Argentina’s plans to add over 9GW of renewables capacity by 2025 could prove too ambitious given its default record, according to an S&P report.
The country’s aim to boost clean energy generation to about 20% of its overall capacity will require an investment of $15bn, the credit ratings agency said.
Such an ambitious plan may encounter pushback from foreign investors and capital markets, in part due to the country’s weakened credibility following its 2001 default.
As a result, S&P recommends that Argentina requires wider institutional improvements and stronger, investor-friendly rules to assure investors that risk-return trade-offs are justified.
Argentina granted support to almost 2.4GW of renewable energy projects last year through its first auctions and is planning more tenders.
“If the regulatory framework is not clear and cannot provide investors with long-term legal certainty, the projects’ credit quality will be weak,” S&P Global Ratings’ credit analyst Cecilia Fullone said.
Image: SXC
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