Q: When elected in December, President Mauricio Macri promised a “rain” of investment. That rain has not materialised yet. What is still missing for Argentina to finally fulfil its investment potential?

A: Let’s take a step back here. Until December, Argentina had a government with very little relations with the world, which basically isolated the country. With this in mind, President Macri started a process of repositioning of Argentina within the world economy after 12 years of isolation. This concerned opening up to the world, but it also has to do with the normalisation of the economy.


Argentina’s economy used to have a lot of restrictions, which made it difficult for trade and investment to flourish. We approved important reforms dealing with those restrictions straight away. We freed up the exchange rate, we lifted restrictions to the repatriation of dividends, we lowered export taxes and liberalised import procedures. At the same time, we worked to go back to the financial markets through the agreement we struck with holdout bondholders, which was one of the big troubles we had to fix to regain our place in the world economy. After that, as soon as we went back to the financial market the first sovereign issuance went six times oversubscribed, which shows the current interest of the investor community in Argentina.

Q: Nevertheless, realised foreign direct investment (FDI) amounted to $1.3bn in the first half of the year, according to figures from the central bank, which is more than 2015, but in line with the previous two years.

A: With regard to productive investment, it will unfold as improvements to the overall economic environment gain traction and Mr Macri’s government builds on that trust gained in the financial markets. We want to improve the business climate, remove hurdles to investment, improve regulation to make investment easier, and make state authorities like the Central Bank more independent. The Investment and Trade Promotion Agency launched in February, and we are working with 130 companies that have already announced investment plans for around $23bn that materialise as they wrap up the needed preliminary studies. Argentina offers a unique opportunity because we come from 12 years of basically no investment. But we remain Latin America’s third largest economy and the second largest for GDP per capita, a market of 40 million people with a growing middle class. Today we need a lot of investment in any sector of the industry and economy. As people understand the change happening in the country the cost of capital and guarantees will go down. The upcoming first Business & Investment Forum is an additional step to make sure investors take part in this process because we cannot make it happen by ourselves.


Q: GDP is expected to shrink this year and inflation is running high at around 30%. Does Argentina remain a very risky play for investors?

A: It has to be understood that we were coming from a very difficult situation. Argentina was a patient with terminal illness and we had to save it. We are convinced that inflation will start to go down at the end of this year, and in the fourth quarter there will be signs of economic reactivation too. We expect the economy to be growing at 3% to 3.5% in 2017 with inflation under control.

Q: What are the opportunities for foreign investors?

A: Latin America increased its capacity to attract investment 4.5 times in the last eight years compared with the 1990s. The big winners were countries such as Peru, Brazil, Colombia, Chile and Mexico. The big loser was Argentina, where investment was basically stable in absolute terms, but fell in relative terms to 5% of total foreign investment in Latin America from 16%. Today we have investment opportunities for $150bn in the next year. We are calling out to the world: Argentina is open for business.

Q: Which are the opportunities for foreign investors?

A: First and foremost the energy sector. Although Argentina boasts very good characteristics for the production of energy. We passed from exporters to importers of energy because of the little investment we have had in the past 10 years. Today we have many opportunities for power generation and we want to add 8GW of thermal installed capacity in the next eight years. We are also planning to add one or two hydro power plants for additional 3GW of installed capacity. Besides, in 2015 we finally approved a law on renewable energy, which states that 20% of the overall consumption of electricity in 2025 has to come from renewable sources, which means adding 10GW of installed capacity in renewable sources. Today that stands at only 1.5% and we want to have already 8% in 2017. We have good sun irradiation in the north and wind in the south, and all the big players are taking part in the firs tender we had in May Last but not least we have great opportunities for the exploitation of oil and gas resources, with the Vaca Muerta shale gas deposit being the largest of its kind in South America. Altogether, we see total investment opportunities in the energy sector of some $75bn.

Q: What kind of contracts are you offering investors to foster such developments?

A: We used long-term power purchase agreements for the first tender regarding renewable energy generation to minimise risks and financing costs. Apart from that, we are now starting to discuss a public-private partnership law in the congress and we hope it will be approved by year-end to inspire infrastructure projects.

Q: Argentina’s infrastructure gap has long been high on the agenda of is presidents, but improvements have been slow. What are your plans in this regard?

A: We announced the biggest infrastructure plan in Argentina’s history. We want to rehabilitate all the railways across the country that come from 10 years of basically no investment – today only 4% of the internal freight transport happens on railway. At the same time, we want to tender again all the existing road concessions in the next years. If we take into account investment in roads, railways, airports and ports we expect total investment in the order of $33bn in the next four years.

Then the mining sector is also an attractive one. We share the same Andean mountain range as Chile, but they export $45bn of mining production per year, while we don’t make it to $4bn. We have a pipeline of 10 projects ready to be developed and we are reaching out to companies in Canada, the US, Australia and Europe to take part in these developments. With regard to agriculture, Argentina has an agriculture production for 400 million people, and the government plans to raise it to 650 million and thus play a key role in food security worldwide. Here the idea would be to go up the value chain, adding value to exports like soybeans. And finally there are industrial sectors also needing investment because they haven’t received much either.