PowerChina intends to provide loan — via EPCF arrangement — for Potrero del Clavillo Hydroelectric Dam Project

PowerChina intends to provide loan — via EPCF arrangement — for Potrero del Clavillo Hydroelectric Dam Project On April 18, 2017, at the Third China-Argentina Strategic Dialogue for Economic Cooperation and Coordination, the Potrero del Clavillo Hydroelectric Dam project was identified as a priority project between China and Argentina.

On February 8, 2022, Catamarcan governor Raúl Jalil signed a Memorandum of Understanding (MOU) with PowerChina so that the negotiations on the project could begin. Then, on September 24, 2023, the governors of Tucumán and Catamarca signed a construction agreement for the project.

On October 17, 2023, at the Third Belt and Road Forum for International Cooperation, PowerChina also signed the construction agreement, at which point it was explicitly reported that the project was to be funded using an EPC+F modality.

However, an ultimate financier for the project -- which was expected to be a Chinese bank -- had not been identified by the parties at the time the contract was signed. The project was to be shopped around to potential funders following the EPC+F contract signing. However, there is no evidence a funder was identified before the end of 2023.

The total project cost is $957.12 million dollars, with 85% to be financed via credit from a Chinese bank, and 15% to be financed by the National Energy Secretariat of Argentina.

The Potrero del Clavillo project is to be located between the provinces of of Catamarca and Tucumán, where the Potrero, Del Campo and Chacras rivers meet. Its purpose is both to generate hydroelectricity and control flooding.

The construction scope will include a main dam (with a reservoir capacity of 75.2 million cubic meters and a concrete gravity dam height of 94.15 meters); two overflow dams; 24.3 kilometers of tunnels, canals and pipelines; and other ancillary works. The hydropower station will have a total installed capacity of 122.5 MW.

Project construction will take an estimated 54 months and would be carried out by PowerChina (Sinohydro Fourth Engineering Bureau) and Panedile, an Argentine construction company.