Central Puerto and YPF Luz Sign a Strategic Agreement to Develop an Electric Power Transmission Line Project and Boost the Growth of Mining in the Northern Argentina Region

Rhea-AI Summary

Central Puerto (NYSE: CEPU) and YPF Luz have signed a strategic agreement to jointly develop an electric power transmission line project in Argentina's Puna region. The project aims to supply clean and efficient electricity to mining operations in the Pastos Grandes and Hombre Muerto salt flats, with potential expansion to Carachi Pampa salt flat.

The infrastructure development includes constructing 140-350 km of transmission lines, requiring an investment between $250-400 million. This marks the first collaboration between two major electricity generators for a large-scale electrical infrastructure project in Argentina. The initiative will connect the mining sector and local communities to the Argentine Interconnection System, supporting the region's mining industry development and economic growth, particularly in critical minerals essential for energy transition.

Positive

• Strategic partnership with YPF Luz for major infrastructure project
• Project investment range of $250-400 million shows significant scale
• Potential to capture growing mining sector demand in northwestern Argentina
• Infrastructure development positions company for future growth in critical minerals market

Negative

• High capital expenditure requirement ($250-400M) may impact financial resources
• Project success dependent on mining sector development and demand

News Market Reaction

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On the day this news was published, CEPU declined 4.47%, reflecting a moderate negative market reaction.

Data tracked by StockTitan Argus on the day of publication.

The generators have agreed to jointly move forward with the study and development of a high-voltage interconnection project to supply energy to mining projects in the Puna region.

Buenos Aires, Argentina--(Newsfile Corp. - January 16, 2025) - YPF Energía Eléctrica S.A. (YPF Luz) and Central Puerto S.A. (NYSE: CEPU) announced today the signing of a strategic agreement to jointly move forward with the study and development of a significant electrical interconnection project aimed to supply clean and efficient electricity in the Argentine Puna region.

This agreement marks an important milestone, as it is the first time that two major electricity generation companies will jointly evaluate the technical and regulatory aspects necessary to carry out a large-scale electrical infrastructure project that will provide a comprehensive electricity supply solution, with a particular focus on the development of the mining industry.

The project will connect the mining sector and local communities in the Pastos Grandes and Hombre Muerto salt flats, located in the provinces of Salta and Catamarca, to the Argentine Interconnection System. It also includes a potential expansion to the Carachi Pampa salt flat in Catamarca. This joint effort would involve an investment ranging from $250 million to $400 million, depending on the final scope of the project. The development under evaluation includes the construction of approximately 140 km of electric power transmission line, which could potentially be extended up to 350 km. The line will optimize resources and capabilities to provide efficient and sustainable energy solutions.

"As we stated earlier this month when announcing the signing of the collaboration agreement with the IFC, we are convinced that the development of mining in northwestern Argentina is crucial and strategic for the country's economic growth, especially in the context of an international market that increasingly demands critical minerals essential for the energy transition. Together with YPF Luz, this statement gains even more strength and reaffirms our belief that this project addresses the needs of mining companies to improve their competitiveness through reliable, efficient, and sustainable energy solutions," said Fernando Bonnet, CEO of Central Puerto.

For his part, Martín Mandarano, CEO of YPF Luz, emphasized: "Argentina has a historic opportunity to position itself as a world leader in copper and lithium supply. At YPF Luz, we are committed to providing comprehensive energy solutions that facilitate this goal. This strategic agreement with Central Puerto not only underscores our capacity to develop large-scale energy infrastructure but also our vision of working collaboratively with various sector stakeholders. Together, we will drive the infrastructure needed for mining projects, with significant benefits for the country, provinces, and local communities."

Press Contact:

Adrian Salvatore
Director of Corporate Affairs
Cel. +54 11 43175027
Adrian.salvatore@centralpuerto.com

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/237439

FAQ

What is the estimated cost of Central Puerto's (CEPU) transmission line project in Argentina?

The transmission line project's investment is estimated to range between $250 million to $400 million, depending on the final scope of the project.

How many kilometers of transmission lines will CEPU's new project cover?

The project includes approximately 140 km of electric power transmission line, with potential extension up to 350 km.

Which regions will benefit from CEPU's new power transmission project?

The project will benefit the Pastos Grandes and Hombre Muerto salt flats in Salta and Catamarca provinces, with potential expansion to the Carachi Pampa salt flat in Catamarca.

What is the purpose of CEPU's partnership with YPF Luz?

The partnership aims to develop a high-voltage interconnection project to supply clean and efficient electricity to mining projects in the Argentine Puna region.

How will CEPU's transmission line project impact the mining industry?

The project will provide comprehensive electricity supply solutions to improve mining companies' competitiveness through reliable, efficient, and sustainable energy solutions.