De-privatisation of hydropower in Argentina. An analysis of the dynamics of rent appropriation from concessioned power plants (1990-2020)

Abstract

This article examines the historical trajectory of privatised hydropower plants in Argentina and their prospects. Built with public funds under the impulse of the developmentalist state during the 1960s and 1970s, non-binational hydroelectric power plants were concessioned to local and international private companies during the neoliberal policies of the 1990s. In light of the concession expiration dates in 2023 and 2024, the main objective of this article is to provide an account of the dynamics of hydroelectric rent appropriation between 1990 and 2020, the legal-political framework that sustains it, and the structural consistencies it exhibits. This is especially assessed in view of the projections for a possible energy transition from fossil to renewable sources, which is becoming urgent due to the global environmental crisis. A key fact when assessing this trajectory is that these works have an average amortisation period of around thirty years, a period that in the Argentine case was not yet covered at the time of the disposals. With an estimated investment of around U$S 20,000 million provided by the public coffers, in this article we calculate that private entrepreneurs paid around U$S 2,000 million for the concession of the power plants. We also report that the plants generate an annual income conservatively estimated at between US$350 million and US$400 million, which is appropriated only to a small extent by the provinces in which the hydroelectric plants are located through royalties. The possibility of returning these strategic assets to state hands necessarily opens up a wide range of options, which must be carefully examined.