Narrative
Full Description
Project narrative
On August 12, 2016, Jujuy State Energy and Mining Society (JEMSE) and Shanghai Electric Power Construction Co. Ltd signed an Engineering, Acquisition and Construction Contract for the Cauchari Solar I, II and III Photovoltaic Parks, which was amended on February 3, 2017. The total contract value was $390 million. Then, later in 2017, China Eximbank signed a $331,500,000 preferential buyer credit (PBC) agreement [CHINA EXIMBANK PBC NO (2017) 22 TOTAL NO (44) No. (1420303052017212623)] with the Republic of Argentina for the 312 MW Jujuy Caucharí Photovoltaic Power Plant Project. The PBC, which is captured via Record ID#54783, carried the follow borrowing terms: 3% interest rate, 15 year maturity, 5 year grace period, 0.75% commitment fee, and 0.75% management fee. The recipient was Government of the Province of Jujuy in Argentina. The Republic of Argentina subsequently entered into an on-lending arrangement — through a subsidiary loan agreement — with the Government of the Province of Jujuy. The PBC loan covered roughly 85% of the total cost of the project. Government of the Province of Jujuy agreed to cover the other 15% of the project cost through the issuance of green bonds. This project, which is also known as the Cauchari Solar I, II and III Photovoltaic Parks, involved the installation of 1.2 million solar panels that provide the grid with 312 megawatts of power. Upon completion, the 312 MW complex was expected to generate close to $1 billion in revenue to Jujuy over its first 15 years of operation. It was expected to eventually expand to produce more than 500 megawatts, making it one of the largest solar plants in the world. This photovoltaic park is located in the town of Cauchari. The provincial energy company, Jujuy State Energy and Mining Society (JEMSE), managed the operation of the solar power complex while construction was executed by Shanghai Electric Power Construction (SEPC), a subsidiary of Powerchina. Talesun, also a Chinese company, supplied the 1.18 million solar panels and Huawei provided the inverters. On October 6, 2017, a project construction initiation ceremony was held. The project was officially completed on December 7, 2019. During the G20 Summit in Argentina from November 30 to December 1, 2018, the Government of Argentina and the People's Republic of China agreed to expand the Cauchari Solar Park in Jujuy, Argentina from a 312 MW solar park to a 500 MW solar park The Export-Import Bank of China reportedly agreed in principle to issue a $170 million loan (captured via Record ID#69556) to the Government of the Province of Jujuy in Argentina for the 200 MW expansion of the Cauchari Solar Park (known as Cauchari IV and V), which would cover 85% of the total ($200 million) cost of the project. If approved, the China Eximbank loan would require a sovereign guarantee from the central (national) government and carry the following borrowing terms: a 3% interest rate, a 3-year grace period, and a 15-year maturity. The loan approval process will reportedly take up to eight months after a power purchase agreement (PPA) is signed with Cammesa, since China Eximbank will require up to four months to approve the loan. Argentina’s national government will also need up to four months to approve the loan, because it comes with a sovereign guarantee which is already included in the 2021 budget. As of November 2020, the Government of the Province of Jujuy was still negotiating the power purchase agreement (PPA) with Argentina’s energy ministry. If the project is financed, it will also reportedly involve the expansion of a transformer station in Cobos and the construction of a 220-kW high-voltage line from the Altiplano substation to the town of La Quiaca. The addition of another 200 MW will also require the installation of 400,000 panels of a new available technology (500 volt instead of the current 330 volts), on an area of 1,200 hectares. The solar park was equipped with Chinese technology, developed by a Chinese contractor and financed by CHEXIM, using only 10% Argentine technology. In July 2023, the governor of Jujuy met with representitives from China Eximbank to discuss funding the Cauchari expansion project. Then, in September 2023, the governor of Jujuy met with executives from Shanghai Electric Power Construction Company to discuss the project, at which point funding had still not been secured. The goal remained to secure funding from China Eximbank by the end of 2023, in order to begin construction in early 2024. However, in a March 2025 speech, the new governor of Jujuy indicated that negotiations related to the project were still ongoing with both the federal government of Argentina and international lenders, indicating that as of March 2025, funding had not been formally committed.