Energy transition in Argentina: Challenges and opportunities on the road to a sustainable future

The energy sector is a major contributor to global carbon dioxide (CO2) emissions, accounting for approximately 75% of such emissions, according to the International Energy Agency (IEA). In this context, the transition to renewable energy sources becomes an urgent imperative to mitigate the effects of climate change and reduce the environmental footprint. In Argentina, this process has gained strength in recent years, driven both by government policies and by the commitment of the private sector.

Ambitious goals for the energy mix

In 2015, Argentina committed to having 20% of its energy matrix come from renewable sources by 2025, a goal that has driven the development of several projects across the country. By 2023, renewables accounted for 16% of the energy mix, reflecting considerable progress compared to the global average of 19%, although there is still work to be done to reach the 20% target.

Companies such as Genneia, YPF Luz and Petroquímica Comodoro Rivadavia (PCR) have played a key role in this process. In the particular case of PCR, it has consolidated its leadership in the renewable sector with the development of several wind farms that currently represent an installed capacity of 530 MW, which represents approximately 16% of the country's wind generation. This progress has been possible thanks to the exceptional natural conditions of some regions of Argentina, with efficiency factors above the global average.

Sustainable financing: Key to success

However, the energy transition in Argentina faces some important challenges. One of the most important is the need to modernize and expand electricity transmission infrastructure, especially in regions far from urban centers where many renewable energy projects are located. This structural challenge can create bottlenecks that limit the country's ability to realize its full clean energy potential.

Another crucial aspect is long-term financing. While programs like RenovAr have helped attract investment, Argentina's economic uncertainty poses difficulties in keeping capital flowing into new projects. In this sense, green bonds and other sustainable financing instruments are essential to channel resources towards initiatives that promote a low-carbon economy.

BBVA has been a strategic partner in this process, structuring and placing the first PCR Green Bond in 2021, an important step in financing long-term sustainable projects. Since then, BBVA has accompanied the company in successive green bond issuances and will continue to support both PCR and other customers in their growth plans through structured financing.

Towards a renewable future

By 2024, the share of renewables in Argentina's energy mix is expected to exceed 17%, representing significant progress, although still below the 20% target set for 2025. Achieving this goal will require not only continued investment in projects and infrastructure but also a regulatory and financial framework that allows companies in the sector to plan for the long term with greater certainty.

At BBVA, we want to support our customers in this transition. We believe that sustainability is not only an environmental necessity but also a business opportunity for those companies that integrate these principles into their operating models. Through tailored financial solutions, we continue to mobilize resources to build a more inclusive and greener future, benefiting both the economy and future generations.

To achieve this goal, BBVA Argentina has mobilized $140 million by 2023 and $282 million by June 2024. This commitment highlights the importance of solid and reliable financing to support the transition to a cleaner future.