26 March 2018


ESG Off-grid Grid development Argentina

Argentina's Ambitious Plan for Rural Electrification

Author: Solarplaza

PERMER, the Project for Renewable Energy in Rural Markets (PERMER), started in 1999 as an off-grid rural electrification plan through the use of sustainable sources, mainly solar PV. It has three main components: equipment acquisition & installation, technical support (maintenance), and project administration. The goal is to provide dispersed households and about 6,000 rural public buildings, such as schools and health centers, with electricity that can not be supplied through the grid.

Since its inception, the program has promoted a collaboration between the public and private sectors to ensure the sustainability of the service. This was complemented with a competitive public bidding model in order to reduce the need for subsidies.

Juan José Ochoa, Project Director of PERMER, appeared recently in a number of provincial media channels to present the last tender for the acquisition of solar kits.

"We still have about 100,000 families in Argentina who have no access to energy"

"Many people may not know this, but we still have about 100,000 families in Argentina who have no access to energy and go to sleep every night with candles or kerosene lamps. The authorities of the Ministry of Energy and the President of the Nation are committed to guarantee that everyone has basic access to energy by 2020," he said in an exclusive interview for Jujuy's Canal 4 Noticias.

It is worth mentioning that this ambitious program has an important social component, as it aims to improve the quality of life of the isolated rural inhabitants in a sustainable manner. By covering their basic lighting and communication needs, it improves, among other things, their working conditions and social inclusion.


Who's behind PERMER

The project is implemented by the Under Secretariat of Electric Energy, which is dependent on the National Secretariat of Energy and manages the operation of the Project Coordination Unit (PCU). Each of the provinces that takes part in the program also have a Project Executing Unit (PEU) and a Provincial Entity for Electric Regulation (EPRE), responsible for complying with connection deadlines and service quality, in accordance with the terms of the concession contract. 

But these are not the only players involved. The Ministries of Education, Tourism and Health, for instance, also cooperate in the execution of the activities involving rural education centers, service-delivery buildings, and health centers, respectively.

PERMER I was funded mainly by the National Government through a loan granted by the International Bank for Reconstruction and Development (IBRD) for an amount of 30 million US dollars, supplemented by a 10-million-USD donation from the Global Environmental Fund (GEF). In 2008, IBRD approved a new loan of 50 million US dollars to provide additional financing.

On September 21, 2015, with the Decree No. 1968/2015, IBRD approved a new loan agreement for an amount of 200 million US dollars, with the objective of developing PERMER II.


Previous tenders and achievements

In its first stage, from 2001 to 2012, it is estimated that renewable energy was supplied to around 150,000 people from 15 provinces of the country. The following table, extracted from the National Audit Office report, shows that around 25,000 families benefited from residential kits within the framework of PERMER I. In addition, thermal and electrical equipment was installed in 1800 schools.

The government, with the contribution of the provinces to a greater or lesser extent, covered 100% of the initial investment of acquisition & installation in the case of individual systems, and 80% in the case of collective systems. The idea, according to Juan José Ochoa, is to consider this basic access as a right.

When it comes to the provision of the electric service, however, the beneficiary must pay a periodic tariff, which is intended to cover the costs of operation and maintenance and is established by the province.

But not everything regarding PERMER is picture-perfect. According to the conclusions drawn by the National Audit of the State, there were inconsistencies about the facilities in the information provided by the Project Coordination Unit (PCU), which generated difficulties in the verification of the equipment traceability. Furthermore, they highlighted the absence of a waste management plan.

As far as users were concerned, there is a need for more power to be installed. Users also complained about the lack of batteries replacement and maintenance and the delays in the repair and support.

For PERMER II, the National Audit recommends, among other suggestions, that the PCU implements a complete and updated unified registration system in order to identify and monitor the facilities and provide a clear definition of both the objectives of the program and the measurement indicators to assess the degree of compliance.

Details of investments made

Upcoming tenders

The electricity service supply, within the framework of the PERMER project, is delivered through individual PV solar kits, mainly residential; construction or, occasionally, renovation of renewable, diesel or hybrid mini-grids; installation of bigger PV systems to provide heat or pumping of drinking water for rural public services; and installation of residential wind equipment.

"We are very happy with the work we are doing in the province of Jujuy, one of the first provinces that will be able to guarantee [electricity] access to its whole population."

On March 15, a new tender for the acquisition of residential kits will take place. The results will be revealed in April and installation processes are expected to begin in the last quarter of 2018 in the provinces that join the project. In his appearance on Jujuy's Canal 4, Ochoa claims "we are very happy with the work we are doing in the province of Jujuy, one of the first provinces that will be able to guarantee [electricity] access to its whole population."

The greatest innovation of these solar kits, according to Ochoa, is that they combine renewable energy and energy efficiency. They consist of a small PV solar panel with a lithium battery, 3 fixed lights, a USB charger for cell phones, a radio, and two portable flashlights. The systems will have a 3-year manufacturer's warranty - although they are expected to last for at least 5 years - and will allow an autonomy of 3 days, he claims.

Once the provision contracts are awarded, the Undersecretariat will work jointly with the provinces to identify the areas where people have no access to the grid and distribute the solar kits free of charge. By doing so, they intend to prevent these households from using candles or kerosene, which, in addition to the danger and health risks they entail, involve an average expenditure of 300 or 400 Argentine pesos per month.

With regards to the electrification of rural educational centers, the public bidding for the provision of solar equipment for schools was scheduled for March 5. This tender aims to provide electricity for lamps and refrigerators, as well as an Internet connection. 
Moreover, Ochoa mentioned that another tender for the creation of hybrid mini-grids is scheduled for March or April.

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