financing of projects framed within the Plan GasAr 2020-2024. If the client is a direct beneficiary of Decree No. 277/2022, the value of the benefits of the decree used by the client, directly or indirectly, shall be deducted from the amount allowed in the preceding paragraph, (ii) the access to the Foreign Exchange Market occurs no earlier than two years from the date of settlement in the Foreign Exchange Market of the contribution that allows the framing in this section, and (iii) the client must submit the documentation supporting the definitive capitalization of the contribution. |
| (c) | The client must have a Certification of Increased Exports of Goods for the years 2021 to 2023, issued in accordance with Section 3.18 of the Foreign Exchange Regulations, for the equivalent value of the profits and dividends being paid. |
| (d) | It has a "Certification for the Foreign Exchange Access Regimes for Incremental Oil and/or Natural Gas Production (Decree No. 277/22)" issued under the provisions of section 3.17. of the Foreign Exchange Regulations, for the equivalent value of the profits and dividends being paid. |
| (e) | The client engages in an exchange and/or arbitration transaction with funds deposited in a local account and originating from collections in foreign currency of principal or interest on BOPREAL. |
| (f) | The client is a VPU adhered to the RIGI and the profits correspond to foreign direct investment contributions that fall under Section 14.2.2 of the Foreign Exchange Regulations, the client must present documentation that supports the definitive capitalization of the contribution. In this case, the client must present documentation that supports the definitive capitalization of the contribution. |
In accordance with the terms of Communication “A” 8226, financial institutions are authorized to grant clients access to the Foreign Exchange Market to remit foreign currency abroad as profits and dividends to non-resident shareholders, pursuant to the aforementioned Section 3.4 of the Foreign Exchange Regulations, provided that such distributions arise from distributable earnings based on net income reported in regular, audited annual financial statements for fiscal years beginning on or after January 1, 2025.
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Other specific provisions
Swaps, arbitrage and securities transactions
Financial institutions may carry out foreign exchange swap and arbitrage transactions not associated with the inflow of foreign currency from abroad in the following cases with their clients:
| (i) | An individual transfers funds from his local accounts (which are already in foreign currency) to his own bank accounts outside of Argentina. |
| (ii) | The transfer of foreign currency abroad by local common depositaries of marketable securities in connection with income received in foreign currency on account of principal and interest services on Argentine Treasury bonds or Central Bank bonds when such transaction is part of the payment procedure at the request of foreign common depositaries. |
| (iii) | Transfers of foreign currency abroad to make payments for imports of goods and services under Sections 10.10.2.12., 10.10.2.13., and 13.3.9. of the Foreign Exchange Regulations, from foreign currency funds deposited in local financial institutions. |
| (iv) | Arbitrage transactions not originating in transfers from abroad may be carried out without any restriction, to the extent that the funds are debited from a foreign currency account held by the customer with a local financial institution. To the extent that the funds are not debited from a foreign currency account held by the customer, these transactions may be carried out by individuals, without the prior approval of the Central Bank, up to the amount allowed for the use of cash under Sections 3.8. and 3.13 of the Foreign Exchange Regulations. |
| (v) | Exchange and arbitrage transactions with funds deposited in a local account and originating from capital and interest payments in foreign currency from BOPREAL bonds, provided that the applicable requirements are met, intended for: (a) Payment of commercial debts for imports of goods with customs entry registration up to December 12, 2023, eligible under Section 4.4 of the Foreign Exchange Regulations; (b) Payment of commercial debts for services rendered or accrued up to December 12, 2023, eligible under Section 4.5 of the Foreign Exchange Regulations; (c) Payment of debts with non-resident shareholders for eligible profits and dividends under Section 4.6.1 of the Foreign Exchange Regulations; (d) Repatriation of portfolio investments of non-residents originating from profits and dividends received in Argentina since September 1, 2019, from the distribution determined by the shareholders' meeting based on closed and audited financial statements, eligible under Section 4.6.2 of the Foreign Exchange Regulations. |
| (vi) | Transfer of foreign currency abroad by a local government from its foreign currency holdings deposited in local financial entities, including those constituting a surplus as provided in Section 3.16.2 of the Foreign Exchange Regulations, is permitted provided that the regulatory requirements applicable to the type of transaction to be carried out in the case that it is processed against Argentine pesos are met. |
| (vii) | All other exchange and arbitrage transactions may be conducted by clients without the prior approval of the Central Bank, provided that, when executed as individual transactions involving Argentine pesos, they can be carried out without such approval in accordance with the applicable Foreign Exchange Regulations. This also applies to local custodians of securities regarding foreign currency income received as payments of principal and interest on foreign currency securities paid in Argentina. |
If the transfer is made in the same currency in which the account is denominated, the financial institution will credit or debit the same amount as that received or sent from abroad. When the financial institution charges a commission or fee for these transactions, it will be instrumented in a specifically designated Section.
Securities transactions
CNV Rules establish a minimum holding period of 1 business day counted as of its accreditation at the Central Depository Agent of Negotiable Securities (Agente Depositario Central de Valores Negociables) applicable only to clients who are not considered resident individuals in Argentina for:
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| (a) | sales of securities with settlement in foreign currency, regardless of jurisdiction or issuance law, to the extent that the purchase of said securities has been made with Argentine pesos; |
| (b) | transfers of securities acquired with settlement in local currency to foreign depository entities, regardless of their issuance law, unless their accreditation (i) results from a primary placement of securities issued by the National Treasury or by BOPREAL issued by the Central Bank, (ii) refers to transactions under section 3.16.3.6(v) and the second paragraph of section 4.7.2. of the Foreign Exchange Regulations, or (iii) refers to Argentine shares and/or CEDEARs traded in markets regulated by the CNV. |
| (c) | applying securities from foreign depository entities to transactions with settlement in foreign currency. |
Intermediaries and trading agents must verify compliance with the aforementioned minimum holding periods.
Transfers of securities to foreign depositary entities made by the client for the purpose of participating in a debt securities exchange issued by the Argentine Government, local governments, or resident private sector issuers are not included in the aforementioned provisions. The client must present the corresponding certification for the exchanged debt securities.
Pursuant to currently applicable CNV Rules, prior to executing or registering any of the securities trade set forth in Sections 3.16.3.1. and 3.16.3.2. of the Foreign Exchange Regulations in CNV-authorized markets, local brokers must:
| (a) | if the trade is to be performed by non-resident clients that do not qualify as foreign brokers: (i) ensure that the trades are for such client’s own portfolio and financed with its own funds, and (ii) ensure the trades do not exceed Ps. 200 million per day; |
| (b) | if the trade is to be performed by non-resident clients that qualify as foreign brokers, whether acting for their own portfolio or on behalf of Argentine clients, ensure that the trades do not exceed Ps. 200 million per client per day. If the foreign broker is acting as a depositary of shares issued by local issuers and carries out the trade for purposes of paying dividends to holders of ADRs, GDRs or similar certificates held in custody abroad, it is not subject to this requirement; |
| (c) | if the trade is to be performed by resident clients, acting on behalf of resident or non-resident third parties, ensure that the trades do not exceed Ps. 200 million per client per day; and |
| (d) | if the trade is to be performed by resident clients acting for their own portfolio and financed with their own funds, the above-mentioned daily trading limit does not apply. |
The aforementioned trade restrictions do not apply to BOPREAL acquired in primary bidding and to the sale of securities with settlement in foreign currency and in the local jurisdiction previously acquired in Argentine pesos by individual or corporate resident clients with funds from UVA mortgage loans. These clients must be granted the funds by financial entities authorized to act as such under terms of Law No. 21,526. Furthermore, the proceeds from these sales must be applied to the purchase of real estate in Argentina within the framework of the aforementioned credits.
Communication “A” 8099 - RIGI
Communication “A” 8099 of the Central Bank establishes the regulations pertaining to the foreign exchange benefits for VPU that have adhered to the RIGI. The Central Bank has established:
| (i) | exceptions to the mandatory inflow and settlement of export proceeds in foreign currency made by a VPU adhering to the RIGI. |
| (ii) | exceptions to the mandatory inflow and settlement of foreign currency arising from export of services. |
| (iii) | access to the Foreign Exchange Market to make payments of certain expenses; |
| (iv) | access to the Foreign Exchange Market to make payments of dividends to non-resident shareholders |
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| (v) | application abroad of proceeds from exports of goods; and |
| (vi) | exchange stability applicable to the VPU on the date of adherence to the RIGI. |
Central Bank information regimes
External Assets and Liabilities Survey
On December 28, 2017, the Central Bank replaced the information regimes established in Communications “A” 3602 and “A” 4237 with Communication “A” 6401 (and the complementary Communication “A” 6795), a unified regime applicable from December 31, 2017 (the “External Assets and Liabilities Survey”). The reporting requirements under the information regime are contingent upon the final balance of foreign assets and liabilities:
| · | For individuals or entities whose balance, acquisition, or sale of external assets and liabilities at the end of a given calendar year is equal to or exceeds the equivalent of US$ 50 million, a quarterly declaration prior to the end of each quarter and an annual declaration, which permits the correction, affirmation, or update of quarterly declarations, must be filed. |
| · | For individuals or entities whose balance, acquisition, or sale of external assets and liabilities at the conclusion of a given calendar year exceeds US$ 10 million but does not exceed US$ 50 million, an annual declaration is the sole requisite form of compliance. |
| · | For individuals or entities whose balance, acquisition, or sale of external assets and liabilities at the conclusion of a specified calendar year exceeds US$ 1 million but does not exceed US$ 10 million, a streamlined annual declaration is the sole requisite documentation. |
Individuals or entities for whom the balance or acquisition or sale of foreign assets and liabilities at the end of a given calendar year is less than US$ 1 million are exempt from reporting obligations.
Access to the Foreign Exchange Market for the repayment of foreign financial debt and other transactions is contingent upon the debtor’s compliance with the External Assets and Liabilities Survey. See “—Specific provisions on outflows through the Foreign Exchange Market— Payments for debt securities subscribed abroad and external financial indebtedness with foreign entities.”
Advance Notice of Foreign Exchange Operations
Entities authorized to operate with foreign currency are obliged to provide the Central Bank with information on outgoing transactions through the Foreign Exchange Market for daily amounts equal to or greater than the equivalent of US$ 100,000. This information must be provided at the end of each business day and with two business days’ notice. Clients are obliged to inform financial entities in advance, so that they can comply with the requirements of this information regime. Consequently, as long as the other requirements established in the Foreign Exchange Regulations are simultaneously met, they can process foreign exchange transactions.
Criminal Foreign Exchange Regulations
The Foreign Exchange Regulations establish that transactions that do not comply with the exchange regulations established by the Foreign Exchange Regulations will be subject to the Criminal Foreign Exchange Regulations (Law No. 19,359 and amendments).
For further information on the exchange control restrictions and regulations in force, you should consult your legal advisors and read the applicable rules mentioned in this document, as well as their amendments and complementary regulations, which are available on the website: https://www.infoleg.gob.ar/ or on the Central Bank’s website: https://www.bcra.gob.ar/, as applicable. The information contained in these websites is not part of this annual report and is not deemed to be incorporated herein.
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Item 10.E Taxation
Certain United States Federal Income Tax Considerations
The following is a summary of certain U.S. federal income tax considerations that may be relevant to the purchase, ownership and disposition of common shares or ADSs by a U.S. Holder (as defined below).
This summary is based on provisions of the Internal Revenue Code of 1986, as amended (the “Code”), and regulations, rulings and judicial interpretations thereof, in force as of the date hereof. Those authorities may be changed at any time, perhaps retroactively, so as to result in U.S. federal income tax consequences different from those summarized below. In addition, this summary assumes that the deposit agreement, and all other related agreements, will be performed in accordance with their terms.
This summary is not a comprehensive discussion of all of the tax considerations that may be relevant to a particular investor’s decision to purchase, hold, or dispose of common shares or ADSs. In particular, this summary is directed only to U.S. Holders that hold common shares or ADSs as capital assets and does not address tax consequences to U.S. Holders who may be subject to special tax rules, such as banks, brokers or dealers in securities or currencies, traders in securities electing to mark to market, financial institutions, insurance companies, individual retirement accounts and other tax-deferred accounts, tax exempt entities, entities and arrangements treated as partnerships and the partners therein, holders that own or are treated as owning 10.00% or more of our shares by vote or value, persons holding common shares or ADSs as part of a hedging or conversion transaction or a straddle, nonresident alien individuals present in the United States for more than 182 days in a taxable year, persons that have ceased to be U.S. citizens or lawful permanent residents of the United States, investors holding the ADSs in connection with a trade or business conducted outside of the United States, U.S. citizens or lawful permanent residents living abroad, regulated investment companies, real estate investment trusts, certain taxpayers that file or prepare applicable financial statements and are required to recognize income when the associated revenue is reflected on such financial statements, or persons whose functional currency is not the U.S. dollar. Moreover, this summary does not address state, local or foreign taxes, the U.S. federal estate and gift taxes, net investment income tax of certain non-corporate U.S. Holders, or alternative minimum tax consequences of acquiring, holding or disposing of common shares or ADSs.
For purposes of this summary, a “U.S. Holder” is a beneficial owner of common shares or ADSs that is an individual citizen or resident of the United States or a U.S. domestic corporation or that otherwise is subject to U.S. federal income taxation on a net income basis in respect of such common shares or ADSs.
You should consult your own tax advisors about the consequences of the acquisition, ownership, and disposition of the common shares or ADSs, including the relevance to your particular situation of the considerations discussed below and any consequences arising under foreign, state, local or other tax laws.
ADSs
In general, if you are a U.S. Holder of ADSs, you will be treated, for U.S. federal income tax purposes, as the beneficial owner of the underlying common shares that are represented by those ADSs. Accordingly, deposits or withdrawals of common shares for ADSs will not be subject to U.S. federal income tax.
Taxation of Dividends
Subject to the discussion below under “—Passive Foreign Investment Company,” the gross amount of any distribution of cash or property with respect to common shares or ADSs (including any amount withheld in respect of Argentine withholding taxes) that is paid out of our current or accumulated earnings and profits (as determined for U.S. federal income tax purposes) will generally be includible in a U.S Holder’s taxable income as ordinary dividend income on the day on which the holder receives the dividend, in the case of common shares, or the date the ADS Depositary receives the dividends, in the case of ADSs, and will not be eligible for the dividends-received deduction allowed to corporations under the Code. To the extent that the amount of any distribution exceeds our current and accumulated earnings and profits for a taxable year, the distribution will first be treated as a tax-free return of capital, causing a reduction in the tax basis of the common shares or ADSs, and to the extent the amount of the distribution exceeds your tax basis, the excess will generally be taxed as capital gain recognized on a sale or exchange.
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We do not expect to maintain calculations of our earnings and profits in accordance with U.S. federal income tax principles. U.S. Holders therefore should expect that distributions generally will be treated as dividends for U.S. federal income tax purposes.
Dividends paid in a currency other than U.S. dollars (a “foreign currency”) generally will be includible in a U.S. Holder’s income in a U.S. dollar amount calculated by reference to the exchange rate in effect on the day the holder receives the dividends, in the case of common shares, or the date the ADS Depositary receives the dividends, in the case of ADSs. Any gain or loss on a subsequent sale, conversion or other disposition of such non-U.S. currency (or on behalf of) by such U.S. Holder generally will be treated as ordinary income or loss and generally will be income or loss from sources within the United States. As indicated in “Item 3.D. Risk Factors—Risks Relating to our Shares and ADSs—Restrictions on transfers of foreign exchange and the repatriation of capital from Argentina may impair your ability to receive dividends and distributions on, and the proceeds of any sale of, shares underlying the ADSs”, in light of the current restrictions on the conversion of the Argentine currency into a non-Argentine currency, the Depositary for the ADSs may hold the Argentine pesos it cannot convert for the account of the ADS holders for a significant period of time. The subsequent conversion of such Argentine pesos into U.S. dollars may therefore result in foreign currency exchange gain or loss that is treated as ordinary income or loss as described above. U.S. Holders should consult their own tax advisors regarding the treatment of foreign currency gain or loss, if any, on any foreign currency received that is converted into U.S. dollars after it is received.
The U.S. dollar amount of dividends received by a non-corporate U.S. Holder with respect to the common shares or ADSs will be subject to taxation at a preferential rate if the dividends are “qualified dividends” and certain other requirements are met. Subject to certain exceptions for short-term and hedged positions, dividends paid on the common shares or ADSs will be treated as qualified dividends if:
| · | the common shares or ADSs are readily tradable on an established securities market in the United States and | |
| · | we were not, for the year prior to the year in which the dividend was paid, and are not, for the year in which the dividend is paid, a passive foreign investment company (a “PFIC”). |
Our ADSs are listed on the NYSE, and our ADSs will qualify as readily tradable on an established securities market in the United States so long as they are so listed and remain so listed. Based on our audited financial statements and relevant market and shareholder data, we believe that we were not treated as a PFIC for U.S. federal income tax purposes with respect to our 2023 or 2024 taxable years. In addition, based on our audited financial statements and our current expectations regarding the value and nature of our assets, the sources and nature of our income, and relevant market and shareholder data, we do not anticipate becoming a PFIC for our current taxable year or in the foreseeable future. U.S. Holders should consult their own tax advisors regarding the availability of the reduced dividend tax rate in light of their own particular circumstances.
Because the common shares are not themselves listed on a U.S. exchange, it is possible that dividends received with respect to common shares that are not represented by ADSs may not be treated as qualified dividends. U.S. Holders should consult their own tax advisors regarding the potential availability of the reduced dividend tax rate in respect of common shares.
U.S. Holders that receive distributions of additional common shares or ADSs or rights to subscribe for common shares or ADSs as part of a pro rata distribution to all of our shareholders generally will not be subject to U.S. federal income tax in respect of the distributions.
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Taxation of Dispositions of Common Shares or ADSs
Subject to the discussion below under “—Passive Foreign Investment Company,” if a U.S. Holder realizes gain or loss on the sale, exchange or other disposition of common shares or ADSs, that gain or loss will be capital gain or loss and generally will be long-term capital gain or loss if the common shares or ADSs have been held for more than one year. Long-term capital gain realized by a non-corporate U.S. Holder generally is subject to taxation at a preferential rate. The deductibility of capital losses is subject to limitations.
Foreign Tax Credit Considerations
Subject to generally applicable limitations and conditions, Argentine withholding tax on dividends paid at the appropriate rate applicable to the U.S. Holder may be eligible for a credit against such U.S. Holder’s U.S. federal income tax liability. The rules governing foreign tax credits are complex and recently issued final U.S. Treasury Regulations (“Final FTC Regulations”) have imposed additional requirements that must be met for a foreign tax to be creditable, and we do not intend to determine whether such requirements will be met in case Argentine taxes are withheld from dividends. However, recent notices (the “Notices”) from the IRS indicate that the U.S. Treasury and the IRS are considering proposing amendments to the Final FTC Regulations and allowing taxpayers, subject to certain conditions, to defer the application of many aspects of the Final FTC Regulations until the date when a notice or other guidance withdrawing or modifying this temporary relief is issued (or any later date specified in such notice or other guidance). If the Argentine tax on dividends is not a creditable tax or the U.S. Holder does not elect to claim a foreign tax credit for any foreign income taxes paid or accrued in the same taxable year, the U.S. Holder may be able to deduct the Argentine tax in computing such U.S. Holder’s taxable income for U.S. federal income tax purposes, subject to applicable limitations. Dividend distributions will constitute income from sources without the United States and, for U.S. Holders that elect to claim foreign tax credits, generally will constitute “passive category income” for foreign tax credit purposes.
Capital gain or loss recognized by a U.S. Holder on the sale or other disposition of common shares or ADSs generally will be U.S. source gain or loss for U.S. foreign tax credit purposes. Subject to the Notices described above, under the Final FTC Regulations, Argentine taxes on disposition gains of U.S. Holders are likely not creditable for U.S. federal income tax purposes. If the Argentine tax is not a creditable tax, the tax would generally reduce the amount realized on the sale or other disposition of the shares even if the U.S. Holder has elected to claim a foreign tax credit for other taxes in the same year. U.S. Holders should consult their own tax advisors regarding the application of the foreign tax credit rules to a sale or other disposition of the shares and any Argentine tax imposed on such sale or disposition.
The availability and calculation of foreign tax credits and deductions for foreign taxes depend on a U.S. Holder’s particular circumstances and involve the application of complex rules to those circumstances. U.S. Holders should consult their own tax advisors regarding the application of these rules to their particular situations.
Passive Foreign Investment Company
Special tax rules apply to U.S. Holders if we are a PFIC. In general, we will be a PFIC in a particular taxable year if, after applying certain look-through rules, either 75 percent or more of our gross income for the taxable year is passive income, or 50 percent or more of the value of our assets (determined on the basis of a quarterly average) is attributable to assets that produce or are held for the production of passive income. Based on our audited financial statements and relevant market and shareholder data, we believe that we were not treated as a PFIC for U.S. federal income tax purposes with respect to our 2023 or 2024 taxable years. In addition, based on our audited financial statements and our current expectations regarding the value and nature of our assets, the sources and nature of our income, and relevant market and shareholder data, we do not anticipate becoming a PFIC for our current taxable year or in the foreseeable future. The determination of whether we are a PFIC for any taxable year depends on the classification of our income and assets, our cash position and the nature of the activities performed by our officers and employees. Because this determination is made annually, it is possible that we may become a PFIC for the current taxable year or for any future taxable year due to changes in the composition of our income or assets.
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If we are a PFIC for the current taxable year or for a future taxable year during which a U.S. Holder owns common shares or ADSs, the U.S. Holder will be subject to a special tax at ordinary income rates on certain “excess distributions” and on gain recognized on the sale or other disposition of such holder’s common shares or ADSs. For these purposes, distributions received in a taxable year will be treated as excess distributions to the extent that they are greater than 125.00% of the average annual distributions received during the shorter of the three preceding taxable years or the U.S. Holder’s holding period for the common shares or ADSs. In addition, the amount of income tax on any excess distributions or gains will be increased by an interest charge to compensate for tax deferral, calculated as if the excess distributions or gains were earned ratably over the period the U.S. Holder held the common shares or ADSs. Classification as a PFIC may also have other adverse tax consequences, including with respect to any lower-tier companies within our group treated as PFICs, and will subject a U.S. Holder to certain annual reporting requirements with respect to their interest in common shares or ADSs on IRS Form 8621. If we are a PFIC for our current taxable year or in future taxable years during which a U.S. Holder holds the ADSs, we would generally continue to be treated as a PFIC with respect to such U.S. Holder for all succeeding years during which such holder owns the ADSs, even if we cease to meet the threshold requirements for PFIC status (unless the U.S. Holder makes a deemed sale election with respect to the Shares once the Company is no longer a PFIC). U.S. Holders may be able to make certain elections that would mitigate the consequences of our status as a PFIC, including by electing to mark common shares or ADSs to market annually. We do not intend to make information available to U.S. Holders in order for them to make a “qualified electing fund” election with respect to our common shares or ADSs if we are a PFIC. U.S. Holders should consult their own tax advisor regarding the U.S. federal income tax considerations discussed above.
Specified Foreign Financial Assets
Certain individual U.S. Holders that own “specified foreign financial assets” with an aggregate value in excess of US$50,000 on the last day of the taxable year or US$75,000 at any time during the taxable year are generally required to file an information statement along with their tax returns, currently on IRS Form 8938, with respect to such assets. “Specified foreign financial assets” include any financial accounts held at a non-U.S. financial institution, as well as securities issued by a non-U.S. issuer (which would include the common shares or ADSs) that are not held in accounts maintained by financial institutions. Higher reporting thresholds apply to certain individuals living abroad and to certain married individuals. Regulations extend this reporting requirement to certain entities that are treated as formed or availed of to hold direct or indirect interests in specified foreign financial assets based on certain objective criteria. U.S. Holders who fail to report the required information could be subject to substantial penalties. In addition, the statute of limitations for assessment of tax would be suspended, in whole or part. Prospective investors should consult their own tax advisors concerning the application of these rules to their investment in the common shares or ADSs, including the application of the rules to their particular circumstances.
Backup Withholding and Information Reporting
Dividends paid on, and proceeds from the sale, exchange or other disposition of, the common shares or ADSs to a U.S. Holder generally will be subject to the information reporting requirements of the Code and may be subject to backup withholding unless the U.S. Holder provides an accurate taxpayer identification number and makes any other required certification or otherwise establishes an exemption. Backup withholding is not an additional tax. The amount of any backup withholding from a payment to a U.S. Holder will be allowed as a refund or credit against the U.S. Holder’s U.S. federal income tax liability, provided the required information is furnished to the U.S. Internal Revenue Service in a timely manner.
Material Argentine Tax Considerations
The following discussion is a summary of the material Argentine tax considerations relating to the purchase, ownership and disposition of our common shares or ADSs. The following summary is based upon tax laws of Argentina as in effect on the date of this document and is subject to any change in Argentine law that may come into effect after such date and any change that could apply retroactively and could affect the continued validity of this summary.
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This summary considers the most relevant aspects of Argentine tax law as of the date of this document, nevertheless, it does not include all of the tax considerations that may be relevant to you or your situation, particularly if you are subject to special tax rules.
This summary does not purport to be a comprehensive description of all the Argentine tax considerations that may be relevant to a holder of such securities. No assurance can be given that the courts or tax authorities responsible for the administration of the laws and regulations described in this report will agree with this interpretation. In this regard, due to recent nature of certain modifications to Argentine tax law, it is not possible to determine how the relatively new regulations will be applied and/or construed by the tax authorities of Argentina. Holders are encouraged to consult their tax advisors regarding the tax treatment of our ADSs or common shares as it relates to their situation.
Income tax (“IT”)
Taxation on dividends
According to the amendments introduced to the Argentine Income Tax Law (“Income Tax Law”), taxation applicable on the distribution of dividends from Argentine companies would be as follows:
| · | No Argentine income tax withholding would be levied on dividends paid on our Class D shares or ADSs derived from profits earned during tax periods beginning up to December 31, 2017, whether disbursed in cash, property or other equity securities, except for the application of the equalization tax (the “Equalization Tax”). The Equalization Tax applies to dividends exceeding the “net accumulated taxable income” from the immediate prior fiscal period at the time of distribution. To determine the “net accumulated taxable income” under Income Tax Law, the income tax paid in the same fiscal period should be subtracted and the local dividends received in the previous fiscal period should be added to such income. The Equalization Tax would be imposed at a 35% rate on the excess amount. It is considered a final tax and it is not applicable if dividends are paid in shares (“acciones liberadas”) instead of cash. If applicable, we are responsible for withholding this tax. | |
| · | Dividends originated in profits obtained during fiscal years initiated as of January 1, 2018, on Argentine shares paid to Argentine resident individuals and/or non-Argentine residents would be subject to a 7% income tax withholding as a single and definitive payment on the amount of such dividends (“Dividend Tax”). However, if dividends are distributed to Argentine entities (in general, entities organized or incorporated under Argentine law, certain traders and intermediaries, local branches of non-Argentine entities, sole proprietorships and individuals carrying on certain commercial activities in Argentina, among others), no Dividend Tax would apply. In addition, Equalization Tax is not applicable for dividends originated in profits obtained during fiscal years initiated on or after January 1, 2018. |
For Argentine individuals and undivided estates not registered before the Argentine tax authorities as taxpayers for income tax purposes, as well as for non-Argentine residents, the Dividend Tax withholding will be considered a final payment. Argentine individuals and undivided estates are not allowed to offset income arising from the distribution of dividends on Argentine shares with losses from other types of operations.
The Income Tax Law provides a first in-first out rule pursuant to which distributed dividends correspond to the former accumulated profits of the distributing company.
Holders are encouraged to consult a tax advisor as to the particular Argentine income tax consequences derived from profit distributions made on Class D shares and ADSs.
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Taxation on capital gains
As per income tax regulations, gains arising from the transfer of shares, as well as quotas and other equity interests, titles, bonds and other securities, are liable to Argentine income tax (unless exempt), regardless of the type of beneficiary who realizes the gain.
Argentine entities are subject to income tax on the net income from the sale, exchange or other disposition of shares through a progressive tax rate system, ranging from 25% to 35% determined based on the taxpayer’s net accumulated taxable income. The applicable scales for fiscal periods commencing on January 1, 2025, are as follows: (i) net taxable income accumulated up to Ps.101.679.575,26 will be subject to a rate of 25%; (ii) net taxable income accumulated over Ps.101.679.575,26 up to Ps.1.016.795.752,62 will incur a payment of Ps. 25.419.893,82 plus 30% on the excess over Ps.101.679.575,26; and (iii) net taxable income accumulated over Ps.1.016.795.752,62 will be subject to a payment of Ps.299.954.747,02 plus 35% on the excess over Ps. 1.016.795.752,62.
Losses arising from the sale of shares and ADSs can only be offset against income derived from the same type and source of operations (understanding by “type” the different concepts of income included under each article of Chapter II, Title IV of the Income Tax Law), for a five-year carryover period.
Starting in 2018, Argentine resident individuals and undivided estates enjoy an exemption from capital gains tax on income derived from the sale of shares and other securities in specific scenarios. These scenarios encompass: (i) shares placed through a CNV-authorized public offering; (ii) shares traded on CNV-authorized stock markets with segments ensuring priority of price-time and interference of offers; and/or (iii) the sale, exchange or other disposition of shares through CNV-authorized tender offer regimes and/or share exchanges.
Additionally, article 34 of the Solidarity Law stipulates that, starting from the 2020 tax period, Argentine resident individuals and undivided estates are exempt from capital gains tax on the sale, exchange, or disposal of securities falling under the provisions of Article 98 of the Income Tax Law, not included in the first paragraph of article 26 subsection u) of the Income Tax Law. This exemption applies as long as said securities are listed on CNV-authorized stock exchanges or securities markets, without the application of article 109 of the Income Tax Law. In this sense, Article 109 of the Income Tax Law specifies that total or partial exemptions established or that will be established in the future by special laws for securities issued by national, provincial, or municipal states or the City of Buenos Aires, do not affect income tax for Argentine resident individuals and undivided estates.
Notably, ADSs would not qualify for the exemption applicable to Argentine resident individuals due to non-compliance with the referred conditions. In the absence of the exemption, income obtained by Argentine resident individuals and undivided estates located in Argentina from the sale, exchange, or other disposal of ADSs (and shares, if applicable) is subject to a 15% capital gains tax on net income (calculated in Argentine pesos). The acquisition cost may be adjusted based on the CPI inflationary index rate published by the INDEC, provided that the equity participation was acquired after January 1, 2018. Losses arising from the sale of non-exempt Argentine shares can only be offset by Argentine individuals and undivided estates located in Argentina against income derived from operations of the same source and type (understanding by “type” the different concepts of income included under each article of Chapter II, Title IV of the Income Tax Law), for a five-year carryover period.
If Argentine resident individuals and undivided estates undertake a conversion process involving securities representing shares that do not fall within the exemption scenarios outlined in points (i), (ii) and/or (iii) above, with the intention to hold the underlying shares eligible for the exemption, such conversion would be considered a taxable transfer of the securities representing shares. The taxable value is determined based on their fair market value at the time of conversion. The same tax treatment will apply if the conversion process involves shares not eligible for the exemption being transformed into securities representing shares that qualify for the exemption.
Upon completion of the conversion, the results obtained from any subsequent sale, exchange, swap or any other disposition of the underlying shares or securities representing shares would be exempt from income tax, provided that the conditions specified in points (i), (ii) and/or (iii) of the paragraph above are satisfied.
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In light of amendments introduced by the Solidarity Law, it could also be construed that a capital gains exemption could also apply for Argentine resident individuals and undivided estates if the securities involved in the conversion process are listed on stock exchanges or securities markets authorized by the CNV (although the matter is not free from doubt and further clarifications should be issued).
Due to the amendments introduced to the Income Tax Law, as from 2018, non-Argentine resident individuals or legal entities (“Foreign Beneficiaries”) are also exempt from income tax derived from the sale of Argentine shares in the following situations: (i) when the shares are placed through a CNV-authorized public offering; (ii) when shares are traded on CNV-authorized stock markets, with segments that ensure priority of price-time and interference of offers; and/or (iii) when the sale, exchange or other disposition of shares is made through CNV-authorized tender offer regimes and/or share exchanges. The exemption applies to the extent the Foreign Beneficiaries do not reside in a “non-cooperative jurisdiction” (as defined in “Incoming funds arising from non-cooperative or low or nil tax jurisdictions”) and, in accordance with article 90 of the Regulatory Decree of the Income Tax Law, if their funds do not come from “non-cooperative jurisdictions”.
In addition, under Law No. 27,430 income arising from the sale of ADSs is categorized as Argentine source income. However, capital gains resulting from the sale, exchange or other disposition of ADSs by Foreign Beneficiaries not residing in a “non-cooperative jurisdiction”, and/or whose funds are not channeled through from “non-cooperative jurisdictions”, as per article 90 of the Regulatory Decree of the Income Tax Law, are exempt from income tax on capital gains. This exemption applies as long as the underlying shares are authorized for public offering by the CNV.
In the event that Foreign Beneficiaries undergo a conversion process of shares not eligible for the exemption into securities representing shares that are exempt from income tax, such conversion would be treated as a taxable transfer of shares. The taxable value is determined based on their fair market value at the time of the conversion.
Nevertheless, it is essential to highlight that if nonresidents are situated in a “non-cooperating jurisdiction” (as defined below) or if the invested funds are originated in a non-cooperating jurisdiction, the aforementioned exemptions do not apply. Consequently, any capital gains resulting from the disposal of Class D shares or ADSs will be subject to income tax at an effective rate of 31.5% on the gross sale price.
In cases where the exemption is not applicable, and Foreign Beneficiaries do not reside in a “non-cooperative jurisdiction”, nor their funds channeled through non-cooperative jurisdictions, the gain derived from the disposition of ADSs would be subject to income tax at a 15% rate on the net capital gain or at an effective rate of 13.5% on the gross price.
As per AFIP (now ARCA) General Resolution No. 4,227/2018, various payment mechanisms are outlined depending on the specific circumstances of each sale transaction. In line with article 252 of the Regulatory Decree of the Income Tax Law, in situations covered by the final paragraph of article 98 of the Income Tax Law (i.e. when both the acquirer and the seller of the security are non-Argentine residents), the tax shall be paid by the foreign seller directly through the mechanism established for such purpose by the tax authorities. Alternatively, the payment can be facilitated either (i) through an Argentine individual resident with sufficient mandate or (ii) by the foreign seller’s legal representative domiciled in Argentina.
Holders are encouraged to consult a tax advisor as to the particular Argentine income tax consequences derived from holding and disposing of Class D shares and ADSs and whether any different treatment under a treaty to avoid double taxation could apply.
Personal assets tax
Since tax period 2019, Argentine individuals and undivided estates, foreign individuals and undivided estates and foreign entities are subject to personal assets tax of 0.5% of the value of any shares issued by Argentine entities, held on December 31 of each year. This tax is imposed on Argentine issuers of such shares, such as us, who assume responsibility for paying this tax on behalf of the relevant shareholders. The tax is calculated based on the proportional net worth value (“valor patrimonial proporcional”) of the shares, derived from the latest consolidated financial statements on December 31 of each year. According to the Argentine Personal Assets Tax Law (“Personal Assets Tax Law”), we are entitled and expect to seek reimbursement of such paid tax from the applicable shareholders, including by foreclosing on the shares, or by withholding dividends.
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Under existing regulations, the applicable tax treatment for Argentine resident individuals who hold securities representing Argentine shares (such as the ADSs) is currently unclear. Additionally, there is uncertainty about how the personal assets tax should be estimated in those cases.
Tax on debits and credits in bank accounts
Tax on debits and credits in bank accounts (“TDC”) is levied, with certain exceptions, for debits and credits on checking accounts maintained at financial institutions located in Argentina and other transactions that are used as a substitute for the use of checking accounts. The general tax rate is 0.6% for each debit and credit, although there are reduced rates of 0.075%, as well as increased rates of 1.2%.
Decree No. 409/2018 established that the account holder may use up to 33% of the amounts paid for TDC for taxable events subject to the general rate of 0.6%, as well as those taxed at the rate of 1.2%, as a credit against other specific federal taxes. The remaining amount is deductible for income tax purposes. If lower rates were applied, the available credit would be reduced to 20%. Additionally, Law No. 27,264 establishes that 100% of the tax paid may be considered as a credit against income tax by entities that are characterized as “micro” and “small” and 60% of the tax paid by those entities related to the manufacturing industry that are characterized as “medium - stage 1-” by means of Article 1 of Law No. 25,300 and its complementary ones.
TDC has certain exemptions. Debits and credits in special checking accounts (created under Communication “A” 3,250 of the BCRA) are exempted from this tax if the accounts are held by foreign legal entities and if they are exclusively used for financial investments in Argentina. For certain exemptions and/or tax rate reductions to apply, bank accounts must be registered with the tax authority (ARCA and/or DGI) in accordance with AFIP General Resolution No. 3,900/2016.
According to Decree No. 796/2021, the TDC exemptions foreseen in Decree No. 380/2001 and other regulations of the same nature shall not be applicable in those cases where cash payments are related to the purchase, sale, exchange, intermediation and/or any other type of operation on crypto assets, cryptocurrencies, digital currencies or similar instruments, in the terms defined by the applicable rules.
Whenever financial institutions governed by Law No. 21,526 make payments acting in their own name and behalf, the application of this tax is restricted to certain specific transactions. Such specific transactions include, among others, dividends or profits distributions.
Value added tax
The sale, exchange or other disposition of our Class D shares or ADSs and the distribution of dividends are exempt from the value added tax.
Stamp tax
This tax is an Argentine provincial tax, which is also levied in the City of Buenos Aires, applicable to the execution of onerous transactions within a provincial jurisdiction or the City of Buenos Aires, or also outside an Argentine provincial jurisdiction or the City of Buenos Aires but with effects in such jurisdiction. Each of the provinces and the City of Buenos Aires apply different tax rates depending on the type of activity. In the City of Buenos Aires, acts or instruments related to the negotiation of shares and other securities duly authorized for its public offering by the CNV are exempt from stamp tax to the extent their placement is made within a 180-days term counting as from when such authorization is granted.
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Stamp tax may apply in certain Argentine provinces if transfer of our Class D shares or ADSs is performed or executed in such jurisdictions by means of written agreements.
Gross turnover tax
This tax is an Argentine provincial tax, which is also levied in the City of Buenos Aires, applicable to gross revenues resulting from the regular and onerous exercise of commerce, industry, profession, business, services or any other onerous activity conducted on a regular basis within the respective Argentine jurisdiction. Each of the provinces and the City of Buenos Aires apply different tax rates depending on the type of activity.
In addition, gross turnover tax could be applicable on the transfer of Class D shares or ADSs and on the perception of dividends to the extent such activity is conducted on a regular basis within an Argentine province or within the City of Buenos Aires. However, under the Tax Code of the City of Buenos Aires, any transaction with shares as well as the perception of dividends are exempt from gross turnover tax.
Regimes for the collection of provincial tax revenues on the amounts credited to bank accounts
Different Argentine tax authorities have established collection regimes for gross turnover tax purposes applicable to those credits verified in accounts opened at financial entities, of any type and/or nature and including all branch offices, irrespective of territorial location. These regimes apply to those taxpayers included in the lists provided monthly by the tax authorities of each jurisdiction. The applicable rates may vary depending on the jurisdiction involved. Collections made under these regimes shall be considered as a payment on account of the gross turnover tax. Note that certain jurisdictions have excluded the application of these regimes on certain financial transactions. Holders of Class D shares and ADSs shall corroborate the existence of any exclusions to these regimes in accordance with the jurisdiction involved.
Estate and gift tax
The Buenos Aires Province has imposed a tax on free transmission of assets, including inheritance, legacies, donations, etc., effective January 1, 2011.
Regarding the fiscal year 2025, gratuitous transfers of assets are exempt from this tax when their total amount, without including deductions, exemptions, and exclusions, is equal to or less than Ps.2,038,752.00, or Ps.8,488,486 in the case of parents, children, and spouses. The amount to be taxed, which includes a fixed component and a variable component that is based on differential rates (which range from 1.603% to 9.513% in tax period 2025), varies according to the property value to be transferred and the degree of kinship of the parties involved. The transfer of Class D shares or ADSs among residents of the Buenos Aires Province shall be subject to this tax if other applicable conditions are met.
Regarding the existence of taxes on the free transmission of assets in the remaining provincial jurisdictions, the analysis must be carried out taking into consideration the legislation of each province in particular.
Court tax
In the event that it becomes necessary to institute enforcement proceedings in relation to our Class D shares and ADSs in the Argentine federal courts or the courts sitting in the City of Buenos Aires, a court tax (in general at a rate of 3.0%) will be imposed on the amount of any claim brought before such courts. Certain court and other taxes could be imposed on the amount of any claim brought before provincial courts.
Other tax considerations
Subject to the discussion above regarding state and gift taxes, there are no federal inheritance or succession taxes applicable to the ownership, transfer or disposition of our Class D shares or ADSs.
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Incoming funds arising from non-cooperative or low or nil tax jurisdictions.
According to Article 82 of Law No. 27,430, for fiscal purposes, any reference to “low tax or no tax countries” or “non-cooperative countries” should be understood to be “non-cooperative jurisdictions or low or nil tax jurisdictions,” as defined in Article 19 and Article 20 of the Income Tax Law.
As defined under Article 19 of the Argentine Income Tax Law, non-cooperative jurisdictions are those countries or jurisdictions that do not have an agreement in force with the Argentine Government for the exchange of information on tax matters or a treaty to avoid international double taxation with a broad clause for the exchange of information. Likewise, those countries that, having an agreement of this type in force, do not effectively comply with the exchange of information will also be considered as non-cooperative. The aforementioned treaties and agreements must comply with international standards of transparency and exchange of information on fiscal matters to which the Argentine Government has committed. The Executive Branch published a list of the non-cooperative jurisdictions based on the criteria above, currently included in art 24 of the Regulatory Decree of the Income Tax Law.
In turn, low or nil tax jurisdictions are defined as those countries, domains, jurisdictions, territories, associated states or special tax regimes in which the maximum corporate income tax rate is lower than 60% of the minimum corporate income tax rate established in the first paragraph of Article 73 of the Income Tax Law.
Pursuant to Article 25 of the regulatory decree of the Income Tax Law, for purposes of determining the taxation level referred to in Article 20 of the Income Tax Law, the aggregate corporate tax rate in each jurisdiction, regardless of the governmental level in which the taxes were levied must be considered. In turn, “special tax regime” is understood as any regulation or specific scheme that departs from the general corporate tax regime applicable in said country and results in an effective rate below that stated under the general regime.
According to the legal presumption under Article 18.2 of Law No. 11,683, as amended, incoming funds from low or nil jurisdictions could be deemed unjustified net worth increases for the Argentine party, no matter the nature of the operation involved.
The unjustified increases in net worth mentioned in the preceding paragraph, plus an additional 10% attributed as income used or consumed in non-deductible expenses, constitute net gains for the fiscal year in which they occur, for the purpose of determining the Income Tax. Furthermore, they may serve as a basis for estimating the omitted taxable transactions during the corresponding commercial fiscal year for Value Added Tax and internal taxes, if applicable.
The Argentine party may rebut such legal presumption by duly evidencing before the Argentine tax authority that the funds arise from activities effectively performed by the Argentine party or by a third -party in such jurisdiction, or that such funds have been previously declared.
Tax treaties
Argentina has tax treaties for the avoidance of double taxation currently in force with Australia, Belgium, Bolivia, Brazil, Canada, Chile, China, Denmark, Finland, France, Germany, Italy, Mexico, the Netherlands, Norway, Qatar, Russia, Spain, Sweden, Switzerland, the United Arab Emirates, the United Kingdom, Turkey and Uruguay (through an information exchange treaty that contains clauses for avoidance of double taxation). Tax treaties between Argentina and Austria, Japan and Luxemburg have been signed, but the treaties have not yet been ratified by their respective governments. There is currently no tax treaty or convention in effect between Argentina and the United States. However, since January 2021 an international administrative agreement for the exchange of information between the Argentine tax administration (“ARCA”) and the United States tax administration (Internal Revenue Service, “IRS”) has been in force.
Additionally, it should be noted that a legislative bill has undergone parliamentary consideration, approving the “Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting,” signed within the framework of the OECD. The approval of this bill will result in modifications to the agreements signed with 17 jurisdictions.
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It is not clear when, if ever, a treaty will be ratified or entered into effect. As a result, the Argentine tax consequences described in this section will apply, without modification, to a holder of our Class D shares or ADSs that is a U.S. resident. Foreign shareholders located in certain jurisdictions with a tax treaty in force with Argentina may be (i) exempted from the payment of the personal assets tax and (ii) entitled to apply for reduced withholding tax rates on payments to be made by Argentine parties if certain conditions are met.
THE ABOVE SUMMARY IS NOT INTENDED TO BE A COMPLETE ANALYSIS OF ALL ARGENINE TAX CONSEQUENCES RELATING TO THE OWNERSHIP OR DISPOSITION OF ADSs OR COMMON SHARES. HOLDERS ARE ENCOURAGED TO CONSULT THEIR TAX ADVISORS CONCERNING THE TAX CONSEQUENCES ARISING IN EACH PARTICULAR CASE.
Item 10.F Dividends and paying agents
Not applicable.
Item 10.G Statement by experts
Not applicable.
Item 10.H Documents on display
We are subject to the information requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act. In accordance with these requirements, we file reports and other information with the SEC. These materials, including this annual report and the accompanying exhibits, may be inspected and copied at the SEC’s Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D,C, 20549. Copies of the materials may be obtained from the SEC’s Public Reference Room at prescribed rates. The public may obtain information on the operation of the SEC’s Public Reference Room by calling the SEC in the United States at 1-800-SEC-0330. In addition, the SEC maintains an internet website that contains filings, reports and other information regarding issuers who, like us, file electronically with the SEC. The address of that website is http://www.sec.gov.
We remind investors that we are required to file consolidated financial statements and other periodic reports with the CNV because we are a public company in Argentina. Investors can access our historical consolidated financial statements published in Spanish on the CNV’s website at www.cnv.gob.ar. The information found on the CNV’s website is not a part of this annual report. Investors are cautioned not to place undue reliance on our consolidated financial statements or other information not included in this annual report.
Item 10.I. Subsidiary Information
Not applicable.
Item 10.J Annual Report to Security Holders
Not Applicable.
Item 11. Quantitative and Qualitative Disclosures about Market Risk
Financial Risk Management Goals and Policies
Our principal financial liabilities comprise of bank loans and trade and other payables. The main purpose of these financial liabilities is to finance our operations. We have trade and other receivables, and cash and cash equivalents that result directly from our operations. We also have financial assets at fair value through profit and loss.
Due to our business activity, we are exposed to the following financial risks: market risk, credit risk and liquidity risk. We continuously monitor these risks to minimize the potential negative impact they could have on our finances.
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Market Risk
Market risk is the risk of changes in the fair value or the future cash flows of financial instruments due to fluctuations in market prices. The market risks affecting our business include interest rate risk, foreign currency risk and price risk.
Interest Rate Risk
See Note 19 to our audited and consolidated Financial Statements for the period ended December 31, 2024.
Interest rate sensitivity
See Note 19 to our audited and consolidated Financial Statements for the period ended December 31, 2024.
Foreign Currency Risk
See Note 19 to our audited and consolidated Financial Statements for the period ended December 31, 2024.
Foreign currency sensitivity
See Note 19 to our audited and consolidated Financial Statements for the period ended December 31, 2024.
Price Risk
See Note 19 to our audited and consolidated Financial Statements for the period ended December 31, 2024.
Credit Risk
See Note 19 to our audited and consolidated Financial Statements for the period ended December 31, 2024.
See “Item 3.D.—Risk Factors—Risks Relating to Our Business—Our results depend largely on the compensation established by the Secretariat of Electric Energy and received from CAMMESA” and “Item 3.D.—Risk Factors—Risks Relating to the Electric Power Sector in Argentina—We have, in the recent past, been unable to collect payments, or to collect them in a timely manner, from CAMMESA and other customers in the electric power sector”.
We are entitled to receive payments from CAMMESA under the Spot Sales within 42 days after the date of billing. In recent years, due to regulatory conditions in Argentina’s electric power sector that affected the profitability and economic viability of power utilities, certain WEM agents defaulted on their payments to CAMMESA, which adversely affected CAMMESA’s ability to meet its payment obligations to electric power generators, including us. As a consequence, in the past, we have seen CAMMESA pay more than 90 days after month-end, rather than the required 42 days after the date of billing. Such payment delays would result in higher working capital requirements than we would typically have to finance with our own financing sources.
For these delays, we are entitled to receive interests from CAMMESA. Payments related to PPAs under the Renovar Regulatory Framework have not suffered delays. CAMMESA may once again be unable to make payments to generators both in respect of energy dispatched and generation capacity availability on a timely basis or in full, which may substantially and adversely affect our financial position and the results of our operations.
The Company carries out multiple financial transactions on a daily basis for the efficient management of its liquidity and investments, which is normal and customary in its financial management, thus the payment capacity of our obligations in general has not been affected to date.
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On May 24, 2024, we reported that within the framework of Resolutions No. 58/2024, 66/2024, and 77/2024 of the National Energy Secretariat, issued in connection with the debts of CAMMESA for economic transactions corresponding to the months of December 2023 and January and February 2024, we entered into an agreement with CAMMESA, by virtue of which outstanding debts were paid by CAMMESA as follows:
| 1. | The debts corresponding to the economic transactions for the months of December 2023 and January 2024 were paid through the delivery of public securities "BONDS OF THE ARGENTINE REPUBLIC IN US DOLLARS STEP UP 2038" (BONO USD 2038 L.A.) within ten (10) business days from the signing of the agreement; and |
| 2. | The debts corresponding to the economic transaction for the month of February 2024 were paid with the funds available in the bank accounts enabled in CAMMESA within 48 hours from the signing of the agreement. |
Given that Central Costanera S.A. (a subsidiary of ours) also accepted the offer from the Energy Secretariat, and provided that bonds had a parity lower than their nominal value, the subscription of the Agreement represented a consolidated loss (considering the bond's quotation on such date) of approximately Ps. 24.78 billion. See “Item 3.D. Risk Factors—Risks Relating to the Electric Power Sector in Argentina”.
The chart below shows the payment cycle of CAMMESA (for sales under the Spot Sales) in terms of number of days after the due date that CAMMESA took to pay the balances each month from January 2020 to December 2024
| __________________ |
Source: Central Puerto
Under our contracts with YPF and Terminal 6 Industrial S.A., we typically issue monthly invoices, and YPF/Terminal 6 Industrial S.A. pay them within 35 to 45 days after they are issued. Our invoices are issued in U.S. dollars) and payments are made in pesos at the exchange rate as of the date of the payment.
Under our PPAs pursuant to Energía Plus, we typically issue monthly invoices and the off-taker pays them within 20 to 30 days after they are issued. The tariff for the energy sold is set in U.S. dollars. Our invoices can be issued in U.S. dollars or pesos converted into U.S. dollars, and are payable in pesos at the exchange rate as of the date of the payment, with the off-taker in this second case typically covering any exchange rate fluctuations as a result of any payment delay through credit or debit payments.
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With respect to the FONINVEMEM program, after commercial authorization was granted to the Manuel Belgrano power plant (on January 7, 2010) and the San Martín power plant (on February 2, 2010), we started to collect monthly partial payments of our outstanding receivables from electric power sales from January 2004 through December 2007. These receivables were denominated in U.S. dollars bearing interest at LIBOR plus 1.00% (for receivables paid from the proceeds of the Manuel Belgrano plant) and 2% (for receivables paid from the proceeds of the “San Martín” power plant), and payments were made in pesos at the exchange rate as of the date of the payment.
During January and February 2020, we collected the last installments from the total 120 installments that were established by TMB and TSM agreements, respectively.
Regarding the CVO Agreement, effective as of March 20, 2018, CAMMESA granted the CVO Commercial Approval in the WEM, as a combined cycle, of the thermal plant Central Vuelta de Obligado, which entitled us to receive the collection of the trade receivables under the CVO Agreement. A PPA between the CVO Trust and CAMMESA, through which the CVO Trust makes energy sales and, consequently, receives the cash flow to pay the trade receivables, had to be signed in order to start the collections. The PPA agreement was signed on February 7, 2019, with retroactive effect to March 20, 2018.
As a result, the original amortization schedule from the CVO Agreement is in full force and effect.
During 2023, we collected Ps.83.78 billion in CVO receivables, measured in Pesos as of December 31, 2024.
During 2024, we collected Ps.83.66 billion in CVO receivables, measured in Pesos as of December 31, 2024.
Liquidity Risk
See Note 19 to our audited and consolidated Financial Statements for the period ended December 31, 2024.
Item 12. Description of Securities Other Than Equity Securities
Item 12.A Debt Securities
Not applicable.
Item 12.B Warrants and Rights
Not applicable.
Item 12.C Other Securities
Not applicable.
Item 12.D American Depositary Shares
Fees and Charges
On September 5, 2023, we terminated our deposit agreement with Citibank, N.A., filed with the Commission on January 17, 2018. On October 16, 2023 we entered into a deposit agreement with JPMorgan Chase Bank, N.A. under which JPMorgan Chase Bank, N.A. was engaged to act as depositary of our ADSs.
As an ADS holder, you will be required to pay the following fees under the terms of the deposit agreement:
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| Service | Fees | |
| Issuance of ADSs (e.g., an issuance of ADS upon a deposit of common shares, upon a change in the ADS(s)-to-common share(s) ratio, or for any other reason), excluding ADS issuances as a result of distributions of common shares) | Up to U.S. 3¢ per ADS issued | |
| Cancellation of ADSs (e.g., a cancellation of ADSs for delivery of deposited property, upon a change in the ADS(s)-to-common share(s) ratio, or for any other reason) | Up to U.S. 5¢ per ADS cancelled | |
| Distribution of cash dividends or other cash distributions (e.g., upon a sale of rights and other entitlements) | Up to U.S. 2¢ per ADS held | |
| Distribution of ADSs pursuant to (i) stock dividends or other free stock distributions, or (ii) exercise of rights to purchase additional ADSs | Up to U.S. 2¢ per ADS held | |
| Distribution of securities other than ADSs or rights to purchase additional ADSs (e.g., upon a spin-off) | Up to U.S. 2¢ per ADS held | |
| ADS Services | Up to U.S. 2¢ per ADS held on the applicable record date(s) established by the depositary bank |
As an ADS holder you will also be responsible to pay certain charges such as:
| · | taxes (including applicable interest and penalties) and other governmental charges; | |
| · | the registration fees as may from time to time be in effect for the registration of common shares on the share register and applicable to transfers of common shares to or from the name of the custodian, the depositary bank or any nominees upon the making of deposits and withdrawals, respectively; | |
| · | certain cable, telex and facsimile transmission and delivery expenses; | |
| · | the expenses and charges incurred by the depositary bank in the conversion of foreign currency; | |
| · | the fees and expenses incurred by the depositary bank in connection with compliance with exchange control regulations and other regulatory requirements applicable to common shares, ADSs and ADRs; and | |
| · | the fees and expenses incurred by the depositary bank, the custodian, or any nominee in connection with the servicing or delivery of deposited property. |
ADS fees and charges for (i) the issuance of ADSs, and (ii) the cancellation of ADSs are charged to the person for whom the ADSs are issued (in the case of ADS issuances) and to the person for whom ADSs are cancelled (in the case of ADS cancellations). In the case of ADSs issued by the depositary bank into DTC, the ADS issuance and cancellation fees and charges may be deducted from distributions made through DTC, and may be charged to the DTC participant(s) receiving the ADSs being issued or the DTC participant(s) holding the ADSs being cancelled, as the case may be, on behalf of the beneficial owner(s) and will be charged by the DTC participant(s) to the account of the applicable beneficial owner(s) in accordance with the procedures and practices of the DTC participants as in effect at the time. ADS fees and charges in respect of distributions and the ADS service fee are charged to the holders as of the applicable ADS record date. In the case of distributions of cash, the amount of the applicable ADS fees and charges is deducted from the funds being distributed. In the case of (i) distributions other than cash and (ii) the ADS service fee, holders as of the ADS record date will be invoiced for the amount of the ADS fees and charges and such ADS fees and charges may be deducted from distributions made to holders of ADSs. For ADSs held through DTC, the ADS fees and charges for distributions other than cash and the ADS service fee may be deducted from distributions made through DTC and may be charged to the DTC participants in accordance with the procedures and practices prescribed by DTC and the DTC participants in turn charge the amount of such ADS fees and charges to the beneficial owners for whom they hold ADSs.
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In the event of refusal to pay the depositary bank fees, the depositary bank may, under the terms of the deposit agreement, refuse the requested service until payment is received or may set off the amount of the depositary bank fees from any distribution to be made to the ADS holder. Certain of the depositary fees and charges (such as the ADS services fee) may become payable shortly after the closing of the ADS offering. Note that the fees and charges you may be required to pay may vary over time and may be changed by us and by the depositary bank. You will receive prior notice of such changes. The depositary bank may reimburse us for certain expenses incurred by us in respect of the ADR program, by making available a portion of the ADS fees charged in respect of the ADR program or otherwise, upon such terms and conditions as we and the depositary bank agree from time to time. Accordingly, we have received the following amounts from the depositary bank on the dates indicated below:
| (i) | February 5, 2021: US$137,442.96; | |
| (ii) | February 5, 2022: US$128,375.40; and | |
| (iii) |
October 19, 2023: US$186,992.90.
| |
| (iv) | March 10, 2025: US$493,360.45 (net amount received with respect to fiscal year 2024) |
Item 13. Defaults, Dividend Arrearages and Delinquencies
None.
Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
None.
Item 15. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures
Our company, under the supervision and with the participation of our chief executive officer and chief financial officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures pursuant to 13a-15(e) of the Exchange Act, as of December 31, 2024.
There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based upon their evaluation, our company’s Chief Executive Officer and Chief Financial Officer concluded that as of December 31, 2024, our disclosure controls and procedures were effective to provide reasonable assurance of achieving their control objectives.
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(b) Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. Our internal control over financial reporting was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board. Our internal control over financial reporting includes those policies and procedures that:
(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with IFRS Accounting Standards, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
(iii) provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the consolidated financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2024. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013). Based on our assessment and those criteria, management believes that we maintained effective internal control over financial reporting as of December 31, 2024.
(c) Attestation report of the registered public accounting firm
Reference is made to the report of Pistrelli, Henry Martin y Asociados S.A. (a member firm of Ernst & Young Global Limited) on page F-1 of this annual report.
(d) Changes in internal controls over financial reporting
There was no change in our internal control over financial reporting that occurred during the period covered by this annual report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Item 16.A Audit committee financial expert
Mr. Tomás José White is our audit committee’s financial expert. He is an independent member of the audit committee under Rule 10A-3 and applicable NYSE standards.
Item 16.B Code of Ethics
We have adopted a “Code of Business Conduct” (the “code”) designed to establish guidelines with respect to professional conduct, morals and employee performance. This code applies to all our directors, managers, heads and employees. The code is posted on our website at https://www.centralpuerto.com/en/corporate-governance-documents/. In 2018, the code was amended to comply with the requirements set forth in Argentine Law No. 27.401 (the “Corporate Criminal Liability Law”), which include that our employees shall act with due care while dealing with public sector officers or agencies on our behalf and shall avoid, at all times, circumstances that may be considered contrary to the public duties of such public sector officers, illicit enrichment of such public sector officers, bribery and influence-peddling, extortion and preparation of false balance sheets and reports. On March 9, 2018, our Audit Committee approved the amendment. In addition, we did not grant any waivers to the code during the year ended December 31, 2024.
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Item 16.C Principal Accountant Fees and Services
Pistrelli, Henry Martin y Asociados S.A. (a member firm of Ernst & Young Global Limited) acted as our independent registered public accounting firm for the fiscal years ended December 31, 2024, and 2023. The following tables sets forth the total amount billed to us and our subsidiaries for the indicated fiscal years (stated in the current measurement unit as of December 31, 2024):
|
|
2024 |
2023 |
|||
| (in thousands of Ps.) | |||||
| Audit Fees | 1,559,915 | 1,511,227 | |||
| Tax Fees | 74,561 | 155,052 | |||
| Total | 1,634,476 | 1,666,279 | |||
Audit fees are fees billed for professional services rendered by the principal accountant for the audit of the registrant’s annual consolidated financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years. It includes the audit of our annual consolidated financial statements, the reviews of our quarterly consolidated financial statements submitted to CNV and other services that generally only the independent accountant reasonably can provide, such as comfort letters, statutory audits, attestation services, consents and assistance with and review of documents filed with the SEC.
Tax fees are billed for professional services related to tax compliance and tax advice for fiscal years 2024 and 2023, respectively.
Audit Committee Pre-Approval Policies and Procedures
Consistent with SEC requirements regarding auditor independence, the Audit Committee pre-approves services prior to commencement of the specified service. Before any accountant is engaged to render audit or non-audit services, the engagement must be approved by the Audit Committee and the Audit Committee must pre-approve the provision of services by our principal auditor prior to commencement of the specified service. The Audit Committee has delegated the authority to grant pre-approvals to auditors’ services to its president. The decision of the president to pre-approve a service is presented to the full Audit Committee at each of its scheduled meetings.
All audit fees, audit-related fees, tax fees and other fees, if any, are submitted to our Audit Committee for prior approval. The Audit Committee evaluates the scope of the work to be performed by our accountants and the fees for such work prior to their engagement.
Consequently, 100% of the services and fees rendered by our principal accountants in 2024 were approved by the Audit Committee prior to their engagement to perform such work.
Item 16.D Exemptions from the Listing Standards for Audit Committees
Not applicable.
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Item 16.E Purchases of Equity Securities by the Issuer and Affiliated Purchasers
On October 13, 2022, our Board of Directors sanctioned a treasury stock acquisition program. The program followed existing regulations and capped the acquisition at either US$10,000,000 or 10% of our share capital, whichever was lower. The program lasted for 180 days starting from the first business day after the announcement of the purchase was made public in the market media. Said program expired on April 11, 2023. Under the framework of the program, CP Renovables repurchased 125,782 of our shares for a total value of Ps.0.88 billion.
On August 24, 2023, our Board of Directors sanctioned a new treasury stock acquisition program. The program will follow existing regulations and will also cap the acquisition at either US$10,000,000 or 10% of our share capital, whichever is lower. The program is set to last for 180 days starting from the first business day after the announcement of the purchase is made public in the market media. This period is subject to potential renewal or extension.
The buyback can be conducted by us or our subsidiaries, with a daily transaction ceiling of 25% of the average daily trading volume of our stock, based on market data from the preceding 90 trading days. The shares' purchase price is capped at US$8 per ADS on the NYSE and initially up to Ps. 605 per share on BYMA. This last cap was later raised to Ps. 800 per share, as authorized by our Board of Directors on October 17, 2023.
There were no share repurchases during fiscal year 2024.
Item 16.F Change in Registrant’s Certifying Accountant
Not applicable.
Item 16.G Corporate Governance
NYSE Corporate Governance Rules
Under NYSE rules, foreign private issuers are subject to more limited corporate governance requirements than U.S. domestic issuers. As a foreign private issuer, we must comply with Sections 303A.06, 303A.11 and 303A.12(b) and (c) of the NYSE Listed Company Manual which set forth the following corporate governance rules: (i) we must satisfy the requirements of Rule 10A-3 of the Exchange Act relating to audit committees; (ii) our CEO must promptly notify the NYSE in writing after any executive officer becomes aware of any non-compliance with the applicable NYSE corporate governance rules; (iii) we must provide a brief description of any significant differences between our corporate governance practices and those followed by U.S. companies under NYSE listing standards; and (iv) we must provide the NYSE with annual and interim written affirmations as required under the NYSE corporate governance rules.
The table below briefly describes the significant differences between our Argentine corporate governance rules and the NYSE corporate governance rules:
| Section | NYSE corporate governance rule for U.S. domestic issuers | Argentine corporate governance rules | ||
|
303A.01
|
A listed company must have a majority of independent directors. “Controlled companies” are not required to comply with this requirement.
|
A listed company must have at least two independent directors who form a majority of the Audit Committee.
|
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|
303A. 02
|
No director qualifies as “independent” unless the board of directors affirmatively determines that the director has no material relationship with the listed company (whether directly or as a partner, shareholder, or officer of an organization that has a relationship with the company) and emphasizes that the concern is independence from management. The board is also required, on a case-by-case basis, to express an opinion with regard to the independence or lack of independence, of each individual director.
|
Pursuant to CNV Rules, a director is not independent if such director is:
(a) a member of management or an employee of shareholders who hold material holdings in the listed company or of other entities in which these shareholders have material holdings or over which these shareholders exercise a material influence;
(b) is currently an employee or has, in the last three years, been an employee of the listed company;
(c) a person who has a professional relationship or is part of a company or professional association that maintains professional relations with, or that receives remunerations or fees (other than directors’ fees) from, the listed company or from shareholders that have material holdings in the listed company, or with a company in which such shareholders have material holdings or exercise a material influence;
(d) a person who has material holdings in the listed company or in an entity that has material holdings in, or exercises a material influence over, the listed company;
(e) a person who directly or indirectly provides goods or services to the listed company or to shareholders that have material holdings in or exercise a material influence over the listed company and receives compensation for such services that is substantially higher than that received as director of the listed company;
(f) the member is married or is a family member to an individual who would not qualify as independent.
(g) the member is the director, CEO, administrator or principal executive from a non-profit organization which had received funds for amounts exceeding those established by Resolution No. 30/2011 of the UIF (currently equivalent to Ps. 150 Minimum Living and Mobile Wages), coming from the company, or a parent company;
(h) a person who receive any payments from the company or group companies other than fees as a director or dividends as shareholder; or
(i) a member of the administrative or supervisory committee and/or hold a significant participation (directly or indirectly) with respect to one or more companies that are registered as Agente de Negociación, Agente de Liquidación y Compensación y/o Agente de Corretaje de Valores Negociables.
It is necessary to comply with the conditions of independence for at least three years before the designation as a director.
The independent directors will cease to be independent after 10 years of holding its position of directors and will be restored with its status of independent three years after leaving office.
“Material holdings” are shareholdings, either directly or indirectly, that represent at least 5% of the capital stock of the relevant entity, or a smaller percentage when the person has the right to elect one or more directors per class of shares or by having entered into agreements with other shareholders relating to the governance and the management of the relevant entity or of its controlling shareholders. |
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|
303A.03
|
The non-management directors of a listed company must meet at regularly scheduled executive sessions without management.
|
Neither Argentine law nor our bylaws require the holding of such meetings and we do not hold non-management directors meetings.
The Argentine Corporate Law provides, however, that the board shall meet at least once every three months, and according to our bylaws, whenever the chairman considers necessary to convene for a meeting.
| ||
|
303A.04
|
A listed company must have a nominating/corporate governance committee composed entirely of independent directors, with a written charter that covers certain minimum specified duties. “Controlled companies” are not required to comply with this requirement.
|
Neither Argentine law nor our bylaws require the establishment of a nominating/corporate governance committee. We do not have a nominating/corporate governance committee.
Directors are nominated and appointed by the shareholders.
| ||
|
303A.05
|
A listed company must have a compensation committee composed entirely of independent directors, with a written charter that covers certain minimum specified duties. “Controlled companies” are not required to comply with this requirement.
|
Neither Argentine law nor our bylaws require the establishment of a compensation committee. We do not have a compensation committee.
The compensation of our directors is determined at the annual ordinary shareholders’ meeting. Additionally, the audit committee must issue an opinion regarding the reasonableness and adequacy of such compensation.
|
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|
303A.06*
|
A listed company must have an audit committee with a minimum of three independent directors who satisfy the independence requirements of Rule 10A-3, with a written charter that covers certain minimum specified duties.
|
Argentine law requires the audit committee be composed of three or more members from the board of directors (with a majority of independent directors), all of whom must be well-versed in business, financial or accounting matters. In addition, we are required to satisfy the audit committee requirements of Rule 10A-3.
The responsibilities of an audit committee, as provided in Law No. 26,831 and the CNV standards, are essentially the same as those provided for under Rule 10A-3, including, but not limited to, the following:
(a) advise on the board of directors’ proposal for the designation of external independent accountants and to ensure their independence;
(b) oversee our internal control mechanisms and administrative and accounting procedures and assess the reliability of all financial and other relevant information filed with the CNV and other entities to which we report;
(c) oversee our information policies concerning risk management;
(d) provide the market with complete information on transactions in which there may be a conflict of interest with members of our various corporate bodies or controlling shareholders;
(e) advise on the reasonableness of fees or stock option plans for our directors and managers proposed by the board of directors;
(f) advise on our fulfillment of legal requirements and the reasonableness of the terms of the issuance of shares or other instruments that are convertible into shares in cases of capital increase in which pre-emptive rights are excluded or limited;
(g) verify the fulfillment of any applicable rules of conduct; and
(h) issue grounded opinions on related-party transactions under certain circumstances and file such opinions with regulatory agencies as required by the CNV in the case of possible conflicts of interest.
| ||
|
303A.08
|
Shareholders must be given the opportunity to vote on all equity-compensation plans and material revisions thereto, with limited exemptions set forth in the NYSE rules.
|
The basic terms for any equity-based compensation plan should be considered by the general shareholders’ meeting, notwithstanding its power to delegate any decision to the board of directors. We do not currently offer equity-based compensation to our directors, executive officers or employees, and have no policy on this matter.
|
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|
303A.09
|
A listed company must adopt and disclose corporate governance guidelines that cover certain minimum specified subjects.
|
Neither Argentine law nor our bylaws require the adoption or disclosure of corporate governance guidelines. The CNV Rules contain a recommended Code of Corporate Governance for listed companies and the board of directors must include on its annual report, the degree of compliance of such code. We have adopted, as of May 26, 2011, a corporate governance manual.
| ||
|
303A.10
|
A listed company must adopt and disclose a code of business conduct and ethics for directors, officers and employees, and promptly disclose any waivers of the code for directors or executive officers.
|
Neither Argentine law nor our bylaws require the adoption or disclosure of a code of business conduct. We, however, have adopted a code of business conduct and ethics that applies to all of our employees.
| ||
|
303A.12
|
(a) Each listed company CEO must certify to the NYSE each year that he or she is not aware of any violation by the company of NYSE corporate governance listing standards.
(b)* Each listed company CEO must promptly notify the NYSE in writing after any executive officer of the listed company becomes aware of any non-compliance with any applicable provisions of this Section 303A.
(c)* Each listed company must submit an executed Written Affirmation annually to the NYSE. In addition, each listed company must submit an interim Written Affirmation as and when required by the interim Written Affirmation form specified by the NYSE.
|
The CNV Rules provide that each year the board of directors shall include in the annual report included in the financial statement, a report on the degree of compliance with the code of corporate governance for listed companies included in the CNV Rules. In such report, which shall be submitted to the CNV and published for the general public, the board of directors must: (i) inform if it fully complies with the guidelines and recommendations of the aforementioned code of corporate governance; or (ii) explain the reasons for which it complies only partially or it does not comply with such principles and recommendations, and indicate if the company intends to incorporate the principles and guidelines it failed to adopt. To such end, the company must (a) adopt the principles as general corporate governance guidelines and the recommendations as a framework to adopt the principles within the company; (b) notify compliance with each of the recommendations included in the Corporate Governance Manual; (c) in case of compliance include the required information in accordance with CNV Rules; and (d) in case of partial or non-compliance, justify such event and indicate the action plan for future years, or an indication of the reasons for which the board of directors does not consider appropriate or applicable to follow the recommendations and guidelines provided in the CNV Rules. |
| __________________ |
| * | We are required to comply with these rules under the NYSE Listed Company Manual |
| * | We are required to conform the structure of the Board of Directors to the independence criteria established in article 11, Chapter III, Title II of the CNV Rules by the first shareholders’ meeting held after December 31, 2018. |
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Item 16.H Mine Safety Disclosure
Not applicable.
Item 16.I Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
Item 16.J Insider Trading Policies
We have
Item 16.K Cybersecurity
We uphold a thorough procedure for evaluating, recognizing, and addressing cybersecurity risks, encompassing threats such as business operations disruption, reporting system vulnerabilities, data breaches, and reputational concerns. The Department of Cybersecurity holds the mandate to implement a range of proactive and responsive measures that influence data processing and facilitate information protection. Moreover, it carries out risk analysis and assessment concerning cybersecurity threats that could affect the Company, working closely with the Cybersecurity Manager and other cybersecurity experts. The functions of our Department of Cybersecurity have been integrated into our general risk systems and processes.
Key responsibilities of the Department of Cybersecurity encompass:
| · | Restricting unauthorized access or alterations to information by individuals, entities, or processes. | |
| · | Guaranteeing the availability of critical information as required by authorized users, entities, or processes. | |
| · | Identifying risks and suggesting security solutions for their monitoring and mitigation. | |
| · | Supervising, communicating, and implementing technical security solutions aligned with business objectives. | |
| · | Proactively detecting threats to enable early identification and containment, thus minimizing impacts on Company assets, products, and operations. | |
| · | Formulating and enhancing cybersecurity policies and controls to ensure compliance with relevant standards and regulations. |
The Cybersecurity Department’s procedures undergo annual reviews, testing, updates, and approval by the Approval Committee. Any necessary updates resulting from these reviews are implemented accordingly.
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Incident Response Plan
We rely on and use recognized international frameworks, including the NIST SP 800-30, NIST SP 800-37, NIST CSF and MAGERIT frameworks for the identification, assessment, and management of cybersecurity risks relevant to our business.
Our Cybersecurity Risk Management Program includes the following key elements:
| · | A cybersecurity risk identification and assessment procedure that allows us to identify risks, especially those that are critical to our business. |
| · | A team with a defined leader and members; with the main function of identifying, assessing, and managing cybersecurity risks. |
| · | A process for implementing strategies and measures to address cybersecurity risks. |
| · | A cyber incident response plan that allows restoring systems and resuming operations, also, minimizing the consequences and acquiring incident information to conduct investigations and activate other internal processes. |
| · | A cyber incident management plan that allows us to carry out a process for determining the materiality of potential cyber incidents, their documentation and corresponding communication to the competent bodies (SEC, entities at the national level, stakeholders, etc.). |
During 2024, a cyber incident management simulation exercise was conducted to test the processes of materiality assessment and cyber incident handling. The evaluation team, consisting of executives from the areas involved, convened and analyzed various scenarios of a hypothetical ransomware attack and its material impact on our organization.
Controlled service disruption tests were performed on essential components of the IT infrastructure to verify the performance of recovery mechanisms. The results of these tests were satisfactory in all cases, as contingency measures were successfully activated to maintain operational continuity.
Four independent security tests (Penetration Tests) were conducted on the internet-exposed infrastructure and the internal network to determine our degree of exposure to threats and cyber-attacks.
| 283 |
Management
In the event that the preliminary assessment Cybersecurity Manager suggests that the incident could be significant, our policy stipulates the formation of an Approval Committee consisting of the CEO, CFO, and Cybersecurity Manager. The role of the Approval Committee is to oversee the materiality determination made by the Cybersecurity team. If deemed necessary, the Approval Committee forwards pertinent information to the Audit Committee for review. Should the Audit Committee validate the incident’s materiality, it is then communicated to the Board of Directors, and subsequently, publicly disclosed in accordance with relevant laws and regulations.
Board of Directors
To fulfill this duty, the Audit Committee convenes regular meetings and ad-hoc sessions as necessary, during which the Cybersecurity Manager provides reports on cybersecurity events and updates on prevailing risks. Additionally, the Audit Committee engages with the Cybersecurity Manager if a material event arises.
The Cybersecurity Manager communicates significant activities related to cybersecurity incidents in accordance with the Cybersecurity Risk Assessment Procedure to both the Board of Directors and the Audit Committee.
Third-Party Service Provider
Training
The Department of Cybersecurity organizes awareness campaigns and training sessions for employees, emphasizing various topics such as creating secure passwords, recognizing phishing attempts, understanding social engineering tactics, data leakage, ensuring security on WhatsApp and social networks, understanding data protection principles, and promoting secure development practices, among other relevant subjects.
Risks from Cybersecurity Threats
For further details regarding our cybersecurity-related risks, please refer to "Item 3—Key Information—Risk Factors— A cyberattack could adversely affect our business, balance sheet, results of operations and cash flow.
| 284 |
Item 17. Financial Statements
We have responded to Item 18 in lieu of responding to this Item 17.
Item 18. Financial Statements
Our Audited Consolidated Financial Statements are included in this annual report beginning at Page F-1.
Item 19. Exhibits
EXHIBIT INDEX
| 285 |
| 286 |
| 287 |
SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.
| CENTRAL PUERTO S.A. | |||
| By: | /S/ ENRIQUE TERRANEO | ||
| Name: Enrique Terraneo | |||
| Title: Chief Financial Officer | |||
Date: April 25, 2025.
| 288 |
INDEX TO THE FINANCIAL STATEMENTS
| 289 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors of Central Puerto S.A.:
Opinion on the Financial Statements
We have audited the accompanying consolidated statements of financial position of Central Puerto S.A. (the Company) as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with IFRS Accounting Standards as issued by the International Accounting Standards Board (IASB).
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated April 25, 2025 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
| F-1 |
| Impairment of property, plant and equipment and intangible assets | |
| Description of the matter |
As reflected in the Company´s consolidated financial statements, at December 31, 2024, the Company´s property, plant and equipment (“PP&E”) and intangible assets were Argentine pesos (“Ps.”) 1,617,870 million and Ps. 30,716 million, respectively.
As further described in Note 2.2.8 to the consolidated financial statements, PP&E and intangible assets are tested for impairment when an existing event, or one that took place after year end and provides additional evidence of conditions that existed at the end of the reporting period, indicates that the recoverable amount of the PP&E and/or intangible assets amounts may be impaired. For each individual asset or cash generating unit (“CGU”) for which impairment indicators are identified, management estimates the recoverable amount of the asset or CGU, which is the higher of the fair value less costs to sell and its value in use, and compares it to the respective carrying amount. The value in use for the Company´s CGUs related to the Electric Power Generation from conventional and renewable sources operating segments was estimated based on discounted future cash flows, considering a significant assumption related to electricity prices as well as assumptions related to operational costs, discount rates and macroeconomic variables such as inflation and exchange rates. The recoverable amount for gas turbines and land was estimated based on fair value less cost to sell.
During 2024, the Company recorded a Ps. 100,742 million and Ps. 1,339 million impairment loss on PP&E and intangible assets, respectively, related to the Brigadier Lopez thermoelectric power plant, the Terminal 6 San Lorenzo cogeneration unit, the Luján de Cuyo combined cycle plant, the Buenos Aires combined cycle plant, the Manque and La Genoveva wind farms and the gas turbine stored in the facilities of the Nuevo Puerto plant.
Auditing the impairment of PP&E and intangible assets is especially challenging because it involves a high degree of auditor judgment in performing procedures to evaluate the significant and other assumptions described above used to determine the value in use, including projected financial information, and the fair value less cost to sell.
|
| How We Addressed the Matter in our Audit |
We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s impairment assessment process, including controls over management’s review of the significant and other assumptions described above, the completeness and accuracy of the underlying data and the consistency of the discounted cash flow model used by the Company.
To test management´s impairment evaluation, our audit procedures included, among others, assessing the methodologies used by management, testing the significant and other assumptions described above and testing the completeness and accuracy of underlying data. For example, we compared the electricity prices used by management with historical data and performed sensitivity analysis to evaluate the changes in the value in use that would result from changes in the underlying significant assumption, if applicable. Additionally, we compared the other assumptions used by management, such as inflation and exchange rates, to current available economic trends data. We also assessed the historical accuracy of management’s estimates and tested the arithmetical accuracy of the discounted cash flows model. We involved our internal valuation specialists in the evaluation of the methodologies and assumptions related to inflation, exchange rates and discount rates used in the future cash flows prepared by management and in the evaluation of the assumptions used by management for the determination of the fair value less costs to sell. We also assessed the related disclosures in the consolidated financial statements. |
/s/
Member of Ernst & Young Global Limited
We have served as the Company’s auditor since 2002.
April 25, 2025
| F-2 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of Central Puerto S.A.
Opinion on Internal Control Over Financial Reporting
We have audited Central Puerto S.A.’ internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), (the COSO criteria). In our opinion, Central Puerto S.A. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statements of financial position of Central Puerto S.A. as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes, and our report dated April 25, 2025 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ PISTRELLI, HENRY MARTIN Y ASOCIADOS S.A.
Member of Ernst & Young Global Limited
City of Buenos Aires, Argentina April 25, 2025
| F-3 |
CENTRAL PUERTO S.A.
CONSOLIDATED STATEMENT OF INCOME
| For the years ended December 31, | ||||||||||||||||
| Notes | 2024 | 2023 | 2022 | |||||||||||||
| ARS 000 | ARS 000 | ARS 000 | ||||||||||||||
| Revenues | 5 | |||||||||||||||
| Cost of sales | 6.1 | ( | ) | ( | ) | ( | ) | |||||||||
| Gross income | ||||||||||||||||
| Administrative and selling expenses | 6.2 | ( | ) | ( | ) | ( | ) | |||||||||
| Other operating income | 7.1 | |||||||||||||||
| Other operating expenses | 7.2 | ( | ) | ( | ) | ( | ) | |||||||||
| (Impairment) / reversal of impairment of property, plant and equipment and intangible assets |
2.2.8 | ( | ) | ( | ) | |||||||||||
| Operating income | ||||||||||||||||
| Loss on net monetary position | 2.1.2 | ( | ) | ( | ) | ( | ) | |||||||||
| Finance income | 7.3 | |||||||||||||||
| Finance expenses | 7.4 | ( | ) | ( | ) | ( | ) | |||||||||
| Share of the profit of associates | 3 | |||||||||||||||
| Income from investments in entities measured at fair value | ||||||||||||||||
| Gain from bargain purchase | 2.2.20 | |||||||||||||||
| Income before income tax | ||||||||||||||||
| Income tax for the year | 8 | ( | ) | ( | ) | ( | ) | |||||||||
| Net income for the year | ||||||||||||||||
| Attributable to: | ||||||||||||||||
| – Equity holders of the parent | ||||||||||||||||
| – Non-controlling interests | ( | ) | ||||||||||||||
| Total net income loss for the year | ||||||||||||||||
| Basic and diluted earnings per share (ARS) | 9 | |||||||||||||||
| F-4 |
CENTRAL PUERTO S.A.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
| For the years ended December 31, | ||||||||||||||||
| Notes | 2024 | 2023 | 2022 | |||||||||||||
| ARS 000 | ARS 000 | ARS 000 | ||||||||||||||
| Net income for the year | ||||||||||||||||
| Other comprehensive income (loss) for the year | ||||||||||||||||
| Other comprehensive income (loss) not to be reclassified to income in subsequent periods | ||||||||||||||||
| Remeasurement of results from long-term employee benefits | 14.3 | ( | ) | ( | ) | |||||||||||
| Income tax related to remeasurement of results from long-term employee benefits | 8 | ( | ) | |||||||||||||
| Total other comprehensive income (loss) not to be reclassified to income in subsequent periods | ( | ) | ( | ) | ||||||||||||
| Total other comprehensive income (loss) for the year | ( | ) | ( | ) | ||||||||||||
| Total comprehensive income for the year | ||||||||||||||||
| Attributable to: | ||||||||||||||||
| – Equity holders of the parent | ||||||||||||||||
| – Non-controlling interests | ( | ) | ||||||||||||||
| Total comprehensive income loss for attributable for the year | ||||||||||||||||
| F-5 |
CENTRAL PUERTO S.A.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
| 12-31-2024 | 12-31-2023 | |||||||||||
| Notes | ARS 000 | ARS 000 | ||||||||||
| Assets | ||||||||||||
| Non-current assets | ||||||||||||
| Property, plant and equipment | 11 | |||||||||||
| Intangible assets | 12 | |||||||||||
| Biological assets | ||||||||||||
| Investment in associates | 3 | |||||||||||
| Inventories | 10 | |||||||||||
| Other non-financial assets | 14.1 | |||||||||||
| Trade and other receivables | 13.1 | |||||||||||
| Other financial assets | 13.6 | |||||||||||
| Deferred tax asset | 8 | |||||||||||
| Total non current assets | ||||||||||||
| Current assets | ||||||||||||
| Biological assets | ||||||||||||
| Inventories | 10 | |||||||||||
| Other non-financial assets | 14.1 | |||||||||||
| Trade and other receivables | 13.1 | |||||||||||
| Other financial assets | 13.6 | |||||||||||
| Cash and cash equivalents | 15 | |||||||||||
| Total current assets | ||||||||||||
| Total assets | ||||||||||||
| Equity and liabilities | ||||||||||||
| Equity | ||||||||||||
| Capital stock | ||||||||||||
| Adjustment to capital stock | ||||||||||||
| Legal reserve | ||||||||||||
| Voluntary reserve | ||||||||||||
| Other equity accounts | ( | ) | ( | ) | ||||||||
| Voluntary reserve for future dividends distribution | ||||||||||||
| Retained earnings | ||||||||||||
| Equity attributable to holders of the parent | ||||||||||||
| Non-controlling interests | ||||||||||||
| Total equity | ||||||||||||
| Non-current liabilities | ||||||||||||
| Trade and other payables | 13.2 | |||||||||||
| Other non-financial liabilities | 14.2 | |||||||||||
| Loans and borrowings | 13.3 | |||||||||||
| Compensation and employee benefits liabilities | 14.3 | |||||||||||
| Provisions | ||||||||||||
| Deferred income tax liabilities | 8 | |||||||||||
| Total non current liabilities | ||||||||||||
| Current liabilities | ||||||||||||
| Trade and other payables | 13.2 | |||||||||||
| Other non-financial liabilities | 14.2 | |||||||||||
| Loans and borrowings | 13.3 | |||||||||||
| Compensation and employee benefits liabilities | 14.3 | |||||||||||
| Income tax payable | ||||||||||||
| Provisions | 17 | |||||||||||
| Total current liabilities | ||||||||||||
| Total liabilities | ||||||||||||
| Total equity and liabilities | ||||||||||||
| F-6 |
CENTRAL PUERTO S.A.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
| Attributable to holders of the parent | ||||||||||||||||||||||||||||||||||||||||
| Capital stock | Retained earnings | |||||||||||||||||||||||||||||||||||||||
Face value | Adjustment to capital stock |
Legal reserve |
Voluntary reserve |
Other equity accounts | Voluntary reserve for future dividends distribution | Unappropriated retained earnings |
Total | Non- controlling interests | Total |
|||||||||||||||||||||||||||||||
| ARS 000 | ARS 000 | ARS 000 | ARS 000 | ARS 000 | ARS 000 | ARS 000 | ARS 000 | ARS 000 | ARS 000 | |||||||||||||||||||||||||||||||
| As of January 1, 2024 | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Net income for the year | ||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income for the year | ||||||||||||||||||||||||||||||||||||||||
| Total comprehensive income for the year | ||||||||||||||||||||||||||||||||||||||||
| Increase in legal reserve | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Increase in voluntary reserve for future dividends distribution | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Dividends distribution | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Transaction between related parties (Note 18) | ||||||||||||||||||||||||||||||||||||||||
| Dividends distributed by a subsidiary (2) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| As of December 31, 2024 (1) | ( | ) | ||||||||||||||||||||||||||||||||||||||
| As of January 1, 2023 | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Net income (loss) for the year | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss for the year | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Total comprehensive income (loss) for the year | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Increase in legal reserve | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Increase in voluntary reserve for future dividends distribution | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Dividends distribution | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Business combination (5) | ||||||||||||||||||||||||||||||||||||||||
| Dividends distributed by a subsidiary (4) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Transaction between related parties (Note 18) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Dividends collected by a subsidiary (3) | ||||||||||||||||||||||||||||||||||||||||
| Acquisition of treasury shares (Notes 13.3.10) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| As of December 31, 2023 (1) | ( | ) | ||||||||||||||||||||||||||||||||||||||
| As of January 1, 2022 | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Net income for the year | ||||||||||||||||||||||||||||||||||||||||
| Other comprehensive (loss) income for the year | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Total comprehensive income for the year | ||||||||||||||||||||||||||||||||||||||||
| Decrease in voluntary reserve due to loss absorption | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Dividends distribution | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Dividends distributed by a subsidiary (6) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Acquisition of treasury shares (Notes 13.3.10) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| As of December 31, 2022 (7) | ( | ) | ||||||||||||||||||||||||||||||||||||||
| (1) |
| (2) |
| (3) |
| (4) |
| (5) |
| (6) |
| (7) |
| F-7 |
CENTRAL PUERTO S.A.
CONSOLIDATED STATEMENT OF CASH FLOWS
| For the years ended December 31, | ||||||||||||
| 2024 | 2023 | 2022 | ||||||||||
| ARS 000 | ARS 000 | ARS 000 | ||||||||||
| Operating activities | ||||||||||||
| Income for the year before income tax | ||||||||||||
| Adjustments to reconcile income for the year before income tax to net cash flows: | ||||||||||||
| Depreciation of property, plant and equipment | ||||||||||||
| Amortization of intangible assets | ||||||||||||
| Impairment / (reversal) of impairment of property, plant and equipment and intangible assets | ( | ) | ||||||||||
| Loss from disposal (Income from sale) of property, plant and equipment | ( | ) | ||||||||||
| Recovery (Charge) discount of tax credits | ( | ) | ||||||||||
| Interest earned from customers | ( | ) | ( | ) | ( | ) | ||||||
| Finance income | ( | ) | ( | ) | ( | ) | ||||||
| Finance expenses | ||||||||||||
| Insurance recovery collected | ( | ) | ( | ) | ||||||||
| Share of the profit of associates | ( | ) | ( | ) | ( | ) | ||||||
| Income from investments in entities measured at fair value | ( | ) | ||||||||||
| Gain from bargain purchase | ( | ) | ( | ) | ||||||||
| Material and spare parts impairments | ||||||||||||
| Movements in provisions, and long-term employee benefit plan expense | ||||||||||||
| Biological assets revaluation | ( | ) | ( | ) | ||||||||
| Foreign exchange difference for trade receivables | ( | ) | ( | ) | ( | ) | ||||||
| Net effect CAMMESA agreement (Note 1.2.p) | ||||||||||||
| Results on net monetary position | ( | ) | ||||||||||
| Trade and tax interests lost | ||||||||||||
| Working capital adjustments: | ||||||||||||
| Decrease in trade and other receivables | ||||||||||||
| Decrease (Increase) in other non-financial assets, biological assets and inventories | ( | ) | ||||||||||
| Decrease in trade and other payables, other non-financial liabilities and liabilities from employee benefits | ( | ) | ( | ) | ( | ) | ||||||
| Interest received from customers | ||||||||||||
| Trade and tax interests paid | ( | ) | ( | ) | ||||||||
| Income tax paid | ( | ) | ( | ) | ( | ) | ||||||
| Insurance recovery collected | ||||||||||||
| Net cash flows provided by operating activities | ||||||||||||
| Investing activities | ||||||||||||
| Purchase of property, plant and equipment and materials (1) | ( | ) | ( | ) | ( | ) | ||||||
| Dividends received | ||||||||||||
| Sale of property, plant and equipment | ||||||||||||
| Acquisition of financial assets, net (1) | ( | ) | ( | ) | ( | ) | ||||||
| Acquisition of subsidiaries and associates, net of cash acquired (1) | ( | ) | ( | ) | ||||||||
| Acquisition of treasury shares | ( | ) | ( | ) | ||||||||
| Net cash flows used in investing activities | ( | ) | ( | ) | ( | ) | ||||||
| Financing activities | ||||||||||||
| Bank and investment accounts overdrafts received | ||||||||||||
| Bank and investment accounts overdrafts paid | ( | ) | ( | ) | ( | ) | ||||||
| Loans and other financial debts received (1) | ||||||||||||
| Loans and other financial debts paid (1) | ( | ) | ( | ) | ( | ) | ||||||
| Corporate bonds repurchase payment | ( | ) | ||||||||||
| Direct financing and loans refinancing costs | ( | ) | ( | ) | ||||||||
| Interest and other financial costs paid (1) | ( | ) | ( | ) | ( | ) | ||||||
| Bank fees and charges | ( | ) | ( | ) | ||||||||
| Dividends paid (1) | ( | ) | ( | ) | ( | ) | ||||||
| Contribution of non-controlling interests | ||||||||||||
| Net cash flows used in financing activities | ( | ) | ( | ) | ( | ) | ||||||
| (Decrease) Increase in cash and cash equivalents | ( | ) | ( | ) | ||||||||
| Exchange difference and other financial results | ||||||||||||
| Monetary results effect on cash and cash equivalents | ( | ) | ( | ) | ( | ) | ||||||
| Cash and cash equivalents as of January 1 | ||||||||||||
| Cash and cash equivalents as of December 31 | ||||||||||||
| (1) |
| 2024 | 2023 | 2022 | ||||||||||
| Acquisition of PP&E pending payment and through pre-financing | ||||||||||||
| Incorporation of PP&E, financial assets, and financial debts through the acquisition of companies | ||||||||||||
| Agreement with CAMMESA - Resolutions SE N° 58/2024 and 66/2024 (Note 1.2.p) | ||||||||||||
| Acquisition of financial assets through the TRUST | ||||||||||||
| Acquisition of investment in associate | ||||||||||||
| Payment of dividends through securities | ||||||||||||
| Cancellation of financial debts through the TRUST - Capital | ||||||||||||
| Cancellation of financial debts through the TRUST - Interest | ||||||||||||
| Disbursements received through pre-financing | ||||||||||||
| F-8 |
CENTRAL PUERTO S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| 1. | Corporate information and main business |
Central Puerto S.A. (hereinafter the “Company”, ”we”, “us” or “CPSA”) and the companies that make up the business group (hereinafter the “Group”) form an integrated group of companies pertaining to the energy sector. The Group is mainly engaged in electric power generation.
CPSA was incorporated pursuant to Executive Order No. 122/92. We were formed in connection with the privatization process involving Servicios Eléctricos del Gran Buenos Aires S.A. (“SEGBA”) in which SEGBA’s electricity generation, transportation, distribution and sales activities were privatized.
On April 1, 1992, Central Puerto S.A., the consortium-awardee, took possession of SEGBA’s Nuevo Puerto and Puerto Nuevo plants, and we began operations.
Our shares are listed on the BCBA (“Buenos Aires Stock Exchange”), and, since February 2, 2018, they have been listed on the NYSE (“New York Stock Exchange”), both under the symbol “CEPU”.
In order to carry out our its electric energy generation activity the Group owns the following assets:
| – | Our Puerto complex is composed of two facilities, Central Nuevo Puerto (“Nuevo Puerto”) and Central Puerto Nuevo (“Puerto Nuevo”), located in the port of the City of Buenos Aires. Our Puerto complex’s facilities include steam turbines plants and a Combined Cycle plant and have a current installed capacity of 1,747 MW. |
| – | Our Luján de Cuyo plants are located in Luján de Cuyo, Province of Mendoza and have an installed capacity of 576 MW and a steam generating capacity of 125 tons per hour. |
| – | The Group also owns the concession right of the Piedra del Águila hydroelectric power plant located at the edge of Limay River in Neuquén province. Piedra del Águila has four 360 MW generating units. |
| – | The thermal station Brigadier López located in Sauce Viejo, Province of Santa Fe, with an installed power of 280.5 MW (open-cycle operation). |
| – | The thermal cogeneration plant Terminal 6 - San Lorenzo located in Puerto General San Martín, Santa Fe Province, with an installed power of 391 MW and 340 tn/h of steam production. |
| – | The thermal station Costanera located in the City of Buenos Aires consists of a thermal generation plant composed of four turbo-steam units with an installed power capacity of 661 MW and two combined cycle plants with an installed power capacity of 1,128 MW. |
| – | Generation plants using renewable energy sources with a total installed capacity of 473.8 MW of commercially available installed capacity from renewable energy sources, distributed as follows: (i) wind farm La Castellana 100.8 MW; (ii) wind farm La Castellana II 15.2 MW; (iii) wind farm La Genoveva 88.2 MW; (iv) wind farm La Genoveva II 41.8 MW; (v) wind farm Achiras 48 MW; (iv) wind farm Los Olivos 22.8 MW, (vii) wind farm Manque 57 MW and (viii) solar farm Guañizuil II A 100 MW. |
| – | Equity interests in the companies Termoeléctrica José de San Martín S.A. (“TJSM”) and Termoeléctrica Manuel Belgrano S.A. (“TMB”). Those entities operate the two thermal generation plants with an installed capacity of 865 MW and 873 MW, respectively. Additionally, through its subsidiary Central Vuelta de Obligado S.A. (“CVO”) the Group is engaged in the operation of the thermal plant Central Vuelta de Obligado, with an installed capacity of 816 MW. |
During 2022, within the framework of MEyM Resolution No. 281/2017, the Company was awarded the project “Parque Solar San Carlos” (solar power station) for a 10 MW power. This project will be built in San Carlos, Salta province. See Note 20.10.
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CENTRAL PUERTO S.A.
The Group is also engaged in the natural gas distribution sector in the Cuyo and Centro regions in Argentina, through its equity investees belonging to ECOGAS Group. On July 19, 2018, the National Gas Regulation Entity (Enargas) registered the Company with the Registry of Traders and Trade Agreements of Enargas. Later on March 22, 2024, the controlled company Puerto Energía S.A.U. was also registered as a natural gas trader in said registry, and on September 20, 2024, its entry as a Commercial Participant in the Wholesale Electricity Market ("MEM") was authorized.
Also, through Proener S.A.U., a company fully controlled by CPSA, the Group is engaged in the forestry sector since Proener S.A.U. is the parent company of: a) Forestal Argentina S.A. and Loma Alta Forestal S.A.; such companies own forestry assets which consist of 72,000 hectares approximately in Entre Ríos and Corrientes provinces, in which 46,000 hectares approximately are planted with eucalyptus and pine tree, and b) Empresas Verdes Argentina S.A., Las Misiones S.A. and Estancia Celina S.A.; such companies own forest assets that are made of approximately 88,000 hectares in Corrientes province, of which approximately 28,900 hectares are planted with pine out of a total plantable area of approximately 36,900 hectares.
Lastly, the Group has begun to participate in the mining sector through an interest in the Diablillos silver and gold mining project located in northwestern Argentina and an interest in the Tres Cruces lithium mining project located in the province of Catamarca (See Notes 20.8 and 20.9).
| 1.1. | Overview of Argentine Electricity Market |
Transactions among different participants in the electricity industry take place through the wholesale electricity market (“WEM”) which is a market in which generators, distributors and certain large users of electricity buy and sell electricity at prices determined by supply and demand (“Term market”) and also, where prices are established on an hourly basis based on the economic production cost, represented by the short term marginal cost measured at the system’s load center (“Spot market”). CAMMESA (Compañía Administradora del Mercado Mayorista Eléctrico Sociedad Anónima) is a quasi-government organization that was established to administer the WEM and functions as a clearing house for the different market participants operating in the WEM. Its main functions include the operation of the WEM and dispatch of generation and the price calculation in the Spot market, the real-time operation of the electricity system and the administration of the commercial transactions in the electricity market.
After the Argentine economic crisis in 2001 and 2002 and the end of the Convertibility Law, the costs of generators increased as a result of the Argentine peso devaluation. In addition, the price of fuel for their generation increased as well. The increasing generation costs combined with the freezing of rates for the final user decided at the time by the National Government led to a permanent deficit in CAMMESA accounts, which faced difficulties in paying the energy purchases to generators. Due to this structural deficit, the Secretariat of Energy issued a series of regulations to keep the electricity market working despite the deficit.
| 1.2. | Amendments to WEM regulations |
| a) | Resolution SE No. 406/03 and other regulations related to WEM generators’ receivables |
Resolution 406/03 issued in September 2003 enforced priority payments of generator’s balances. Under the priority payment plan, generators only collected the variable generation costs declared and the payments for power capacity and the remaining payments on these plants were delayed as there were not sufficient funds as a result of the structural deficit. Resolution 406/03 established that the resulting monthly obligations to generators for the unpaid balance were to be considered payments without a fixed due date, or “LVFVD receivables” using the Spanish acronym. Although these obligations did not have a specified due date, the Resolution provided that they would earn interest at an equivalent rate to the one received by CAMMESA on its own cash investments, hereafter “the CAMMESA rate”.
As a result of this regulation, a portion of the invoices issued by the Company’s plants were not paid in full beginning in 2004.
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CENTRAL PUERTO S.A.
Between 2004 and 2007, the Argentine government issued a series of resolutions aimed at increasing thermal generation capacity while at the same time providing a mechanism for generators to collect their LVFVD receivables. These resolutions created funds called the “FONINVEMEM” which were administered by trusts (“the FONINVEMEM trust”) to made investments in two thermal generation plants within Argentina. All WEM creditor agents with LVFVD (including the Company) were invited to state formally their decision to participate in forming the FONINVEMEM. The Company, like most LVFVD generators, stated its decision to participate in the creation of the FONINVEMEM with the abovementioned receivables.
Within this framework, generators created the companies Termoeléctrica José de San Martín S.A. (“TSM”) and Termoeléctrica Manuel Belgrano S.A. (“TMB”), which were engaged in managing the purchase of equipment, and the building, operating and maintaining of each new power plant.
Under these Resolutions, the trusts Central Termoeléctrica Timbúes ("FCTT") and Central Termoeléctrica Manuel Belgrano ("FCTMB") were the owners of the Central Termoeléctrica San Martin and Central Termoeléctrica Belgrano plants during the first ten years of operations. The Trusts were aimed at administrating, each of them, 50% of the resources accrued under FONINVEMEM and other funds for the purpose of financing the power stations. Under these agreements, CAMMESA acted as a Trustor, Banco de Inversión y Comercio Exterior (“BICE”) as Trustee, the Secretariat of Energy as regulatory authority and TSM and TMB as Trust Beneficiaries and the Company, with the remaining shareholders of TSM and TMB, as guarantors of the obligations of the latter.
The trust agreements were to remain in force until the termination date of the supply agreement that the Trustee - in representation of the Trust - entered into with CAMMESA - as the purchasing party - that had to remain valid for 10 years from the date of the commercial authorization of the power stations. Upon the termination of that term, the trust assets were to be transferred to TSM and TMB provided that, prior to such transference, TSM and TMB and their shareholders had performed all the corporate acts necessary to allow private contributors and/or the Argentine Government to receive their corresponding shares in the capital of the power stations pursuant to the terms of the agreement. If this condition was not met, holders of interest certificates (Argentine Government) and the generators who are the current shareholders of TSM and TMB shall be deemed trust beneficiaries.
The FONINVEMEM agreements established
that the receivables mentioned above were to be paid by CAMMESA in 120 equal, consecutive monthly installments commencing on the commercial
operation date of the plants. Also, the agreements established that the LVFVD receivables were to be collected and converted to US dollar
and would
Once Manuel Belgrano and San Martin plants were commissioned (on January 7, 2010 and February 2, 2010, respectively), CAMMESA began paying the LVFVD receivables. In May 2010, CAMMESA informed the Company of the payment plan, including the amount of accrued interest at the CAMMESA rate which was added to the principal to be repaid in monthly installments over a ten-year period. Upon receipt of the payment schedule, the Company recognized accrued interest (related to the CAMMESA rate). The Company also began recognizing LIBOR interest income based on the contractual rate provided in the Resolution and the conversion of the receivables into US dollar. Since achieving commercial operations in 2010, CAMMESA has made all scheduled contractual principal and interest payments in accordance with the installment plan.
On January 7, 2020, the supply agreement with TMB was terminated and on February 2, 2020, the supply agreement with TSM was terminated, therefore payments of the final installment of the 120 established in the agreement for each power stations ceased. As a result, the reimbursement for the LVFVD receivables was deemed complete.
Additionally, in 2010 the Company approved
a new agreement with the former Secretariat of Energy (Central Vuelta Obligado, the “CVO agreement”). This agreement established,
among other things, a framework to determine a mechanism to settle unpaid trade receivables as per Resolution No. 406/03 accrued over
the 2008 - 2011 period by the generators (“CVO receivables”) and to enable the construction of a thermal combined cycle plant
named Central Vuelta de Obligado. The CVO agreement established that the CVO receivables were to be paid by CAMMESA in 120 equal and
consecutive monthly installments. For the determination of the novation of CVO credits, the following mechanism was applied: the cumulative
LVFVD (sale settlements with due date to be defined) were converted to USD at the exchange rate established in the agreement (ARS 3.97
per USD for the cumulative LVFVD until the execution date of the CVO Agreement and the closing exchange rate corresponding to each month
for the LVFVD subsequently accumulated), and the LIBOR rate was applied plus a 5% margin.
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CENTRAL PUERTO S.A.
Effective March 20, 2018, CAMMESA granted the commercial operations for a combined cycle of Central Vuelta de Obligado thermal power plant (the “Commercial Approval”). The financial impact of the Commercial Approval is described in Note 13.1.
Under the agreement mentioned above, generators created the company Central Vuelta de Obligado S.A., which was responsible for managing the purchase of equipment and construction and operation and maintenance of the Central Vuelta de Obligado thermal power plant.
TSM and TMB
After termination of the supply agreements with TSM and TMB dated February 2, 2020 and January 7, 2020, respectively, trust agreements also terminated. As from those dates, a 90-day period commenced in which TSM and TMB and their shareholders had to perform all the company acts necessary to allow the Argentine Government to receive the corresponding shares in the capital of TSM and TMB that their contributions gave them rights to.
On January 3, 2020, i.e. before the aforementioned 90-day period commenced, the Argentine Government (through the Ministry of Productive Development) served notice to the Company (together with TSM, TMB and their other shareholders and BICE, among others) stating that, according to the Final Agreement for the Re-adaptation of WEM, TSM and TMB shall perform the necessary acts to incorporate the Argentine Government as shareholder of both companies, acknowledging equity interest rights: 65.006% in TMB and 68.826% in TSM.
On January 9, 2020, the Company, together with the other generation shareholders of TSM and TMB, rejected such act understanding that the equity interest the Government claimed does not correspond with the contributions made for the construction of the power stations and that gave it the right to claim such equity interest.
On March 4, 2020, the Company was notified on two notes sent by the Minister of Productive Development whereby he answered the one sent by the Company on January 9, 2020 - mentioned above -, ratifying the terms of the note notified to the Company on January 3, 2020. In March 2020, the Company raised a reconsideration motion, with hierarchical supplementary appeal, against the Argentine Government’s order for the acts mentioned above.
On May 4 and 8, 2020, the Company attended the Special Shareholder’s Meetings of TMB and TSM, respectively, in which the admission of the Argentine Government as shareholder of TSM and TMB was allowed, in accordance with the shareholding interest claimed by the Argentine Government. This was done with the sole purpose of complying with the suspensive condition established in the respective Trust Agreements, which stated that for the trusted equity -comprised, among others, by the power plants- to be transferred to the companies TSM and TMB within a 90-day period counted from the end of the supply agreements, such companies and their shareholders (among which the Company is included) should allow the entry of the Argentine Government in TSM and TMB, receiving the same amount of shares representing the contributions made by the Argentine Government for the construction of the plants and giving it the right to claim such interest.
In both cases, when the mentioned Shareholders’ Meetings were held, through which the Argentine Government was allowed to become shareholder of TMB and TSM due to its interest claim, the Company made the corresponding reservation of rights in order to continue the abovementioned claims already commenced.
On November 19, 2020, BICE (in its capacity as trustee of both trust agreements) had the condition precedent established in the Trust Agreements fulfilled since the necessary corporate acts for the Argentine Government to be allowed as shareholder of TSM and TMB were performed. Finally, on March 11, 2021, the Argentine Government subscribed its shares in TSM and TMB. In this way, the Group´s equity interest in TSM and TMB changed from 30.8752% to 9.6269% and from 30.9464% to 10.8312%, respectively. As of the date of these financial statements, the transference of power stations has not been made to TSM and TMB.
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CENTRAL PUERTO S.A.
On the other hand, the Company, together with the other shareholders of TSM and TMB (as guarantor within the framework and the limits stated by the Final Agreement for the Re-adaptation of WEM, Note SE no. 1368/05 and trust agreements), BICE, TSM, TMB and SE signed: a) on January 7, 2020 an amendment addendum of the Operation and Maintenance (“OMA”) of Thermal Plant Manuel Belgrano and b) on January 9, 2020 an amendment addenda of the Operation and Maintenance Agreement (“OMA”) of Thermal Plant San Martín, which extended the operating period until the effective transference of the trust’s liquidation equity.
As result of the business combination described in Note 2.2.20, the Group´s equity interest in TSM and TMB was increased from 9.6269% to 11.3069% and from 10.8312% to 12.7212%, respectively.
The values recorded in these financial statements for the investments in TMB and TSM are included in non- current assets under other financial assets.
| b) | Resolution No. 95/2013, Resolution No. 529/2014, Resolution No. 482/2015 and Resolution No. 22/2016 |
On March 26, 2013, the former Secretariat of Energy released Resolution No. 95/2013 (“Resolution 95”), which affected the remuneration of generators whose sales prices had been frozen since 2003. This new regulation, which modified the regulatory framework for the electricity industry, was applicable to generators with certain exceptions. It defined a new compensation system based on compensating for fixed costs, non-fuel variable costs and an additional remuneration. Resolution 95 converted the Argentine electric market towards an “average cost” compensation scheme. Resolution 95 applied to all the Company’s plants, excluding La Plata plant, which sold energy in excess of YPF’s demand on the Spot market pursuant to the framework in place prior to Resolution 95.
In addition, Resolution 95 established that those Sales Settlements with Maturity Dates to be Defined (“LVFVD”) issued by CAMMESA through the application of Resolution 406 that were not committed to the execution of investment and/or maintenance works of existing equipment, should be allocated to the integration of trust estate in the aforementioned trust.
Thermal units had to achieve an availability target which varied by technology in order to receive full fixed cost revenues. The availability of all the Company’s plants exceeds the market average. As a result of Resolution 95, revenues to Company’s thermal units increased, but the impact on the hydroelectric plant Piedra del Águila was dependent on hydrology. The new Resolution also established that all fuels, except coal, would be provided by CAMMESA.
This resolution also established that part of the additional remuneration would not be collected in cash rather it would be implemented through LVFDV and would be directed to a “New Infrastructure Projects in the Energy Sector” which needed to be approved by the former Secretariat of the Energy.
Finally, Resolution 95 temporarily suspended the inclusion of new contracts in the Term market as well as their extension or renewal. Notwithstanding the foregoing, contracts in force as at the effective date of Resolution 95 were continue being managed by CAMMESA upon their termination. As from such termination, large users would acquire their supplies directly from CAMMESA. Also, Resolution 95 temporarily suspended the acquisition of fuel by the generation agents. All fuel purchases for the generation of electric power were centralized through CAMMESA.
On May 23, 2014, Resolution SE No. 529/2014 was published in the Argentine Official Gazette (“Resolution 529”) and was to be applied starting from February 2014 transactions. Resolution 529 modified Resolution 95 by increasing the amounts that remunerate fixed costs, variable costs and additional remuneration of the Comprised Generators in MEM (Wholesale Electricity Market) of the conventional thermal type or national hydro type. Resolution 529 included a new “Remuneration of Non-Recurrent Maintenance” scheme for the Comprised Generators. This new remuneration was determined monthly and its calculation was made based on the total generated energy. Regarding this aspect, CAMMESA was instructed to issue LVFVD for the financing of major maintenances subject to the approval of the former SE.
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CENTRAL PUERTO S.A.
On July 17, 2015, the Secretariat of Electric Energy set forth Resolution No. 482/2015 (“Resolution 482”) which retroactively updated the prices of Resolution 529 to February 1, 2015, and created a new trust called “Recursos para las inversiones del FONINVEMEM 2015-2018” in order to invest in new generation plants. The Company’s plants would receive compensation under this program.
Finally, on March 30, 2016, through Resolution No. 22/2016 (“Resolution 22”), the values set by Resolution 482 were updated to become effective starting from the transactions of February 2016.
| c) | Resolution No. 19/2017 |
On February 2, 2017, the Secretariat of Electric Energy (“SEE”) issued Resolution SEE No. 19/17 (Resolution 19), which replaced Resolution 95, as amended. This resolution changed electric energy generators remuneration methodology for transactions operated since February 1, 2017, which were previously covered by Resolution 95 as amended (see section b in this note).
Resolution 19 substantially amended the tariff scheme applicable, which was previously governed by Resolution 22. Among its most significant provisions, such resolution established: (a) that generation companies would receive a remuneration of electric power generated and available capacity, (b) gradual increases in tariffs effective as of February, May and November 2017, (c) that the new tariffs would be denominated in U.S. dollars, instead of Argentine pesos, thus protecting generation companies from potential fluctuations in the value of the Argentine peso and (d) 100% of the energy sales would be collected in cash by generators, eliminating the creation of additional LVFVD receivables.
Pursuant to this resolution, the Secretariat of Electric Energy established that electricity generators, co- generators and self-generators acting as agents in the WEM and which operate conventional thermal power plants, may make guaranteed availability offers (ofertas de disponibilidad garantizada) in the WEM. Pursuant to these offers, these generation companies may commit specific capacity and power output of the generation, provided that such capacity and energy have not been committed under other power purchase agreements. The offers must be accepted by CAMMESA (acting on behalf of the electricity demanding agents of the WEM), who will be the purchaser of the power under the guaranteed availability agreements (compromisos de disponibilidad garantizada). The term of the guaranteed availability agreements is 3 years, and their general terms and conditions are established in Resolution 19.
Resolution 19 also established that WEM agents that operate hydroelectric power plants would be remunerated for the energy and capacity of their generation units in accordance with the values set forth in such resolution.
| d) | SGE (Secretaría de Gobierno de Energía) Resolution No. 70/2018 and Ministry of Productive Development Resolution No. 12/2019 |
On November 6, 2018, Resolution No. 70/2018 of the SGE was published, which resolution replaced Article 8 of Resolution issued by former SE no. 95/2013. The new article allowed MEM Generators, Autogenerators and Cogenerators to obtain their own fuel. This did not alter the commitments assumed by Generation Agents within the context of MEM supply agreements with CAMMESA. It was established that generation costs with their own fuel would be valued according to the recognition mechanism of Average Variable Costs (“CVP”) recognized by CAMMESA. The Resolution also established that regarding those Generators not purchasing their own fuel, CAMMESA would continue the commercial management and the fuel supply.
Regarding this matter, under Resolution No. 12/2019 by the Ministry of Productive Development (published in the Official Gazette on December 30, 2019) fuel purchase for the generation of electric power was once again centralized through CAMMESA, therefore repealing the effect of Resolution No. 70/2018 of the former Secretariat of Energy, and Section 8 of Resolution No. 95/2013 of the former Secretariat of Energy and Section 4 of Resolution No. 529/2014 of the former Secretariat of Energy were back in force.
| e) | Resolution of the Secretariat of Renewable Resources and Electricity Market no. 1/2019 |
On March 1, 2019 Resolution No.
1/2019 (“Resolution 1”) of the Secretariat of Renewable Resources and Electricity Market was published in the Official Gazette
by virtue of which Resolution 19 was abolished. It established the new remuneration values of energy, power and associated services for
the affected generators, as well as their application methodology. Its validity commenced on the date of its publication in the Official
Gazette.
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CENTRAL PUERTO S.A.
According to Resolution 1, the approved remuneration system would be of transitional application and until the following would be defined and gradually implemented: regulatory mechanisms aimed at reaching an autonomous, competitive and sustainable operation that allows for freedom of contract between supply and demand; and a technical, economical and operative functioning for the integration of different generation technologies so as to guarantee a reliable and cost effective system.
The following were the main changes introduced by Resolution 1 in connection with Resolution 19:
Energy Sale:
| – | The price of energy generated by thermal power stations was reduced. Therefore, the price for energy generated with natural gas was of 4 USD/MWh and 7 USD/MWh for energy generated with liquid fuel. |
| – | The price of energy operated by thermal power stations was reduced. Therefore, the price for energy operated with any fuel was of 1.4 USD/MW. |
| – | The price for energy generated from non-conventional energy sources (renewable energies) was fixed at 28 USD/MWh. |
Power Sale:
| – | DIGO price (established by Resolution 19) went from 7,000 USD/MW-month during the twelve months of the year to 7,000 USD/MW-month the six months of higher seasonal demand for electrical energy (December, January, February, June, July and August) and to 5,500 USD/MW-month the remaining months of the year (March, April, May, September, October and November). |
| – | Some minimum values of offered availability are reduced. Its compliance was subject to the foregoing prices. |
| – | A weighting factor was fixed for the foregoing prices, between 1 and 0.7, depending on the use factor of the twelve months previous to each month of the transaction. |
| f) | Resolution No. 31/2020 of the Secretariat of Energy |
On February 27, 2020, the Secretariat of Energy published in the Official Gazette Resolution No. 31 (“Resolution 31”) which sets forth the criteria to calculate the economic transactions of energy and power that the generating parties commercialize in the spot market, which was in force as from February 1, 2020.
This new regulation, contrary to Resolution 1, establishes all prices for the remuneration of energy and power in Argentine pesos, and it sets forth that the prices would be adjusted on a monthly basis with a formula based on the evolution of Consumer Price Index (IPC) and the Domestic Wholesale Price Index (IPIM). New power prices were generally reduced in relation to the current prices as of January 2020, and the energy prices remained equivalent, expressed in Argentine pesos instead of US dollars. Finally, this regulation introduced a new remuneration component which applied to the energy generated during the first 50 hours of maximum thermal requirement of the month (MTR, which is determined by the sum of the hours of all the thermal generation of the system), it determines different remuneration prices based on the season of the year and the energy delivered during the first and second 25 hours of MTR.
On April 8, 2020, the Company learned that the Secretariat of Energy instructed CAMMESA to postpone until further notice the application of the price update mechanism described in the second paragraph of this note. Accordingly, CAMMESA did not apply the price update mechanism to the energy and power sold since March 2020.
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CENTRAL PUERTO S.A.
| g) | Secretariat of Energy Resolution No. 440/2021 |
Through Resolution No. 440 (“Resolution 440”), published in the Official Gazette on May 21, 2021, the Secretariat of Energy established a new remuneration scheme for MEM generation agents. In this regard, Exhibits II, III, IV and V of Resolution 31 were replaced. Moreover, section 2 of Resolution 31, which established a system for the automatic updating of remuneration values, was repealed. In general terms, Resolution 440 increased the remuneration values of generation agents by 29% compared to Resolution 31.
It was established that for what Resolution 440 set forth (collection of the new values as from February 2021 transactions, among others), MEM generation agents must submit before CAMMESA a note -to CAMMESA’s satisfaction- stating full and unconditional withdrawal of any administrative complaint or ongoing judicial procedure against the National Government, the Secretariat of Energy and/or CAMMESA, related to section 2 of Resolution 31. Dated June 17, 2021, the Company submitted the requested withdrawal note.
In addition, on November 9, 2021, the Secretariat of Energy established that in order to determine the Power Availability Remuneration of thermal generators under Resolution 440, a constant Utilization Factor equal to 70% must be considered.
| h) | Secretariat of Energy Resolution No. 354/2020 |
This resolution established, among other things, that as from the effectiveness of Plan “GasAr” (Plan Gas 4), Generators of WEM may adhere to centralized dispatch, assigning CAMMESA such contracts entered into with producers or transporters of natural gas, so that such contracts are used by the Dispatch Entity (OED for its acronym in Spanish), based on dispatch criteria.
In addition, this resolution established that generation agents who, pursuant to Resolution No. 287/2017, have the obligation of self-procuring fuel are able to deem such obligations null and therefore, have their associated costs recognized, and they must keep maintenance of the transport capacity for its management in centralized dispatch, as long as CAMMESA determines the convenience of having such.
| i) | Secretariat of Energy Resolution No. 238/2022 |
On April 21, 2022, Resolution No. 238/2022 ("Resolution 238") issued by the Secretariat of Energy was published in the Official Gazette. This resolution updates remuneration prices for energy and capacity of generation units not committed on a Purchase Power Agreement, it replaces Annex I to V of the former Resolution No. 440/2021 and it abolishes section 4 of Resolution No. 1037/2021, which granted an additional and temporary increase to generators remuneration. It also removes the Use Factor from the capacity payment calculation, improving revenue performance.
Resolution 238 increased by 30% the remuneration values starting February 2022, and it provided an additional 10% above the new values starting in June 2022.
| j) | Secretariat of Energy Resolution No. 826/2022 |
On December 14, 2022, Resolution No. 826/2022 (“Resolution 826”) issued by the Secretariat of Energy was published in the Official Gazette, through which the power and energy remuneration values of the generation not committed under contracts were updated. Exhibits I to V of Resolution No. 238 were replaced therein, and a 20% retroactive increase was ordered as of September 1, 2022, as well as the following consecutive increases: 10% as from December 1, 2022, 25% as from February 1, 2023 and 28% as from August 1, 2023.
| k) | Secretariat of Energy Resolution No. 59/2023 |
On February 7, 2023, Resolution No. 59/2023 (“Resolution 59”) was published in the Official Gazette whereby generators with combined cycle units are authorized to adhere to the Power Availability and Efficiency Improvement Agreement (the "Agreement") so as to foster the necessary investments for major and minor maintenance of the equipment.
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CENTRAL PUERTO S.A.
Through this agreement, adhering generators commit to reach, at least, 85% of monthly average power availability in exchange of a new power and energy price formed, in part, by amounts denominated in US dollars. In the case of power, a 2,000 USD/MW-month, plus the amount in ARS corresponding to the 85% and 65% of the power value established by Resolution 826 is set for the spring/autumn and summer/winter periods, respectively. Additionally, the price for generated energy is set at 3.5 USD/MWh in case of using gas, and at 6.1 USD/MWh in case of alternative fuel (gasoil) use.
On April 25, 2023, CAMMESA accepted the subscription to the Agreement of all the Group's combined cycle units, except for the unit so-called Buenos Aires that belongs to Central Costanera S.A. Hence, an increase in the remuneration of these units for their sales to the spot market occurred from the transactions since March 2023, as described in the preceding paragraph.
Regarding Buenos Aires combined cycle, on July 28, 2023 CAMMESA agreed to the Agreement subscription by Central Costanera S.A. (valid as from July transactions), once the Secretariat of Energy successfully ordered CAMMESA the following regarding the mentioned thermal unit: a) conversion to mono-fuel, i.e. operation just with natural gas, eliminating the possibility of operation with gas oil; and b) the adequation of the installed capacity to the real technical possibility of energy generation by the combined cycle. During the month of October 2023, the corrective maintenance tasks of this unit were concluded, therefore, the increases in the remuneration of this unit were applied as from the transactions of October 2023.
| l) | Secretariat of Energy Resolution No. 574/2023, 2/2024, 33/2024 and 78/2024. PEN Decree No. 718/2024 |
On July 11, 2023, Resolution No. 574/2023 was published, which extended for 60 days (with the possibility of being extended for 60 days more) the termination date for the Concession Agreement of the Hydroelectric Power Station Piedra del Águila, among other Argentine Hydroelectric Power Stations, whose concession term was set to end during 2023.
On January 17, 2024, through Resolution No. 2/2024, published in the Official Gazette, the transition period of the concession agreement was extended for 60 days starting February 28, 2024. Then, through Resolution No. 33/2024, published in the Official Gazette on March 18, 2024, the termination term of the concession agreement was extended again for 60 days starting April 28, 2024, so that term expires on June 27, 2024.
On May 17, 2024, through Resolution No. 78/2024, the transition period of the concession contract was extended until the end of the term established in the contract, that is, December 28, 2024.
On August 12, 2024, PEN Decree No. 718/2024 was published in the Official Gazette, which extended for one year the term to continue operating the Piedra del Águila Hydroelectric Complex by CPSA in its capacity as concessionaire, with a maximum date of December 28, 2025. The mentioned Decree also establishes that, within one hundred and eighty days of its publication, the Secretariat of Energy will call for a National and International Public Tender in order to proceed with the sale of the stock package of the companies created for each of the hydroelectric power stations of Comahue.
| m) | Secretariat of Energy Resolution No. 750/2023 |
On September 6, 2023, Secretariat of Energy Resolution No. 750/2023 (“Resolution 750”) was published in the Official Gazette. Resolution 750 updated the amounts of remuneration for power and energy for the generation which is not committed in contracts. Thus, Annexes I to IV of Resolution 826 were replaced and a 23% increase as from September 1, 2023 was established.
| n) | Secretariat of Energy Resolution No. 869/2023 |
On October 30, 2023, Secretariat of Energy Resolution No. 869/2023 (“Resolution 869”) was published in the Official Gazette. Resolution 869 updated the amounts of remuneration for power and energy of the generation which is not committed in contracts. Thus, Annexes I to IV of Resolution 750 were replaced and a 28% increase as from November 1, 2023 was established.
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CENTRAL PUERTO S.A.
| ñ) | Secretariat of Energy Resolution No. 9/2024, 99/2024, 193/2024, 233/2024, 285/2024, 387/2024 and 603/2024, Secretariat for the Coordination of Energy and Mining Resolution No. 20/2024 |
On February 8, 2024, Resolution No. 9/2024 (“Resolution 9”) of the Secretariat of Energy was published in the Official Gazette. This Resolution updated the power and energy remuneration values of the generation not committed under contracts. In addition, Exhibits I to IV of Resolution No. 869 were replaced and a 74% increase effective as from February 1, 2024 was established.
On June 14, 2024, Resolution No. 99/2024 issued by the Secretariat of Energy was published in the Official Gazette, through which the power and energy remuneration values of the generation not committed under contracts were updated. This resolution replaces Exhibits I to V of Resolution No. 9/2024 and establishes a 25% increase effective as from June 1, 2024.
On August 2, 2024, Resolution No. 193/2024 issued by the Secretariat of Energy was published in the Official Gazette, through which the power and energy remuneration values of the generation not committed under contracts were updated. This resolution replaces Exhibits I to V of Resolution No. 99/2024 and establishes a 3% increase effective as from August 1, 2024.
On August 30, 2024, Resolution No. 233/2024 issued by the Secretariat of Energy was published in the Official Gazette, through which the power and energy remuneration values of the generation not committed under contracts were updated. This resolution replaces Exhibits I to V of Resolution No. 193/2024 and establishes a 5% increase effective as from September 1, 2024.
On September 30, 2024, Resolution No. 285/2024 issued by the Secretariat of Energy was published in the Official Gazette, through which the power and energy remuneration values of the generation not committed under contracts were updated. This resolution replaces Exhibits I to V of Resolution No. 233/2024 and establishes a 2,7% increase effective as from October 1, 2024.
On November 1, 2024, Resolution No. 20/2024 issued by the Secretariat for Coordination of Energy and Mining was published in the Official Gazette, through which the power and energy remuneration values of the generation not committed under contracts were updated. This resolution replaces Exhibits I to V of Resolution No. 285/2024 and establishes a 6% increase effective as from November 1, 2024.
On December 2, 2024, Resolution No. 387/2024 issued by the Secretariat of Energy was published in the Official Gazette, through which the power and energy remuneration values of the generation not committed under contracts were updated. This resolution replaces Exhibits I to V of Resolution No. 20/2024 and establishes a 5% increase effective as from December 1, 2024.
On December 27, 2024, Resolution No. 603/2024 issued by the Secretariat of Energy was published in the Official Gazette, through which the power and energy remuneration values of the generation not committed under contracts were updated. This resolution replaces Exhibits I to V of Resolution No. 387/2024 and establishes a 4% increase effective as from January 1, 2025.
| o) | Secretariat of Energy Resolution No 294/2024 |
On October 2, 2024, Resolution No. 294/2024 ("Resolution 294") issued by the Secretariat of Energy was published in the Official Gazette, which establishes a "Contingency and Forecast Plan for critical months of the 2024/2026 period", defining measures that cover the supply of generation, transportation and distribution of energy.
For generation, an additional, complementary and exceptional remuneration is proposed subject to a commitment of availability in machines that are not committed under contracts with the MEM or that have not adhered to S.E. Resolution No. 59/2023.
Adhering to this regulation, generators assume a commitment to power availability for each unit, at certain times of the day, characterized as critical, during the working days of the summer months (December to March) and winter (June to August). Remuneration prices are defined in dollars, both for compliance with power availability (US$2,000/MW-month) and for the energy generated in the hours included in the evaluation periods indicated above, as shown below:
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CENTRAL PUERTO S.A.
|
Technology |
Natural Gas USD/MWh |
Fuel Oil USD/MWh |
Gas Oil USD/MWh |
Biofuels USD/MWh |
Coal USD/MWh | |||||
| GT | - | - | ||||||||
| ST | - | |||||||||
| Engines | - |
To determine the remuneration of each unit, the prices of power and energy will be affected by a criticality factor, which may vary between 0.75 and 1.25, depending on the nodes in which the units are linked to the transmission system.
The Group adhered to Resolution 294 with the steam turbine (ST) units located in Buenos Aires and Luján de Cuyo and the gas turbine (GT) units located in Luján de Cuyo and the Brigadier López thermal power plant.
| p) | Secretariat of Energy Resolution No 58/2024 and 66/2024 |
On May 8, 2024, Secretariat of Energy
Resolution No. 58/2024 as amended by Resolution No. 66/2024 was published in the Official Gazette (the “Resolution”) whereby
an exceptional, temporary, and unique payment regime was established for MEM transactions for December 2023, and January and February
2024. Such Resolution (i) orders CAMMESA to prepare and determine the amounts of the credit for the economic transactions with each of
MEM Creditor Agents in a term of 5 (five) working days from the effective date of the Resolution; (ii) establishes that the lack of agreement
regarding such amounts authorizes the Creditor Agents to resort to the corresponding judicial, administrative and/or out-of-court means;
(iii) stipulates that once the amounts are determined and the corresponding agreements are signed, CAMMESA shall pay the transactions
as follows: a) the settlement for the transactions for December 2023 and January 2024 shall be paid 10 (ten) working days from the date
of individual agreements through the delivery of bond AE38 USD; the calculation of nominal amounts to be delivered per each bond shall
be at the reference exchange rate (Communication “A” 3500) at the quote in force at closing on the date of the formal acceptance
by Creditor Agents; b) settlement for February 2024 shall be paid with available funds in bank accounts authorized in CAMMESA for collection
and with the available funds from the transfers made by the Argentine State to the Unified Fund allocated to the Stabilization Fund. The
Group´s MEM economic transactions for December 2023 and January and February 2024 amount to
On May 23, 2024, the Group entered into
agreements with CAMMESA under the provisions of the Resolution. As a result of these agreements, the Group recognized a loss of
| q) | Secretariat of Energy Resolution No 21/2025 |
On January 28, 2025, Secretariat of Energy Resolution No. 21/2025 was published in the Official Gazette, establishing that new conventional electric power generation projects, commercially enabled as of January 1, 2025, may enter into supply contracts in the Term Market with Large Users and Distributors. Additionally, Resolution No. 354/2020 issued by the Secretariat of Energy was repealed, modifying some considerations of the GasAr Plan and the priorities for natural gas consumption in the Electric Market. It was also established that as of March 1, 2025, generators selling their energy in the spot market may purchase their fuel, and it will be recognized by CAMMESA according to the variable production cost declared and recognized by the generator. The cost of unsupplied energy in the MEM was also set, with a maximum value of 1500 USD/MWh when it exceeds 10% of the system's demand. Finally, the Energía Plus scheme was repealed, with existing contracts remaining in force until their termination.
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CENTRAL PUERTO S.A.
| r) | Secretariat of Energy Resolution No 67/2025 |
On February 17, 2025, Secretariat of Energy Resolution No. 67/2025 was published in the Official Gazette, authorizing the National and International Open Call "Almacenamiento AlmaGBA" to enter into storage generation contracts with MEM distributor agents Edenor and Edesur, with CAMMESA as the last resort payment guarantor, in accordance with the terms and conditions approved by this resolution.
This new energy storage system will cover short-term capacity requirements and provide fast-response reserve services, as evidenced by Battery Energy Storage Systems.
| 2. | Basis of preparation of the consolidated financial statements |
| 2.1. | Basis of preparation |
The consolidated financial statements of the Group have been prepared in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (IASB).
The attached financial statements have been prepared in order to be included in a Securities and Exchange Commission (“SEC”) filing and have been approved by the Company’s Board of Directors on April, 25, 2025.
These consolidated financial statements provide comparative information in respect of the previous years.
In preparing these consolidated financial statements, the Group applied the material accounting policies, estimates and assumptions described in Notes 2.2 and 2.3, respectively. Moreover, the Group has adopted the changes in accounting policies described in Note 2.4.
The Group’s consolidated financial statements are presented in Argentine pesos, which is the Group’s functional currency, and all values have been rounded to the nearest thousand (ARS 000), except when otherwise indicated.
| 2.1.1. | Basis of consolidation |
The consolidated financial statements as of December 31, 2024 and 2023 and for each of the years ended December 31, 2024, 2023 and 2022, include the financial statements of the Group formed by the parent company and its subsidiaries: Central Vuelta de Obligado S.A., Proener S.A.U., and its controlled companies, Vientos La Genoveva S.A.U., Vientos La Genoveva II S.A.U. and CP Renovables S.A. and its subsidiaries.
Control is achieved when the investor is exposed or entitled to variable returns arising from its ownership interest in the investee, and has the ability to affect such returns through its power over the investee. Specifically, the investor controls an investee, if and only if it has:
| – | Power over the investee (i.e. the investor has rights that entitle it to direct the relevant activities of the investee). |
| – | Exposure or right to variable returns arising from its ownership interest in the investee. |
| – | Ability to exercise its power over the investee to significantly affect its returns. |
Consolidation of a subsidiary begins when the parent company obtains control over the subsidiary and ends when the parent company loses control over the subsidiary. The assets, liabilities, income and expenses of a subsidiary acquired or sold during the fiscal year are included in the consolidated financial statements from the date on which the parent company acquired control of the subsidiary to the date on which the parent company ceased to control the subsidiary.
| F-20 |
CENTRAL PUERTO S.A.
The result for the fiscal year and each component of the other comprehensive income (loss) are assigned to the owners of the parent company and non-controlling interests, even if the results of the non-controlling interests give rise to a debit balance. If necessary, appropriate adjustments are made to the subsidiaries’ financial statements so that their accounting policies are in accordance with the Group’s accounting policies. All assets and liabilities, equity, income, expenses and cash flows within the Group that relate to transactions among the members of the Group are completely eliminated in the consolidation process.
A change in ownership interest in a subsidiary, without loss of control, is accounted for as an equity transaction. If the Group loses control of a subsidiary, it cancels the carrying amount of the assets (including goodwill) and related liabilities, non-controlling interests and other equity components, while recognizing the profit or loss resulting from the transaction in the relevant income statement.
| 2.1.2. | Measuring unit |
The financial statements as at December 31, 2024, including the figures for the previous periods (this fact not affecting the decisions taken on the financial information for such periods) were restated to consider the changes in the general purchasing power of the functional currency of the Company (Argentine peso) pursuant to IAS 29. Consequently, the financial statements are stated in the current measurement unit at the end of the reported period.
In accordance with IAS 29, the restatement of the financial statements is necessary when the functional currency of an entity is the currency of a hyperinflationary economy. To define a hyperinflationary state, the IAS 29 provides a series of non-exclusive guidelines that consist on (i) analyzing the behavior of the population, prices, interest rates and wages before the evolution of price indexes and the loss of the currency’s purchasing power, and (ii) as a quantitative characteristic, which is the most considered condition in practice, verifying if the three-year cumulative inflation rate approaches or exceeds 100%.
Due to different macroeconomic factors, the triennial inflation in 2024 was higher than such figure, as the goals of the Argentine government, and other available projections, indicate that this trend will not revert in the short term.
So as to evaluate the mentioned quantitative condition and to restate the financial statements, the Argentine Securities Commission established that the series of indexes to be used in the IAS 29 application is the one established by the Argentine Federation of Professional Councils in Economic Sciences.
Considering the before mentioned index, the inflation was 117.76%, 211.41% and 94.79% for the years ended December 31, 2024, 2023 and 2022, respectively.
The following is a summary of the effects of the IAS 29 application:
Restatement of the Balance Sheet
| (i) | The monetary items (those with a fixed face value in local currency) are not restated since they are stated in the current measurement unit at the closing date of the reported period. In an inflationary period, keeping monetary assets causes the loss of purchasing power, and keeping monetary liabilities causes gain in purchasing power as long as those items are not tied to an adjustment mechanism compensating those effects. The monetary loss or gain is included in the income (loss) for the reported period. |
| (ii) | The assets and liabilities subject to changes established in specific agreements are adjusted in accordance with those agreements. |
| (iii) | Non-monetary items measured at their fair values at the end of the reported period are not restated to be included in the balance sheet; however, the adjustment process must be completed to determine the income (loss) produced for having those non-monetary items in the terms of a uniform measurement unit. |
As at December 31, 2024 and 2023, the Company counted with the following items measured with the current value method: biological assets and the share kept in foreign currency of the items Trade and other receivables, Cash and cash equivalents, Other financial assets, Loans and borrowings and Trade and other payables.
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CENTRAL PUERTO S.A.
| (iv) | Non-monetary items at historical cost or at fair value of a date previous to the end of the reported period are restated at rates reflecting the variation occurred at the general level of prices from the acquisition or revaluation date until the end of the reported period; then the amounts restated for those assets are compared with the corresponding recoverable values. Charges to the income (loss) for the period due to property, plant and equipment depreciation and intangible assets amortization, as well as other non- monetary assets consumption are determined in accordance with the new restated amounts. |
As at December 31, 2024 and 2023, the items subject to this restatement process were the following:
| – | Non-monetary items measured at fair value of a date previous to the end of the reported period: certain machines, equipment, turbogroups and auxiliary equipment of the Property, Plant and Equipment item, which were measured at their fair value as at January 1, 2011 (transition date to IFRS Accounting Standards as issued by the International Accounting Standards Board (IASB)) and Property, Plant and Equipment items acquired in business combinations which were measured at fair value at acquisition date. |
| – | Non-monetary items at historical cost: the remaining items of Property, Plant and Equipment, Intangible assets, Investment in associates, Inventories and Deferred income tax liabilities and assets. |
| (v) | When borrowing costs in non-monetary assets are capitalized in accordance with IAS 23, the share of those cost compensating the creditor for the effects of inflation is not capitalized. |
The Company proceeded to the capitalization of borrowing costs as stated in Note 2.2.6.
| (vi) | The restatement of the non-monetary assets in the terms of a current measurement unit at the end of the reported period without an equivalent adjustment for tax purposes leads to a temporary taxable difference and to the recognition of a deferred-tax liability whose balancing entry is recognized in the income (loss) for the period. In Note 8 the effects of this process are detailed. |
Restatement of the statement of income (loss) and other comprehensive income
| (i) | The expenses and income are restated as from the date of accountable entry, including interest and currency exchange differences, except for those items not reflecting or including in their determination the consumption of assets measured in currency of purchasing power previous to the consumption entry, which are restated taking into account the origin date of the asset related to the item (for example, depreciation, devaluation and other consumptions of assets valued at historical cost); and except for income (loss) emerging from comparing two measurements expressed in currency of purchasing power of different dates. For such purpose, it is necessary to identify the compared amounts, separately restate them and compare them again, but with amounts already restated. |
| (ii) | The income (loss) for exposure to change in purchasing power of currency (income (loss) on net monetary position), originated by the keeping of monetary assets and liabilities, is shown in a separate item of the income (loss) for the period. |
| (iii) | Gains and losses on non-monetary items measured at fair value are typically calculated as the difference between the restated opening balance, or if acquired during the year, the restated acquisition date value, and the fair value on the reporting date. |
Restatement of the Statement of Changes in Equity
All the components of equity are restated by applying the general prices index as from the beginning of the period, and each variation of such components is re-expressed as from the contribution date or as from the moment in which such contribution was made through any other form, with the exception of the account “Capital stock -face value” which has been maintained for its nominal value and the effects of their restatement can be found in the account “Adjustment to capital stock”.
| F-22 |
CENTRAL PUERTO S.A.
Restatement of the Statement of Cash Flows
IAS 29 sets forth that all the items of this section shall be restated in terms of the current measurement unit at the closing date of the reported period.
The monetary result generated by cash and equivalents to cash are stated in the Statement of Cash Flows separately from the cash flows resulting from operation, investment and financing activities as a specific item of the conciliation between the existence of cash and cash equivalents at the beginning and at the end of the period.
| 2.2. | Summary of material accounting policies |
The following are the material accounting policies applied by the Group in preparing its consolidated financial statements.
| 2.2.1. | Classification of items as current and non-current |
The Group classifies assets and liabilities in the consolidated statement of financial position as current and non-current. An entity shall classify an asset as current when:
| – | it expects to realize the asset, or intends to sell or consume it, in its normal operating cycle; |
| – | it holds the asset primarily for the purpose of trading; |
| – | it expects to realize the asset within twelve months after the reporting period; or |
| – | the asset is cash or a cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period. |
All other assets are classified as non-current. An entity shall classify a liability as current when:
| – | it is expected to be settled in normal operating cycle; |
| – | It is held primarily for the purpose of trading; |
| – | it is due to be settled within twelve months after the reporting period; or |
| – | there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period. |
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities, in all cases.
| 2.2.2. | Fair value measurement |
The Group measures certain financial instruments at their fair value at each reporting date. In addition, the fair value of financial instruments measured at amortized cost is disclosed in Note 13.5.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
| – | in the principal market for the asset or liability, or |
| – | in the absence of a principal market, in the most advantageous market for the asset or liability. |
| F-23 |
CENTRAL PUERTO S.A.
The principal or the most advantageous market must be accessible to the Group. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
| – | Level 1 input data: quoted (unadjusted) prices in active markets for identical assets or liabilities. |
| – | Level 2 input data: valuation techniques with input data other than the quoted prices included in Level 1, but which are observable for assets or liabilities, either directly or indirectly. |
| – | Level 3 input data: valuation techniques for which input data are not observable for assets or liabilities. |
| 2.2.3. | Transactions and balances in foreign currency |
Transactions in foreign currencies are recorded by the Group at the related functional currency rates prevailing at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rate of exchange ruling at the reporting period-end.
All differences are taken to consolidated statement of income under other operating income or expenses, or under finance income or expenses, depending on the nature of assets or liabilities generating those differences.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured by their fair value in foreign currency are converted using exchange rates at the date in which such fair value is determined.
| 2.2.4. | Revenue recognition |
| 2.2.4.1. | Revenue from ordinary activities |
IFRS 15 presents a five-step detailed model to explain revenue from contracts with customers. Its fundamental principal lies on the fact that an entity has to recognize revenue to represent the transference of goods or services promised to the customers, in an amount reflecting the consideration the entity expects to receive in exchange for those goods or services at the moment of executing the performance obligation. An asset is transferred when (or while) the client gets control over such asset, defined as the ability to direct the use and substantially obtain all the remaining benefits of the asset. IFRS 15 requires the analysis of the following:
| – | If the contract (or the combination of contracts) contains more than one promised good or service, when and how such goods or services should be granted. |
| – | If the price of the transaction distributed to each performance obligation should be recognized as revenue throughout time or at a specific moment. According to IFRS 15, an entity recognizes revenue when the performance obligation is satisfied, i.e. every time control over those goods and services is transferred to the customer. The model does not include separate guidelines for the “sale of goods” and the “rendering of services”; instead, it requires that entities should evaluate whether revenue should be recognized throughout time or at a specific moment, regardless of the fact that it includes “the sale of goods” or “the rendering of services”. |
| F-24 |
CENTRAL PUERTO S.A.
| – | When the price includes an estimation element of variable payments, how that will affect the amount and the time to recognize such revenue. The concept of variable payment estimation is broad. A transaction price is considered as variable due to discounts, reimbursement, credits, price concessions, incentives, performance bonus, penalties and contingency agreements. The model introduces a big condition for a variable consideration to be considered as revenue: only as long as it is very unlikely for a significant change to occur in the cumulative revenue amount, when the uncertainties inherent to the variable payment estimation are solved. |
| – | When the incurred cost to close an agreement and the costs to comply with it can be recognized as an asset. |
The most relevant revenue source of the Group is the commercialization of energy produced in the spot market and under the energy supply agreements, CAMMESA being its main customer.
The Company recognizes its sales revenue in accordance with the availability of its machines’ effective power, the energy and steam supplied; and as balancing entry, a sales receivable is recognized, which represents the Company’s unconditional right to consideration owed by the customer. Billing for the service is monthly made by CAMMESA in accordance with the guidelines established by SEE; and compensation is usually received in a maximum term of 90 days. Therefore, no implicit financing components are recognized. The satisfaction of the performance obligation is done throughout time since the customer simultaneously receives and consumes the benefits given by the performance of the entity as the entity does it. Payments by CAMMESA related to the sale of energy and power under the spot market during each month are usually paid before 90 days after the end of such month. When payments are made after such deadline interests are collected from CAMMESA.
Revenues from energy, power and steam sales are calculated at the prices established in the respective contracts or at the prices prevailing in the electricity market, according to the regulations in force. These include revenues from the sale of steam, energy and power supplied and not billed until the closing date of the reported period, valued at the prices defined in the contracts or in the respective regulations.
Additionally, the Group recognizes the sales from contracts regarding the supplied energy and the prices established in such contracts, and as balancing entry it recognizes an account receivable. Such credit represents the unconditional right the Company has to receive the consideration owed by the customer. Billing for the service is monthly made by CAMMESA in the case of the contracts of the wind farms La Castellana, La Genoveva and Achiras and the contracts of the solar farm Guañizuil II A and for the Energía plus contracts in accordance with the guidelines established by SEE; and compensation is received in a maximum term of 90 days. Therefore, no implicit financing components are recognized. For the rest of the clients, billing is also monthly and done by the Company; and compensation is received in a maximum term of 90 days. Therefore, no implicit financing components are recognized. The satisfaction of the performance obligation is done throughout time since the customer simultaneously receives and consumes the benefits given by the performance of the entity as the entity does it.
The Group recognizes revenues from resale and distribution of gas and revenues for the monthly management of the thermal power plant CVO in accordance with the monthly fees established in the respective contracts and as balancing entry, it recognizes a sale credit. Such credit represents the unconditional right the Company has to receive the consideration owed by the customer. Billing for the service is also monthly made by the Company and compensation is generally received in a maximum term of 90 days. Therefore, no implicit financing components are recognized.
Finally, the Group recognizes sales revenues from its forestry activities based on the wood delivered and at the current prices, and it recognizes a sales credit as an offsetting entry. This credit represents the Company’s unconditional right to receive the consideration owed by the client. The performance obligation is satisfied when the wood is delivered to the respective clients. Billing for the service is made every two weeks and compensation is usually received in a maximum term of 21 days. Therefore, no implicit financing components are recognized.
| F-25 |
CENTRAL PUERTO S.A.
The detail of revenues from ordinary activities of the Group is included in Note 5 to these consolidated financial statements.
| 2.2.4.2. | Other income and expenses - Interest |
For all financial assets and liabilities measured at amortized cost and interest bearing financial assets classified as available for sale, interest income or expense is recorded using the effective interest rate method, which is the rate that exactly discounts the estimated future cash payments or receipts through the expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount of the financial asset or liability. In general, interest income and expense are included in finance income and expenses in the consolidated statement of income, respectively, unless they derive from operating items (such as trade and other receivables or trade and other payables); in that case, they are booked under other operating income and expenses, as the case may be.
| 2.2.5. | Taxes |
Current income tax
Current income tax assets and liabilities for the year are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute those amounts are those that are enacted or substantively enacted, at the end of the reporting period. The statutory tax rate for the Group for the fiscal year 2024 is described in Note 22.
Current income tax relating to items recognized directly in equity is recognized in equity and not in the consolidated statement of income.
Management periodically assesses the positions taken in each tax report regarding the situations in which the applicable tax regulations are subject to interpretation, and it determines whether they must be treated as uncertain tax treatment, and in such case, whether it must be treated independently or collectively with one or more tax treatments, pursuant to IFRIC 23. For these cases, we use the approach which better predicts uncertainty and applies criteria to identify and quantify uncertainties.
Deferred income tax
Deferred income tax is provided using the liability method on temporary differences at the end of the reporting period between the tax bases of assets and liabilities and their related carrying amounts.
Deferred income tax liabilities are recognized for all taxable temporary differences, except:
| – | where the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; |
| – | in respect of taxable temporary differences associated with investments in subsidiaries and associates, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future. |
Deferred income tax assets are recognized for all deductible temporary differences and tax carry forwards losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and/or the tax losses carry forward can be utilized, except:
| – | where the deferred income tax asset arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; |
| F-26 |
CENTRAL PUERTO S.A.
| – | in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred income tax assets are recognized only to the extent that it is probable that the deductible temporary differences will reverse in the foreseeable future and taxable profit will be available against which those differences can be utilized. |
The carrying amount of deferred income tax assets is reviewed at each reporting period date and reduced against income or loss for the period or other comprehensive income, as the case may be, to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized (recovered). Unrecognized deferred income tax assets are reassessed at each reporting period date and are recognized with a charge to income or other comprehensive income for the period, as the case may be, to the extent that it has become probable that future taxable profits will allow the deferred income tax asset not previously recognized to be recovered.
Deferred income tax assets and liabilities are measured at undiscounted nominal value at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting period date.
Deferred income tax relating to items recognized outside profit or loss is recognized outside profit or loss. Deferred income tax items are recognized in correlation to the underlying transactions either in other comprehensive income or directly in equity.
Deferred income tax assets and deferred income tax liabilities are offset if a legally enforceable right exists to set off current income tax assets and liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority.
Uncertainties over income tax treatments
The Group determines whether each tax treatment should be considered independently or whether some tax treatments should be considered together and uses an approach that provides better predictions of the resolution of the uncertainty.
The Group applies significant judgment when identifying uncertainties on the income tax treatment. The Group evaluated whether the Interpretation had an impact on its consolidated financial statements, especially within the framework of tax inflation adjustment in determining the tax income of mentioned periods:
| a) | Income tax return for fiscal year 2014 |
In February 2015 CPSA filed income tax returns for the nine-month period ended September 30, 2014, applying the adjustment for inflation mechanism established by the Argentine Income Tax Law. In addition, the Company filed its income tax return for the three-month period ended December 31, 2014, applying the same adjustment for inflation mechanism.
Later on, on July 27, 2021, the Argentine Tax Authorities issued a resolution through which it implemented an infringement investigation in relation to the income tax for the irregular fiscal periods ended September 2014 and December 31, 2014, for the alleged omission included in Section 45, Law No. 11683. On September 8, 2021, CPSA submitted the corresponding deposition and the corresponding evidence. Based on the Tax Determination issued by ARCA on April 28, 2022, CPSA appealed before the Argentine Fiscal Court (TFN) on May 23, 2022. By virtue of this appeal, the TFN ordered the admission of evidence through a resolution dated March 29, 2023; and to that effect, on October 26, 2023, the accounting expert’s report was furnished as evidence.
| b) | Action for recovery - Income tax refund for fiscal period 2010 |
In December 2014, the Company, as merging company and continuing company of HPDA, raised a recourse action before fiscal authorities regarding the income tax for the fiscal period 2010. This recourse action seeks to recover the income tax entered by HPDA in accordance with the lack of application of the inflation-adjustment mechanism established by the Law on Income Tax. In December 2015, since the term stated by Law no. 11,683 elapsed, the Company brought a contentious-administrative claim before the National Court to assert its right to recover the income tax.
| F-27 |
CENTRAL PUERTO S.A.
In October 2018, the Company was served notice of the judgment issued by the Federal Contentious- Administrative Court No. 5, which granted the right to recourse. The judgment ordered tax authorities to return the amount of 67,612 (at historical values) to the Company plus the interest stated in the BCRA Communication 14290 and ordered that legal cost must be borne by the defendant. Such judgment was appealed by the National Tax Administration, and on September 9, 2019, Division I of the National Court of Appeals of the Federal Contentious- Administrative Court (“CNACAF”) confirmed the appealed judgment. On September 24, 2019, the National Tax Administration raised Federal Extraordinary Appeal (“REF”) against CNACAF judgment, which was replied by the Company. On October 29, 2019, CNACAF granted the REF and sent the file to the Argentine Supreme Court. On October 25, 2022, the Argentine Supreme Court (CSJN) confirmed the appealed decision. On March 21, 2024, CPSA collected the amount claimed plus the corresponding interest.
| c) | Action for recovery - income tax refund for fiscal years 2009, 2011 and 2012 |
In December 2015, the Company filed a petition with the Argentine Tax Authorities for the recovery of income tax for the fiscal year 2009, in the amount of 20,395 at historical values which had been incorrectly paid by the Company in excess of our income tax liability. By filling such action, the Company seeks to recover the excess income tax paid by CPSA due to the failure to apply the adjustment for inflation set forth in the Argentine Income Tax Law. On April 22, 2016, after the term required by Law No. 11,683 expired, the Company filed an action for recovery for the amount claimed with the Argentinean Court. On September 27, 2019, the judge entered judgment rejecting the complaint filed by the Company. Such judgment was appealed by the Company last October 4, 2019. Room I of CNACAF (Argentine Appeal Court for Federal Contentious Administrative Matters) granted the appeal presented by the Company on March 11, 2020. Against this resolution, the Argentine Tax Authorities raised an Extraordinary Appeal. On October 25, 2022, the Argentine Supreme Court confirmed the decision made by the CNACAF and on November 27, 2023, CPSA collected the amount claimed plus the corresponding interest.
In December 2017, the Company, as merging company and continuing company of HPDA, filed a petition with the Argentine Tax Authorities for the recovery of 52,783 at historical values paid in excess by HPDA for payment of Income Tax for 2011 fiscal period. The purpose of such action is to recover the income tax paid by HPDA due to the failure to apply the adjustment for inflation mechanism aforementioned. On April 1, 2019 such claim was rejected by national fiscal authorities. Therefore, the Company filed an administrative and legal action on April 25, 2019. On September 13, 2022, the Company obtained a favorable first-instance judgment. This judgment was appealed by ARCA and subsequently confirmed by the Court of Appeals on May 14, 2024. In response to this judgment, ARCA filed a Federal Extraordinary Appeal on June 4, 2024.
In December 2018, the Company brought two administrative complaints of recovery before the Argentine Tax Authorities: the first one was filed by the Company, as merging company and continuing company of HPDA, regarding the income tax for the fiscal period 2012 that amounted to 62,331 at historical values, which was entered in excess by HPDA. The second complaint was filed by the Company regarding the income tax for the same fiscal period that amounted to 33,265 at historical values, which was entered in excess by the Company. These recourse actions seek to recover the income tax entered by HPDA and the Company in accordance with the lack of application of the inflation-adjustment mechanism aforementioned. On September 12, 2019, the Company filed both recourse actions before the Federal Contentious- Administrative Court against the Argentine Tax Authorities in accordance with Section 82, paragraph “c” of Law no. 11,683 (restated text 1998 as amended), as the term established in the second paragraph of Section 81 of such law had elapsed. Regarding the first of the claims, after the Company obtained a favorable first instance ruling, and upon the appeal of said ruling by ARCA, on November 14, 2024, the Court of Appeals confirmed the first instance ruling.
| F-28 |
CENTRAL PUERTO S.A.
| d) | Action for recovery - Income tax for the fiscal year 2015 |
On December 23, 2020, the Company submitted before the fiscal authorities an action for recovery of the income tax for the fiscal year 2015 for the amount of 129,231 (at historical values) unduly paid by CPSA. The purpose of the action for recovery is to obtain reimbursement of the income tax paid by CPSA based on the lack of application of the inflation adjustment mechanism set forth in the Argentine Income Tax Act. On April 22, 2021, the Company filed a recovery lawsuit before the Court for Contentious Administrative Matters against the Argentine Tax Authorities pursuant to the provisions of Section 82, subsection c of Law No. 11683 (restated and amended 1998), on the grounds that the term established in the second paragraph of Section 81 of that body of rules had elapsed.
| e) | Action of recovery - Income tax for the fiscal year 2016 |
On January 24, 2022, the Company filed before the tax authorities a recovery action of the income tax for the fiscal year 2016, for the amount of 189,376 (at historical values) unduly paid by CPSA. Such recovery action is aimed at obtaining the reimbursement of the income tax paid by CPSA based on the lack of application of the inflation adjustment mechanism set for by the Argentine Income Tax Act.
The Group considered, based on the opinion of its legal advisors and on the IFRIC 23 accounting guidelines: 1) regarding the income tax 2014 determination stated in a), that it is probable that authorities will accept the Company's position and, therefore, it is not required to register a liability under such item, and 2) regarding recourse actions for income tax, except for the case of recourse action by HPDA for the fiscal period 2011, that it is also probable that the positions adopted by the Company will be accepted in court; therefore, an asset has been recognized for such recourse actions.
The corresponding asset is included
in the item “Other non-financial assets” of Non-Current Assets under “Income Tax Credits” and it amounts to
Other taxes related to sales and to bank account transactions
Revenues from recurring activities, expenses incurred and assets are recognized excluding the amount of sales tax, as in the case of value-added tax or turnover tax, or the tax on bank account transactions, except:
| – | where the tax incurred on a sale or on a purchase of assets or services is not recoverable from the taxation authority, in which case the sales tax is recognized as part of the cost of acquisition of the asset or as part of the expense item as the case may be; |
| – | receivables and payables are stated including value-added tax. |
The charge for the tax on bank account transactions is presented in the administrative and selling expenses line within the consolidated statement of income.
The net amount of the tax related to sales and to bank account transactions recoverable from, or payable to, the taxation authority is included as a non-financial asset or liability, as the case may be.
| 2.2.6. | Property, plant and equipment |
Property, plant and equipment are measured at the acquisition cost restated according to Note 2.1.2, net of the cumulative depreciation and/or the cumulative losses due to impairment, if any. This cost includes the cost of replacing components of property, plant and equipment and the cost for borrowings related to long-term construction projects, as long as the requirements for their recognition as assets are fulfilled. The Property, Plant and equipment acquired in a business combination was valued at fair value at acquisition date restated as explained in Note 2.1.2.
When significant parts of property, plant and equipment are required to be replaced at intervals, the Group derecognizes the replaced part and recognizes the new part with its own associated useful life and depreciation. Likewise, when a major maintenance is performed, its cost is recognized as a replacement according to the conditions stated in the IFRS Accounting Standards as issued by the International Accounting Standards Board (IASB). All other regular repair and maintenance costs are recognized in the consolidated statement of income as incurred.
| F-29 |
CENTRAL PUERTO S.A.
Electric power facilities and materials and spare parts related to the Nuevo Puerto Combined Cycle plant were depreciated on a unit-of-production basis.
Electric power facilities related to the Luján de Cuyo combined cycle plant and cogeneration unit, the Terminal 6 - San Lorenzo cogeneration unit, the Central Costanera combined cycle power plants and the Brigadier Lopez thermal station are depreciated on a straight-line basis over the total useful lives estimated.
Electric power facilities and auxiliary equipment of Piedra del Águila hydroelectric power plant are depreciated on a straight-line basis over the remaining life of the concession agreement of the mentioned power plant.
The depreciation of the remaining property, plant and equipment is calculated on a straight-line basis over the total estimated useful lives of the assets as follows:
| – | Buildings: |
| – | Wind turbines and solar farm equipment: |
| – |
| – | Material and spare parts: |
| – | Furniture, fixtures and equipment: |
| – | Others: |
| – | Gas turbines and Construction in progress: |
An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the consolidated statement of income when the asset is derecognized.
The residual values, useful lives and methods of depreciation are reviewed at each reporting period end and adjusted prospectively, if appropriate.
During the years ended December 31, 2024 and 2023 the Group has not capitalized interests.
| 2.2.7. | Intangible assets |
Intangible assets acquired separately are measured on initial recognition at acquisition cost restated according to Note 2.1.2. The cost of the intangible assets acquired in a business combination is their fair value at the date of the acquisition. Following initial recognition, intangible assets are carried at cost less accumulated amortization (if they are considered as having finite useful lives) and accumulated impairment losses, if any.
The useful lives of intangible assets are assessed as either finite or indefinite. The useful lives of the intangible assets recognized by the Group are finite.
Intangible assets with finite useful lives are amortized over their useful economic lives. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of the asset is accounted for by changing the amortization period or method, as appropriate, and are treated prospectively as changes in accounting estimates. The amortization expense on intangible assets with finite lives is recognized in the consolidated statement of income in the expense category consistent with the function of the intangible assets.
The Group’s intangible assets are described in Note 12.
| F-30 |
CENTRAL PUERTO S.A.
| 2.2.8. | Impairment of property, plant and equipment and intangible assets |
The Group assesses at each reporting period-end whether an existing event or one that took place after year end and provides additional evidence of conditions that existed at the end of the reporting period, indicates that an individual component or a group of property, plant and equipment and/or intangible assets with limited useful lives may be impaired. If any indication exists, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of the fair value less costs to sell, and the value-in-use. That amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets; in which case, the cash flows considered are the ones from the cash-generating unit (“CGU”) where such asset belongs.
Where the carrying amount of an individual asset or CGU exceeds its recoverable amount, the individual asset or CGU, as the case may be, is considered impaired and is written down to its recoverable amount.
In assessing value in use of an individual asset or CGU, the estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the individual asset or CGU, as the case may be.
In determining fair value less costs to sell, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used. These calculations are verified by valuation multiples, quoted values for similar assets on active markets and other available fair value indicators, if any.
The Group assess if environmental risks, including physical and transition risks, could have a significant impact. In such a case, these risks are included in the cash flows when calculating the value-in-use. See Note 23 for more information regarding the impact of environmental risks.
The Group bases its impairment calculation on detailed budgets and forecast calculations which are prepared separately for each of the Group’s CGU to which the individual assets are allocated.
Impairment losses of continuing operations are recognized in a specific line of the consolidated statement of income.
In addition, for the assets for which an impairment loss had been booked, as of each reporting period-end, an assessment is made whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased.
Should there be such triggering event, the Group makes an estimate of the recoverable amount of the individual asset or of the cash generating unit, as the case may be.
A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the individual assets or CGU’s recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount of the asset or CGU does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of the related depreciation or amortization, had no impairment loss been recognized for the asset or CGU in prior periods. Such reversal is recognized in the statement of income in the same line in which the related impairment charge was previously recognized, unless the asset is carried at a revalued amount, in which case, the reversal is treated as a revaluation increase.
The Group has identified a triggering of potential impairment of its property, plant and equipment and/or intangible assets with finite useful lives due to the uncertainty over the evolution of rates in relation to the evolution of the increase of costs.
| F-31 |
CENTRAL PUERTO S.A.
In order to measure the recoverability of its conventional and renewable Electric Power Generation property, plant and equipment and its intangible assets with finite useful lives and with indicators of impairment, the Group has used the value in use of such assets, except for the generating group classified as “Gas turbines” and the land on which the Puerto Nuevo and Nuevo Puerto thermoelectric plants are located, for which the Group has used the fair value less cost of sale. As a result of the recoverability analysis, the Group has concluded that the net book value of the assets is recoverable, except for the assets comprising the cash generating unit corresponding to the Brigadier Lopez thermoelectric station, the Terminal 6 San Lorenzo cogeneration unit, the Luján de Cuyo combined cycle power plant, the Buenos Aires combined cycle power plant located in the Costanera plant and the Manque and La Genoveva wind farms, and the generator group classified under the "Turbines" category". During 2023, the Group recorded a 36,220,872 million and 4,811,296 million impairment loss on PP&E and intangible assets, respectively, related to the Brigadier Lopez thermoelectric plant. Also, the Company recorded a gain on the reversal of PP&E impairment of 136,621,999 million related to the Luján de Cuyo combined cycle, the Terminal 6 San Lorenzo cogeneration unit, the Manque and La Genoveva wind farms, a gas turbine and land, and a gain of 214,266 million on the reversal of intangible assets impairment related to the Manque and La Genoveva wind farms.
CGUs Thermoelectric Station Brigadier López, Luján de Cuyo Combined Cycle Power Plant, Terminal 6 San Lorenzo cogeneration unit, Buenos Aires Combined Cycle Power Plant and Manque and La Genoveva Wind Farms
The Group estimated that the
book value of the assets related to the Terminal 6 San Lorenzo cogeneration unit exceeded its recoverable value by
The Group estimated that the
book value of the assets related to the Thermoelectrical Station Brigadier Lopez exceeded its recoverable value by
The Group estimated that the book value
of the assets related to the combined cycle plant located in Luján de Cuyo exceeded its recoverable value by
The Group estimated that the
book value of the assets related to the Buenos Aires combined cycle plant located at the Costanera plant exceeded its recoverable value
by
The Group estimated that the book
value of the assets related to the Manque wind farm exceeded its recoverable value by
| F-32 |
CENTRAL PUERTO S.A.
The Group estimated that the
book value of the assets related to the La Genoveva wind farm exceeded its recoverable value by
Key assumptions to estimate the value in use are the following:
| – | Sales price: the sale price has been determined for the budgeted period on the basis of the energy sales prices arising from the current resolutions issued by the Ministry of Energy adjusted for projections of price increases and on the basis of the power purchase agreements entered into. In this regard, the Group considered different weighted alternatives in relation to the evolution of energy and power prices that remunerate conventional thermoelectrical power generation units, which implied the development of different scenarios with different estimates of the expected cash flows and assigning probabilities of occurrence based on the Group's experience and expectations regarding the outcome of the uncertainties involved. |
Other relevant assumptions are described below:
| – | Costs: costs have been determined on the basis of operating costs incurred in the past, the most significant cost being maintenance, which was estimated under the terms of the contracts in force with suppliers Siemens Energy and Vestas Argentina. |
| – | Discount rate: it represents the current market assessment of the specific risks of the Company, taking into consideration the time-value of money. Discount rate calculation is based on the circumstances of the market participants and it is derived from the weighted average cost of capital (WACC). The WACC rate takes into consideration both debt and equity. The cost of equity is derived from the expected return on investment by market participant investors, whereas the cost of debt is based on the conditions of the debt which market participants could access to. The specific risks of the operational segment are incorporated by applying individual beta factors, which are annually assessed from the available public information of the market. |
Discount rates used to determine
the value in use as of December 31, 2024 were
Any increase in the discount rate would entail an additional impairment loss for the cash-generation units Thermoelectrical Station Brigadier López, Terminal 6 San Lorenzo cogeneration unit, Luján de Cuyo combined cycle plant, Buenos Aires combined cycle plant located at the Costanera plant and Manque and La Genoveva wind farms.
| – | Macroeconomic variables: estimated inflation and devaluation rates, as well as exchange rates, were obtained from external sources, which are well known consulting firms dedicated to the local and global economic analysis, widely experienced in the market. |
The Luján de Cuyo combined cycle units, the Brigadier Lopez thermoelectric plant, the Buenos Aires combined cycle unit located at the Costanera plant and the Terminal 6 San Lorenzo cogeneration unit belong to the electric power generation from conventional sources operating segment while wind farms Manque and La Genoveva belong to the electric power generation from renewable sources operating segment.
| F-33 |
CENTRAL PUERTO S.A.
Gas turbines
The Group has reviewed during
the 2024 financial year the recoverability of the turbines as individual assets and has estimated that the book value of the General Electric
generator group, which is stored in the facilities of the Nuevo Puerto plant, exceeds its recoverable value, for which a charge for impairment
of property, plant and equipment was determined for
To determine the recoverable value of this generating group, the Group has used the fair value less costs to sell.
After recognizing such impairment, the
book value of the General Electric generator group amounts to
| 2.2.9. | Financial instruments. Presentation, recognition and measurement |
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
| 2.2.9.1. | Financial assets Classification |
According to IFRS 9 “Financial instruments”, the Group classifies its financial assets in three categories:
| – | Financial assets at amortized cost |
A financial asset is measured at amortized cost if both of the following conditions are met: (i) the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and (ii) the contractual terms of the financial asset give rise on specified dates to solely payments of principal and interest.
Additionally, and for those assets complying with the above-mentioned conditions, IFRS 9 provides for the option of determining, at initial recognition, an asset measured at fair value if doing so would eliminate or significantly reduce a measurement or recognition inconsistency, which would appear if the assets or liabilities valuation or the recognition of their profits or losses are made on different grounds. The Group has not classified a financial asset at fair value using this option.
At the closing of these consolidated financial statements, the financial assets at amortized cost of the Group include certain cash elements and cash equivalents, trade and other receivables and other non-current financial assets.
| – | Financial assets at fair value through other comprehensive income |
Financial assets are measured at fair value through other comprehensive income if they are held in a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets.
At the closing of these consolidated financial statements, the Group does not have financial assets at fair value through other comprehensive income.
| – | Financial assets at fair value through profit or loss |
Any financial assets at fair value through profit or loss belong to a residual category that includes the financial assets that are not held in one of the two business models mentioned, including those kept to negotiate and those classified at fair value at initial recognition.
| F-34 |
CENTRAL PUERTO S.A.
At the closing of these consolidated financial statements, the financial assets of the Group at fair value through profit or loss include mutual funds, public debt securities, stocks and corporate bonds and interest rate swaps accounted under other financial assets.
Recognition and measurement
The purchase and sale of financial assets are recognized at the date on which the Group commits to purchase or sale the asset.
Financial assets valued at amortized cost are initially recognized at their fair value plus cost of transaction. These assets accrue interest according to the effective interest rate method.
Financial assets valued at fair value through profit or loss and other comprehensive income are initially recognized at fair value, and transaction costs are recognized as expenses in the comprehensive income statement. Subsequently, they are valued at fair value. Changes in fair value and income from the sale of financial assets at fair value through profit or loss and other comprehensive income are recorded in Finance Income or Finance Expenses and Other comprehensive income, respectively, in the consolidated statement of income and comprehensive income, respectively.
In general, the Group uses the transaction price to determine the fair value of a financial instrument at the initial recognition. In the rest of the cases, the Group only records gain or loss at initial recognition if the fair value of the instrument is evidenced with other comparable and visible transactions of the market for the same instrument or if it is based on a valuation technique that only includes visible market data. Gains or loss not recognized at the initial recognition of a financial asset is later recognized as long as they derive from a change in factors (including time) in which the market participants consider establishing the price.
The profit or loss of debt instruments which are measured at amortized cost and are not designated as hedge instruments are recognized in profit or loss when the financial assets are derecognized or when impairment is recognized and during the amortization process by using the effective interest rate method. The Group only reclassifies all investments in debt instruments when it changes the business model used to manage those assets.
Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognized; that is to say, it is deleted from the statement of financial position, when:
| – | the contractual rights to receive cash flows from the asset have expired; |
| – | the contractual rights to receive cash flows from the asset have been transferred or an obligation has been assumed to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) all the risks and rewards of the asset have been transferred substantially, or |
(b) all the risks and rewards of the asset have neither been transferred nor retained substantially, but control of the asset has been transferred.
When the contractual rights to receive cash flows from an asset have been transferred or a pass-through arrangement has been entered into, but all of the risks and rewards of the asset have neither transferred nor retained substantially and no control of it has been transferred, such asset shall continue to be recognized to the extent of the Group’s continuing involvement in it. In this case, the Group shall also recognize the associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained.
Impairment of financial assets
IFRS 9 establishes an “expected credit loss” model (“ECL”). This requires the application of considerable judgment with regard to how changes in economic factors affect ECL, which is determined over a weighted average base. ECL results from the difference between contractual cash flows and cash flows at current value that the Group expects to receive.
| F-35 |
CENTRAL PUERTO S.A.
The impairment model set forth by IFRS 9 is applicable to the financial assets measured at amortized value or at fair value through changes in other comprehensive income, except for the investment in equity securities and assets from the contracts recognized under IFRS 15.
Pursuant to IFRS 9, loss allowances are measured using one of the following bases:
| – | The 12-month ECL: these are expected credit losses that result from those default events on the financial instrument that are possible within 12 months after the reporting date; and |
| – | Full lifetime expected credit losses: these are expected credit losses that result from all possible default events over the life of the financial instrument. |
Given the nature of the clients with which the Group operates and on the base of the foregoing criteria, the Group did not identify expected credit losses.
With regard to financial placements and according to the placement policies in force, the Group monitors the credit rate and the credit risk of these instruments. Pursuant to the analysis, the Group did not identify the need to record impairment of these types of instruments.
| 2.2.9.2. | Financial liabilities |
Initial recognition and subsequent measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, accounts payables or as derivatives designated as hedging instruments in an effective hedge ratio, as appropriate.
Financial liabilities are initially recognized at their fair value, net of the incurred transaction costs. Since the Group has no financial liabilities whose characteristics require the fair value accounting, according to IFRS Accounting Standards as issued by the International Accounting Standards Board (IASB), after the initial recognition, the financial liabilities are valued at amortized cost. Any difference between the amount received as financing (net of transaction costs) and the reimbursement value is recognized in comprehensive income throughout the life of the debt financial instrument using the method of effective interest rate.
Regarding the loan with Mitsubishi Corporation, described in Note 13.3.11., the initial recognition was at its fair value and subsequently the loan is measured at amortized cost. The mentioned loan includes a scheme of annual repayments with minimum payments, which can increase according to the free cash flows of the previous year of the controlled company Central Costanera S.A. If there are changes in the estimated free cash flows that result in changes in future capital payments, the Group recognizes the impact within financial income or financial costs, as appropriate, in the comprehensive income statement for the year in which such change in estimate occurs.
At the closing date of these consolidated financial statements, the financial liabilities classified as loans and borrowings and accounts payables of the Group include Trade and other payables, and Loans and borrowings.
Derecognition of financial liabilities
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognized as finance income or costs in the statement of income, as the case may be.
| F-36 |
CENTRAL PUERTO S.A.
| 2.2.9.3. | Offsetting financial assets and financial liabilities |
Financial assets and financial liabilities are offset, and the net amount presented in the statement of financial position if, and only if, there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously.
| 2.2.9.4. | Financial assets and liabilities with related parties |
Assets and liabilities with related parties are recognized initially at fair value plus directly attributable transaction costs. As long as credits and debts with related parties do not derive from arms-length transactions, any difference arising at the initial recognition between such fair value and the consideration given or received in return shall be considered as an equity transaction (capital contribution or payment of dividends, which will depend on whether it is positive or negative).
Following initial recognition, these receivables and payables are measured at their amortized cost through the effective interest rate (EIR) method. The EIR amortization is included in finance income or costs or other operating income or expenses in the statement of income, depending on the nature of the liability giving rise to it.
| 2.2.9.5. | Derivative financial instruments and hedge accounting |
Initial recognition and subsequent measurement
The derivative financial instruments used by the Group are initially recognized through their fair values at the date on which the contract is entered into, and they are subsequently measured again at their fair value. The derivative financial instruments are accounted as financial assets when their fair value is positive and as financial liabilities when their fair value is negative.
The method to recognize the loss or income from the change in fair value depends on whether the derivative was determined as a hedge instrument; in such case, on the nature of the item it is covering. The Company can determine certain derivative as:
| – | Fair value hedge; |
| – | Cash flow hedge; |
At the beginning of the transaction, the Group records the relationship between the hedge instruments and items covered, as well as its objectives for risk management and the strategy to make different hedge operations. It also records its assessment, both at the beginning and on a continuous base, on whether the derivatives used in the hedge transactions are highly effective to compensate changes in fair value or in the cash flows of the items covered.
Fair value hedge
Changes in fair value of derivatives determined and classified as fair value hedge are recorded in the statement of comprehensive income together with any change in the fair value of the covered asset or liability attributable to the covered risk.
Cash flow hedge
The effective part of changes in fair value of the derivatives determined and classified as cash flow hedge are recognized in Other comprehensive income. The loss or income related to the non-effective part is immediately recognized in the consolidated statement of income within the Finance Expenses or Finance Income, respectively.
The cumulative amounts in Other comprehensive income are recorded in the consolidated statement of income in the periods in which the item covered affects the consolidated statement of income. In the case of interest rates hedge, this means the amounts recognized in equity are reclassified as net finance income (loss) as interest is accrued on associated debts.
| F-37 |
CENTRAL PUERTO S.A.
As at December 31, 2024, the Group has no hedging derivative instruments. Hence, swap contracts of interest rate are measured at their current value at the closing of each period or fiscal year and are stated as assets or liabilities depending on the rights and obligations emerging from the respective contracts. In this way, changes in the accounting measure of such contracts are recognized in the consolidated statement of income under finance income or finance cost, as applicable.
| 2.2.10. | Inventories |
Inventories are valued at the lower of restated acquisition cost and net realizable value. In the estimation of recoverable values, the purpose of the asset to be measured and the movements of items of slow or scarce rotation are taken into account. Inventories balance is not higher than its net realizable value at the corresponding dates.
| 2.2.11. | Cash and cash equivalents |
Cash is deemed to include both cash fund and freely-available bank deposits on demand. Short-term deposits are deemed to include short-term investments with significant liquidity and free availability that, subject to no previous notice or material cost, may be easily converted into a specific cash amount that is known with a high degree of certainty upon the acquisition, are subject to an insignificant risk of changes in value, maturing up to three months after the date of the related acquisitions, and whose main purpose is not investment or any other similar purpose, but settling short-term commitments.
For the purpose of the consolidated statement of financial position and the consolidated statement of cash flows, cash and cash equivalents comprise cash at banks and on hand and short-term investments meeting the abovementioned conditions.
| 2.2.12. | Provisions |
Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of income under the item that better reflects the nature of the provision net of any reimbursement to the extent that the latter is virtually certain.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax market rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost in the consolidated statement of income.
| – | Provision for lawsuits and claims |
In the ordinary course of business, the Group is exposed to claims of different natures (e.g., commercial, labor, tax, social security, foreign exchange or customs claims) and other contingent situations derived from the interpretation of current legislation, which result in a loss, the materialization of which depends on whether one more events occur or not. In assessing these situations, Management uses its own judgment and advice of its legal counsel, both internal and external, as well as the evidence available as of the related dates. If the assessment of the contingency reveals the likelihood of the materialization of a loss and the amount can be reliably estimated, a provision for lawsuits and claims is recorded as of the end of the reporting period.
– Provision for wind and solar farms dismantling See Note 23.
| F-38 |
CENTRAL PUERTO S.A.
| 2.2.13. | Contingent liabilities |
A contingent liability is: (i) a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity; or (ii) a present obligation that arises from past events but is not recognized because:
(a) it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or (2) the amount of the obligation cannot be measured with sufficient reliability.
A contingent liability is not recognized in financial statements; it is reported in notes, unless the possibility of an outflow of resources to settle such liability is remote. For each type of contingent liability as of the relevant reporting period-end dates, the Group shall disclose (i) a brief description of the nature of the obligation and, if possible, (ii) an estimate of its financial impact; (iii) an indication of the uncertainties about the amount or timing of those outflows; and (iv) the possibility of obtaining potential reimbursements.
| 2.2.14. | Contingent assets |
A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group.
A contingent asset is not recognized in financial statements; it is reported in notes only where an inflow of economic benefits is probable. For each type of contingent asset as of the relevant reporting period-end dates, the Group shall disclose (i) a brief description of the nature thereof and, if possible, (ii) an estimate of its financial impact.
| 2.2.15. | Employee benefits |
Employee short-term benefits:
The Group recognizes short-term benefits to employees, such as salary, vacation pay, bonuses, among others, on an accrued basis and includes the benefits arising from collective bargaining agreements.
Post-employment employee long-term benefits:
The Group grants benefits to all trade-union employees when obtaining the ordinary retirement benefit under the Argentine Integrated Pension Fund System, based on multiples of the relevant employees’ salaries.
The amount recognized as a liability for such benefits includes the present value of the liability at the end of the reporting period, and it is determined through actuarial valuations using the projected unit credit method.
Actuarial gains and losses are fully recognized in other comprehensive income in the period when they occur and immediately allocated to unappropriated retained earnings (accumulated losses), and not reclassified to income in subsequent periods.
The Group recognizes the net amount of the following amounts as expense or income in the statement of income for the reporting year: (a) the cost of service for the current period; (b) the cost of interest; (c) the past service cost, and (d) the effect of any curtailment or settlement.
Other long-term employee benefits:
The Group grants seniority-based benefits to all trade-union employees when reaching a specific seniority, based on their normal salaries.
The amount recognized as liabilities for other long-term benefits to employees is the present value of the liability at the end of the reporting period. The Group recognizes the net amount of the following amounts as expense or income: (a) the cost of service for the current period; (b) the cost of interest; (c) actuarial income and loss, which shall be recognized immediately and in full; (d) the past service cost, which shall be recognized immediately and in full; and (e) the effect of any curtailment or settlement.
| F-39 |
CENTRAL PUERTO S.A.
| 2.2.16. | Share-based payments |
The cost of share-based payments transactions that are settled with equity instruments is determined by the fair value at the date when the grant is made using an appropriate valuation model.
This cost is recognized in the consolidated financial statements under employee benefits expense, together with a corresponding total increase in non-controlling interest.
On January 18, 2017, the subsidiary CP Renovables S.A. (“CPR”) entered into a stock option agreement with its minority shareholder at that time that was also its chairman and general manager and a shareholder of the Company (the “minority shareholder”). Under such agreement the minority shareholder had the right to purchase class B shares of CPR that represented 10% of the fully diluted capital stock of CPR. The option was exercisable in whole or in part, at any time prior to the seventh anniversary of the date of the stock option agreement. On November 15, 2023, the minority shareholder exercised the option and acquired the shares representing 10% of the capital stock of CPR. See Consolidated Statement of Changes in Equity. As of December 31, 2023 all assumed obligations under the stock option agreement were met.
| 2.2.17. | Investment in associates |
The Group’s investments in associates are accounted for using the equity method. An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee, but is neither control nor joint control.
According to the equity method, investments in associates are originally booked in the statement of financial position at cost, plus (less) the changes in the Group’s ownership interests in the associates’ net assets subsequent to the acquisition date. If any, goodwill relating to the associate is included in the carrying amount of the investment and is neither amortized nor individually tested for impairment.
If the cost of the investments is lower than the proportional share as of the date of acquisition on the fair value of the associate’s assets and liabilities, a gain is recognized in the period in which the investment was acquired.
The statement of income reflects the share of the results of operations of the associates adjusted on the basis of the fair values estimated as of the date on which the investment was incorporated. When there has been a change recognized directly in the equity of the associates, the Group recognizes its share of any changes and includes them, when applicable, in the statement of changes in equity.
The Group’s share of profit of an associate is shown in a single line on the main body of the consolidated statement of income. This share of profit includes income or loss after taxes of the associates.
The financial information of the associates is prepared for the same reporting period as the Group. When necessary, adjustments are made to bring the accounting policies of the associates in line with those of the Group.
After application of the equity method, the Group determines whether it is necessary to recognize impairment losses on its investment in its associates. At each reporting date, the Group determines whether there is objective evidence that the value of investment in the associates has been impaired. If such was the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the investment in the associates and its carrying value, and recognizes the loss as “Share of losses of an associate” in the consolidated statement of income.
The information related to associates is included in Note 3.
| F-40 |
CENTRAL PUERTO S.A.
| 2.2.18. | Information on operating segments |
For management purposes, the Group is organized in four different business units to carry out its activities, as follows:
| – | Electric power generation from conventional sources: the Group is engaged in the production of electric power from conventional sources and its sale. |
| – | Electric power generation from renewable sources: the Group also is engaged in the production of electric power from renewable sources and its sale. |
| – | Natural gas transport and distribution: through its equity investees companies belonging to ECOGAS Group, the Group is engaged in the natural gas distribution public sector service in the Cuyo and Centro regions of Argentina and it is also engaged in the natural gas transport sector service through its equity investee Company Transportadora de Gas del Mercosur S.A. Also, the Company resells certain gas transport and distribution capacity that was previously contracted by the Company. |
| – | Forestry activity: the Group is engaged in the forestation, reforestation, woods plantation and commercialization of its products. |
The financial performance of segments is evaluated based on operating income / expense before depreciation, amortization and impairment ("Adjusted EBITDA") (Note 4). The group of executive directors is the Chief Operating Decision Maker (CODM) and monitors the Adjusted EBITDA of its business units separately for the purpose of making decisions about resource allocation and performance assessment.
| 2.2.19. | Biological assets |
Forestry plantations are measured, both on initial recognition and at the end of the reporting period, at their fair value, less costs of sale at harvest or collection point. Fair value of the plantations with no available market prices under their current condition is determined through discounted cash flows, using market discount rates.
Forestry plantations included in the harvest plan for the twelve months following the closing of the period are classified as current biological assets.
| 2.2.20. | Business combinations |
Business combinations are accounted for using the acquisition method when the Group takes effective control of the acquired company.
The Group will recognize in its financial statements the acquired identifiable assets, the assumed liabilities, any non-controlling interest and, if any, goodwill according to IFRS 3.
The acquisition cost is measured as the aggregate of the transferred consideration, measured at fair value on that date, and the amount of any non-controlling interest in the acquiree. The Group will measure the non- controlling interest in the acquiree at fair value or at the proportional interest in the identifiable net assets of the acquiree.
If the business combination is made in stages, the Group will measure again its previous holding at fair value at the acquisition date and will recognize income or loss in the consolidated statement of comprehensive income.
Goodwill is measured at cost, as the excess of the transferred consideration regarding the acquired identifiable assets and the net assumed liabilities of the Group. If this consideration is lower than the fair value of the identifiable assets and of the assumed liabilities, the difference is recognized in the consolidated statement of income. If the fair value of the net assets acquired is higher than the consideration paid, the Group reassesses whether it has properly identified all the assets acquired and all the liabilities assumed and reviews the procedures used to measure the amounts to be recognized at the acquisition date. If the reassessment still results in an excess of the fair value of the net assets acquired in comparison to the consideration paid, then the gain is recognized in the consolidated statement of income.
| F-41 |
CENTRAL PUERTO S.A.
As described in Note 20.5, on
February 17, 2023, the Group acquired Central Costanera S.A. The business combination was accounted for using the "acquisition method"
provided for in IFRS 3. As a result of the application of this method, the Group determined that the consideration transferred was lower
than the fair value of the assets acquired and liabilities assumed at the acquisition date. Therefore, the Group recognized a gain from
bargain purchase amounting to
As described in Note 20.6, on May 3,
2023, the Group acquired the companies Empresas Verdes Argentina S.A., Las Misiones S.A. and Estancia Celina S.A. The business combination
was accounted for using the "acquisition method" provided for in IFRS 3. As a result of the application of this method, the
Group determined that the consideration transferred was lower than the fair value of the assets acquired and liabilities assumed at the
acquisition date. Therefore, the Group recognized a gain from bargain purchase amounting to
As described in Note 20.6, on December
27, 2022, the Group acquired the companies Forestal Argentina S.A. and Loma Alta Forestal S.A. The business combination was accounted
for using the “acquisition method” set forth in IFRS 3. As a result of the application of such method, the Group considered
that the consideration transferred was lower than the fair value of the assets acquired and liabilities assumed at the acquisition date.
Therefore, the Group recognized a gain from bargain purchase amounting to
| 2.3. | Significant accounting estimates and assumptions |
The preparation of the Group’s financial statements requires management to make significant estimates and assumptions that affect the recorded amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the end of the reporting period. In this sense, the uncertainties related to the estimates and assumptions adopted could give rise in the future to final results that could differ from those estimates and require significant adjustments to the amounts of the assets and liabilities affected.
The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Group based its accounting assumptions and significant estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising beyond the control of the Group. Such changes are reflected in the assumptions when they occur.
Recoverability of property, plant and equipment and intangible assets:
At each closing date of the reported period, the Group evaluates if there is any sign that the property, plant and equipment and/or intangible assets with finite useful lives may have their value impaired. Impairment exists when the book value of assets related to the Cash Generating Unit (CGU) exceeds its recoverable value, which is the higher between its fair value less costs of sale of such asset and value in use. The value in use is calculated through the estimation of future cash flows discounted at their present value through a discount rate that reflects the current assessments of the market over the temporal value of money and the specific risks of each CGU. The recoverable value is sensitive to the estimated inflows as well as the discount rate applied.
| F-42 |
CENTRAL PUERTO S.A.
Biological assets:
The process of estimating the value of biological assets is determined using fair values. This estimation includes judgment and assumptions related to estimated forest growth, margins, and discount rates.
Business combinations:
See Note 2.2.20.
| 2.4. | Changes in accounting policies |
New standards and interpretations adopted
As from the fiscal year beginning January 1, 2024, the Group has applied for the first time certain new and/or amended standards and interpretations as issued by the IASB.
Below is a brief description of the new and/or amended standards and interpretations adopted by the Group and their impact on these consolidated financial statements.
Amendments to IAS 1: Classification of Liabilities as Current or Non-current
In January 2020 and October 2022, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the requirements for classifying liabilities as current or non-current. The amendments clarify: (i) the meaning of a right to defer settlement; (ii) that a right to defer must exist at the end of the reporting period; (iii) that classification is unaffected by the likelihood that an entity will exercise its deferral right and (iv) that only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a liability not impact its classification.
In addition, a requirement has been introduced to disclose when a liability arising from a loan agreement is classified as non-current and the entity’s right to defer settlement is contingent on compliance with future covenants within twelve months.
These amendments have not had a significant impact on the Group's financial statements.
Supplier Finance Arrangements - Amendments to IAS 7 and IFRS 7
In May 2023, the IASB issued amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures to clarify the characteristics of supplier finance arrangements and require additional disclosure of such arrangements. The disclosure requirements in the amendments are intended to assist users of financial statements in understanding the effects of supplier finance arrangements on an entity’s liabilities, cash flows and exposure to liquidity risk.
These amendments have not had a significant impact on the Group's financial statements.
Amendments to IFRS 16: Lease liability in subsequent sale and leaseback
In September 2022, the IASB issued amendments to IFRS 16 to clarify the requirements a seller-lessee uses to measure liabilities in a leaseback from a subsequent sale and leaseback transaction to guarantee the seller-lessee does not recognize any amount of the gain or loss that relates to the right of use it retains.
These amendments have not had a significant impact on the Group's financial statements.
| 2.5. | IFRS Accounting Standards as issued by the International Accounting Standards Board (IASB) issued but not yet effective |
The following new and/or amended standards and interpretations have been issued but were not effective as of the date of issuance of these consolidated financial statements of the Group. In this sense, only the new and/or amended standards and interpretations that the Group expects to be applicable in the future are indicated. In general, the Group intends to adopt these standards, as applicable when they become effective.
| F-43 |
CENTRAL PUERTO S.A.
Lack of interchangeability - Amendments to IAS 21
In August 2023, the IASB issued amendments to IAS 21 Effects of Changes in Foreign Currency Exchange Rates to clarify when entities should assess whether a currency is interchangeable with another currency and when it is not, and how an entity determines the exchange rate to be applied when a currency is not interchangeable. In addition, the amendments require information that allows users of their financial statements to assess how the lack of interchangeability of a currency affects or is expected to affect its financial performance, financial position and cash flows.
The amendments will take effect for annual periods beginning on or after January 1, 2025. Early application is allowed as long as this fact is disclosed. When applying the modifications, the entities will not be able to re-express the comparative information.
The amendments are not expected to have a material impact on the Group's financial statements.
IFRS 18 Presentation and disclosure in the financial statements
In April 2024, the IASB issued IFRS 18, which replaces IAS 1 Presentation of Financial Statements. IFRS 18 introduces new requirements for the presentation of information within the statement of income, including specific totals and subtotals. Additionally, entities must classify all income and expenses within the statement of income into one of five categories: operating activities, investing activities, financing activities, income tax, and discontinued operations, with the first three categories being new.
It also requires entities to disclose newly defined performance measures by management, subtotals of income and expenses, and includes new requirements to aggregate and disaggregate financial information based on the “functions” identified from the primary financial statements and notes.
Limited scope amendments to IAS 7 Statement of Cash Flows were issued, which include changing the starting point for determining cash flows generated by operations using the indirect method, from “net profit or loss” to “operating profit or loss” and removing the optionality around the classification of cash flows from dividends and interest. Consequently, new amendments to many other standards were made.
IFRS 18 and the amendments to other standards are effective for periods beginning on or after January 1, 2027; however, early application is allowed as long as this fact is disclosed. IFRS 18 will be applied retrospectively.
The Group is currently working to identify all the effects that the amendments will have on the primary financial statements and notes to the financial statements.
IFRS 19 Subsidiaries without Public Accountability: Disclosures
In May 2024, the IASB issued IFRS 19, which allows eligible entities to opt for reduced disclosure requirements while still applying the recognition, measurement, and presentation requirements of other IFRS Accounting Standards as issued by the International Accounting Standards Board (IASB). To be eligible, at the end of the reporting period, the entity:
(i) must be a subsidiary as defined by IFRS 10, (ii) must not have public accountability, and (iii) must have a parent entity (either ultimate or intermediate) that prepares consolidated financial statements that are available for public use and comply with IFRS Accounting Standards as issued by the International Accounting Standards Board (IASB).
IFRS 19 is effective for periods beginning on or after January 1, 2027, with early application permitted.
| F-44 |
CENTRAL PUERTO S.A.
Since the Group's equity instruments are publicly traded, the Group cannot opt to apply IFRS 19.
| 3. | Investment in associates |
The book value of investment in associates as of December 31, 2024 and 2023 amounts to:
| 12-31-2024 | 12-31-2023 | |||||||
| ARS 000 | ARS 000 | |||||||
| ECOGAS Group (Note 3.1) | ||||||||
| 3C Lithium Pte. Ltd | ||||||||
| Transportadora de Gas del Mercosur S.A. | ||||||||
The share of the profit of associates for the years ended December 31, 2024, 2023 and 2022 amounts to:
| 2024 | 2023 | 2022 | ||||||||||
| ARS 000 | ARS 000 | ARS 000 | ||||||||||
| ECOGAS Group (Note 3.1) | ||||||||||||
| Transportadora de Gas del Mercosur S.A. | ( | ) | ( | ) | ||||||||
As of December 31, 2024 CPSA holds
ownership interests of
Ecogas is a public entity listed on BYMA. DGCE's main activity is the provision of the public service of distribution of natural gas by networks in the provinces of Córdoba, La Rioja and Catamarca, while the main activity of DGCU is the provision of the public service of distribution of natural gas by networks in the provinces of Mendoza, San Juan and San Luis.
During May 2024, December 2023
and April 2022 the Group received dividends from the ECOGAS Group of
On December 19, 2024, Ecogas
carried out a public offering of subscription of shares in kind and a voluntary exchange, which consisted of (i) a voluntary public exchange
offer of DGCU shares for new ordinary shares of Ecogas at an exchange ratio equivalent to 15.83467388 DGCU shares for each new share and
(ii) a voluntary public exchange offer of DGCE shares for new ordinary shares of Ecogas at an exchange ratio equivalent to 12.55431094
DGCE shares for each new share. The settlement date for the share exchange was January 17, 2025. As a result of the exchange offer, from
that date, CPSA´s resulting direct participation in Ecogas is
On March 31, 2025, CPSA’s Board
of Directors approved proceeding with the corporate reorganization whereby, subject to approval by the Shareholders’ Meeting of
the companies involved convened for May 22, 2025, CPSA will spin off its shares in Ecogas and
| F-45 |
CENTRAL PUERTO S.A.
Below is summarized investment in associate of Ecogas Inversiones S.A. as of December 31, 2024, and 2023:
| 2024 | 2023 | |||||||||||||||||||||||
Ecogas Inversiones S.A. | Distribuidora de Gas del Centro S.A. |
Total |
Ecogas Inversiones S.A. | Distribuidora de Gas del Centro S.A. |
Total | |||||||||||||||||||
| Equity attributable to holders of the parent | ||||||||||||||||||||||||
| % of participation in an investment in associate | % | % | % | % | ||||||||||||||||||||
| Subtotal | ||||||||||||||||||||||||
| Lower value of investment | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
| Investment in associate | ||||||||||||||||||||||||
Below is summarized share of the profit of associate of Ecogas Inversiones S.A. as of December 31, 2024, 2023 and 2022:
| 2024 | 2023 | 2022 | ||||||||||||||||||||||||||||||||||
Ecogas Inversiones S.A. | Distribuidora de Gas del Centro S.A. |
Total |
Ecogas Inversiones S.A. | Distribuidora de Gas del Centro S.A. |
Total |
Ecogas Inversiones S.A. | Distribuidora de Gas del Centro S.A. |
Total | ||||||||||||||||||||||||||||
| Total comprehensive income for the year | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| % of participation in an investment in associate | % | % | % | % | % | % | ||||||||||||||||||||||||||||||
| Subtotal | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Lower value of investment | ||||||||||||||||||||||||||||||||||||
| Share of the profit of associate | ||||||||||||||||||||||||||||||||||||
Below is summarized financial information of Ecogas Inversiones S.A. as of December 31, 2024, and 2023:
| 2024 | 2023 | ||
| Statement of financial position | |||
| Non-current assets | |||
| Current assets | |||
| Non-current liabilities | |||
| Current liabilities | |||
| Equity attributable to holders of the parent | |||
| Non-controlling interests |
Below is summarized revenues, equity holders of the parent and non-controlling interests of Ecogas Inversiones S.A. as of December 31, 2024, and 2023, 2022:
| 2024 | 2023 | 2022 | ||||||||||
| Revenues | ||||||||||||
| Net income for the year: | ||||||||||||
| - Equity holders of the parent | ( | ) | ||||||||||
| - Non-controlling interests | ||||||||||||
| 3.2. | Transportadora de Gas del Mercosur S.A. |
The Group has
a
| 3.3. | 3C Lithium Pte. Ltd. |
See Note 20.9.
| F-46 |
CENTRAL PUERTO S.A.
| 4. | Operating segments |
The following provides summarized information of the operating segments for the years ended December 31, 2024, 2023 and 2022:
2024 | Electric Power Generation from conventional sources | Electric Power Generation from renewable sources | Natural Gas Transport and Distribution (1) (2) |
Forest |
Others | Adjustments and eliminations (3) |
Total | |||||||||||||||||||||
| ARS 000 | ARS 000 | ARS 000 | ARS 000 | ARS 000 | ARS 000 | ARS 000 | ||||||||||||||||||||||
| Revenues | ( | ) | ||||||||||||||||||||||||||
| Cost of sales | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
| Administrative and selling expenses | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Other operating income | ( | ) | ||||||||||||||||||||||||||
| Other operating expenses | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
| Impairment of property, plant and equipment and intangible assets | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
| Operating income | ( | ) | ||||||||||||||||||||||||||
| Depreciation of property, plant and equipment | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
| Amortization of intangible assets | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||
| Adjusted EBITDA (5) | ( | ) | ||||||||||||||||||||||||||
| Operating income | ||||||||||||||||||||||||||||
| Other results (4) | ( | ) | ||||||||||||||||||||||||||
| Net income | ||||||||||||||||||||||||||||
| Total assets | ( | ) | ||||||||||||||||||||||||||
| Total liabilities | ( | ) | ||||||||||||||||||||||||||
2023 | Electric Power Generation from conventional sources | Electric Power Generation from renewable sources | Natural Gas Transport and Distribution (1) (2) |
Forest activity |
Others | Adjustments and eliminations (3) |
Total | |||||||||||||||||||||
| ARS 000 | ARS 000 | ARS 000 | ARS 000 | ARS 000 | ARS 000 | ARS 000 | ||||||||||||||||||||||
| Revenues | ( | ) | ||||||||||||||||||||||||||
| Cost of sales | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
| Administrative and selling expenses | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Other operating income | ( | ) | ||||||||||||||||||||||||||
| Other operating expenses | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
| Reversal of impairment of property, plant and equipment and intangible assets | ||||||||||||||||||||||||||||
| Operating income | ( | ) | ( | ) | ||||||||||||||||||||||||
| Depreciation of property, plant and equipment | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
| Amortization of intangible assets | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||
| Adjusted EBITDA (5) | ( | ) | ( | ) | ||||||||||||||||||||||||
| Operating income | ||||||||||||||||||||||||||||
| Other results (4) | ( | ) | ||||||||||||||||||||||||||
| Net Income | ||||||||||||||||||||||||||||
| Total assets | ( | ) | ||||||||||||||||||||||||||
| Total liabilities | ( | ) |
2022 | Electric Power Generation from conventional sources | Electric Power Generation from renewable sources | Natural Gas Transport and Distribution (1) (2) |
Forest activity |
Others | Adjustments and eliminations (3) |
Total | |||||||||||||||||||||
| ARS 000 | ARS 000 | ARS 000 | ARS 000 | ARS 000 | ARS 000 | ARS 000 | ||||||||||||||||||||||
| Revenues | ( | ) | ||||||||||||||||||||||||||
| Cost of sales | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Administrative and selling expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||
| Other operating income | ( | ) | ||||||||||||||||||||||||||
| Other operating expenses | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Impairment of property, plant and equipment and intangible assets | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
| Operating income | ( | ) | ||||||||||||||||||||||||||
| Depreciation of property, plant and equipment | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Amortization of intangible assets | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||
| Adjusted EBITDA (5) | ( | ) | ||||||||||||||||||||||||||
| Operating income | ||||||||||||||||||||||||||||
| Other results (4) | ( | ) | ||||||||||||||||||||||||||
| Net Income | ||||||||||||||||||||||||||||
| Total assets | ( | ) | ||||||||||||||||||||||||||
| Total liabilities | ( | ) |
| (1) | Includes information from associates. |
| (2) | Includes income (expenses) related to resale of gas transport and distribution capacity. |
| (3) | Includes adjustments and eliminations related to equity method investees. |
| (4) | Includes loss on net monetary position, share of the profit of associates, gain from bargain purchase, finance income and expenses, net. |
| (5) | It corresponds to the operating income before deducting depreciation, amortization, impairment and reversal. |
| F-47 |
CENTRAL PUERTO S.A.
Major customers
During the years
ended December 31, 2024, 2023 and 2022 revenues from CAMMESA amounted to
| 5. | Revenues |
| 2024 | 2023 | 2022 | ||||||||||
| ARS 000 | ARS 000 | ARS 000 | ||||||||||
| Spot market revenues | ||||||||||||
| Sales under contracts | ||||||||||||
| Steam sales | ||||||||||||
| Forest activity revenues | ||||||||||||
| Resale of gas transport and distribution capacity | ||||||||||||
| Revenues from CVO thermal plant management | ||||||||||||
| 6. | Operating expenses |
| 6.1. | Cost of sales |
| 2024 | 2023 | 2022 | ||||||||||
| ARS 000 | ARS 000 | ARS 000 | ||||||||||
| Inventories and biological assets at the beginning of each year | ||||||||||||
| Acquisition of biological assets (1) | ||||||||||||
| Purchases and operating and forest production expenses for each year: | ||||||||||||
| – Purchases | ||||||||||||
| – Operating expenses (Note 6.2) | ||||||||||||
| – Transfers to property, plant and equipment, net | ( | ) | ||||||||||
| – Forest production expenses (Note 6.2) | ||||||||||||
| – Forest growth and revaluation of biological assets (Note 7.1) | ||||||||||||
| Inventories and biological assets at the end of each year | ( | ) | ( | ) | ( | ) | ||||||
| (1) | Corresponds to the biological assets that were added to the Group through the business combinations described in Note 2.2.20. |
| 6.2. | Operating, forest production, administrative and selling expenses |
| 2024 | 2023 | 2022 | ||||||||||||||||||||||||||||||
Accounts |
Operating | Forest production expenses | Administrative and selling expenses |
Operating expenses | Forest production expenses | Administrative and selling expenses |
Operating expenses | Administrative and selling expenses | ||||||||||||||||||||||||
| ARS 000 | ARS 000 | ARS 000 | ARS 000 | ARS 000 | ARS 000 | ARS 000 | ARS 000 | |||||||||||||||||||||||||
| Compensation to employees | ||||||||||||||||||||||||||||||||
| Other long-term employee benefits | ||||||||||||||||||||||||||||||||
| Depreciation of property, plant and equipment | ||||||||||||||||||||||||||||||||
| Amortization of intangible assets | ||||||||||||||||||||||||||||||||
| Purchase of energy and power | ||||||||||||||||||||||||||||||||
| Fees and compensation for services | ||||||||||||||||||||||||||||||||
| Maintenance expenses | ||||||||||||||||||||||||||||||||
| Consumption of materials and spare parts | ||||||||||||||||||||||||||||||||
| Insurance | ||||||||||||||||||||||||||||||||
| Levies and royalties | ||||||||||||||||||||||||||||||||
| Taxes and assessments | ||||||||||||||||||||||||||||||||
| Tax on bank account transactions | ||||||||||||||||||||||||||||||||
| Forest production services | ||||||||||||||||||||||||||||||||
| Others | ||||||||||||||||||||||||||||||||
| Total | ||||||||||||||||||||||||||||||||
| F-48 |
CENTRAL PUERTO S.A.
| 7. | Other income and expenses |
| 7.1. | Other operating income |
| 2024 | 2023 | 2022 | ||||||||||
| ARS 000 | ARS 000 | ARS 000 | ||||||||||
| Interest earned from customers | (1) | (1) | (1) | |||||||||
| Foreign exchange difference, net | (2) | (2) | (2) | |||||||||
| Income from growth and revaluation of biological assets | ||||||||||||
| Insurance recovery | ||||||||||||
| Trade discounts | ||||||||||||
| Recovery related to discount of tax credits | ||||||||||||
| Income from sale of property, plant and equipment | ||||||||||||
| Net recovery related to the provision for lawsuits and claims | ||||||||||||
| Net recovery related to the allowance for doubtful accounts and other receivables | ||||||||||||
| Others | ||||||||||||
| (1) | Includes |
| (2) | Includes |
| 7.2. | Other operating expenses |
| 2024 | 2023 | 2022 | ||||||||||
| ARS 000 | ARS 000 | ARS 000 | ||||||||||
| Agreement with CAMMESA - Resolutions SE N° 58/2024 and 66/2024 (Note 1.2.p) | ( | ) | ||||||||||
| Wind farms incident-related expenses | ( | ) | ||||||||||
| Property, plant and equipment disposal | ( | ) | ||||||||||
| Forestry expenses | ( | ) | ( | ) | ||||||||
| Impairment of material and spare parts | ( | ) | ( | ) | ( | ) | ||||||
| Net charge related to the provision for lawsuits and claims | ( | ) | ( | ) | ||||||||
| Net charge related to the allowance for doubtful accounts and other receivables | ( | ) | ( | ) | ||||||||
| Trade and tax interests | ( | ) | ( | ) | ||||||||
| Charge related to discount of tax credits | ( | ) | ||||||||||
| Others | ( | ) | ( | ) | ( | ) | ||||||
| ( | ) | ( | ) | ( | ) | |||||||
| 7.3. | Finance income |
| 2024 | 2023 | 2022 | ||||||||||
| ARS 000 | ARS 000 | ARS 000 | ||||||||||
| Interest earned | ||||||||||||
| Net income on financial assets at fair value through profit or loss (1) | ||||||||||||
| Interest rate swap income | ||||||||||||
| Others (2) | ||||||||||||
| (1) | Net of |
| (2) | It corresponds to the effect on the valuation of the loan with Mitsubishi Corporation as described in Note 2.2.9.2. |
| F-49 |
CENTRAL PUERTO S.A.
| 7.4. | Finance expenses |
| 2024 | 2023 | 2022 | ||||||||||
| ARS 000 | ARS 000 | ARS 000 | ||||||||||
| Interest on loans | ( | ) | ( | ) | ( | ) | ||||||
| Foreign exchange differences | ( | ) | ( | ) | ( | ) | ||||||
| Bank commissions for loans and others | ( | ) | ( | ) | ( | ) | ||||||
| Others | ( | ) | ( | ) | ( | ) | ||||||
| ( | ) | ( | ) | ( | ) | |||||||
| 8. | Income tax |
The major components of income tax during the years ended December 31, 2024, 2023 and 2022, are the following:
Consolidated statements of income and comprehensive income
Consolidated statement of income
| 2024 | 2023 | 2022 | ||||||||||
| ARS 000 | ARS 000 | ARS 000 | ||||||||||
| Current income tax | ||||||||||||
| Income tax charge for the year | ( | ) | ( | ) | ( | ) | ||||||
| Variation between provision and tax return | ( | ) | ||||||||||
| IFRIC 23 | ( | ) | ( | ) | ||||||||
| Deferred income tax | ||||||||||||
| Related to the net variation in temporary differences | ( | ) | ||||||||||
| Income tax | ( | ) | ( | ) | ( | ) | ||||||
Consolidated statement of comprehensive income
| 2024 | 2023 | 2022 | ||||||||||
| ARS 000 | ARS 000 | ARS 000 | ||||||||||
| Income tax for the year related to items charged or credited directly to equity | ||||||||||||
| Deferred income tax (expense) income | ( | ) | ||||||||||
| Income tax credited charged to other comprehensive income | ( | ) | ||||||||||
| F-50 |
CENTRAL PUERTO S.A.
The reconciliation between income tax in the consolidated statement of income and the accounting income multiplied by the statutory income tax rate for the years ended December 31, 2024, 2023 and 2022, is as follows:
| 2024 | 2023 | 2022 | ||||||||||
| ARS 000 | ARS 000 | ARS 000 | ||||||||||
| Income before income tax | ||||||||||||
| At statutory income tax rate 35% | ( | ) | ( | ) | ( | ) | ||||||
| Effect of dividends received from associates | ( | ) | ||||||||||
| Effect related to the discount of income tax payable | ( | ) | ||||||||||
| Variation between provision and tax return | ( | ) | ||||||||||
| Tax inflation adjustment and inflation accounting effect | ( | ) | ( | ) | ( | ) | ||||||
| Tax-loss carryforwards utilized | ( | ) | ||||||||||
| Non- taxable financial earnings | ||||||||||||
| Income from growth and revaluation of biological assets | ||||||||||||
| Business combination tax effects | ||||||||||||
| Others | ( | ) | ||||||||||
| Income tax for the year | ( | ) | ( | ) | ( | ) | ||||||
Deferred income tax
Deferred income tax relates to the following:
| Consolidated statement of financial position | Consolidated statement of income and statement of other comprehensive income | |||||||||||||||||||
| 12-31-2024 | 12-31-2023 | 2024 | 2023 | 2022 | ||||||||||||||||
| ARS 000 | ARS 000 | ARS 000 | ARS 000 | ARS 000 | ||||||||||||||||
| Trade receivables | ( | ) | ( | ) | ||||||||||||||||
| Other financial assets | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Provisions and others | ( | ) | ( | ) | ||||||||||||||||
| Employee benefit liability | ( | ) | ( | ) | ||||||||||||||||
| Investments in associates | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Property, plant and equipment - Material & spare parts - Intangible assets | ( | ) | ( | ) | ||||||||||||||||
| Deferred tax income | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Tax loss carry-forward | ( | ) | ( | ) | ||||||||||||||||
| Tax inflation adjustment - Asset | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Tax inflation adjustment - Liability | ( | ) | ( | ) | ||||||||||||||||
| Deferred income tax (expense) income | ( | ) | ||||||||||||||||||
| Deferred income tax liabilities, net | ( | ) | ( | ) | ||||||||||||||||
liability, net, disclosed in the consolidated statement of financial position
| Consolidated statement of financial position | ||||||||||||
| 2024 | 2023 | 2022 | ||||||||||
| ARS 000 | ARS 000 | ARS 000 | ||||||||||
| Deferred income tax asset | ||||||||||||
| Deferred income tax liability | ( | ) | ( | ) | ( | ) | ||||||
| Deferred income tax liability, net | ( | ) | ( | ) | ( | ) | ||||||
As of December 31, 2024, the Group
holds tax loss carry-forward in its subsidiaries for
| F-51 |
CENTRAL PUERTO S.A.
| 9. | Earnings per share |
Earnings per share amounts are calculated by dividing net income for the year attributable to equity holders of the parent by the weighted average number of ordinary shares during the year, net of the number of treasury shares.
There are no transactions or items generating an effect of dilution.
The following reflects information on income and the number of shares used in the earnings per share computations:
| 2024 | 2023 | 2022 | ||||||||||
| ARS 000 | ARS 000 | ARS 000 | ||||||||||
| Income attributable to equity holders of the parent | ||||||||||||
| Weighted average number of ordinary shares | ||||||||||||
There have been no transactions involving ordinary shares or potential ordinary shares between the reporting date and the date of issuance of these consolidated financial statements that may produce a dilution effect.
| 10. | Inventories |
| 2024 | 2023 | |||||||
| ARS 000 | ARS 000 | |||||||
| Non-current: | ||||||||
| Materials and spare parts | ||||||||
| Provision for obsolete inventory (Note 10.1) | ( | ) | ( | ) | ||||
| Current: | ||||||||
| Materials and spare parts | ||||||||
| Forest inventories | ||||||||
| Fuel oil | ||||||||
| Gas oil | ||||||||
| 10.1. | Provision for obsolete inventory |
| 12-31-2024 | 12-31-2023 | |||||||
| Item | At beginning | Increases | At end | At end | ||||
| Inventories | ||||||||
| Total 12-31-2024 | ||||||||
| Total 12-31-2023 | ||||||||
| F-52 |
CENTRAL PUERTO S.A.
| 11. | Property, plant and equipment |
Lands and buildings | Electric power facilities and other equipment |
Wind turbines |
Gas |
Construction |
Other |
Total | ||||||||||||||||||||||
| ARS 000 | ARS 000 | ARS 000 | ARS 000 | ARS 000 | ARS 000 | ARS 000 | ||||||||||||||||||||||
| Cost | ||||||||||||||||||||||||||||
| 01-01-2023 | ||||||||||||||||||||||||||||
| Additions | (2) | |||||||||||||||||||||||||||
| Transfers | ( | ) | ( | ) | (1) | |||||||||||||||||||||||
| Disposals | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||
| 12-31-2023 | ||||||||||||||||||||||||||||
| Additions | ||||||||||||||||||||||||||||
| Transfers | ( | ) | ||||||||||||||||||||||||||
| Disposals | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||
| 12-31-2024 | ||||||||||||||||||||||||||||
Lands and buildings | Electric power facilities and other equipment |
Wind turbines |
Gas turbines |
Construction |
Other |
Total | ||||||||||||||||||||||
| ARS 000 | ARS 000 | ARS 000 | ARS 000 | ARS 000 | ARS 000 | ARS 000 | ||||||||||||||||||||||
| Depreciation and impairment | ||||||||||||||||||||||||||||
| 01-01-2023 | ||||||||||||||||||||||||||||
| Depreciation for the year | ||||||||||||||||||||||||||||
| Disposals and (Impairment reversal) / Impairment, net | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| 12-31-2023 | ||||||||||||||||||||||||||||
| Depreciation for the year | ||||||||||||||||||||||||||||
| Disposals and Impairment | ||||||||||||||||||||||||||||
| 12-31-2024 | ||||||||||||||||||||||||||||
| Net book value: | ||||||||||||||||||||||||||||
| 12-31-2024 | ||||||||||||||||||||||||||||
| 12-31-2023 |
| (1) | Transferred from inventories. |
| (2) | Includes 221,312,844 that were added to the Company’s equity through the business combinations occurred during 2023 that are described in Note 2.2.20. |
| F-53 |
CENTRAL PUERTO S.A.
| 12. | Intangible assets |
Concession |
Transmission | Turbogas and turbosteam supply agreements for thermoelectrical station Brigadier López |
Total | |||||||||||||
| ARS 000 | ARS 000 | ARS 000 | ARS 000 | |||||||||||||
| Cost | ||||||||||||||||
| 01-01-2023 | ||||||||||||||||
| Transfers | ||||||||||||||||
| 12-31-2023 | ||||||||||||||||
| Transfers | ||||||||||||||||
| 12-31-2024 | ||||||||||||||||
| Amortization and impairment | ||||||||||||||||
| 01-01-2023 | ||||||||||||||||
| Amortization for the year | ||||||||||||||||
| (Impairment reversal) / Impairment | ( | ) | ||||||||||||||
| 12-31-2023 | ||||||||||||||||
| Amortization for the year | ||||||||||||||||
| Impairment | ||||||||||||||||
| 12-31-2024 | ||||||||||||||||
| Net book value | ||||||||||||||||
| 12-31-2023 | ||||||||||||||||
| 12-31-2024 | ||||||||||||||||
Concession right of Piedra del Águila hydroelectric power plant
Includes the amounts paid as consideration for rights relating to the concession of Piedra del Águila hydroelectric power plant awarded by the Argentine government for a 30-year term, from the date of taking possession of such hydroelectric complex. The concession term terminated on December 29, 2023 and it was extended to a maximum date of December 28, 2025 (see Note 1.2.l).
For a concession arrangement to fall within the scope of IFRIC 12, usage of the infrastructure must be controlled by the concession grantor. This requirement is met when the following two conditions are met:
| – | the grantor controls or regulates what services the operator must provide with the infrastructure, to whom it must provide them, and at what price; and |
| – | the grantor controls the infrastructure, i.e., retains the right to take back the infrastructure at the end of the concession. |
Upon Resolution 95 passed by Argentine government the Company´s concession right of Piedra del Águila hydroelectric power plant met both conditions above.
The main features of the concession contract are as follows:
Control and regulation of prices by concession grantor: Pricing schedule approved by grantor;
| F-54 |
CENTRAL PUERTO S.A.
Remuneration paid by: CAMMESA;
Grant or guarantee from concession grantor: None;
Residual value: Infrastructure returned to grantor for no consideration at end of concession;
Concession end date: maximum date December 28, 2025 (see Note 1.2.l);
IFRIC 12 accounting model: Intangible asset.
Fees and royalties: the Intergovernmental
Basin Authority is entitled to a fee of 2.5% of the plant’s revenues, and the provinces of Rio Negro and Neuquén are entitled
to royalties of 12% of such revenues. For the years ended December 31, 2024 and 2023, the fees and royalties amounted to
Contractual capital investment obligations and obligations relating to maintenance expenditure on infrastructure under concession are not significant.
Transmission lines of wind farms Achiras, La Castellana, La Genoveva, La Genoveva II and Manque
The Group finished the construction of wind farms La Castellana, Achiras, La Genoveva, La Genoveva II and Manque, whereby the Group agreed to build high and medium tension lines and the electrical substation to connect the wind farms to Sistema Argentino de Interconexión ("SADI"), a part of which were given to the companies transporting the energy; therefore, such companies are in charge of the maintenance of such transferred installations. Consequently, the Group recognized intangible assets for the works related to the construction of the described equipments.
Turbogas and turbosteam supply agreements for Brigadier Lopez thermoelectric power plant
During fiscal year 2019, as a result of the business combination related to the acquisition of Brigadier Lopez thermoelectric power plant, the Group recognized an intangible asset related to turbogas and turbosteam supply agreements entered into with CAMMESA regarding Brigadier Lopez thermoelectric power plant.
| 13. | Financial assets and liabilities |
| 13.1. | Trade and other receivables |
| 12-31-2024 | 12-31-2023 | |||||||
| ARS 000 | ARS 000 | |||||||
| Non-current: | ||||||||
| Trade receivables - CAMMESA | ||||||||
| Receivables from shareholders | ||||||||
| Guarantee deposits | ||||||||
| Current: | ||||||||
| Trade receivables - CAMMESA | ||||||||
| Trade receivables - YPF S.A. and YPF Energía Eléctrica S.A. | ||||||||
| Trade receivables - Large users | ||||||||
| Trade receivables - Forest clients | ||||||||
| Receivables from associates and other related parties | ||||||||
| Other receivables | ||||||||
| Allowance for doubtful accounts (Note 13.1.1.) | ( | ) | ( | ) | ||||
| F-55 |
CENTRAL PUERTO S.A.
For the terms and conditions of receivables from related parties, refer to Note 18.
Trade receivables from CAMMESA accrue interest, once they become due.
The Company accrues interests on CVO receivables since the Commercial Approval date and according to the rate agreed in the CVO agreement, as described in Note 1.2.a).
Trade receivables related to large users accrue interest as stipulated in each individual agreement. The average collection term is generally from 30 to 90 days.
CVO receivables
As described in Note 1.2.a), in 2010 the Company approved the “CVO agreement” and as from March 20, 2018, CAMMESA granted the “Commercial Approval”.
Receivables under CVO agreement are disclosed under “Trade receivables - CAMMESA”.
As a consequence of the Commercial Approval and in accordance with the CVO agreement, the Company collects the CVO receivables converted in US dollars in 120 equal and consecutive installments.
CVO receivables are expressed in USD
and they accrued LIBOR interest at a 5% rate. Due to the fact that as from June 30, 2023, the calculation and publication of the LIBO
rate were suspended, for the purpose of determining the applicable interest this rate has been replaced by the Secured Overnight Financing
Rate (SOFR) published by the CME (Chicago Mercantile Exchange) plus a fixed spread of
During the years ended December 31,
2024, 2023 and 2022, collections of CVO receivables belonging to CPSA amounted to
The information on the Group’s objectives and credit risk management policies is included in Note 19.
The breakdown by due date of trade and other receivables due as of the related dates is as follows:
| Past due | ||||||||||||||||||||||||||||||
Total |
To due | <90 days | 90-180 days | 180-270 days | 270-360 days | >360 days | ||||||||||||||||||||||||
| ARS 000 | ARS 000 | ARS 000 | ARS 000 | ARS 000 | ARS 000 | ARS 000 | ||||||||||||||||||||||||
| 12-31-2024 | ||||||||||||||||||||||||||||||
| 12-31-2024 | ||||||||||||||||||||||||||||||
| 13.1.1. | Allowance for doubtful accounts |
| 12-31-2024 | 12-31-2023 | |||||||||||||||||||||||
| Item | At beginning | Increases | Decreases | Recoveries | At end | At end | ||||||||||||||||||
| Allowance for doubtful accounts - Trade and other receivables | ( | )(1) | ||||||||||||||||||||||
| Total 12-31-2024 | ( | ) | ||||||||||||||||||||||
| Total 12-31-2023 | (2) | ( | )(1) | ( | ) | |||||||||||||||||||
| (1) | Loss on net monetary position. |
| (2) | Includes 6.522 that were added to the Company’s equity through the business combinations described in Note 2.2.20. |
| F-56 |
CENTRAL PUERTO S.A.
| 13.2. | Trade and other payables |
| 12-31-2024 | 12-31-2023 | |||||||
| ARS 000 | ARS 000 | |||||||
| Non-current | ||||||||
| Trade and other payables | ||||||||
| Current | ||||||||
| Trade and other payables | ||||||||
| Payables to associates and other related parties | ||||||||
Trade payables are non-interest bearing and are normally settled on 60-day terms.
The information on the Group’s objectives and financial risk management policies is included in Note 19.
For the terms and conditions of payables to related parties, refer to Note 18.
| 13.3. | Loans and borrowings |
| 12-31-2024 | 12-31-2023 | |||||||
| ARS 000 | ARS 000 | |||||||
| Non-current | ||||||||
| Long-term loans for project financing (Notes 13.3.1, 13.3.2, 13.3.3, 13.3.4, 13.3.5, 13.3.6, 13.3.11, 13.3.12 and 13.3.13) |
| (1) |
| (1) | ||||
| Corporate bonds - CPSA Program (Note 13.3.9) | (1) | (1) | ||||||
| Current | ||||||||
| Long-term loans for project financing (Notes 13.3.1,13.3.2, 13.3.3, 13.3.4, 13.3.5, 13.3.6, 13.3.11, 13.3.12 and 13.3.13) | (1) | (1) | ||||||
| Short-term loans for import financing (Note 13.3.14) | ||||||||
| Corporate bonds - CPSA Program (Note 13.3.9) | (1) | (1) | ||||||
| Bank and investment accounts overdrafts | ||||||||
| (1) | Net of debt issuance costs. |
| 13.3.1. | Loans from the IIC-IFC Facility |
On October 20, 2017 and January 17,
2018, CP La Castellana S.A.U. and CP Achiras S.A.U. (both of which are subsidiaries of CPR), respectively, agreed on the structuring of
a series of loan agreements in favor of CP La Castellana S.A.U. and CP Achiras S.A.U., for a total amount of USD
In accordance with the terms of the
agreement subscribed by CP La Castellana S.A.U., USD
In accordance with the terms of the
agreement subscribed by CP Achiras, USD
| F-57 |
CENTRAL PUERTO S.A.
As per the executed loan agreement and among other obligations undertaken, the subsidiaries CP La Castellana and CP Achiras have committed to maintain a Historical Senior Debt Service Coverage Ratio of at least 1.20:1.00 until the project’s termination date. Such ratio is calculated by dividing the addition of EBITDA for the most recent four financial quarters prior to the calculation date by the amount of all scheduled debt payments due in those four quarters.
In addition, as a guarantee of the obligations undertaken, the subsidiaries CP La Castellana and CP Achiras have a pledge in favor of IFC and IIC with a first degree recording on the financed assets.
Other related agreements and documents, such as the Guarantee and Sponsor Support Agreement (the “Guarantee Agreement” by which CPSA completely, unconditionally and irrevocably guaranted, as the main debtor, all payment obligations undertaken by CP La Castellana and CP Achiras until the projects reach the commercial operations date) hedging agreements, guarantee trusts, a mortgage, guarantee agreements on shares, guarantee agreements on wind turbines, direct agreements and promissory notes have been signed.
As of February 16, 2023, CP La Castellana and CP Achiras have fulfilled all the requirements and conditions to certify the occurrence of the project’s compliance date. As a result, the Guarantee Agreement posted by CPSA was released.
The Company also agreed to maintain, unless otherwise consented to in writing by each senior lender, ownership and control of the CP La Castellana and CP Achiras as follows: (i) until each project completion date, (a) it shall maintain (x) directly or indirectly, at least seventy percent (70%) beneficial ownership of CP La Castellana and CP Achiras; and (y) control of the CP La Castellana and CP Achiras; and (b) CP Renovables shall maintain (x) directly, ninety-five percent (95%) beneficial ownership of CP La Castellana and CP Achiras; and (y) control of CP La Castellana and CP Achiras. In addition, (ii) after each project completion date, (a) we shall maintain (x) directly or indirectly, at least fifty and one tenth percent (50.1%) beneficial ownership of each of CP La Castellana, CP Achiras and CP Renovables; and (y) control of each of CP La Castellana, CP Achiras and CP Renovables; and (b) CP Renovables shall maintain control of CP La Castellana and CP Achiras. Finally, there are certain requirements to be fulfilled in order to distribute dividends from CP La Castellana and CP Achiras.
As of December 31, 2024, the Group has met such obligations.
Under the subscribed trust guarantee
agreement, as of December 31, 2024 and 2023, there are trade receivables with specific assignment amounting to
As of December 31, 2024 and 2023,
the balance of these loans amounts to
| 13.3.2. | Borrowing from Kreditanstalt für Wiederaufbau (“KfW”) |
On March 26, 2019 the Company entered
into a loan agreement with KfW for an amount of up to USD
In accordance with the terms of the
agreement, the loan accrues an interest rate equal to LIBOR plus
Pursuant to the loan agreement, among other obligations, CPSA has agreed to maintain a debt ratio of no more than 3.5:1.00 as of December 31 of each year. As of the date of issuance of these financial statements, the Company has complied with this requirement.
As of December 31, 2024 and 2023,
the balance of this loan amounts to
| F-58 |
CENTRAL PUERTO S.A.
| 13.3.3. | Loan from Citibank N.A., JP Morgan Chase Bank N.A. and Morgan Stanley Senior Funding INC. |
On June 12, 2019, the Company entered into a loan agreement with Citibank N.A., JP Morgan Chase Bank N.A. and Morgan Stanley Senior Funding INC. for USD 180 million to fund the acquisition of the Thermal Station Brigadier López.
According to the terms of the agreement, this loan accrued at a variable interest rate based on the LIBO rate plus a margin. Due to the suspension of the LIBO rate on June 30, 2023, the Company and Citibank N.A., JP Morgan Chase Bank N.A. and Morgan Stanley Senior Funding INC amended the loan agreement on August 16, 2023, replacing the LIBO rate with the Secured Overnight Financing Rate (SOFR) plus a Credit Adjustment Spread (CAS) of 0.26161% applicable from September 12, 2023.
Considering the restrictions imposed
by the Argentine Central Bank (“BCRA”) described in Note 22, two amendments to the loan agreement were entered into on December
22, 2020 and June 15, 2021 to modify the amortization calendar to comply with BCRA requirements. As part of such amendments, the applicable
interest rates were increased by 200 basic points and then by 125 basic points, and limitations were established for the payment of dividends
as follows: no dividends could be paid during 2021, only up to USD
On October 19, 2023, the Company
prepaid principal for an amount of USD
As of December 31, 2023, the balance
of this loan amounted to
| 13.3.4. | Loan from the IFC to the subsidiary Vientos La Genoveva S.A.U. |
On June 21, 2019, Vientos La Genoveva
S.A.U., a CPSA subsidiary, signed a loan agreement with IFC on its own behalf, as Eligible Hedge Provider and as an implementation entity
of the Managed Co-Lending Portfolio Program (MCPP) administered by IFC, for an amount of USD
Pursuant to the terms of the agreement
signed with Vientos La Genoveva S.A.U., this loan accrued an interest rate equal to LIBOR plus
As per the executed loan agreement and among other obligations undertaken, the subsidiary Vientos La Genoveva S.A.U. has committed to maintain a Historical Senior Debt Service Coverage Ratio of at least 1.20:1.00 until the project’s termination date. Such ratio is calculated by dividing the addition of EBITDA for the most recent four financial quarters prior to the calculation date by the amount of all scheduled debt payments due in those four quarters.
In addition, as a guarantee of the obligations undertaken, the subsidiary Vientos La Genoveva S.A.U. has a pledge in favor of IFC with a first degree recording on the financed assets.
Other related agreements and documents, such as the Guarantee and Sponsor Support Agreement (the “Guarantee Agreement” by which CPSA fully, unconditionally and irrevocably guarantees, as the main debtor, all payment obligations undertaken by Vientos La Genoveva S.A.U until the project reaches the commercial operations date) hedging agreements, guarantee trusts, guarantee agreements on shares, guarantee agreements on wind turbines, direct agreements and promissory notes have been signed.
Pursuant to the Guarantee Agreement, among other customary covenants for this type of facilities, CPSA had committed, until the project completion date, to maintain (i) a leverage ratio of not more than 3.5:1.00; and (ii) an interest coverage ratio of not less than 2.00:1.00. In addition, CPSA, upon certain conditions, agreed to make certain equity contributions to Vientos La Genoveva S.A.U.
| F-59 |
CENTRAL PUERTO S.A.
On November 29, 2024, Vientos La Genoveva S.A.U. has fulfilled all the requirements and conditions to prove the occurrence of the project’s compliance date. As a result, the Guarantee Agreement provided by CPSA was released.
Finally, there are certain requirements to be fulfilled in order to distribute dividends from Vientos La Genoveva S.A.U.
As of December 31, 2024, the Group has met such obligations.
Under the signed trust guarantee
agreement, as of December 31, 2024 and 2023, there are trade receivables with specific assignments amounting to
As of December 31, 2024 and 2023,
the balance of the loan amounts to
| 13.3.5. | Loan from Banco de Galicia y Buenos Aires S.A. to CPR Energy Solutions S.A.U. |
On May 24, 2019, CPR Energy Solutions S.A.U. (subsidiary of CPR) signed a loan agreement with Banco de Galicia y Buenos Aires S.A. for an amount of USD 12.5 million to fund the construction of the wind farm “La Castellana II”.
According to the executed agreement,
this loan accrues a fixed interest rate equal to
As per the executed loan agreement, the subsidiary CPR Energy Solutions S.A.U. has committed to maintain: (i) a financial debt and EBITDA ratio lower than 2.25, and (ii) an EBITDA and financial debt service ratio higher than 1.10, both until the total payment of the owed amounts. As of June 29, 2024, the subsidiary obtained waivers to comply with the mentioned ratios and other contractual obligations in relation to the wind farm incident expenses included in Other operating expenses of the income statement for the year ended December 31, 2024. Finally, there are certain requirements that such subsidiary must fulfill for dividend payments.
In addition, as a guarantee of the obligations undertaken, the subsidiary CPR Energy Solutions S.A.U. has a pledge in favor of Banco de Galicia y Buenos Aires S.A. with a first degree recording on the financed assets.
Other agreements and related documents, such as the Collateral (in which CPSA fully, unconditionally and irrevocably guaranted, as the main debtor, all the payment obligations assumed by CPR Energy Solutions S.A.U. until total fulfillment of the guaranteed obligations or until the project reaches the commercial operation date, whichever it happens first) -, guarantee agreements on shares, guarantee agreements on wind turbines, promissory notes and other agreements have been executed.
On September 3, 2021, CPR Energy Solutions S.A.U. fulfilled all the requirements and conditions to certify the occurrence of the project’s compliance date. As a result, the Collateral provided by the Company was released.
As of December 31, 2024 and 2023,
the balance of this loan amounts to
| 13.3.6. | Loan from Banco Galicia y Buenos Aires S.A. to subsidiary Vientos La Genoveva II S.A.U. |
On July 23, 2019, subsidiary Vientos
La Genoveva II S.A.U. signed into a loan agreement with Banco de Galicia y Buenos Aires S.A. for an amount of USD
According to the executed agreement,
this loan accrued interest at LIBOR plus
| F-60 |
CENTRAL PUERTO S.A.
Within the framework of the loan agreement, the subsidiary Vientos La Genoveva II S.A.U. has committed to maintain: (i) a financial debt and EBITDA ratio lower than 3.75 until the end of June 2025 and lower than 2.25 from that date onwards; and (ii) an EBITDA and financial debt service ratio higher than 1.00 until late June 2025 and higher than 1.10 from that date onwards, both until the total payment of the owed amounts. Finally, there are certain requirements that such subsidiary must fulfill for dividend payments. As of December 31, 2024, the subsidiary has met such obligations.
In addition, as guarantee of the obligations undertaken, the subsidiary Vientos la Genoveva II S.A.U. has a pledge in favor of Banco de Galicia Buenos Aires S.A. with a first degree recording on the financed assets.
Other agreements and related documents, like the Collateral (in which CPSA fully, unconditionally and irrevocably guaranted, as the main debtor, all the payment obligations assumed by Vientos La Genoveva II S.A.U. until total fulfillment of the guaranteed obligations or until the project reaches the commercial operation date, whichever happens first) -, guarantee agreements on shares, guarantee agreements on wind turbines, direct agreements and promissory notes have been signed.
On September 3, 2021, Vientos La Genoveva II S.A.U. fulfilled all the requirements and conditions to certify the occurrence of the project’s compliance date, as a result, the Collateral provided by the Company was released.
As of December 31, 2024 and
2023, the balance of this loan amounts to
| 13.3.7. | Financial trust corresponding to Thermal Station Brigadier López |
Within the framework of the acquisition
of the Thermal Station Brigadier López, the Company assumed the capacity of trustee in the financial trust previously entered into
by Integración Energética Argentina S.A., which was the previous owner of the thermal station. The financial debt balance
at the transfer date of the thermal station was USD
According to the provisions of the
trust agreement, the financial debt accrued an interest rate equal to the LIBO rate plus
Under the subscribed trust guarantee
agreement, as of December 31, 2024 and 2023, there are trade receivables with specific assignment amounting to
During December 2024, CPSA initiated an arbitration with the Buenos Aires Stock Exchange to recover the amounts corresponding to the reserve fund and proceed with the subsequent dissolution of the Trust.
| 13.3.8. | CP Manque S.AU. and CP Los Olivos S.A.U. Program of Corporate Bonds |
On August 26, 2020, under Resolution
No. RESFC-2020 - 20767 - APN.DIR#CNVM, the public offering of the Global Program for the Co-Issuance of Simple Corporate Bonds (not convertible
into shares) by CP Manque S.A.U. and CP Los Olivos S.A.U. (both subsidiaries of CPR, and together the “Co-issuers”) for the
amount of up to USD
Within the framework of the mentioned
program, on September 2, 2020, Corporate Bonds Class I were issued for an amount of USD
Finally, on June 26, 2024 and considering the decisions taken at the Special General Shareholders’ Meetings of the Co-Issuers dated May 13, 2024, CNV decided to cancel the authorization duly granted to the Co-Issuers for the Public Offering of their corporate bonds, the early cancellation of the mentioned global co-issuance program and the termination of CNV corporate control over the Co-Issuers.
| F-61 |
CENTRAL PUERTO S.A.
| 13.3.9. | CPSA Notes Program |
On July 31, 2020, the Special
Shareholders’ Meeting of the Company approved the creation of a new global issuance program of corporate bonds for a maximum amount
of up to USD
Within this program framework, the
Company issued two types of corporate bonds. On the one hand, on September 17, 2023, the subscription and settlement of the Class A Corporate
Bond (CB) took place, denominated, paid-in and payable in US dollars abroad. The characteristics of this CB are the following: i) face
value issued: USD
Finally, on October 20, 2023, the
Company decided to reopen the Class A CB. This procedure allows the Company to offer in the market security which replicates the conditions
of the security already offered, incorporating the interest rate determined in the original offer (7%) and bidding the price. As a result
of this process, the Company issued an additional USD
| 13.3.10. | CPSA´s Shares Buyback Program |
On August 24, 2023, the Company's Board of Directors approved the creation of a new program for the acquisition of the shares issued by the Company as per the regulations in force, for a maximum amount of up to USD 10,000,000 or the lowest amount resulting from the acquisition until reaching 10% of the share capital and for a 180-calendar-day period counted as from the business day following the publication of the purchase in the market’s media, which shall be subject to any term renewal or extension.
The acquisition procedures may be conducted by the Company and/or its subsidiaries with a daily limit for operations of up to % of the average volume of daily transactions for the share in the markets in which it is listed, considering to such end the previous 90 trading business days. As of December 31, 2024, the Group acquired of its own shares under the program for a total amount of .
The transactions conducted through this program have been recorded as acquisitions of treasury shares in accordance with IAS 32. Therefore, the consideration paid for such shares was directly recorded against Equity under the “Other equity accounts” item.
| 13.3.11. | Mitsubishi Corporation Loan |
On November 29, 1996, the Company Central
Costanera S.A. entered into an agreement with Mitsubishi Corporation for the installation of a combined cycle power station. The original
agreement included a USD 192.5 million financing for 12 years from the provisional reception of the project, with an annual
| F-62 |
CENTRAL PUERTO S.A.
On October 27, 2014, Central Costanera
S.A. and Mitsubishi Corporation agreed to the restructuring of this liability. Among the main restructuring conditions, the following
stand out: accrued and accumulated interest forgiveness as of September 30, 2014 amounting to USD
Considering the restrictions imposed by the Argentine Central Bank described in Note 22, several amendments to the loan agreement were entered into since September 30, 2020.
The loan considers certain financial restrictions, which as of December 31, 2024 have been fully met by Central Costanera S.A. Moreover, as a guarantee of the obligations undertaken, Central Costanera S.A. has a first degree recording pledge on the financed assets in favor of Mitsubishi Corporation. The amount of the pledge has varied depending on the refinancing obtained.
As of December 31, 2024 and 2023, the
liabilities balance amounted to
| 13.3.12. | Loan from Equinor Wind Power AS |
As a result of the acquisition
of the Guañizuil II A solar farm, the Group assumed the liabilities corresponding to the loan granted to the subsidiary CP Cordillera
Solar S.A. (“CPCS”) by its previous shareholder Equinor Wind Power AS for a capital amount of USD
On October 18, 2023, both parties agreed
to a refinancing plan for a period of 24 months from the refinancing date at an annual rate of
Moreover, as a result of the acquisition,
the Group assumed the liabilities for the Junior Shareholder Loan Agreement granted to CPCS with a USD
On September 6 and October
7, 2024, both loans were fully repaid. As of December 31, 2023, the loan balance amounted to
| 13.3.13. | Loan from Banco Santander International |
On October 18, 2023, the subsidiary
CPCS agreed to a financing agreement with Banco Santander International for an amount of USD
As of December 31, 2024 and 2023, the
loan balance amounted to
| 13.3.14. | Short-term loans for import financing |
As of December 31, 2024, the
subsidiary Vientos La Genoveva II S.A.U. had agreed to several short-term loans with Banco Santander S.A. (Uruguay) for a total amount
of USD
The aforementioned loans are intended to finance the acquisition of trackers, panels and inverters and transformation centers to be installed in the San Carlos solar farm (see Note 20.10).
| F-63 |
CENTRAL PUERTO S.A.
As of December 31, 2024, CPSA has
several short-term loans with Banco Santander S.A. (Uruguay) for a total of USD
On November 4, 2024, the subsidiary
Central Costanera S.A. signed a short-term loan with Banco Santander S.A. (Uruguay) for a total of USD
| 13.4. | Changes in liabilities arising from financing activities |
01-01-2024 | Incorporation by acquisition of companies |
Payments |
Non-cash transactions |
Disbursements |
Other |
31-12-2024 | ||||||||||||||||||||||
| ARS 000 | ARS 000 | ARS 000 | ARS 000 | ARS 000 | ARS 000 | ARS 000 | ||||||||||||||||||||||
| Non-current liabilities | ||||||||||||||||||||||||||||
| Loans and borrowings | ( | ) | ( | ) | ||||||||||||||||||||||||
| Current liabilities | ||||||||||||||||||||||||||||
| Loans and borrowings | ( | ) | ( | ) | ||||||||||||||||||||||||
01-01-2024 | Incorporation by acquisition of companies |
Payments |
Non-cash transactions |
Disbursements |
Other |
31-12-2024 | ||||||||||||||||||||||
| ARS 000 | ARS 000 | ARS 000 | ARS 000 | ARS 000 | ARS 000 | ARS 000 | ||||||||||||||||||||||
| Non-current liabilities | ||||||||||||||||||||||||||||
| Loans and borrowings | ( | ) | ||||||||||||||||||||||||||
| Current liabilities | ||||||||||||||||||||||||||||
| Loans and borrowings | ( | ) | ( | ) | ||||||||||||||||||||||||
| (1) | As of December 31, 2024 and 2023, includes NON-CASH movements (payments through the TRUST), in ARS 4,930,248 and 4,233,242, respectively |
| (2) | As of December 31, 2024, includes NON-CASH movements (disbursements received through the pre-financing), in ARS 13,564,633 |
| (3) | As of December 31, 2024 and 2023, includes paid interest in ARS 43,713,532 and 51,015,832, respectively |
The “Non-cash transactions”
column includes the income for exposure to change in purchasing power of currency (income on net monetary position), which amounted to
| 13.5. | Quantitative and qualitative information on fair values |
Information on the fair value of financial assets and liabilities by category
The following tables is a comparison by category of the carrying amounts and the relevant fair values of financial assets and liabilities.
| Carrying amount | Fair value | |||||||||||||||
| 12-31-2024 | 12-31-2023 | 12-31-2024 | 12-31-2023 | |||||||||||||
| ARS 000 | ARS 000 | ARS 000 | ARS 000 | |||||||||||||
| Financial assets | ||||||||||||||||
| Trade and other receivables | ||||||||||||||||
| Other financial assets | ||||||||||||||||
| Cash and cash equivalents | ||||||||||||||||
| Total | ||||||||||||||||
| Financial liabilities | ||||||||||||||||
| Loans and borrowings | ||||||||||||||||
| Total | ||||||||||||||||
| F-64 |
CENTRAL PUERTO S.A.
Valuation techniques
The fair value reported in connection with the abovementioned financial assets and liabilities is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:
Management assessed that the fair values of current trade receivables approximate their carrying amounts largely due to the short-term maturities of these instruments.
The Group measures long-terms receivables at fixed and variable rates based on discounted cash flows. The valuation requires that the Group adopt certain assumptions such as interest rates, specific risk factors of each transaction and the creditworthiness of the customer.
Fair value of quoted debt securities, mutual funds, stocks and corporate bonds is based on price quotations at the end of each reporting period.
Fair value of loans and borrowings approximates their book value.
Fair value hierarchy
The following tables provides, by level within the fair value measurement hierarchy, as described in Note 2.2.2, the Company’s financial assets, that were measured at fair value on recurring basis as of December 31, 2024 and 2023:
| Fair value measurement using: | ||||||||||||||||
| 12-31-2024 | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
| ARS 000 | ARS 000 | ARS 000 | ARS 000 | |||||||||||||
| Assets measured at fair value | ||||||||||||||||
| Financial assets at fair value through profit or loss: | ||||||||||||||||
| Mutual funds | ||||||||||||||||
| Public debt securities | ||||||||||||||||
| Stocks and corporate bonds | ||||||||||||||||
| Interest rate swap | ||||||||||||||||
| Interest in companies (Note 20.8) | ||||||||||||||||
| Total financial assets measured at fair value | ||||||||||||||||
| Fair value measurement using: | ||||||||||||||||
| 12-31-2023 | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
| ARS 000 | ARS 000 | ARS 000 | ARS 000 | |||||||||||||
| Assets measured at fair value | ||||||||||||||||
| Financial assets at fair value through profit or loss: | ||||||||||||||||
| Mutual funds | ||||||||||||||||
| Public debt securities | ||||||||||||||||
| Stocks and corporate bonds | ||||||||||||||||
| Interest rate swap | ||||||||||||||||
| Total financial assets measured at fair value | ||||||||||||||||
| F-65 |
CENTRAL PUERTO S.A.
There were no transfers between hierarchies and there were not significant variations in assets values.
The information on the Group’s objectives and financial risk management policies is included in Note 19.
| 13.6. | Other financial assets |
| 12-31-2024 | 12-31-2023 | |||||||
| Book value | Book value | |||||||
| ARS 000 | ARS 000 | |||||||
| CURRENT ASSETS | ||||||||
| Financial assets at fair value through profit or loss | ||||||||
| Public debt securities issued by the National Government | ||||||||
| Public debt securities - T-Bills | ||||||||
| Mutual funds | ||||||||
| Stocks and corporate bonds | ||||||||
| Interest rate swap | ||||||||
| NON-CURRENT ASSETS | ||||||||
| Financial assets at fair value through profit or loss | ||||||||
| Public debt securities - T-Bills | ||||||||
| Mutual funds | ||||||||
| Interest rate swap | ||||||||
| Interest in companies - AbraSilver Resource Corp | ||||||||
| Financial assets at amortized cost | ||||||||
| Unquoted shares: | ||||||||
| - TSM | ||||||||
| - TMB | ||||||||
The information on the objectives and financial risk management policies is included in Note 19.
| F-66 |
CENTRAL PUERTO S.A.
| 13.7. | Financial assets and liabilities in foreign currency |
| 12-31-2024 | 12-31-2023 | ||||||||||||
| Account | Currency and amount (in thousands) |
Effective exchange rate (1) |
Book |
Currency and amount (in thousands) |
Book | ||||||||
| ARS 000 | ARS 000 | ||||||||||||
| NON-CURRENT ASSETS | |||||||||||||
| Trade and other receivables | USD | (2) | USD | ||||||||||
| Other financial assets | USD | USD | |||||||||||
| CURRENT ASSETS | |||||||||||||
| Cash and cash equivalents | USD | USD | |||||||||||
| EUR | EUR | ||||||||||||
| Other financial assets | USD | USD | |||||||||||
| Trade and other receivables | USD | (2) | USD | ||||||||||
| USD | USD | ||||||||||||
| NON-CURRENT LIABILITIES | |||||||||||||
| Loans and borrowings | USD | USD | |||||||||||
| Trade and other payables | USD | USD | |||||||||||
| CURRENT LIABILITIES | |||||||||||||
| Loans and borrowings | USD | USD | |||||||||||
| Trade and other payables | USD | USD | |||||||||||
| EUR | EUR | ||||||||||||
| SEK | |
SEK | |||||||||||
USD: US dollar. EUR: Euro.
SEK: Swedish Crown.
| (1) | At the exchange rate prevailing as of December 31, 2024 as per Banco de la Nación Argentina. |
| (2) | At the exchange rate according to Communication “A” 3500 (wholesale) prevailing as of December 31, 2024 as per the Argentine Central Bank. |
| 14. | Non-financial assets and liabilities |
| 14.1. | Other non-financial assets |
| 12-31-2024 | 12-31-2023 | |||||||
| ARS 000 | ARS 000 | |||||||
| Non-current: | ||||||||
| Tax credits | ||||||||
| Income tax credits | ||||||||
| Prepayments to vendors | ||||||||
| Current: | ||||||||
| Upfront payments of inventories purchases | ||||||||
| Prepayment insurance | ||||||||
| Tax credits | ||||||||
| Dividends receivable from associated companies (Note 18) | ||||||||
| Others | ||||||||
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CENTRAL PUERTO S.A.
| 14.2. | Other non-financial liabilities |
| 12-31-2024 | 12-31-2023 | |||||||
| ARS 000 | ARS 000 | |||||||
| Non-current: | ||||||||
| VAT payable | ||||||||
| Tax on bank account transactions payable | ||||||||
| Current: | ||||||||
| VAT payable | ||||||||
| Turnover tax payable | ||||||||
| Income tax withholdings payable | ||||||||
| Concession fees and royalties | ||||||||
| Tax on bank account transactions payable | ||||||||
| Others | ||||||||
| 14.3. | Compensation and employee benefits liabilities |
| 12-31-2024 | 12-31-2023 | |||||||
| ARS 000 | ARS 000 | |||||||
| Non-current: | ||||||||
| Employee long-term benefits | ||||||||
| Current: | ||||||||
| Employee long-term benefits | ||||||||
| Vacation and annual statutory bonus | ||||||||
| Contributions payable | ||||||||
| Bonus accrual | ||||||||
| Others | ||||||||
The following tables summarize the components of net benefit expense recognized in the consolidated statement of income as long-term employee benefit plans and the changes in the long-term employee benefit liabilities recognized in the consolidated statement of financial position.
| 12-31-2024 | 12-31-2023 | 12-31-2022 | ||||||||||
| ARS 000 | ARS 000 | ARS 000 | ||||||||||
| Benefit plan expenses | ||||||||||||
| Cost of interest | ||||||||||||
| Cost of service for the current year | ||||||||||||
| Past service cost | ( | ) | ||||||||||
| Expense recognized during the year | ||||||||||||
| Defined benefit obligation at beginning of year | ||||||||||||
| Incorporation from business combination | ||||||||||||
| Cost of interest | ||||||||||||
| Cost of service for the current year | ||||||||||||
| Past service cost | ( | ) | ||||||||||
| Actuarial (Gains) losses | ( | ) | ||||||||||
| Benefits paid | ( | ) | ( | ) | ( | ) | ||||||
| Decrease due to gain on net monetary position | ( | ) | ( | ) | ( | ) | ||||||
| Defined benefit obligation at end of year | ||||||||||||
| F-68 |
CENTRAL PUERTO S.A.
The main key assumptions used to determine the obligations as of year-end are as follows:
| Main key assumptions used | 2024 | 2023 | ||
| Discount rate | ||||
| Increase in the real annual salary | ||||
| Turnover of participants |
A one percentage point change in the discount rate applied would have the following effect:
| Increase | Decrease | |||||||
| ARS 000 | ARS 000 | |||||||
| Effect on the benefit obligation as of the 2024 year-end | ( | ) | ||||||
| Effect on the benefit obligation as of the 2023 year-end | ( | ) | ||||||
A one percentage point change in the annual salary assumed would have the following effect:
| Increase | Decrease | |||||||
| ARS 000 | ARS 000 | |||||||
| Effect on the benefit obligation as of the 2024 year-end | ( | ) | ||||||
| Effect on the benefit obligation as of the 2023 year-end | ( | ) | ||||||
As of December 31, 2024 and 2023, the Group had no assets in connection with employee benefit plans.
| 15. | Cash and cash equivalents |
For the purpose of the consolidated statement of financial position and the consolidated statement of cash flow, cash and short-term deposits comprise the following items:
| 12-31-2024 | 12-31-2023 | |||||||
| ARS 000 | ARS 000 | |||||||
| Cash at banks and on hand | ||||||||
Bank balances accrue interest at variable rates based on the bank deposits daily rates. Short-term deposits are made for varying periods of between one day and three months, depending on the immediate cash requirements of the Group, and earn interest at the respective fixed short-term deposit rates.
| 16. | Equity reserves and dividends |
Pursuant to the Argentine Companies Act (Ley General de Sociedades) and the bylaws, 5% of the income for the year must be allocated to the legal reserve until such reserve reaches 20% of the capital stock.
On April 29, 2022, the Shareholders´
Meeting of the Company approved that the unappropriated earnings (loss) as of December 31, 2021 amounting to
On December 23, 2022, the Shareholders´
Meeting of the Company decided to partially deallocate the voluntary reserve by
On April 28, 2023, the Shareholders’
Meeting of the Company approved an increase in the legal reserve in the amount of
| F-69 |
CENTRAL PUERTO S.A.
On November 2, 2023, the Company’s
Board of Directors decided to partially deallocate the voluntary reserve intended for dividends payment so as to distribute a dividend
equivalent to
On December 1, 2023, the Company’s
Board of Directors decided to partially deallocate the voluntary reserve intended for dividends payment so as to distribute a dividend
equivalent to
On December 15, 2023, the Company’s
Board of Directors decided to partially deallocate the voluntary reserve intended for dividends payment so as to distribute a dividend
equivalent to
On January 2, 2024, the Company’s
Board of Directors decided to partially deallocate the voluntary reserve intended for dividends payment so as to distribute a dividend
equivalent to
On April 30, 2024, the Shareholders’
Meeting of the Company approved an increase in the legal reserve in the amount of
On November 7, 2024, the Company´s
Board of Directors decided to partially deallocate the voluntary reserve intended for dividends payment so as to distribute a dividend
equivalent to
Within the framework of the amendment to the loan agreement with Citibank N.A., JP Morgan Chase Bank N.A. and Morgan Stanley Senior Funding INC -described in Note 13.3.3-, there was a restriction for the payment of dividends until 80% of the loan’s principal and interests were paid. Thus, during 2021 no dividends could be paid, while during 2022 and 2023 dividends could be paid up to USD 25 million and USD 20 million, respectively. Due to the advanced partial payment of the balance of such loan on October 19, 2023 as described in Note 13.3.3, through which more than 80% of the loan was paid, this limitation was no longer applicable as from that date.
In connection with loans described in Notes 13.3.1, 13.3.4, 13.3.5, 13.3.6 and 13.3.11 there are certain requirements to be fulfilled by the subsidiaries CP Achiras S.A.U., CP La Castellana S.A.U., CPR Energy Solutions S.A.U., Vientos La Genoveva II S.A.U., Central Costanera S.A. and Vientos La Genoveva S.A.U. in order for them to distribute dividends.
Dividends originated in profits obtained
during fiscal years initiated on or after January 1, 2018, that are to be paid to Argentine resident individuals and/or non-Argentine
residents, are subject to a
| 17. | Provisions |
| 2024 | 2023 | |||||||||||||||||||||||
| Item | At beginning | Increases | Decreases | Recoveries | At end | At end | ||||||||||||||||||
| ARS 000 | ARS 000 | ARS 000 | ARS 000 | ARS 000 | ARS 000 | |||||||||||||||||||
| Current | ||||||||||||||||||||||||
| Provision for lawsuits and claims | ( | )(1) | ( | ) | ||||||||||||||||||||
| Total 2024 | ( | ) | ( | ) | ||||||||||||||||||||
| Total 2023 | (2) | ( | )(1) | ( | ) | |||||||||||||||||||
| Non-current | ||||||||||||||||||||||||
| Provision for wind and solar farms dismantling |
( | )(1) | ||||||||||||||||||||||
| Total 2024 | ( | ) | ||||||||||||||||||||||
| Total 2023 | ( | )(1) | ||||||||||||||||||||||
| (1) | Relates to the effect of the inflation for the year. |
| (2) | Includes 2,507,690 that were added to the Company’s equity through the business combinations described in Note 2.2.20. |
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CENTRAL PUERTO S.A.
| 18. | Information on related parties |
The following table provides the transactions performed for the years ended December 31, 2024, 2023 and 2022, and the accounts payable to/receivable from related parties as of December 31, 2024, 2023 and 2022:
| Income | Expenses | Receivables | Payables | |||||||||||||||||
| ARS000 | ARS000 | ARS000 | ARS000 | |||||||||||||||||
| Associates: | ||||||||||||||||||||
| 12-31-2024 | ||||||||||||||||||||
| 12-31-2023 | ||||||||||||||||||||
| 12-31-2022 | ||||||||||||||||||||
| 12-31-2024 | ||||||||||||||||||||
| 12-31-2023 | ||||||||||||||||||||
| 12-31-2022 | ||||||||||||||||||||
| 12-31-2024 | ||||||||||||||||||||
| 12-31-2023 | ||||||||||||||||||||
| 12-31-2022 | ||||||||||||||||||||
| 12-31-2024 | ||||||||||||||||||||
| 12-31-2023 | ||||||||||||||||||||
| 12-31-2022 | ||||||||||||||||||||
| 12-31-2024 | ||||||||||||||||||||
| 12-31-2023 | ||||||||||||||||||||
| 12-31-2022 | ||||||||||||||||||||
| Related companies: | ||||||||||||||||||||
| 12-31-2024 | ||||||||||||||||||||
| 12-31-2023 | ||||||||||||||||||||
| 12-31-2022 | ||||||||||||||||||||
| 12-31-2024 | ||||||||||||||||||||
| 12-31-2023 | ||||||||||||||||||||
| 12-31-2022 | ||||||||||||||||||||
| 12-31-2024 | ||||||||||||||||||||
| 12-31-2023 | ||||||||||||||||||||
| 12-31-2022 | ||||||||||||||||||||
| 12-31-2024 | ||||||||||||||||||||
| 12-31-2023 | ||||||||||||||||||||
| 12-31-2022 | ||||||||||||||||||||
| Total | 12-31-2024 | |||||||||||||||||||
| 12-31-2023 | ||||||||||||||||||||
| 12-31-2022 | ||||||||||||||||||||
| (1) | Acquisition of natural gas for our thermal station located in Mendoza province. The purchase price is set according to current regulation of the natural gas market. |
| (2) | Administrative, financial, commercial, human resources and general management services rendered under the terms of the management assistance agreement. The management assistance fee is calculated as a percentage of revenues. |
Balances and transactions with shareholders
As at December 31, 2024 and 2023, there is
a balance of
As described in Note 2.2.16, on January 18, 2017, the subsidiary CPR entered into a stock option agreement with its minority shareholder at that time.
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CENTRAL PUERTO S.A.
During the fiscal year ended December 31, 2024, the Group sold % of its shareholding in controlled companies, without losing control over these companies. According to IFRS 10, the effects of this transaction were recognized directly in equity.
On January 7, 2025, the Shareholders' Meeting of the subsidiary CPR approved the redemption of all the shares owned by CPR minority shareholders, except for one share retained by Vientos la Genoveva II S.A.U., under the terms of article 220 paragraph 1 of the General Companies Law ("LGS"), and voluntarily reduced the capital stock under the terms of article 203 of the LGS. Subsequently, on March 31, 2025 CPSA acquired the share that had been retained by Vientos La Genoveva II S.A.U.
On March 31, 2025, CPSA’s Board
of Directors approved proceeding with the corporate reorganization whereby, subject to approval by the Shareholders’ Meeting of
the companies involved convened for May 22, 2025, CPSA will absorb CPR’s assets and liabilities, thereby assuming ownership of all
assets, liabilities, rights, and obligations of CPR as of the effective date of the merger. Since CPSA holds
Key management personnel compensation
During 2024, 2023 and 2022, short-term
employee benefits compensation for key management personnel amounted to approximately Argentine pesos
Terms and conditions of transactions with related parties
Balances at the related reporting period-ends are unsecured and interest free. There have been no guarantees provided or received for any related party receivables or payables.
For the years ended December 31, 2024, 2023 and 2022, the Group has not recorded any impairment of receivables relating to amounts owed by related parties. This assessment is undertaken at the end of each reporting period by examining the financial position of the related party and the market in which the related party operates.
| 19. | Financial risk management objectives and policies |
– Interest rate risk
Interest rate variations affect the value of assets and liabilities accruing a fixed interest rate, as well as the flow of financial assets and liabilities with floating interest rates.
The Company´s risk administration policy is defined for the purposes of reducing the effect of the purchasing power loss. During most of 2024 and 2023 net monetary positions have been assets; hence, during such period the Company sought to mitigate the risk by implementing adjustment mechanisms through interest and exchange differences. Consequently, during 2024 and 2023, item Loss on net monetary position registered a net loss due to inflation-exposure of monetary items.
Interest rate sensitivity
The following table shows the sensitivity of income before income tax for the year ended December 31, 2024, to a reasonably possible change in interest rates over the portion of loans bearing interest at a variable interest rate, with all other variables held constant:
| Increase in percentage | Effect on income before income tax (Loss) | |
| ARS 000 | ||
| ( |
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CENTRAL PUERTO S.A.
– Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.
The Company is exposed to the foreign
currency risk at an ARS/USD ratio, mainly due to its operating activities, the investment projects defined by the Company and the financial
debt related to the bank loans mentioned in Note 13.3. The Company does not use derivative financial instruments to hedge such risk. As
of December 31, 2024, the net balance exposed to this risk amounts to USD
Foreign currency sensitivity
The following table shows the sensitivity to a reasonably possible change in the US dollar exchange rate, with all other variables held constant, of income before income tax as of December 31, 2024 (due to changes in the fair value of monetary assets and liabilities).
| Change in USD rate |
Effect on income before income tax (Loss) | |
| ARS 000 | ||
| ( |
| – | Price risk |
The Company’s revenues depend on the electric power price in the spot market paid by CAMMESA. The Company has no power to set prices in the market where it operates, except for the income from agreements entered into in the Term Market, where the price risk is reduced since normally prices are negotiated above the spot market price.
Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily for trade receivables) and from its financing activities, including holdings of government securities.
| – | Trade and other receivables |
The Finance Department is in charge of managing customer credit risk subject to policies, procedures and controls relating to the Group’s credit risk management. Customer receivables are regularly monitored. Although the Group has received no guarantees, it is entitled to request interruption of electric power flow if customers fail to comply with their credit obligations. In regard to credit concentration, see Note 13.1. The need to book impairment is analyzed at the end of each reporting period on an individual basis for major clients. The allowance recorded as of December 31, 2024, is deemed sufficient to cover the potential impairment in the value of trade receivables.
| – | Cash and cash equivalents |
Credit risk from balances with banks and financial institutions is managed by the Group’s treasury department in accordance with corporate policy. Investments of surplus funds are made only with approved counterparties; in this case, the risk is limited because high-credit-rating banks are involved.
| – | Public and corporate securities |
This risk is managed by the Company’s finance management according to corporate policies, whereby these types of investments may only be made in first-class companies and in instruments issued by the federal or provincial governments.
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CENTRAL PUERTO S.A.
Liquidity risk
The Group manages its liquidity to guarantee the funds required to support its business strategy. Short-term financing needs related to seasonal increases in working capital are covered through short-and medium-term bank credit lines.
The table below summarizes the maturity profile of the Company’s financial liabilities.
| Less than 3 months | 3 to 12 months | More than a year | Total | |||||||||||||
| ARS 000 | ARS 000 | ARS 000 | ARS 000 | |||||||||||||
| As of December 31, 2024 | ||||||||||||||||
| Loans and borrowings | ||||||||||||||||
| Trade and other payables | ||||||||||||||||
| As of December 31, 2023 | ||||||||||||||||
| Loans and borrowings | ||||||||||||||||
| Trade and other payables | ||||||||||||||||
Granted and received guarantees
The Group has posted a bank guarantee
to cover the obligations undertaken under the Concession Agreement of Complejo Hidroeléctrica Piedra del Águila for
On March 19, 2009, the Group entered into a pledge agreement with the former Secretariat of Energy to secure its obligations in favor of FONINVEMEM trusts by virtue of the operation and maintenance agreement of the Timbúes and Manuel Belgrano power stations, by which it pledged as a collateral 100% of the shares in TSM and TMB.
On the other hand, shares acquired by the Group in Central Costanera S.A. have a pledge for which the Group will follow the procedure to achieve its extinguishment.
Regarding the agreement described
in Note 13.3.13., the Group has granted T-BILLs as compliance guarantee for USD
Furthermore, the Group has carried out stock market guarantees, being these financial operations guaranteed with short-term negotiable securities in local currency.
Likewise, the Group entered into various guarantee agreements to provide performance assurance of its obligations arising from the agreements described in Notes 1.2.a), 13.3.1, 13.3.4, 13.3.5, 13.3.6, 13.3.11 and 20.3.
| 20. | Contracts, acquisitions and agreements |
| 20.1. | Maintenance and service contracts |
The Group entered into long-term service agreements executed with leading global companies in the construction and maintenance of thermoelectrical generation plants, such as (i) General Electric, which is in charge of the maintenance of the Nuevo Puerto Combined Cycle plant, and part of the Mendoza based units, (ii) Siemens Energy, which is in charge of the maintenance of the combined cycle unit based in Mendoza site, the thermoelectrical power plant Brigadier López, the Luján de Cuyo and Terminal 6 San Lorenzo cogeneration units, and one of the combined cycle units based in Costanera thermoelectrical power plant, and (iii) Mitsubishi, which is in charge of the maintenance of the other combined cycle unit located in the Costanera thermoelectrical power plant.
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CENTRAL PUERTO S.A.
Under long-term service agreements, suppliers provide materials, spare parts, labor and on-site engineering guidance in connection with scheduled maintenance activities, in accordance with the applicable technical recommendations.
| 20.2. | Acquisition of General Electric gas turbine |
On March 13th, 2015, the Company acquired a gas turbine from General Electric and hired their specialized technical support services. The unit is a gas turbine with 373 MW output power.
| 20.3. | Renewable Energy generation farms |
In 2017 the Group entered into a power purchase agreement with CAMMESA for La Castellana and Achiras wind farms for a 20-year term as from the launch of the commercial operations. Likewise, during 2018 the Group entered into a power purchase agreement with CAMMESA for La Genoveva wind farm for a 20-year term as from the launch of the commercial operations.
Regarding wind farm La Castellana II, the Group entered into supply agreements with Rayen Cura S.A.I.C. for a 7-year term and approximately 35,000 MWh/year volume, with Metrive S.A. for a 15-year term and 12,000 MWh/year volume, with N. Ferraris for a 10-year term and 6,500 MWh/year volume and with Banco de Galicia y Buenos Aires S.A. for a 10-year term to supply energy demand for approximately 4,700 MWh/year.
Regarding wind farm La Genoveva II, the Group entered into supply agreements with Aguas y Saneamiento S.A. (AYSA) for a 10-year term from the beginning of operations date of the wind farm and approximately 87.6 GWh/year volume, with PBB Polisur S.R.L. (Dow Chemical) for a term of 6 years and an estimated volume of 80 GWh/year, with INC S.A. (Carrefour) for a term of 3 years and an estimated volume of 12 GWh/year, with Farm Frites for a 5-year term and 9.5 GWh/year volume and with BBVA for a 5-year term and 6 GWh/year volume.
Regarding wind farm Manque, the Group entered into a power purchase agreement with Cervecería y Maltería Quilmes SAICAyG (“Quilmes”) for the wind farm Manque for a 20-year term as from the launch of the commercial operations and for an estimated volume of 235 GWh per year.
Regarding the wind farm Los Olivos, the Group entered into power purchase agreements with S.A. San Miguel A.G.I.C.I. y F., Minera Alumbrera Limited and SCANIA Argentina S.A.U. for a 10-year term as from the launch of commercial operations, to supply them 8.7 GWh/year, 27.4 GWh/year and 20.2 GWh/year, respectively.
During the year 2018, the subsidiary company CPCS entered into an agreement with CAMMESA for the purchase of energy generated by the Guañizuil II A solar farm, for a period of 20 years from the beginning of operations (see Note 20.7).
Acquisition and operation of wind turbines
The Group has entered into agreements with Nordex Windpower S.A. for the operation and maintenance of Achiras and La Castellana wind farms for a 10-year term.
In addition, the Group has entered into agreements with Vestas Argentina S.A. for the operation and maintenance of wind farms La Genoveva I until August 30, 2040; La Genoveva II until May 31, 2039; La Castellana II until May 31, 2039; and Manque and Los Olivos until December 31, 2039.
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CENTRAL PUERTO S.A.
| 20.4. | Acquisition of Brigadier López thermoelectric plant |
In the context of a local and foreign public tender called by Integración Energética Argentina S.A. (“IEASA”), which has been awarded to the Company, on June 14, 2019 the transfer agreement of the production unit that is part of Brigadier López thermoelectric plant and of the premises on which the plant is located, was signed, including: a) production unit for the plant, which includes personal property, recordable personal property, facilities, machines, tools, spare parts, and other assets used for the plant operation and use; b) IEASA’s contractual position in executed contracts (including turbogas and turbosteam supplying contracts with CAMMESA and the financial trust agreement signed by IEASA as trustor, among others); c) permits and authorizations in effect related to the plant operation; and d) the labor relationship with the transferred employees.
The plant currently has a Siemens gas turbine of 280.5 MW. According to the tender specifications and conditions, it is expected to supplement the gas turbine with a boiler and a steam turbine to reach the closing of the combined cycle, which will generate 420 MW in total.
During February 2024, the agreement with SACDE on the works, services, and necessary works to close the cycle was agreed on, having the “notice to proceed” been granted on February 26, 2024. The cycle closing works are in progress.
| 20.5. | Shares purchase agreements with Enel Group |
On February 17, 2023, Proener S.A.U. acquired
shares from Enel Argentina S.A., which represent
| 20.6. | Forest companies’ acquisition |
On December 27, 2022, Proener S.A.U., entered into a shares purchase agreement with Masisa S.A. and Masisa Overseas S.A. (jointly, “Masisa”), one of the main forestry companies in the region. Through such agreement, Masisa sold Proener S.A.U. the total shares of its Argentine affiliates Forestal Argentina S.A. and Masisa Forestal S.A. (currently, Loma Alta Forestal S.A.), which hold the forestry assets Masisa had in the country.
On May 3, 2023, Proener S.A.U. acquired
100% of capital stock and votes of companies Empresas Verdes Argentina S.A., Las Misiones S.A. y Estancia Celina S.A. The purchase price
amounted to USD
| 20.7. | Acquisition of solar farm |
On October 18, 2023, the Group acquired from Equinor Wind Power A.S., Scatec Solar Netherlands B.V. and Scatec Solar Argentina B.V. 100% of the share capital and votes of Cordillera Solar VIII S.A., currently called CP Cordillera Solar S.A. ("CPCS"), and Scatec Equinor Solutions Argentina S.A., currently called CP Servicios Renovables S.A., owner and operating companies, respectively, of a solar farm located in the province of San Juan, with an approximate power of 100 MW. The solar farm has an agreement with CAMMESA for the purchase of generated energy for a 20-year term counted as from the operations beginning date of such farm. This acquisition has been recorded as an assets acquisition as per IFRS 3. For further information regarding CPCS loans see Notes 13.3.12 and 13.3.13.
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CENTRAL PUERTO S.A.
| 20.8. | Acquisition of equity interest in AbraSilver Resource Corp. |
On April 22, 2024, Proener S.A.U.
entered into a shares subscription agreement for a
After the end of the fiscal year,
on January 31, 2025, Proener S.A.U. made an additional share subscription for an amount of Canadian dollars, through which
its shareholding in AbraSilver Resource Corp. increased to
| 20.9. | Acquisition of interest in 3C Lithium Pte. Ltd. |
On December 26, 2024, CPSA subscribed
to shares, equivalent to
| 20.10. | San Carlos solar farm |
On July 28, 2022, within the framework of Resolution MEyM No. 281/2017, the Group obtained dispatch priority allocation for the San Carlos Solar Farm project with a capacity of 10 MW, which was later increased to 15 MW, to be built in the locality of San Carlos, Province of Salta. On March 27, 2024, agreements were signed for the construction of the solar farm with the Chinese company Shanghai Electric Power Construction Company Ltd. Argentina. As of the date of these financial statements, the solar farm is under construction.
| 21. | Tax integral inflation adjustment |
Pursuant to Law no. 27,468, modified by Law no. 27,430, to determine the amount of taxable net profits for fiscal years commencing January 1, 2019, the inflation adjustment calculated on the basis of the provisions set forth in the income tax law will have to be added to or deducted from the fiscal year’s tax result. This adjustment will only be applicable (a) if the variance percentage of the consumers price index (“IPC”) during the 36 months prior to fiscal year closing is higher than 100%, and (b) for the first, second, and third fiscal year as from January 1, 2018, if the accumulated IPC variance is higher than 55%, 30% or 15% of such 100%, respectively. The positive or negative tax inflation adjustment, depending on the case, corresponding to the first, second and third period commenced as from January 1, 2018, which must be calculated in case of verifying the statements on the foregoing paragraphs (a) y (b), shall be charged in a sixth for that fiscal period and the remaining five sixths, equally, in the immediately following fiscal periods.
At December 31, 2019 and during the following fiscal years, such conditions have been already met. Consequently, the current and deferred income tax booked since the fiscal year ended December 31, 2019 include the effects derived from the application of the tax inflation adjustment under the terms established by the income tax law.
| 22. | Measures in the Argentine economy |
On December 10, 2023, new government authorities took office, which authorities issued a series of measures among whose main objectives the following stand out: flexibility of regulations for economic development, reduction of expenses towards reducing fiscal deficit, reduction of subsidies, among others. Within the context of the new government, on December 31, 2023 there was a significant devaluation of the Argentine peso which was reflected on the official exchange rate.
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CENTRAL PUERTO S.A.
During 2024, the national government has taken actions to achieve fiscal balance, which allowed it to reach a primary and financial surplus relative to the Gross Domestic Product in a short period of time, and to begin a process of slowing down inflation.
Passing of Law No. 27742 “Law of Bases”
On June 28, 2024, Law No. 27742 (“Law of Bases”) was passed, which Law came into force after its enactment by the Executive Power.
Regarding energy, the Law of Bases modifies laws that form the regulatory framework of hydrocarbons, natural gas, biofuels, electricity, among others. These changes are projected with the aim of rearranging the relationship between the government and the market so as to give predominance to private initiatives in order to gain in competitive terms and maximize the rent obtained.
In this regard, the Law of Bases enables the Executive Power to modify the Laws No. 15336 on Electrical Energy and No. 24065 on the Regulatory Framework of Electric Energy, by guaranteeing the following bases:
| – | Free international trade of electricity. |
| – | Free trade, competition and expansion of markets, and the possibility for the final user to choose the supplier. |
| – | A clear establishment of the different items to be paid by the final user. |
| – | The development of electricity transportation infrastructure through open, transparent, efficient and competitive mechanisms. |
| – | The review of administrative structures of the electricity sector, modernizing and professionalizing them. |
The Law of Bases combines the gas and electricity regulators (ENRE and Enargas) in one National Gas and Electricity Regulatory Entity, which shall have the same functions as the current ones.
Foreign exchange market
As from December 2019, the BCRA issued a series of communications whereby it extended indefinitely the regulations on Foreign Market and Foreign Exchange Market issued by BCRA that included regulations on exports, imports and previous authorization from BCRA to access the foreign exchange market to transfer profits and dividends abroad, as well as other restrictions on the operation in the foreign exchange market.
Particularly, as from September 16, 2020, Communication “A” 7106 established, among other measures referred to human persons, the need for refinancing the international financial indebtedness for those loans from the non-financial private sector with a creditor not being a related counterparty of the debtor expiring between October 15, 2020 and March 31, 2021. The affected legal entities were to submit before the Central Bank a refinancing plan under certain criteria: that the net amount for which the foreign exchange market was to be accessed in the original terms did not exceed 40% of the capital amount due for that period and that the remaining capital had been, as a minimum, refinanced with a new external indebtedness with an average life of 2 years. This point shall not be applicable when indebtedness is taken from international entities and official credit agencies, among others. On February 25, 2021, through Communication “A” 7230, BCRA broadened the regulation scope to all those debt installments higher than USD 2 million becoming due between April 1 and December 31, 2021. The effects of these regulations for the Company are described in Note 13.3.3. and 13.3.11. Moreover, on March 3, 2022 and October 13, 2022, through Communications “A” 7466 and "A" 7621, BCRA broadened the regulation scope to all those debt installments higher than USD 2 million becoming due until December 31, 2022 and December 31, 2023, respectively. The effects of this regulation for the Company are described in Note 13.3.11.
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CENTRAL PUERTO S.A.
As of the issuance date of these financial statements, after the new authorities took office on December 10, 2023, the restrictions for the payment of imports with customs entry record prior to December 13, 2023 were reduced, while other BCRA restrictions to access to the Unique and Free Exchange Rate Market and to operate in the exchange rate market still apply.
On April 11, 2025, the Argentine government
announced a set of measures aimed at easing the regulatory framework governing access to the foreign exchange market.
Income Tax
On June 16, 2021, the Argentine Executive
Power passed Law No. 27,630, which established changes in the corporate income tax rate for the fiscal periods commencing as from January
1, 2021. Such law establishes payment of the tax based on a structure of staggered rates regarding the level of accumulated taxable net
income. The estimated amounts in this scale will be annually adjusted as from January 1, 2022, considering the annual variation of the
consumer price index provided by the INDEC corresponding to October of the year prior to the adjustment compared with the same month of
the previous year. For fiscal year 2023
Investment Promotion Plan
In order to boost the productive matrix and at the same time generate employment and fiscal resources, the national government has implemented during 2024 the "Incentives Regime for Large Investments" (RIGI), which will grant tax benefits, access to foreign currency for imports and, under certain conditions, allow the remittance of profits to those investment projects that are presented and approved corresponding to certain strategic sectors, capable of generating exports in the medium and long term.
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CENTRAL PUERTO S.A.
| 23. | Environment-related topics |
The Group’s activities are subject to certain environmental regulations: The Group Management considers its operations comply, in all relevant aspects, with the laws and regulations related to the protection of the environment. On the other hand, the Group records provisions for the dismantling of wind and solar renewable assets based on the commitments assumed with the owners of the premises in which they are located. The Group monitors potential relevant changes on environmental regulations related with its activities and no significant future changes were identified for a foreseeable future.
| 24. | Subsequent events |
No facts or operations, other than disclosed, occurred between the closing date of the fiscal year and the date of issuance of these financial statements that may significantly affect such financial statements.
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