1. DISPERSED RURAL POPULATION ELECTRICITY SUPPLY PROGRAM OF ARGENTINA Lic. Aldo FABRIS Coordinator for R&D Energy Secretariat Ministry of Economy and Public Works and Services Finansol 98 - ALBUQUERQUE

2. ELECTRICITY SERVICES IN SOUTH CONE OF LATIN AMERICA

3. THE PROBLEM/ARGENTINA F Between 2.5 y 3 million people with no electricity services. F Relatively high number of public services with no electricity supply (schools, first aid medical centers, water services, etc.). F Electricity supply by grid extension not possible due to high extension costs by new incorporated user.

4. DISPERSED RURAL POPULATION WITHOUT ELECTRICITY SERVICES BY STATE (THOUSAND OF INHABITANTS)

5. PREVIOUS ELECTRICITY SUPPLY EXPERIENCE WITH RENEWABLES F SEVERAL STATES INSTALLED DIESEL GEN-SETS, MICRO- HYDRO, PV SYSTEMS AND WIND SYSTEMS. F IN ALL CASES SYSTEM MAINTENANCE WAS CARRIED ON BY THE USERS AND/OR THE STATE OWNED ELECTRICITY UTILITIES. F FACTORS FOR FAILURE: –LOW TECHNOLOGY KNOWLEDGE. –LOW PRIORITY OF THE USERS WITHIN COMPANY PROGRAM. –NO SYSTEM MAINTENANCE. F FINAL RESULT: –PEOPLE CHARACTERIZED RENEWABLES TECHNOLOGY AS UNRELIABLE.

6. DIAGNOSIS F RENEWABLE ENERGY (SOME OF IT, TYPICALLY SHS) TECHNOLOGIES ARE ELECTRICITY SUPPLY READY BECAUSE THEY ARE: –TECHNOLOGICALLY MATURE. –ECONOMICALLY COMPETITIVE. –SOCIALLY ACCEPTED. F THE MAIN DETECTED PROBLEM IS SUSTAINABILITY DUE TO PROGRAMS WITH A STRONG EMPHASIS IN SOCIAL WELFARE NOT LOOKING FOR MEDIUM/LONG TERM ISSUES THAT DO NOT CARE OF: –LONG TERM MAINTENANCE AND PARTS REPLACEMENT. –PEOPLE TECHNICAL TRAINING. –ECONOMIC SUSTAINABILITY OF SUPPLY.

7. ELECTRICITY SUPPLY PROGRAM GOAL AND PREMISES F PROVIDE MINIMUM ELECTRICITY SERVICES TO DISPERSED RURAL INHABITANTS AND RURAL SERVICES (LIGHTS AND SOCIAL COMMUNICATIONS) USING THE MOST ECONOMIC TECHNOLOGY. F SHARED RESPONSIBILITY: –USERS (THE PAY A TARIFF IN ALL CASES) –STATE GOVERNMENTS (THEY USE THEIR ELECTRICITY PROMOTION FUND PARTIALLY FOR THE PROGRAM) –FEDERAL GOVERNMENT (ASSIST THOSE STATE IN WHICH THE LOCAL AVAILABLE FUND ARE NOT SUFFICIENT F ELECTRICITY SERVICES PROVIDED BY PRIVATE CONCESSIONAIRES WHOSE INCOME IS ENOUGH TO RUN THE BUSINESS UNDER PREVAILING ECONOMIC CONDITIONS IN THE PRIVATE SECTOR.

8. ELECTRICITY SUPPLY PROGRAM GOALS F REACH WITH ELECTRICITY SERVICES TO 1.400.000 INHABITANTS (315.000 users) and 6000 PUBLIC SERVICES WITH SEVERAL TECHNOLOGIES. MOST OF THESE SERVICES RENEWABLE ENERGY TECHNOLOGIES WILL BE USED. F MINIMUM TARIFF TO USERS OF ABOUT $15 A MONTH. F MINIMUM SERVICES QUALITY IS OF ABOUT 4 KWh/MONTH. F WORKING POSITIONS IN THE PRIVATE SECTOR ARE CREATED.

9. FINANCING FIVE YEARS PROGRAM F TARIFAS A USUARIOS(1)$147.000.000 F FONDOS ESPECIALES (2)$113.000.000 F FONDOS ADICIONALES$ 54.000.000 TOTAL$314.000.000 (1)VALOR PRESENTE NETO DE BALANCE DE TARIFAS (TARIFAS - COSTOS DE O&M ) 10% - 20 AÑOS (2)FONDOS EXISTENTES SECTOR ELECTRICO (FCT)

10. WORLD BANK RESPONSE F RENEWABLE ENERGY PROJECT IN RURAL MARKET (PERMER) –FIRST PHASE UP TO 10 STATES –WB LENDING TO THE ARGENTINIAN GOVERNMENT OF ABOUT U$ 40 MILLIONS. –GEF SUBSIDY (CO2 MITIGATION) OF AROUND U$ 13 MILLIONS. F VERY IMPORTANT TECHNICAL ASSISTANCE PROGRAM TO OVERCOME THE BARRIERS FOR THE INTRODUCTION OF RENEWABLES. F WB PARTICIPATION GIVES TO THE GOA INITIATIVE CREDIBILITY WORLD WIDE. F CREDIT NEGOTIATION IS IN THE FINAL PHASE.

11. PRESENT SITUATION/ 1 l DISPERSED MARKET OF SALTA PROVINCE. –PRIVATE CONCESSIONAIRE SINCE SEPTEMBER/96. –18000 POTENTIAL PRIVATE USERS. –500 PUBLIC SERVICES TO BE SUPPLIED WITHIN FIRST 3 YEARS. –MAXIMUN TARIFF STRUCTURE FIXED. –BIDDING IN COMBINATION WITH THE CONCENTRATED MARKET WITH CROSS DEFAULT PUNISHMENT. –WINNER UNION FENOSA & EXCEL GROUP. –AROUND 200 SCHOOLS UNDER CONSTRUCTION.

12. PRESENT SITUATION/ 2 l DISPERSED MARKET OF JUJUY PROVINCE. –PRIVATE CONCESSIONAIRE STARTING IN DEC/96. –INVESTMENT GROUP –JOINT OFFER WITH CONCENTRATED MARKET ALTHOUGH CLEARLY IDENTIFIED. –CROSS DEFAULT STATEMENT –6500 POTENTIAL PRIVATE USERS. – 300 PUBLIC SERVICES. –14 SOLAR VILLAGES –100 SCHOOLS REPOWERED –NOW BUYING 600 SHS FOR PRIVATE USERS. –AUTOMATION OF 5 EXISTING MICRO HYDRO.

13. PRESENT SITUATION/ 3 F RIO NEGRO MARKET –8000 PRIVATE POTENTIAL USERS. –PRIVATE CONCESSIONAIRE OF GRID MARKETS USE AN OPTION TO PROPOSE A CONTRACT AND TARIFF STRUCTURE TO ATTEND THE DISPERSED RURAL MARKET. –THE STATE GOVERNMENT IS BEING ASSESSED BY CONSULTANTS OF THE WB PROGRAM FOR PRIVATE COMPANY PROPOSAL EVALUATION. F LA RIOJA MARKET –IS UNDER NATIONAL AND INTERNATIONAL TENDER FOR THE ELECTRICITY AND WATER RURAL MARKETS.

14. RESUME F MOVE FROM EQUIPMENT SUPPLY TO ELECTRICITY SERVICE CONCEPT. F MOVE FROM PROGRAM OR PROJECTS THINKING TO LONG TERM BUSINESS THINKING. F BUILD UP GOVERNMENTAL SUPPORT FOR THE IDEA. LOOK FOR GOVERNMENT PRIORITIES. F WORK WITH THE ENERGY SECTOR. F FINANCING INSTITUTION PARTICIPATION ADDS VALUE TO THE INITIATIVES. F IF YOU HAVE A BUSINESS, FINANCING IS NOT A HEAVY PROBLEMS. MAY TAKE SOME TIME, BUT IT IS POSSIBLE.

15. FOR MORE INFORMATION INTERNET http://www.mecon.ar/energia/energia.htm afabri@mecon.ar.

16. MUCHAS GRACIAS POR SU ATENCION FIN