MercoPress. South Atlantic News Agency

Go ahead to build two dams in Patagonia's Santa Cruz, financed by China

President Mauricio Macri put the project on hold pending an evaluation of the cost and environmental impact after taking office in December 2015.

Argentina’s government approved the construction of two hydroelectric dams in the southern Patagonia region province of Santa Cruz, after holding public hearings as required by the Supreme Court, according to a notice in the Official Gazette on Monday.

 The dams in Santa Cruz province will be constructed by China Gezhouba Group Co Ltd, which holds a majority stake in the project, and Argentina’s Electroingeniera SA.

Together, the dams - to be named after former President Nestor Kirchner and a former regional governor - will represent 1,310 megawatts of hydroelectric capacity and produce an average of 5,171 gigawatt hours of energy, around 5% of the country’s total electricity demand.

The companies won an auction to build the dams in 2013. But President Mauricio Macri put the project on hold pending an evaluation of the cost and environmental impact after taking office in December 2015.

In 2014, the China Development Bank agreed to lend Argentina US$4.7 billion to finance the construction of the dams. Argentina could not tap global capital markets at the time because of disputes over unpaid debt, which was resolved last year when the Macri administration settled with holdout creditors.