Roundup: Impsa share sale, grid coordinator transmission cost concerns

Impsa sale

Argentine province Mendoza said saving cash-strapped energy infrastructure company Impsa remained a priority.

Majority-owned by the jurisdiction and the federal government, and with a debt burden of US$500 million, Impsa is being offered to the private sector.

A bill authorizing the transfer of Mendoza’s shares has advanced through the provincial congress and officials established a dataroom for potential bidders.

Mendoza governor Alfredo Cornejo said the company needed to operate under “private sector logic” and restructure its debt to obtain new contracts, according to a statement from the provincial government. 

With around 700 employees, Impsa exports about 85% of its production, solutions for the power generation and hydrocarbons sectors.

The federal government controls 63.7% of the company, Mendoza 21.2% - for which it paid US$5mn – while creditors hold 9.78% and the Pescarmona founding family 5.26%.

According to local press, the main interested party in fully acquiring Impsa is US firm Arc Energy.

The federal government would also need the green light in congress to offload its stake. 

Transmission concerns

Chile’s grid coordinator CEN sent a letter to energy minister Diego Pardow raising concerns about transmission infrastructure development. 

A “significant number” of works are in limbo following auction processes because of a lack of bidders or because offers received surpassed reserve prices established by national energy commission CNE.

Officials, the letter reads, have witnessed an increase in transmission development costs, citing inflation stemming from the pandemic and the Ukraine-Russia conflict, demand on supply chains and increases in local components.

“These same reasons generate imbalance with the reserve values established by CNE, which have led to auctions being declared deserted even when they have received offers,” it adds.

In addition, since 2021, projects to expand existing infrastructure have been abandoned, with higher construction costs cited by builders as the chief factor.

The trend may be observed in upcoming auctions, it says. CEN has three auction processes underway. The latest development was the opening of bids corresponding to the first of 2024.

Saying that project delays constitute a headwind for economic development in some zones and also for increased electrification of demand, CEN suggests several remedial measures.

• Update investment reference values (an estimate of how much the project will cost) for projects to be re-auctioned, in line with current market prices. 
• Incorporate an indexation formula over the period between the award date and the completion date, encompassing material, forex and labor costs.
• Establish reserve values for the works based on market costs at the time of awarding. 

In a survey commissioned by Acenor, Chile’s association of nonregulated electricity clients, 53% of respondents cited transmission charges as one of three main reasons behind increases in the prices they pay for their power. The others are systemic charges or side payments, and public services charges. 

Increases in the cost of supply is the prime concern of nonregulated electricity clients in Chile. That was among the takeaways of the research, conducted by consultancy In-Data.