

Currently released so far... 12404 / 251,287
Browse latest releases
2010/12/01
2010/12/02
2010/12/03
2010/12/04
2010/12/05
2010/12/06
2010/12/07
2010/12/08
2010/12/09
2010/12/10
2010/12/11
2010/12/12
2010/12/13
2010/12/14
2010/12/15
2010/12/16
2010/12/17
2010/12/18
2010/12/19
2010/12/20
2010/12/21
2010/12/22
2010/12/23
2010/12/24
2010/12/25
2010/12/26
2010/12/27
2010/12/28
2010/12/29
2010/12/30
2011/01/01
2011/01/02
2011/01/04
2011/01/05
2011/01/07
2011/01/09
2011/01/10
2011/01/11
2011/01/12
2011/01/13
2011/01/14
2011/01/15
2011/01/16
2011/01/17
2011/01/18
2011/01/19
2011/01/20
2011/01/21
2011/01/22
2011/01/23
2011/01/24
2011/01/25
2011/01/26
2011/01/27
2011/01/28
2011/01/29
2011/01/30
2011/01/31
2011/02/01
2011/02/02
2011/02/03
2011/02/04
2011/02/05
2011/02/06
2011/02/07
2011/02/08
2011/02/09
2011/02/10
2011/02/11
2011/02/12
2011/02/13
2011/02/14
2011/02/15
2011/02/16
2011/02/17
2011/02/18
2011/02/19
2011/02/20
2011/02/21
2011/02/22
2011/02/23
2011/02/24
2011/02/25
2011/02/26
2011/02/27
2011/02/28
2011/03/01
2011/03/02
2011/03/03
2011/03/04
2011/03/05
2011/03/06
2011/03/07
2011/03/08
2011/03/09
2011/03/10
2011/03/11
2011/03/13
2011/03/14
2011/03/15
2011/03/16
2011/03/17
2011/03/18
2011/03/19
2011/03/20
2011/03/21
2011/03/22
2011/03/23
2011/03/24
2011/03/25
2011/03/26
2011/03/27
2011/03/28
2011/03/29
2011/03/30
2011/03/31
2011/04/01
2011/04/02
2011/04/03
2011/04/04
2011/04/05
2011/04/06
2011/04/07
2011/04/08
2011/04/09
2011/04/10
2011/04/11
2011/04/12
2011/04/13
2011/04/14
2011/04/15
2011/04/16
2011/04/17
2011/04/18
2011/04/19
2011/04/20
2011/04/21
2011/04/22
2011/04/23
2011/04/24
2011/04/25
2011/04/26
2011/04/27
2011/04/28
2011/04/29
2011/04/30
Browse by creation date
Browse by origin
Embassy Athens
Embassy Asuncion
Embassy Astana
Embassy Asmara
Embassy Ashgabat
Embassy Apia
Embassy Ankara
Embassy Amman
Embassy Algiers
Embassy Addis Ababa
Embassy Accra
Embassy Abuja
Embassy Abu Dhabi
Embassy Abidjan
Consulate Auckland
Consulate Amsterdam
Consulate Adana
American Institute Taiwan, Taipei
Embassy Bujumbura
Embassy Buenos Aires
Embassy Budapest
Embassy Bucharest
Embassy Brussels
Embassy Bridgetown
Embassy Bratislava
Embassy Brasilia
Embassy Bogota
Embassy Bishkek
Embassy Bern
Embassy Berlin
Embassy Belmopan
Embassy Belgrade
Embassy Beirut
Embassy Beijing
Embassy Banjul
Embassy Bangkok
Embassy Bandar Seri Begawan
Embassy Bamako
Embassy Baku
Embassy Baghdad
Consulate Barcelona
Embassy Copenhagen
Embassy Conakry
Embassy Colombo
Embassy Chisinau
Embassy Caracas
Embassy Canberra
Embassy Cairo
Consulate Curacao
Consulate Ciudad Juarez
Consulate Chennai
Consulate Casablanca
Consulate Cape Town
Consulate Calgary
Embassy Dushanbe
Embassy Dublin
Embassy Doha
Embassy Djibouti
Embassy Dili
Embassy Dhaka
Embassy Dar Es Salaam
Embassy Damascus
Embassy Dakar
Consulate Dubai
Embassy Helsinki
Embassy Harare
Embassy Hanoi
Consulate Ho Chi Minh City
Consulate Hermosillo
Consulate Hamilton
Consulate Hamburg
Consulate Halifax
Embassy Kyiv
Embassy Kuwait
Embassy Kuala Lumpur
Embassy Kinshasa
Embassy Kingston
Embassy Kigali
Embassy Khartoum
Embassy Kathmandu
Embassy Kampala
Embassy Kabul
Consulate Kolkata
Embassy Luxembourg
Embassy Luanda
Embassy London
Embassy Ljubljana
Embassy Lisbon
Embassy Lima
Embassy Lilongwe
Embassy La Paz
Consulate Lahore
Consulate Lagos
Mission USOSCE
Mission USNATO
Mission UNESCO
Embassy Muscat
Embassy Moscow
Embassy Montevideo
Embassy Monrovia
Embassy Minsk
Embassy Mexico
Embassy Mbabane
Embassy Maputo
Embassy Manila
Embassy Manama
Embassy Managua
Embassy Malabo
Embassy Madrid
Consulate Munich
Consulate Mumbai
Consulate Montreal
Consulate Monterrey
Consulate Milan
Consulate Melbourne
Embassy Nicosia
Embassy New Delhi
Embassy Ndjamena
Embassy Nassau
Embassy Nairobi
Consulate Naples
Consulate Naha
Embassy Pristina
Embassy Pretoria
Embassy Prague
Embassy Port Of Spain
Embassy Port Louis
Embassy Port Au Prince
Embassy Phnom Penh
Embassy Paris
Embassy Paramaribo
Embassy Panama
Consulate Peshawar
REO Basrah
Embassy Rome
Embassy Riyadh
Embassy Riga
Embassy Reykjavik
Embassy Rangoon
Embassy Rabat
Consulate Rio De Janeiro
Consulate Recife
Secretary of State
Embassy Suva
Embassy Stockholm
Embassy Sofia
Embassy Skopje
Embassy Singapore
Embassy Seoul
Embassy Sarajevo
Embassy Santo Domingo
Embassy Santiago
Embassy Sanaa
Embassy San Salvador
Embassy San Jose
Consulate Strasbourg
Consulate St Petersburg
Consulate Shenyang
Consulate Shanghai
Consulate Sao Paulo
Embassy Tunis
Embassy Tripoli
Embassy Tokyo
Embassy The Hague
Embassy Tel Aviv
Embassy Tehran
Embassy Tegucigalpa
Embassy Tbilisi
Embassy Tashkent
Embassy Tallinn
Consulate Toronto
Consulate Tijuana
USUN New York
USEU Brussels
US Office Almaty
US Mission Geneva
US Interests Section Havana
US Delegation, Secretary
UNVIE
Embassy Ulaanbaatar
Embassy Vilnius
Embassy Vienna
Embassy Vatican
Embassy Valletta
Consulate Vladivostok
Consulate Vancouver
Browse by tag
ASEC
AE
AF
AM
AR
AJ
AU
AORC
AG
AEMR
AMGT
APER
AGMT
AL
AFIN
AO
AMED
ADCO
AS
ABUD
ABLD
ASUP
ASECKFRDCVISKIRFPHUMSMIGEG
APECO
AID
AND
AMBASSADOR
AN
ARM
AY
AODE
AMG
ASCH
AMCHAMS
ARF
APCS
APEC
ASEAN
AGAO
ANET
ADPM
ACOA
ACABQ
AORL
AFFAIRS
ATRN
ACS
AFSI
AFSN
ADANA
ASIG
AA
AX
AUC
AC
AECL
AADP
AGRICULTURE
AMEX
ACAO
ACBAQ
AQ
AORG
ADM
AINF
AIT
ASEX
AGR
AROC
ATFN
AFGHANISTAN
AFU
AER
ALOW
AZ
AVERY
BA
BY
BU
BR
BE
BL
BO
BK
BM
BILAT
BH
BEXP
BF
BTIO
BC
BBSR
BMGT
BTIU
BG
BWC
BB
BD
BX
BP
BRUSSELS
BN
BIDEN
BT
CW
CH
CF
CD
CV
CVIS
CM
CE
CA
CJAN
CLINTON
CIA
CU
CASC
CI
CO
CACM
CDB
CN
CMGT
CS
CG
CBW
CIS
CR
CONDOLEEZZA
CPAS
CAN
CWC
CY
COUNTER
CDG
CL
CT
CIC
CIDA
CSW
CHR
CB
CODEL
COUNTERTERRORISM
CTR
COM
CICTE
CFED
CJUS
CKGR
CBSA
CEUDA
CARSON
CONS
CITEL
CLMT
CROS
CITT
CAC
CVR
CDC
CAPC
COPUOS
CBC
CBE
CARICOM
COE
COUNTRY
CLEARANCE
CACS
CTM
CNARC
ECON
EFIN
ETRD
EUN
EFIS
EG
ETTC
EZ
EPET
EAID
EAGR
ENRG
ECUN
EU
ELAB
ECPS
EAIR
EINV
ELTN
EWWT
EIND
EMIN
EI
ECIN
ENVR
ELECTIONS
EINVEFIN
EN
ES
ER
EC
EUC
EINT
EINVETC
ENGR
ET
EK
ENIV
ETRDEINVECINPGOVCS
ECONOMY
EAP
EFTA
EUR
EUMEM
EXIM
ERD
ENERG
EUREM
ESA
ERNG
EXTERNAL
EPA
EINVECONSENVCSJA
ECONOMICS
ELN
EINN
EFINECONCS
ENNP
EEPET
ETRDEINVTINTCS
ENVI
ETRO
ESENV
ECINECONCS
ECONOMIC
EAIDS
EDU
ETRA
ETRN
EFIM
EIAR
ETRC
EAIG
EXBS
EURN
ECIP
EREL
ECA
ENGY
ECONCS
ECONEFIN
ETC
ETRDECONWTOCS
EUNCH
EINDETRD
IR
IZ
IS
IAEA
INRB
IRAJ
IQ
IN
IT
IMO
INTERPOL
ICAO
IO
IC
ITALY
ITALIAN
IRAQI
ICTY
ID
IPR
IWC
ILC
INTELSAT
IL
IBRD
IMF
IA
IRC
ICRC
ILO
ITU
ITRA
IV
IDA
IAHRC
ICJ
ISRAELI
IRS
INMARSAT
ISRAEL
ISLAMISTS
INDO
IZPREL
ITPHUM
ITPGOV
ITF
IBET
IEFIN
INR
IACI
INTERNAL
IDP
IGAD
IEA
ICTR
IIP
INRA
INRO
IF
KJUS
KSCA
KNNP
KU
KCOR
KCRM
KDEM
KTFN
KHLS
KPAL
KWBG
KACT
KGHG
KPAO
KTIA
KIRF
KWMN
KS
KG
KZ
KN
KMDR
KISL
KSPR
KHIV
KPRP
KAWK
KR
KUNR
KDRG
KCIP
KGCC
KTIP
KSUM
KPKO
KVIR
KAWC
KPIN
KGIC
KRAD
KIPR
KOLY
KCFE
KMCA
KE
KV
KICC
KNPP
KBCT
KSEP
KFRD
KFLU
KVPR
KOCI
KBIO
KSTH
KMPI
KCRS
KOMC
KTBT
KPLS
KIRC
KREL
KFRDKIRFCVISCMGTKOCIASECPHUMSMIGEG
KFLO
KBTS
KSTC
KTDB
KFSC
KX
KFTFN
KNEI
KIDE
KREC
KMRS
KICA
KPAONZ
KCGC
KSAF
KRGY
KCMR
KRVC
KVRP
KSEO
KCOM
KAID
KTEX
KNUC
KNAR
KNUP
KNNPMNUC
KLIG
KFRDCVISCMGTCASCKOCIASECPHUMSMIGEG
KCRCM
KHDP
KGIT
KNSD
KOMS
KWMM
KPAI
KHSA
KTLA
KO
KMFO
KRCM
KCSY
KSAC
KTRD
KPWR
KID
KWNM
KRIM
KPOA
KCHG
KOM
KSCI
KFIN
KMOC
KESS
KWAC
KMIG
KSEC
KIFR
KDEMAF
KPRV
KBTR
KERG
KTER
KDDG
KPAK
KRFD
KHUM
KDEV
KCFC
KWWMN
KWMNCS
KJUST
MARR
MOPS
MU
MTCRE
MNUC
MY
MASS
MCAP
MOPPS
MAR
MPOS
MO
ML
MR
MASC
MX
MD
MP
MA
MTRE
MIL
MCC
MZ
MK
MDC
MRCRE
MAPS
MV
MI
MEPN
MAPP
MEETINGS
MAS
MTS
MLS
MILI
MTCR
MG
MC
MARAD
MIK
MILITARY
MEDIA
MEPI
MUCN
MEPP
MT
MERCOSUR
MW
MASSMNUC
MQADHAFI
NZ
NATO
NG
NI
NO
NATIONAL
NU
NPT
NIPP
NL
NPG
NS
NA
NGO
NP
NSG
NDP
NAFTA
NR
NC
NH
NE
NSF
NPA
NK
NSSP
NRR
NATOPREL
NSC
NT
NW
NORAD
NEW
NV
NSFO
NAR
NASA
NZUS
OTRA
OVIP
OPRC
OPDC
OSCE
OAS
ODIP
OIIP
OFDP
OVP
OREP
OFFICIALS
OSAC
OEXC
OPCW
OIE
OIC
OFDA
OSCI
OPIC
OBSP
OECD
ON
OCII
OHUM
OES
OCS
OMIG
OPAD
OTR
PGOV
PREL
PHUM
PINR
PTER
PSOE
PINS
PARM
PK
PBTS
PEPR
PM
POLITICAL
PARTIES
PREF
PBIO
PROP
PA
PSI
PINT
PO
PKFK
PL
PAK
PE
POLITICS
PINL
POL
PHSA
PU
PF
POV
PFOR
PHALANAGE
PARTY
PARMS
PRGOV
PNAT
POLINT
PRAM
PMAR
PG
PAO
PROG
PRELP
PPA
PCUL
PSEPC
PSA
PREO
PAHO
PGIV
PREFA
PALESTINIAN
PAIGH
POSTS
PTBS
PGOVLO
PORG
PGOVE
PLN
PINF
PAS
PUNE
POLICY
PDEM
PDOV
PCI
PGOVSMIGKCRMKWMNPHUMCVISKFRDCA
PBT
PHUMPGOV
PMIL
PNG
PP
PS
PHUH
PECON
POGOV
PY
PHUMPREL
PHUS
PRL
PGOC
PNR
PGGV
PROV
PTERE
PGOF
PHUMBA
PEL
RS
RU
RW
REGION
RP
RICE
ROBERT
RSP
RUPREL
RM
RO
RCMP
RSO
RELATIONS
REACTION
REPORT
RIGHTS
ROOD
RF
RFE
RIGHTSPOLMIL
SP
SA
SY
SF
SYR
SENV
SCUL
SOCI
SNAR
SO
SU
SG
STEINBERG
SHUM
SW
SMIG
SR
SZ
SIPRS
SI
SAARC
SPCE
SARS
SN
SYRIA
SANC
SL
SCRS
SC
SENVKGHG
SAN
SNARCS
SHI
SWE
SNARIZ
SIPDIS
SEN
SNARN
SPCVIS
SEVN
SSA
SH
SOFA
SK
ST
TPHY
TU
TRGY
TI
TX
TS
TW
TC
TFIN
TD
TSPA
TH
TT
TIP
TBIO
TSPL
TZ
TERRORISM
TRSY
TN
THPY
TINT
TF
TL
TV
TK
TO
TP
TURKEY
TNGD
TBID
TAGS
TR
UP
US
UNSC
UK
UZ
UE
UNESCO
UV
UNGA
UN
UNMIK
UNO
UY
UAE
UNEP
UG
UNHCR
UNHRC
USUN
UNAUS
USTR
USNC
USOAS
UNCHR
UNCSD
UNDP
USEU
USPS
UNDC
UNDESCO
UNCHC
UNFICYP
UNC
UNODC
UNPUOS
UNCND
UNICEF
UNCHS
UNVIE
USAID
UNIDROIT
Browse by classification
Community resources
courage is contagious
Viewing cable 07BUENOSAIRES1819, ARGENTINA: PAMPA HOLDINGS BETS ON GOVERNMENT PROMISE TO
If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs
Understanding cables
Every cable message consists of three parts:
- The top box shows each cables unique reference number, when and by whom it originally was sent, and what its initial classification was.
- The middle box contains the header information that is associated with the cable. It includes information about the receiver(s) as well as a general subject.
- The bottom box presents the body of the cable. The opening can contain a more specific subject, references to other cables (browse by origin to find them) or additional comment. This is followed by the main contents of the cable: a summary, a collection of specific topics and a comment section.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol). Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #07BUENOSAIRES1819.
Reference ID | Created | Released | Classification | Origin |
---|---|---|---|---|
07BUENOSAIRES1819 | 2007-09-12 16:04 | 2011-03-27 00:12 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy Buenos Aires |
Appears in these articles: http://www.lanacion.com.ar/1360704-de-vido-eje-de-las-sospechas-de-eeuu |
VZCZCXYZ0003
RR RUEHWEB
DE RUEHBU #1819/01 2551648
ZNR UUUUU ZZH
R 121648Z SEP 07
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 9220
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/USDOC WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE USD FAS WASHINGTON DC
RUEHC/DEPT OF LABOR WASHINGTON DC
RHMFIUU/HQ USSOUTHCOM MIAMI FL
RUEHAC/AMEMBASSY ASUNCION 6563
RUEHMN/AMEMBASSY MONTEVIDEO 6756
RUEHSG/AMEMBASSY SANTIAGO 0777
RUEHBR/AMEMBASSY BRASILIA 6426
RUEHLP/AMEMBASSY LA PAZ SEP CARACAS 1495
RUEHSO/AMCONSUL SAO PAULO 3540
RUEHRI/AMCONSUL RIO DE JANEIRO 2372
UNCLAS BUENOS AIRES 001819
SIPDIS
SIPDIS
SENSITIVE
ESC/IEC/EPC FOR MCMANUS,JIZZO
WHA/EPSC FOR FCORNEILLE
PASS NSC FOR MICHAEL SMART
PASS FED BOARD OF GOVERNORS FOR PATRICE ROBITAILLE
PASS USTR FOR KATHERINE DUCKWORTH AND MARY SULLIVAN
TREASURY FOR LTRAN, MMALLOY
USDOC FOR 4322/ITA/MAC/OLAC/PEACHER
US SOUTHCOM FOR POLAD
E.O. 12958: N/A
TAGS: EINV ECON ENRG AR
SUBJECT: ARGENTINA: PAMPA HOLDINGS BETS ON GOVERNMENT PROMISE TO
REWARD NEW ELECTRICITY GENERATION CAPACITY
Ref: (A) Buenos Aires 1726
(B) Buenos Aires 1456
(C) Buenos Aires 1415
(D) Buenos Aires 1352
(E) Buenos Aires 978
(F) Buenos Aires 65
This cable contains business-sensitive information - not for
internet distribution.
-------
Summary
-------
¶1. (SBU) Pampa Holdings, one of Argentina's largest investment funds
with a market capitalization of over $760 million, is aggressively
expanding its participation in Argentina's electricity generation,
transmission, and distribution sectors. Pampa principal Carlos
Mindlin described his investment strategy to Ambassador as (1)
buying quality ""distressed"" energy assets cheaply as large
multinationals re-position themselves out of the Argentine market
(e.g. CMS, Total, Electricite de France); and (2) investing to build
incremental electricity generation capacity based on the GoA's
promise to reward new capacity with closer to international market
returns. If the GoA continues to keep domestic retail and wholesale
energy prices significantly below international market levels,
Argentina will require roughly 1,000 MW of new generating capacity
in each of the next 4-5 years simply to keep up with growing
domestic demand. The GoA has announced over US$ 10 billion in new
energy infrastructure projects in the past few months (Ref A), but a
recent study argues that Argentina will need US$ 3 - 4.5 billion
worth of new energy investment each year to meet demand. Mindlin
argues that, sooner or later, the GoA will have to compare the
relative costs and ability to deliver of public vs. private sector
players. Pampa appears to be benefiting from the Kirchner
administration's unofficial policy favoring domestic ownership of
energy assets. End Summary.
-----------------------------------------
Pampa Holdings: Energy Investment Vehicle
-----------------------------------------
¶2. (SBU) Ambassador and EconCouns met August 28 with Marcelo
Mindlin, Chairman of one of Argentina's largest investment fund
Pampa Holdings (and senior manager of Pampa's majority owner, the
Dolphin Group) to review Pampa's growing investment in Argentina's
electricity generation and distribution sector. Originally a
refrigeration storage company, Pampa was acquired by the Dolphin
Group in 2005 to serve as its investment vehicle for ""distressed
valuation"" energy assets. According to Mindlin, 50% of Pampa
Holding equity is held by Argentine nationals, 35% by U.S. interests
(including U.S. investment fund Eton Park with a 4-5% stake, Ref D)
and the remainder primarily by European interests.
¶3. (SBU) Mindlin called Pampa's first two years of growth
""spectacular"" and emphasized that Pampa's strategy is to continue
growing via equity rather than debt funding. Pampa was taken public
in 2006 and, with a market capitalization of over US$ 760 million,
it is now the second-most heavily weighted stock on Argentina's
benchmark MerVal index. In addition, Pampa took its Edenor
electricity distribution subsidiary public in 2007 with an equity
issue of over $300 million. In a comment on the relative
under-development of Argentina's capital markets and the lack of
home-grown entrepreneurial spirit, Mindlin noted that in all of 2006
and 2007 there have been only four major Argentine equity issues
(Pampa, Edenor, Banco Macro and Banco Patagonia) for roughly US$ 2
billion. This amount, he said, is equivalent to a week's worth of
equity issues in Brazil's deeper and far more active markets.
¶4. (SBU) Key Pampa Group holdings includes its ownership of Buenos
Aires power distribution company Edenor (with roughly 2.4 million
retail clients), its stake in national electricity distribution
network Transener (Ref D), and its equity stakes in a portfolio of
electricity generation assets. These include two hydroelectricity
generation complexes in Mendoza province (Nihuiles and Diamante,
which provide 2.7% of national capacity), Central Termica Guemes in
Salta province, Loma de la Lata in Neuquen province, and Central
Puerto in Buenos Aires province.
---------------------------------------
Pampa Strategy: Buy Low, Build Capacity
---------------------------------------
¶5. (SBU) Mindlin described his investment strategy as (1) buying
quality ""distressed"" energy assets cheaply as large multinationals
re-position themselves out of the Argentine market (e.g. Total,
Electricite de France, CMS); and (2) investing to build incremental
capacity of these generation assets under the GoA's ""Energy Plus""
scheme, whereby new private sector capacity is to be purchased by
the GoA-regulated wholesaler CAMESSA at rates higher than those paid
for existing capacity. Mindlin noted that Argentina will require
roughly 1,000 MW of new generating capacity in each of the next 4-5
years simply to keep up with growing domestic demand. (Separately,
a recent study prepared by the prestigious Technical Institute of
Buenos Aires, ITBA, concluded that Argentina will need US$ 3 - 4.5
billion worth of new energy investment each year to meet demand.
Pampa has already contracted to build 100 MW of incremental capacity
at its Central Thermica Guemes facility in Salta province.
¶6. (SBU) In response to the Ambassador's question on the GoA's
announcement of over US$ 10 billion (Ref A) in new energy
infrastructure projects in the past few months, Mindlin argued that,
sooner or later, the GoA will have to compare both the relative
costs of public vs. private sector and the relative ability of
public vs. private sector players to deliver projects on time.
Public sector costs are high due to general government inefficiency
and pervasive corruption, he said. As a result, Pampa has declined
to get involved in some energy sector projects where high levels of
government procurement are involved, including the expansion of
natural gas pipeline capacity (Ref E). Public sector energy
construction has been plagued by delays, Mindlin said, noting a
2-year delay in the GoA's construction of the two 800 MW
""Foninvenmem"" generators (Ref B) as an example.
--------------------------------------------- ------
The Transener Electricity Transmission Company Deal
--------------------------------------------- ------
¶7. (SBU) Pampa holds a minority stake but management control of
regulated national electricity transmission company Transener.
Mindlin commented on the GoA's decision earlier in 2007 to reject
the bid of U.S. investment fund Eton Park to buy out Brazilian state
oil company Petrobras's minority equity stake in Transener (Ref D)
in favor of a joint venture of local construction company
Electroingenieria and GoA state-owned energy company ENARSA.
Electroingenieria, he said, had experience in building transmission
lines, but no experience running a transmission company. If the GoA
does not significantly raise regulated transmission rates in the
next three years, Electroingenieria will have difficulty servicing
the debt it has incurred to purchase its share of Transener.
---------------------------
Bio Note on Marcelo Mindlin
---------------------------
¶8. (U) Marcelo Mindlin is the Chairman of Pampa Holdings S.A. and,
since 1989, has served as Senior Portfolio Manager of Grupo Dolphin
S.A. Previously, from 1991 to 2003, Mindlin was Vice Chairman and
CFO of IRSA (Inversiones y Representaciones S.A.), a major Argentine
real estate development group controlled by prominent local
entrepreneur Eduardo Elzstain with substantial Soros Group
investment. From 1999 to 2004, he served as a Board Member at the
formerly state-owned Banco Hipotecario (now controlled by IRSA).
From 1996 to 1999, he was a Director of Fondo de Valores
Inmobiliarios in Venezuela and of Brazil Realty in Brazil.
¶9. (U) In November 2003, Mindlin left the IRSA Group, and, with
15-odd years of portfolio management and corporate finance
experience, founded the Grupo Dolphin S.A. Mindlin holds a Masters
in Business Administration from Universidad del CEMA (Center of
Macroeconomic Studies) and a degree in Economics from Universidad de
Buenos Aires.
-------
Comment
-------
¶10. (SBU) Pampa Holdings, with its aggressive investment profile and
attractive returns on capital to date, is one of the darlings of the
Argentine market. It is widely rumored in local financial circles
that President Kirchner has invested a portion of his own wealth in
Dolphin/Pampa equity. While most local energy analysts agree that
Pampa has indeed purchased quality energy assets cheaply, they have
different interpretations of why the purchase prices have been so
low. Some argue that the Kirchner administration, besieged by ICSID
international arbitration suits filed by multinational energy
companies in the aftermath of the 2001/2 economic crisis that seek
cumulative awards worth billions of dollars (Ref F), made a
strategic decision to decrease international participation in
Argentina's energy sector and to increase boh direct state and
private Argentine participation. To ""encourage"" foreign
multinationals to cede control of electricity assets, the GoA is
said to have used its formidable power to delay needed
post-devaluation rate adjustments. As a case in point, they note
Pampa/Dolphin's 2005 purchase of a 65% stake in Argentina's largest
electricity distributor, Edenor, for $100 million while Electricite
de France (EDF) had paid US $800 million for a smaller 45% stake in
¶2001. EDF had filed an ICSID suit against the GoA following the
economic crisis and had been unable to negotiate a tariff rate
increase to return to profitability. Shortly after its purchase by
Pampa, Edenor negotiated a 28% interim tariff increase for rate
payers.
¶11. (SBU) Pampa's own strategy of building incremental generation
capacity based on the GoA's promise to reward new capacity with
returns closer-to-international-market levels appears a high-risk
play given the precarious finances of regulated electricity
wholesaler CAMESSA. The GoA's CAMESSA is a full six months behind
on capacity and variable cost payments to generators, and is also
footing the bill for the GoA's expensive ""Total Energy"" diesel fuel
subsidy program (Ref B). Pampa is betting that the GoA will --
sooner than later -- adjust internal energy market prices to
encourage and reward new investment. Others are not so sanguine,
and wonder how quickly and aggressively the next GoA administration
will move to rationalize energy prices.
WAYNE
=======================CABLE ENDS============================