1. ©2016 IPD Latin America | 1
Renewable Energy Tracker TM
IPD’s Pick of the Month: Brazil
Brazil’s energy sector is much larger than those of its Latin American peers. As the
figure below reflects, total installed capacity in the national interconnected system is
slated to increase to more than 206 GW by 2024. That number is almost twice the
109.3 GW Mexico, Latin America’s second largest market, has targeted for 2030.
Brazil’s renewable energy ambitions are also great: Wind is projected to grow over
80%, to become the country’s third largest energy source in 2024. Utility-scale solar
photovoltaic (PV) targets were revised from 3.5 GW in the 2014-2023 expansion plan
to 7 GW in the 2015-2024 plan. Investors seem enthusiastic about Brazil’s vision. But
the country’s ambitions will be challenged by its high political risk and a worrisome
macro-economic situation. See page 6 for more.
“Brazil can become
one of the greatest
solar energy players
in the world.”
– Fernando Coelho
Filho, Brazil’s
Minister of Mines
and Energy
Contents
IPD’s Pick of the
Month……………..… 1
Energy Auctions
Monitor……………… 2
Renewables Deal
Flow…………………… 3
Regulatory
Developments……. 4
Profile of the
Month……………..… 5
In Focus……………… 6
Consultants:
Sergio Torres
storres@ipdlatam.com
Ricardo Falcón
rfalcon@ipdlatam.com
Editor:
Kirsten Froede
kfroede@ipdltam.com
Issue 3, August 2016
Source: IPD Latin America based on Brazil’s Ministério de Minas e Energia.

2. ©2016 IPD Latin America | 2
Energy Auctions Monitor
Country Auction ID Offered Products Call for Bids Bid Deadline Award Date
Mexico
2nd
Long-term
Energy Auction
SLP-1/2016
 Firm capacity: 1,483 MW
 Energy: 10.63 TWh
 CELs: 10.63 million
13-May-2016 21-Sep-2016 30-Sep-2016
Argentina
RenovAr
Program
(Round 1)
 Capacity: 1,000 MW for renewable
energy sources (60% wind, 30%
solar, 6.5% biomass, 2% small hydro
<= 50 MW, and 1.5% biogas) under
20-year PPAs
17-May-2016 5-Sep-2016 12-Oct-2016
Brazil
1st
Reserve
Energy Auction
2016
 Small hydropower projects (< 1
MW) from 73 small hydro plants
(PCHs) totaling 889 MW; 60
hydropower generation plants
(CGHs) totaling 96 MW. Around 295
solar PV projects totaling 9,210 MW
were excluded.
23-Mar-2016
3-May-2016
(Hydro project
Registration)
Postponed to
23-Sep-2016
(Originally
scheduled for
29-Jul-2016)
Chile
Supply Tender
2015/01
 Energy for supply blocks 1, 2-A, 2-B,
2-C, and 3, totaling 13,750
GWh/year for 2021-2040
29-May-2015 27-Jul-2016
1st
Stage:
17-Aug-2016
2nd
Stage:
25-Aug-2016
Upcoming | Closed
Grand Finale for Mexico’s Long-term Energy Auction 2.0 Draws Near
CENACE, Mexico’s national power grid operator, is moving forward with its second long-term
energy auction (LTA), which it launched in late April this year. In early July, the ISO approved the
Federal Electricity Commission’s (CFE) Purchase Offer (the CFE remains the sole buyer allowed to
participate in this type of tender). Players will formally submit their bids on September 21. CENACE
will announce the winners and award contracts on September 30.
Based on the CFE’s product requirements and payment terms (see table above), the price cap for a
package of MWh-plus-CELs may reach MX$ 1,125.81 (or roughly US$ 60 at a preset MX$ 18.76/
US$). This maximum price is 21% below that of the first LTA, which was set at US$ 76 per package.
The government seems confident that aggressive bids will keep coming. But post-auction
permitting/environment issues and off-taker risk might get potential bidders to sharpen their
pencils. A key signpost to watch is whether the first LTA’s winning projects start up as scheduled
(please contact IPD directly at +1 305-767-2177 or info@ipdlatam.com for a presentation on
Mexico’s post-LTA challenges).
If the first LTA was popularly dubbed “the Yucatán energy auction,” the second one is pointing to
Baja California Sur (BCS). Of the 53 price zones designated by CENACE, BCS’s Villa Constitución, La
Paz, and Los Cabos areas will be the most favored with nodal price adjustments. These zones will
have corrections of -US$ 2.93, -US$ 3.25, and -US$ 10.09 per MWh, respectively, over the bids
offered (against an average +US$ 0.33 per MWh applicable to all other price zones, including
Mérida, in the state of Yucatán, which saw a -US$ 21.98-per-MWh adjustment in the first tender).

3. ©2016 IPD Latin America | 3
Renewables Deal Flow
Latin America and the Caribbean
IRENA & IDB Give Six Clean Energy Projects
Across Latin America a Leg Up
Topic: The International Renewable Energy Agency
(IRENA) and the Inter-American Development Bank
(IDB) is set to award up to US$ 300,000 in technical
assistance for the development of six clean energy
projects across Latin America and the Caribbean
(LAC) (see map). These projects were selected
from 76 proposals from 16 IDB member countries
via the Sustainable Energy Marketplace initiative.
Context: IRENA and IDB run the Sustainable Energy
Marketplace, which is a virtual platform that
promotes the initiation, development, and
financing of green energy projects around the
globe. By bringing together myriad key
stakeholders, the initiative helps channel public
and private resources for renewable energy and
energy efficient project financing. This platform
will help fund feasibility studies, due diligence
efforts, legal structuring, and other critical tasks to
secure the six LAC projects’ economic viability.
IPD Insight: Representing US$ 3.9 billion in
potential investments across the region, the
Marketplace offers an enormous opportunity for
project owners, governments, financiers, service
providers, and technology suppliers to better align
their interests and explore opportunities. A bigger,
more liquid regional market could help enhance
projects’ bankability. Success will largely depend
on stakeholders’ ability to adapt to the region’s
diverse and complex business environments —
especially for renewable energy and energy
efficiency projects that involve government-
sponsored off-takers, like electricity companies.
Project of the Month
Enel’s Nova Olinda solar park in Brazil: In early July, EGPB, the
Brazilian subsidiary of Italy’s Enel Green Power, began
construction of the Nova Olinda solar PV complex in
northeastern Brazil. Worth US$ 300 million, the project is set to
become the largest solar park in Latin America with 292 MW of
installed capacity. Nova Olinda is scheduled to start up in the
second half of 2017. Once operational, it will produce about
604 GWh annually under a 20-year PPA, which EGPB won at the
1st
Reserve Energy Auction in August 2015. It also won PPAs for
the Lapa (158 MW) and Horizonte (103 MW) solar PV projects,
all of which are signed with Brazil’s Electric Energy
Commercialization Chamber (CCEE). Today, EGPB has a total
installed capacity of 546 MW: wind (73.4%), solar (2.2%), and
hydro power (24.4%). The new solar plants will make this mix
more balanced.
401
12 133
442
515
102
292
0
100
200
300
400
500
600
700
800
900
Wind Solar PV Hydro
Enel's Renewable Energy Projects in
Brazil (MW)
Installed Capacity Under Execution
The Six Winning Clean Energy Projects
Source: IPD Latin America based on IRENA and IDB.
Mexico
• Project: Carbon Management Plan
• Lead Proponent: Jalisco state’s
Secretary of Environment and
Territorial Development
Haiti
• Project: Solar-powered
microgrids
• Lead Proponent: EarthSpark
International
El Salvador
• Project: La Cañada wind farm
• Lead Proponent: Vientos de La
Cañada, S.A. de C.V.
Honduras
• Project: Grensa Honduras
• Lead Proponent: Grensa
Green Energy Honduras
Colombia
• Project: Solar photovoltaic
systems for 104 schools
• Lead Proponent: Government of
the Nariño department
Argentina
• Project: Solar-
powered distributed
generation and
storage
• Lead Proponent:
Santa Fe province’s
Energy Secretariat
Source: IPD Latin America based on Enel.
Nova
Olinda

4. ©2016 IPD Latin America | 4
Policy and Regulatory Developments
Chile
New Transmission Law a Positive for Solar Energy Players
Topic: On July 11, Chile’s Electricity Transmission Law (ETL) entered
into effect. The government’s plans to use this law to tackle the
country’s transmission infrastructure issues, promote increased
renewables penetration, and offer cleaner, cheaper energy to end
users (for timely data on Chile’s electricity sector, see our Electricity
Dashboard at http://ipdlatam.com/).
Context: As of 2015, Chile’s renewable energy market is the third-
largest in Latin America after Brazil and Mexico. But its continued
growth is constrained. Rising transmission network congestion,
limited open access rules, and inadequate government incentives,
all contribute to energy spot price volatility. The long-anticipated
ETL provides for the integration of the Central Interconnected
System (SIC) and the Greater North Interconnected System (SING), a
process that should be complete by 2017 (see map). In addition, the
law establishes the following:
 Long-term plans to better align generation and transmission
capacity to secure a coordinated grid expansion
 A more transparent and predictable transmission tariff structure
 Stricter safety standards and compensation mechanisms to
improve system reliability
IPD Insight: The ETL’s enactment is welcome news for renewable
energy players, whose project economics could benefit from a more
robust national transmission system. This is especially true for
project developers in Chile’s Atacama Desert, which boasts world-
class solar irradiation levels of over 8 kWh/m2
per day. Solar energy
companies operating in this area have faced an increasingly difficult
business climate. Energy price disruptions have been partially driven
by a slump in the mining industry: the global copper supply glut has
pushed the commodity’s prices down, taking a toll on Chilean
producers, who are major solar power consumers. With no other
off-takers nearby, and inadequate power lines to send energy
output to demand centers in the south, solar PV players have had to
cope with prices at the US$ 0/ MWh level. Thus, to deliver on the
ETL, the Chilean government must secure follow-up measures,
including timely and incremental transmission tenders.
Source: IPD Latin America based on SING and SIC.
Santiago
Chile’s SING and SIC
Interconnected Systems

5. ©2016 IPD Latin America | 5
Profile of the Month
Suggested Approach
P: Politician
PM: Policy Maker
T: Technical Energy Expert
PB: Pro-business
P PM T PB
English Speaker: Fluent
Against SupportiveIndifferent
Level of Interest
Influence


-
Manage
closely
Monitor
Keep
informed
Keep
satisfied
Suggested Relationship
Clean Energy Support
X X
Tamayo’s To-Do List
 To deliver on President Kuczynski’s campaign pledges, Tamayo will prioritize the expansion of the
domestic natural gas industry and the realization of long-delayed oil and gas infrastructure projects.
However, around 55% of the 1,000-kilometer Southern Gas Pipeline’s (GSP) financing needs (nearly
US$ 4 billion) are in jeopardy because of Brazilian shareholder Odebrecht’s corruption scandal. The
estimated US$ 3.5 billion upgrade of state-run Petroperú’s Talara refinery is uncertain because of
financial and operative woes.
 While at Macroconsult, many of his clients were large mining companies. Tamayo is expected to
remain close to this sector. Mining accounts for half of Peru’s foreign revenue, 20% of tax income, and
11% of GDP.
 He will likely advance Kuczynski’s plans to export electricity to neighboring countries. This could help
address excess supply in the domestic power generation segment. However, it could also prevent
further promotion of renewable energy projects.
Gonzalo Tamayo, Peru’s Minister of Energy and Mines
 On August 1, 2016, Gonzalo Tamayo Flores took office as head of the Peruvian Ministry
of Energy and Mines (MEM). He was appointed by Pedro Pablo Kuczynski, who was
sworn in as Peru’s new President on July 28.
 A well-reputed economist, Tamayo is an expert on regulation and competition in
infrastructure development, institutional reform, and private activity assessment.
 He has over 20 years of experience leading consulting projects in the electricity,
hydrocarbons, transport, and logistics sectors for public and private entities.
 Prior to occupying the MEM chair, Tamayo held various managerial positions at the
Peruvian economic consulting firm, Macroconsult S.A. He was also a board member for
Peru’s Consolidated Reserve Fund, OSIPTEL – Peru’s national telecom authority, and
state-run power generator, Electroperú.
• 1991 – 2016: CEO and other managerial
positions, Macroconsult
• Former board member, Osiptel and Electroperú
• Bachelor’s degree in Economics from Pontificia
Universidad Católica del Perú (PUCP)
• Masters in Economics and doctoral studies from
University of California - Los Angeles (UCLA)
“We intend to recover the balance in those sectors
where the Ministry of Energy and Mines has
competency, such as natural resources, sustainable
development, and environmental protection.”
X

6. ©2016 IPD Latin America | 6
In Focus
Brazil Embarks on Olympic Task of Tapping into its Renewables Potential
Brazil’s Ten-Year Energy Expansion Plan for 2024 (NEP) forecasts new investments for power plants to
total US$ 62 billion between 2015 and 2024; 59% of that will go to renewable technologies other than
large hydro. Thermal expansion will mostly depend on future competitiveness of gas-fired power plants
and is slated to grow less than 33%. Although large hydro will continue to take the lion’s share of the
generation pie, the country has been challenged by the environmental licensing process and social issues
associated with hydro facilities. But most significantly, the country has a direct mandate to prioritize the
development of renewable energy sources.
Since December 2009, Brazil has added approximately 7 GW of installed wind capacity. Through
consistently supportive political and regulatory regimes, the government has shown its will to reach
similar levels of growth in solar, as well. It has committed to contract one-to-two GW of utility-scale solar
per year at government-run auctions.
But this year, a reserve solar PV and hydro auction originally scheduled for July 29 was postponed to
September 23. The solar portion was cancelled altogether; only hydroelectric projects will participate. The
second reserve auction, which includes a solar PV category, has been postponed from October 28 to
December 16. Wind and solar are both slated to participate. (An additional generation auction could also
happen before the end of the year.)
The decision to postpone those auctions — initially with no specified date — raised investor concern.
Brazil’s Ministry of Mines and Energy asserted that it made the changes to align the solar and wind
projects’ completion dates with an analysis of Brazil’s national transmission grid. The move also
considered a policy transition that could result from the government switch-up that started on May 12.
But most importantly, the decision likely addresses the country’s actual need for future installed capacity.
The economic crisis and soaring electricity prices have caused demand to shrink significantly, particularly
in the industrial sector. The country’s annual projections, upon which the expansion plan is based, reflect
these changes: In the 2010-2020 NEP, annual demand growth was projected to run 4.7% per year; that
number is now at 3.9%. It will likely decrease further in the 2016-2025 projections. Brazil certainly faces
some challenges. But not everything looks grim. Every challenge also presents a bright side:
1. Challenge: Political Uncertainty
This year Brazil has undergone the worst and most bitter political crisis of its recent history. Although
unlikely, the left-center rule could still return to power despite Dilma Rousseff’s pending
impeachment. On August 4 a Senate Committee voted 14-5 for Rousseff’s impeachment, but a final
vote will not happen before the end of the Rio Olympics. And political turbulence will not end once
Rousseff’s fate is determined. As long as Interim President Michel Temer remains in political limbo
(accused of kickbacks himself), it will be difficult for him to make the unpopular, but necessary,
decisions to reduce fiscal debt and improve consumer and investor confidence. The country will
continue to be highly polarized — at least until new general elections are called, which could take up
to two years.

7. ©2016 IPD Latin America | 7
Bright Side
Investors are optimistic about Temer’s conservative economic decisions; his moves to open the
market have been well-received. Investors should be confident that this year’s energy auctions will
not suffer any further delays or changes; political developments aside, there is a real need to set clear
rules and secure future electricity supply.
2. Challenge: Grim Macro-economic Figures
Temer’s first priority is to reverse two years of
recession, a difficult task with global commodity
prices running low and the country’s top trading
partner, China, in the midst of an economic
slowdown. Brazil has reported a -3.7% growth in
2016, with inflation averaging 9.6% in 1H/2016.
Reducing the public debt, which equals more than
two thirds of the country’s GDP, is also a major
priority after the public spending spree on the World
Cup and Olympics. Temer hopes to address Brazil’s
challenges while re-activating investor and consumer
confidence.
Bright Side
The harsh economic situation and the government’s
liquidity needs are creating an ideal environment for
large investors seeking to acquire energy assets.
Brazil will see significant M&A activity, particularly
after the political situation settles down toward year
end. Major Chinese players are first in line.
3. Challenge: Transmission Line Shortages
There is not enough transmission capacity to
transport the energy produced in northeastern Brazil
to the major cities in the southeast. Recent
transmission auctions fell short of expectations.
Important transmission projects have been cancelled.
Bright Side
Resolution 687/2015, executed at the end of 2015,
seeks to promote distributed generation and
incentivize self-producers’ excess energy sales. Brazil
hopes to have as much as 1.3 GW of installed
capacity in distributed generation by 2024. Distributed generation is a great alternative to reduce
dependence on long transmission lines. In addition, the new and previous governments have both
shown their commitment to further develop distributed generation. Hopefully, this will all translate
into solid policy (for more on the regulatory specifics of distributed generation, please contact IPD
directly at +1 305-767-2177 or info@ipdlatam.com).
4. Challenge: Financing
Access to credit has been a major obstacle for renewable energy projects in Brazil. Brazilian National
Development Bank’s (BNDES) local content requirements for cheap credit are restrictive. Other local
banks have been extremely cautious about backing solar PV projects.
Bright Side
The Temer government has said it will change local content rules to ease restrictions and draw more
foreign investment. It may also release restrictions on third-party financing options.
The Brazilian Real (BRL) depreciated over 60%
under Rousseff. This trend increased the cost of
renewable energy projects significantly. But it
also had a dramatic effect on developers’
projections. Their winning bid prices were
based on the Brazilian currency, which was
much stronger in 2014. In fact, six major
developers that were awarded projects in the
1st
solar auction in 2014 asked the Electric
Energy National Agency (ANEEL) for more time
to complete their projects, mainly due to
difficulties tied to the BRL drop. Petitions were
denied. The currency has reacted favorably to
the government transition, as the figure
reflects: (1) Rousseff impeachment requested;
and (2) Rousseff suspended. But the situation is
still considered highly unstable and presents a
real risk. The Central Bank is taking measures
to prevent a steep currency appreciation.
Brazilian Real’s Evolution (2010-2016)
BRLperUSD$
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
Jan-10
May-10
Sep-10
Jan-11
May-11
Sep-11
Jan-12
May-12
Sep-12
Jan-13
May-13
Sep-13
Jan-14
May-14
Sep-14
Jan-15
May-15
Sep-15
Jan-16
May-16
(1) (2)
Source: IPD based on OECD Monthly Monetary and Financial Statistics

8. ©2016 IPD Latin America | 8
LATIN AMERICA RENEWABLE ENERGY
ADVISORY SERVICES
IPD Latin America’s Renewable Energy
Advisory Services provide complete analysis
of the market’s current state of play to
support your company as it assesses
opportunities in Latin America’s renewables
segment. The service includes:
Monthly Reports: The Renewable Energy Tracker provides key analytical insights on the most relevant
sector events across Latin America. The tracker includes regulatory and deal flow updates, an energy
auctions monitor, profiles on key stakeholders, and exposés on notable renewables sector
developments, among other information and analysis.
Online, Dynamic Dashboard: Password access to an online, dynamic, systematically updated
dashboard allows for easy comparison of key indicators and regulatory elements in the electricity
and renewable energy sectors. All monthly reports are also archived online.
Quarterly Webinars: IPD analyzes the latest developments impacting renewables across the region
in these quarterly, one-hour, multi-client webinars. A Q&A session rounds out the prepared
presentations.
Beyond the Renewable Energy Tracker service, IPD also offers the following:
Individual Country Profiles: Analysis developed on-demand for
clients interested in a particular country or sub-region. IPD’s
concise, comprehensive country electricity sector profiling tool
covers key markets aspects, including economic and financial
overviews and country risk assessments; institutional framework
and policy mandate for the electricity sector; power market size
and supply-demand fundamentals; generation, transmission, and
distribution segment structure; and renewable energy regulatory
framework.
Due Diligence: IPD undertakes market reputation and financial due
diligence for potential investment opportunities.
Strategic Advisory - Project Development: IPD provides in-country
strategic advice and positioning. Our local consultants work
alongside your team to achieve project success.
For more information, please contact us at +1 305-767-2177 or info@ipdlatam.com
IPD Latin America provides customized energy consulting services to global oil, gas, and power companies,
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“After more than 17 years of on-the-ground
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America