Argentina’s Grupo Albanesi: ‘We’re in a very solid competitive position’

Argentine electric power generator Grupo Albanesi is expanding its footprint.

The company this month brought online its 154MW Ezeiza cycle-closure project and its first built outside the country: the 100MW Talara cogeneration plant in Peru, for state oil firm Petroperú.

On top of this, Albanesi has two more under construction on home turf and by year-end overall installed capacity is expected to climb 454MW to reach the 1.9GW mark.

To find out more, BNamericas conducted an email interview with Albanesi finance manager and director Osvaldo Cado.

BNamericas: The company has two thermoelectric generation projects underway, corresponding to 254MW of new capacity. These are Modesto Maranzana (cycle closure) and Arroyo Seco (open cycle and cogen cycle). How are these progressing?

Cado: I think first it is worth mentioning that we recently completed the expansion of the Ezeiza thermal power plant in Buenos Aires province, making available to the system a combined cycle of 304MW of efficient and sustainable capacity.

In addition, we are starting the operation of a 100MW cogeneration plant in Talara, northern Peru. The plant, which is owned by state oil company Petroperú, will supply energy and steam to the Talara refinery for the next 20 years. This is a very relevant milestone because it allows us to project ourselves as a reliable operator in the region and it is our first project outside of Argentina.

Both contracts will contribute more than US$50mn of incremental Ebitda to the Albanesi Group.

As you mentioned, we continue working on the expansion of the Modesto Maranzana plant and the construction of a new cogeneration plant in Arroyo Seco. Together, the projects will add 254MW of capacity and contribute more than US$50mn of Ebitda to the group. Work is coming along very well. Civil works are well advanced, and the main equipment is already on site and assembled. We hope to have both projects operational during 2024.

The group will reach 1.9GW of installed capacity, of which 1.2GW will be efficient cycles, very important in the context of what could be a gradual deregulation of the industry in Argentina.

BNamericas: Does Albanesi foresee any eventual investment in the area of renewable energy – for example, in the Mater term market or the energy storage segment – or is your current strategy regarding this segment more focused on being a trader?

Cado: It is a pending area for the group, but for the moment, our focus for 2024 is to start our projects under construction. Then we will analyze different opportunities.

BNamericas: In the TerCONF auction, subsidiary Generación Mediterránea was awarded the Modesto Maranzana cogeneration project. Could you give us a brief summary of the project and indicate what the current situation is? For example, it seems that, like other awarded companies, Albanesi is waiting for an announcement from the federal energy department regarding the next steps.

Cado: The project consists of the installation of a 23MW gas turbine and a 50t/h recovery boiler. The steam and some of the electricity will be supplied to Bio4, a bioethanol company in Rio Cuarto in Córdoba province, and 17MW would be supplied to the grid under a contract with [wholesale power market administrator] Cammesa. 

This contract was awarded to us in 2023 within the framework of the TerCONF auction. Ours was one of the few efficient projects presented. As you mention, the auction is under review by the new administration, although we believe that this project will eventually see the light of day if regulations allow us to replace Cammesa with a private entity.

BNamericas: Could you indicate what your capex guidance is for this year and what capex was executed in 2023?

Cado: During 2023, the group invested more than US$250mn, mainly concentrated in projects under construction. This year we expect to reach around US$140mn, also focused on projects. With the Ezeiza CT operational, investment will be mainly for Maranzana and Arroyo Seco.

BNamericas: Finally, what are your prospects for the local thermoelectric generation market? For example, there are reports in the local media that the ministry is considering changes to the structure of the electricity market. Or is Albanesi and other generators basically in ‘wait and see’ mode?

Cado: During the past few weeks, several articles were published in the local/international media, but there is still nothing official regarding the new administration's ideas regarding the industry. 

Yes, we believe that it will gradually move to a more deregulated market, where we are in a very solid competitive position having a relatively new and modern thermal park, and 1.2GW operating under efficient cycles. What is already confirmed is the increase in electricity rates that came into effect from March 2024, which will allow almost 70% of costs to be covered, reaching 100% by the end of the year. This will have very positive consequences for investment and will deliver sustainability to the system in the long term.