Argentina as an investment opportunity - Rodolfo G. Villalba Executive Vice President

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Argentina as an investment opportunity - Rodolfo G. Villalba Executive Vice President
Argentina as an investment opportunity

Rodolfo G. Villalba
Executive Vice President

Buenos Aires, May 2017
                                         1
Argentina as an investment opportunity - Rodolfo G. Villalba Executive Vice President
Argentina has strong fundamentals to become a regional economic engine

                      Large and          • 3rd largest economy in LatAm, GDP of USD 586 Bn
                      diversified        • 2nd highest GDP per capita in PPP terms in the region, USD 22,500
                      ECONOMY
                                         • ~43 Mn pop (~60% under 35); access to 300 Mn pop in Mercosur

                  Vast availability of   • 8th largest country in the world (2.8 Mn km2), with 53% of agricultural land
                      NATURAL            • Abundant food, water and renewable energy resources
                     RESOURCES
                                         • Large oil & gas and mineral reserves

                                         • Qualified labor force, renowned for its technical skills, creativity & versatility
                     High quality
                       HUMAN             • #1 in Latin America’s Indices of Human Development and Education
                       CAPITAL
                                         • 98% literacy rate, ~110,000 higher education graduates per year

                      NATIONAL           • Nationwide road & railroad systems (35,000+ km), 43 ports & 54 airports
                  INFRASTRUCTURE
                                         • High connectivity, with 75% broadband and 141% mobile penetration
                    improvement
                      underway           • Extensive natural gas pipeline and electricity grid coverage

                                                                                                                            2
Argentina as an investment opportunity - Rodolfo G. Villalba Executive Vice President
Argentina has potential to capture USD 25 Bn/year+ in Foreign Direct Investment

 Argentina has lagged behind its peers in capturing                                 Now we have the opportunity to reach the level of
 the strong FDI inflow growth in Latin America                                      FDI correspondent to the size of our economy
 Foreign Direct Investment                                                          ’08 - ’15 FDI/GDP
 (Avg. USD Bn/Year)                                                                 (%, average)
          74.9
                                                                                      8.4%
                                                                      ’90-’00
                                                                      ’08-’15

   6.0x                                                                                        5.0%
                                                                                                                                     Average
                                                                                                         3.9%                         4.5%
                        27.4                                                                                       3.4%

                 2.9x                 19.7                                                                                  2.4%
                                                         1.4x                                                                         1.9%
   12.5                        5.8x          6.6x 12.4                 5.4x
                  9.4                                           9.7           8.2
                                                         7.1
                               3.4            1.9                       1.5

     Brazil      Mexico         Chile        Colombia Argentina          Peru         Chile     Peru    Colombia   Brazil   Mexico   Argentina

     Argentina’s share of regional FDI flows fell from 16%                               To reach the regional average, Argentina needs to
         to 4% between the 90s and the last 7 years                                            capture USD 25 Bn a year in FDI flows

                                       Source: World Bank, IMF                                                                                   3
Argentina as an investment opportunity - Rodolfo G. Villalba Executive Vice President
President Macri’s Administration has taken concrete steps to resolve investors’ concerns

 WEF Survey: Main Concerns for Argentina
 (share of total responses)                                   Key reforms and initiatives

      Inflation                            18                 •    Instituted inflation targeting policy to reach single–digit CPI by 2018

                                                              •    Removed capital controls and repatriation restrictions
FX restrictions                          17                   •    Floated exchange rate and recovered monetary reserves
     Access to
                                    13                        •    Resolved defaulted debt and regained access to global financial markets
     financing

     Tax levels                11                             •    Removed export taxes and import restrictions

                                                              •    Government e-platform for tenders and public accounts
   Corruption                  11                             •    Introduced Central Bank independence
                                                              •    Created the Argentina Investment & Trade Promotion Agency
 Government
                     6                                        •    New Public–Private Partnerships (PPP) regulatory framework
 bureaucracy
                                                              •    Re–launched the National Statistics Bureau (INDEC)
                                                              •    Established 4–year plan to eliminate the primary fiscal deficit
        Other                                       24        •    Implemented an unprecedented tax amnesty scheme

                         •    Country risk declined more than 100bp (-22%) in 12 months*
                         •    Recent public and corporate debt issuances have been oversubscribed by 4-7x**

                         Source: World Economic Forum (2015), press releases
                         * JPMorgan, Embi+ 08/31/15 = 584, Embi+ 08/31/16 = 454. **Includes the Federal Government, Buenos Aires Province and corporations
                                                                                                                                                             4
Argentina as an investment opportunity - Rodolfo G. Villalba Executive Vice President
The new administration was able to stop the decline and strengthen foreign exchange
reserves

                                                                           Recovering
          Foreign exchange reserves (USD million)                       reserves level to
                                                                        pre FX restriction
                                                                         policies in 2011
           $ 60.000
                                                                               USD 51.495            The
           $ 50.000                                                                           unprecedented
                                                                                                tax amnesty
           $ 40.000                                                                            scheme (for a
                                                                                              monetary value
           $ 30.000
                                                                                             of USD 120 Bn so
                                                                                             far) will continue
                                                                                              to contribute to
           $ 20.000
                                                                                               the growth of
                                                                                             foreign exchange
           $ 10.000                                                                               reserves

                $0

                      Source: Central Bank of Argentina. Dates are in dd/mm/yyyy format                           5
Argentina as an investment opportunity - Rodolfo G. Villalba Executive Vice President
Low leverage at the household, corporate and government levels increase potential for
investment and growth
 Household Debt - 2014                                                                                 Corporate Debt - 2014                                           Sovereign Debt - 2015
 (% of GDP)                                                                                            (% of GDP)                                                      (% of GDP)

                    Latin America

                                                                                                                                      125%
                                                                                               101%

                                                                                                                                                                                                                                249%
                                                                                                                                                                121%

                                                                                                                                                                                                                              105%
                    Emerging Markets

                                                                                                                                                                                                                        96%
                    Developed World

                                                                                         81%

                                                                                                                                                                                                                     89%
                                                                                   74%

                                                                                                                        86%

                                                                                                                                                          86%

                                                                                                                                                                                                               71%
                                                                                                                                                                                       70%

                                                                                                                                                                                                         69%
                                                                          55%

                                                                                                                                                    67%
                                                                53%

                                                                                                                                                   65%

                                                                                                                                                                                 54%
                                                                                                                                                                                52%
                                                                                                                                                                               51%
                                                                                                                                             54%

                                                                                                                                                                                                   43%
                                                                                                                                45%
                                            36%

                                                                                                                              40%
                                                                                                                  38%
                                                                                                              30%
                                                                                                              29%

                                                                                                                                                                         24%
                                   21%

                                                                                                                                                                       18%
                                                                                                        19%
                        15%

                                                                                                                                                                                             16%
                                                    9%
               7%
  7%

                                            Chile

                                                                                                            Chile

                                                                                                                                                                           Chile
                                                                                         USA

                                                                                                                                                  USA

                                                                                                                                                                                                                    USA
                                                                                   UK
                                                                          France

                                                                                                        Argentina

                                                                                                                                                   UK
                                                                                                                                               France

                                                                                                                                                                                                                     UK
                                                                                                                                                                                                                 France
               Mexico

                                                    India

                                                                                                                               India
                                                                                                                              China

                                                                                                                                                                         Mexico

                                                                                                                                                                                             China
                                                                                                                                                                                              India
  Argentina

                                                                                                                                                                       Argentina
                                   Brazil

                                                                                                             Peru

                                                                                                            Brazil

                                                                                                                                                                            Peru

                                                                                                                                                                           Brazil
                                                                                               Japan

                                                                                                                              Russia

                                                                                                                                                Japan

                                                                                                                                                                                             Russia

                                                                                                                                                                                                                  Japan
                                                                Germany

                                                                                                                                             Germany

                                                                                                                                                                                                               Germany
                        Colombia

                                                                                                        Colombia

                                                                                                                                                                       Colombia
              Argentine households have significant                                                     Argentine corporations have the lowest                             The government has ample room to
              room to borrow and increase spending                                                          debt to GDP ratio in the world,                                borrow from capital markets to fund
                                                                                                          increasing opportunity for leverage                                    infrastructure projects

                                                            Source: McKinsey Global Institute, BCRA, IMF                                                                                                                      6
Argentina as an investment opportunity - Rodolfo G. Villalba Executive Vice President
Argentina’s macroeconomic indicators are projected to improve markedly beginning in
2017, making this an ideal moment to invest in the country
Argentine GDP growth is expected to rebound                                           According to IMF, Inflation is expected to decrease
strongly in the next few years                                                        significantly, reaching single digits by 2020
YoY GDP Growth (constant 2004 prices)                                                 YoY Consumer Price Change

                                      Historical Projected                              39%
11%
                                                                                                                     Argentina’s Central
 6%                                                                                                                  Bank has set more
                                                                                                                     aggressive goals of
 5%
                                                                                                                      12-17% for 2017
 4%                                                                                                                 and 8-12% for 2018,
                                                                                                                    reaching 5% in 2019
 3%
                                                                                                 21%
 2%
                                                                                                              17%
 1%
                                                                                                                    12%
 0%
      2008

             2010
                    2011

                               2013

                                           2015

                                                   2017
                                                          2018
                                                                 2019
                                                                        2020
                                                                               2021

-1%                                                                                                                           7%
                                                                                                                                           5%
-2%
-6%
                                                                                        2016     2017        2018   2019     2020      2021

                           Sources: Historical – INDEC; Projections – IMF World Economic Outlook (October 2016)                                 7
Argentina as an investment opportunity - Rodolfo G. Villalba Executive Vice President
Argentina offers investment opportunities of more than USD 250 Bn

                                                                                          Manufacture/            Value Added
      Infrastructure                Energy & Mining               Agribusiness
                                                                                         Industrial Goods           Services
           $135 Bn                         $85 Bn                    $25 Bn                     $5 Bn                 $5 Bn

• Roads & highways: $48 Bn     • Oil & Gas: $20 Bn+ (per     • Irrigation: $18 Bn       • Automotive industry   • Tourism
• Water & sanitation: $22 Bn     year)                       • Animal protein (beef,    • Food & Beverage       • Professional
• Education & health: $20 Bn   • Mining: $30 Bn+               pork, poultry): $5 Bn    • Consumer products       services

• Urban mobility: $17 Bn       • Renewable energy: $15 Bn    • Forestry/Pulp: $2.5 Bn   • Machinery &           • Biotechnology

• Freight rail: $15 Bn         • Hydro power: $10 Bn                                      Equipment             • Pharma

• Real estate: $5 Bn           • Power grid: $5 Bn                                      • Basic materials       • Software
                               • Thermal power: $4 Bn                                                             development
• Telco networks: $5 Bn
• Airports & ports: $3 Bn      • Nuclear power: $3 Bn

                               Note: All values are in USD                                                                        8
Argentina as an investment opportunity - Rodolfo G. Villalba Executive Vice President
The Argentina Investment & Trade Promotion Agency

              Contribute to the creation of quality jobs and sustainable economic development by
                      reinserting Argentina into the world, through investment and trade

             ➢ Single point of contact in the government for companies seeking to invest in Argentina
                ➢ Become a strategic partner throughout the investment period

                    ➢ Facilitate investment processes and improve business climate

                   ➢ Promote the highest ethical and professional standards, making Argentina
                     a better and more transparent place to conduct business

               ➢ Unlock SMEs and regional economies potential to strategic international markets

               ECONOMIC      JOB      REGIONAL    SOCIAL   TECHNOLOGY   STRATEGIC    ENVIRONMENTAL
                IMPACT    CREATION   ECONOMIES   IMPACT     TRANSFER     SECTORS          CARE

                                                                                                        9
Argentina as an investment opportunity - Rodolfo G. Villalba Executive Vice President
The Agency facilitates investment processes throughout the business ecosystem

                            Strategic issues                                            Administrative issues
 Sector-specific information, programs, regulatory framework                  Tax/legal paperwork, permits, registrations

                      Foreign                  Regional                           TAX                          LEGAL
                    Consultants               Promotion
                                               Agencies
    Embassies &                   President
                                  /Chief of                  Municipalities
     Consulates
                                    Staff
                    Ministry of
                     Foreign                  Provinces
                     Affairs
                                                                Private,
      Financing                                              state-owned,
      Programs                                               & multilateral
                                                                 banks
                                               Strategic                      CAPITAL FLOWS                   PERMITS
                    Ministries                 Partners
                                                                Big 4,
     Secretariats                  Industry                  management
                                  Chambers                   consultants
                    Ministerial               Associations
                      IPAs

    The Agency is a single-point-of-contact for investment projects, independently of sectors and origins

                                                                                                                            10
Through the end of November, there have been investment announcements totaling
USD ~53 Bn, of which the Agency manages USD ~35 Bn
      Investment Announcements
      (USD Bn)
                                                         # Projects
                                       55.4                  360
                Agribusiness            2.4                   33
                                        2.5                   60
  Technology & Other Services
            Consumer Goods             5.4                    53

             Industrial Goods          6.6                    49                                           # Projects
                                                                                                                 203
                                                                                         34.9
            Financial Services         6.7                    38
                                                                                                2.9              53
                                                                                   2.2                           39
    Transport & Infrastructure         8.0                    28                         4.2                     33
                                                                                         1.3
                                                                                                                 29
                                                                                         4.6
                                                                                                                 25
                                                                                         5.9                      8

          Energy & Resources           23.9                   99
                                                                                         13.7                    32

                            Investments announced*                    Investments managed by the Agency

                         * From 11/12/15 to 11/12/2016. Includes only projects with a declared monetary amount
                                                                                                                        11
We have a world-class team ready to assist you with your investment and trade needs

                                PABLO TARANTINI           JUAN PABLO TRÍPODI           FRANCISCO URANGA
                                 VP Investments           VP International Trade         VP Investments
                                Infrastructure, Mining,    Agribusiness, Consumer       Agribusiness, Industrial
                             Consumer Goods, Innovation        Goods, Services                  Goods
                                   +54 11 5218 8571           +54 11 5218 2924             +54 11 5218 9332
                               ptarantini@invest.org.ar   jtripodi@exportar.org.ar      furganga@invest.org.ar

   JUAN PROCACCINI
      President
     +54 11 5199 8572
 Presidencia@invest.org.ar

                               RODOLFO VILLALBA            ANDRÉS ONDARRA                 ANDRÉS TAHTA
                                VP Investments              VP Investments                VP Investments
                                    Business in Asia          Finance, Power             Telecommunications,
                                  +54 11 5218 9332         Generation, Real Estate,   Renewable Energy, Health &
                               rvillalba@invest.org.ar           Oil & Gas               Professional Services
                                                             +54 11 5218 9332             +54 11 5218 8571
                                                           aondarra@invest.org.ar        atahta@invest.org.ar      12
Rodolfo G. Villalba
 Executive Vice President
 rvillalba@invest.org.ar

     Miguel Mitre
      Analyst Asia
  mmitre@invest.org.ar

www.investandtrade.org.ar

             InvestTradeARG
                              13
APPENDIX

           14
According to private projections, economic growth combined with reduction in subsidies
to consumers should reduce the primary fiscal deficit from 4.8% to 0.9% of GDP by 2021

                 Relationship between primary revenues, expenditures
                 and fiscal deficit (% of GDP)

                  23.4
            24                 22.4
                                           21.7
            22                                        20.6
                                                                   19.4       18.9
            20    18.6         18.3        18.6       18.4         17.9               Expenditures
            18    4.8
                                4.1                                                   Primary revenues
             4                             3.1                                18.0
                                                      2.2
                                                                   1.5
             2                                                                0.9
                                                                                      Fiscal deficit
             0
             2016              2017        2018      2019         2020        2021

                                            3.6%       3.8%            3.2%
                                 3.1%                                          3.1%
            GDP Growth

                 -2.0%

                  Source: Morgan Stanley                                                                 15
A number of regulatory initiatives have been or are in the process of being
implemented to foster a better business and investment climate
                                                                        UNDER CONGRESSIONAL
                  ALREADY IMPLEMENTED                                          REVIEW                           UPCOMING
 ✓   Normalization of Foreign Exchange Market – removal of capital      •   “First Job” Law – tax         •   Cultural Patronage Law –
     controls and exchange rate unification                                 credits and subsidies for         tax incentives for private
                                                                            companies who employ 18           companies to finance
 ✓   Removal of Export Taxes on Mining and Industrial Products
                                                                            – 24 year olds                    cultural projects
 ✓   Reduction of Agricultural Export Taxes
                                                                        •   “Simplified” Stock            •   Transparency in Public
 ✓   New Import Regime (“SIMI”) – clarification of goods requiring          Company Law – new                 Works Law – stipulates a
     non-automatic import licenses, all other goods require only an         company type to facilitate        requirement that all the
     automatic license                                                      the establishment of start-       administrative steps for
 ✓   Rural Land Law – implementation of a more flexible system for          ups (online registration,         public works be made
     productive use of rural land by foreigners                             ability for employees to          public
                                                                            receive stock as
 ✓   Tax Amnesty Law – tax incentives for Argentines to repatriate          compensation)
     assets held abroad and invest in Argentina’s economy
                                                                        •   Venture Capital Law –
 ✓   SME Promotion Law – reduction of income tax and increase in            creation of funds backed
     financing options for SMEs                                             by the government and
 ✓   Automotive Parts Production Law – incentives for automotive            with incentives for
     industry when buying local production                                  investors to foster
                                                                            Argentine
 ✓   Access to Public information Law – stipulates a requirement that
                                                                            entrepreneurship
     all public information requested of the government be provided
     (or denied with a specific reason) within 15 days
 ✓   Public-Private Partnership (PPP) Law – measures to facilitate
     and incentivize fruitful investment partnerships between public
     and private sector

                                                                                                                                       16
Financial markets have been eager lenders to the government and Argentine
companies
 RECENT DEBT PLACEMENTS
             Bond Issuer    Date of issue
                                              Millons    Maturity
                                                                       Av. cost              COMMENTARY
                                               USD       (years)

  SOVEREIGN
                                                                                  ✓ Argentina was the emerging market
  Argentine Republic        April 17, 2016    16.500    3, 5, 10, 30    7.2%
                                                                                    with the most debt placements in H1
                                                                       5.625%
  Argentine Republic       January 26, 2017   7.000        5, 10
                                                                       6.875%       2016 with USD 23 Bn in total
  SUB-SOVEREIGN                                                                     placements (20% share)
  Buenos Aires Prov.
                            March 9, 2016
                           February 7, 2017
                                              1.250
                                               750
                                                           6–8
                                                            6
                                                                       9.375%
                                                                        6.6%
                                                                                  ✓ Issuers included sovereign, sub-
  Neuquén                    May 5, 2016       235          12         8.62%
                                                                                    sovereign and prime corporations and
  Mendoza                   May 12, 2016       500           8         8.375%       many of them were oversubscribed
  Ciudad de Buenos Aires     May 25 2016       890          11         7.625%          ₋   The federal government
  Córdoba                    June 3, 2016      725           5         7.125%              received offers for USD 69 Bn,
  Salta                     June 30, 2016      300           8         9.125%
                                                                                           implying an oversubscription of
  Chubut                     July 18, 2016     650          10         7,75%
                                                                                           4.2x
  Chaco                    August 11, 2016     250           8          9.5%

  Santa Fe                 October 25, 2016    250          10          6,9%
                                                                                       ₋   Buenos Aires Province was
  Entre Ríos               February 1, 2017    350           8         8.75%               oversubscribed by 3x, Neuquén
  CORPORATE                                                                                by 6.3x, Mendoza by 4.6x
  IRSA                     March 17, 2016      300         1–4         8.75%           ₋   Cablevisión was oversubscribed
  YPF                      March 23, 2016      1000          5          8.5%
                                                                                           by 7.0x
  Cablevisión                June 8, 2016      300           5          6.5%
  Arcor S.A.                June 22, 2016      300           4         9.125%

  YPF                       June 30, 2016      750           4         9.125%

  Arcor S.A.               March 23, 2016      1000          5          8.5%

                                                                                                                             17
Argentina has recently passed a law to promote Public-Private Partnerships

                  Objective: Increase private investor participation in a variety of
                  projects promoted by the Argentine government across sectors

                  •   Public sector: access to the experience, efficiency and financing of the private
                      sector
     Benefits
                  •   Private sector: ability to participate as an investor in public projects under clear
                      guidelines and foreseeable streams of payments

                  •   Any private or semi-private company and any public sector entity is allowed to
                      participate through a variety of investment vehicles (e.g. existing societies, trusts
                      etc.)
                  •   Ample guarantees to ensure that contract obligations are met and payments made
                  •   Limits the state’s ability to unilaterally change contract terms or alter the
    Provisions        economic equilibrium of the agreement (e.g. 100% compensation will have to be
                      paid prior to takeover of assets)
                  •   Allows for contracts to be agreed to and payments to be made in foreign currencies
                  •   Dispute resolution can be sought from technical panels and/or
                      national/international tribunals

                                                                                                              18
We have very attractive renewables and unconventional O&G markets under
development
   Power generation: renewables target of 20% of                                Unconventional O&G: “Vaca Muerta” play has
   consumption shall be met by 2025                                             world-scale potential
   Installed Capacity                                       Addt’l Capacity                         Shale Oil Reserves      Shale Gas Reserves
   (GW)                                      54                                                     (Bill. Barrels)         (Trill. Cubic feet)
                                             10                 10 GW                                 75                    1,135

                                              1                 1,5 GW
                   33                                                                                      58
Renewable                                                                                                                           802
                    1                        18                  8 GW
                                                                                                                                          707
   Nuclear                                                                                                                                      665
                   10
  Thermal                                                                                                        32
                                                                                                                      27

    Hydro          22                        25                  3 GW

              2015                2025                                                               Russia USA China Arg   China Arg AlgeriaRussia

   • Investments of USD 15 Bn needed to meet renewables                          • Argentina holds the world’s 2nd largest technically
     target                                                                        recoverable shale gas and 4th largest shale oil reserves
   • Great conditions for wind, solar, biomass and small hydro                   • Vaca Muerta has 4+ years of cumulative development
   • Government commitment and support:                                            - Area of 30,000 km2 with ~300m of shale layer at
                                                                                     ~3,500m of depth (with 3-5% of total O&G content)
       - Competitive prices under guaranteed long term PPAs
                                                                                   - JVs between YPF and Chevron, Dow, Pampa, Petronas
       - Tax incentives (accelerated depreciation, levied import duties, etc)
       - Financing for renewable energy projects                                 • The Government has preagreed modifications to the
                                                                                   Vaca Muerta collective bargaining agreement: gas price
   • >10GW of large baseload plants (thermal/hydro) needed
                                                                                   will have longer predictability, and labor costs and
                                                                                   productivity will be improved
                          Source: Ministry of Energy and Mining, EIA                                                                                  19
Argentina has 300+ GW potential in renewable energies distributed across different
regions in the country*

                                                                                      SOLAR
                                                                   •   High solar radiation levels found in
                                                                       flat terrains with good altitude and
                    BIOMASS                                            low humidity levels
   •   Wide availability of sugar cane                             •   High capacity factors for Solar PV
       bagasse and agricultural residue
   •   Significant forestry coverage and
       wood production in NE and south                                                                MINI - HYDRO
       regions (eg. Tierra del Fuego)
                                                                                                •   Wide availability of
                                                                                                    mini-hydro projects
                                                                                                    with high capacity
                  GEOTHERMAL                                                                        factors (over 50%)
   •   High quality geothermal resources
       located in the Central Andes region.
   •   The area hosts almost every basic
                                                                                                  WIND
       geothermal element such as volcanoes,
       fumaroles, hot springs and geysers                                         •   Year-round strong and stable
                                                                                      winds reflected in capacity
                                                                                      factors of 35%+
                                                                                  •   Favorable terrain conditions
                                                                                      (include rounded hills, open
                                                                                      plains and extensive shoreline)
                      * Excluding biomass
                      Source: Universidad del Comahue, IEA, Enel
                                                                                                                           20
Argentina has the highest wind power potential in the region

       • Patagonia Region has very stable and strong winds throughout the entire year (with
            average winds of over 9m/s)
       • Windfarms with capacity factors ranging from 35% to 50%

 Selected Countries: Wind Capacity Factors (%)                                            Argentina: Average Windspeed Map

      50
            47
                  44
      15
                         37
                                 35
                                                         33

                                                                  23
                                         20                               19
      35

      Arg   Uru   Per   Bra     Mex      Chl             USA     Chi     Ger

                   CF Source: Project public data / BNEF; Map: Centro Regional de Energía Eólica                             21
Argentina also has the second highest solar power potential in the region

        • Northern Region has exceptional radiation levels and terrain conditions, comparable to
           those in the Atacama desert in Chile
        • PV capacity factors expected to range between 25% and 33% (with tracker)

 Selected Countries: Solar Capacity Factors (%)                                            Argentina: Average Solar Radiation Map

      34   33
                 31
            8

                           20      20
                                           16              17
                                                                   15
                                                                           12
           25

     Mex   Arg   Chl       Bra     Per    Uru             Ger     Chi     Jpn

                       CF Source: Project public data / BNEF; Map: National Renewable Energy Laboratory (NREL)                      22
Recent tenders in renewable and thermal energy were heavily oversubscribed

Renewable Energy (RenovAr Rounds 1 and 1.5)                                           Thermal Energy

  1 GW    Capacity called for tender                    Awards                        ✓ Auction initially contemplated
                                                            59 Projects                 increasing installed capacity by 1
                                                TOTAL
  123     Projects presented                   AWARDED
                                                            2,423 MW
                                                            8,268 MWh/yr
                                                                                        GW, but ended up awarding 2.8 GW
                                                                                        due to high demand
                                                 Wind
  x 6.3   Oversubscribed                                    22 Projects
                                                                                      ✓ Results:
                                                            1,472 MW
                                                            5,827 MWh/yr
                                                                                             •    Total of 2.8 GW awarded
                                                Solar PV    24 Projects
                                                            916 MW                           •    6.6x oversubscribed
                                                            2,192 MWh/yr
                                                                                             •    20% offers coming from new
                                                 Biogas     6 Projects                            players
                                                            9 MW
                                                            67 MWh/yr                        •    Pricing ~32% cheaper than
                                                Biomass     2 Projects                            previous auction
                                                            15 MW
                                                            117 MWh/yr

                                              Small Hydro 5 Projects
                                                          11 MW
                                                          65 MWh/yr

                         For specific information on the Renewable Energy awarded projects, please see the RenovAr Brochure
                         developed by the Udersecretariat of Renewable Enery, Ministry of Energy and Mines                     23
We have great mining potential, with abundant reserves of lithium, copper, silver, gold
and potassium
  Significant mining potential with ~75%
  unexplored surface                                             Important opportunities in lithium, copper, silver and gold
                                                                                                                                     World
                               • 750,000      Km2
                                              of high                           Thousand tonnes
                                                                                                                                    Ranking
                                 potential mining areas                                                     11x
                                                                  Lithium        Current    13                                       #3
                               • 183,000 Km2 of already                         Potential                                   148      #2
                                 granted mining rights
                                  - 25 advanced prospects                       Thousand tonnes
                                                                                                             9x
                                                                                                                                     # 20
                                  - 14 production mines           Copper         Current     110
                                                                                                                                     #6
                                                                                Potential             856                100 956

                                     Gold                                       Tonnes
                                     Copper
                                                                                 Current                          3x                 # 10
                                     Uranium                       Silver                            756
                                                                                Potential         1,417            800      2,217
                                                                                                                                     #5
                                     Polymetallic
                                     Lithium                                    Tonnes
                                     Lead-Zinc
                                     Iron                          Gold          Current                    53     2x                # 14
                                     Prospective areas                          Potential           76                 31   107      #9

  • ~65% of the mining surface remains unexplored                 • USD 30 Bn+ needed to develop copper, silver, gold, lithium,
                                                                    potassium and other opportunities
  • No export taxes for mining products
                                                                  • There are 40+ projects with PEA and onward
                    Source: Ministry of Energy and Mining USGS    • There are 340+ projects in initial stages                               24
There are at least 7 world class Copper projects in advanced stages, and 85 projects in early
stages underway
                                                                       Our 7 projects in advanced stage are
 85 projects in early stages in several provinces                      exploitable in the near future

 • 23 in Salta      • 8 in Mendoza        • 1 in La Pampa
 • 17 in San Juan   • 7 in Jujuy
 • 11 in Catamarca • 6 in Neuquen
 • 10 in La Rioja   • 2 in Chubut

   Advanced Projects                         Company                   Metals           Province      State

   Agua Rica                                 Yamana Gold               Cu, Au, Mo, Ag   Catamarca     Feasability
   El Pachón                                 Glencore                  Cu, Mo, Ag       San Juan      Feasability
   San Jorge                                 Solway Investment Ltd     Cu, Au           Mendoza       Pre-Feas.
   Taca-Taca                                 First Quantum             Cu, Au, Mo, Ag   Salta         Feasability
   Josemaría (las Vicuñas, Las Flechas)      NGEX Resources            Cu, Au, Ag       San Juan      PEA
   Los Azules                                McEwen Mining             Cu, Au, Ag       San Juan      PEA
   El Altar                                  Stillwater Mining Corp.   Cu, Au           San Juan      Adv. Exp.

                                                                                                                    25
Argentina has the 3rd largest brine Lithium resource; alongside Bolivia and Chile we form the
Lithium Triangle

                                                             There are 7 projects in pilot stage
                                           Company                       Salar                     Tn/yr

                                           Orocobre Ltd. Toyota          S. Olaroz Cauchari        20k
                                           FMC                           S. Del Hombre Muerto      20k
                                           Enirgi Group                  S. Rincón                 20k
       25       Projects in early stages   Ganfeng Lithium               S. Llullaillaco           20k

            •    5 in Jujuy                Eramet / Eramine              S. Centanario             20k
            •    15 in Salta               SQM                           S. Cauchari Olaroz        20k
            •    5 in Catamarca            Galaxy Resources Ltd.         S. Del Hombre Muerto      20k

                                                                                                           26
There are vast agribusiness opportunities in land irrigation, cattle raising, forestry &
cellulose and food industrialization
  Argentina has excellent agriculture conditions and full                         There are still many opportunities for further
  government support                                                              development
  Argentina´s food production capacity        2016 Argentine production
  (Million people)                                                                                  Development of more than 4 Mn Ha
                                                   56 Mn tons production                            with artificial irrigation
               1.5X                                1st soy oil exporter (6 Mt)
                       600                                                                          Potential investment: USD 8 Bn
                                                   2nd soymeal exporter (32 Mt)
                                                   3rd bean exporter (12 Mt)
       400
                                                                                                    Cattle raising expansion – 10 Mn head,
                                                   28 Mn tons production
                                                                                                    200 K swine and 1,5 Bn poultry
                                                   3rd world exporter (17 Mt)
                                                                                                    Potential investment: USD 10 Bn+
                                                   2.8 Mn Tons produced
                                                   11th meat exporter (265 MT)                      Expansion of the forestry and cellulose/
       2015           2025                                                                          paper industry, biomass energy and
                                                                                                    housing. Raw material: 4-5 Mn m3/year
  • Farming conditions:
                                                                                                    Potential investment: USD 2.5 Bn
     - Mild Climate with abundant rainfall
                                                                                                    Potential and incentives to consolidate
     - Rich soils with low fertilizer needs
                                                                                                    as significant player and develop 300k
     - Exceptional human resources, long farming tradition                                          tons of aquaculture
     - High technology adoption in crop genetics (>65% GMO)
                                                                                                    Potential investment: 1 Bn+
     - Unparalleled logistics with 100% storage capacity
  • Government support: one of the first measures adopted by                                        Increased food industrialization (milling,
    President Macri’s administration was the elimination of                                         wine, canned and frozen food)
    export taxes to wheat, corn, meat and regional products                                         Potential investment: USD 0.5 Bn+

                       Source: Ministry of Agroindustry                                                                                       27
In professional services, we have become a hub for large companies’ shared service centers

  Argentina has a number of distinct benefits for the                               Dozens of companies across industries have
  establishment of shared service centers                                           established their shared service centers in Argentina
   • Ample supply of talented and English speaking workforce                                  40+ shared service centers in Argentina, including
     - 110K higher education graduates per year
     - 15th in the world in terms of English proficiency (1st in
       LatAm)
     - 98% literacy rate countrywide
   • Located in a convenient time zone                                                    1000 employees providing IT,     650 employees providing
      - Entire Americas and Europe within +/- 5 hours*                                    research, credit analysis and        IT, tax & project
      - NYC / Washington D.C. / Boston are at -1 hour                                     processing services (opened       management services
      - London is at +4 and Continental Europe at +5 hours                                          in 2015)                  (opened in 2012 )
   • Availability of high-quality affordable urban office space
     - Buenos Aires office space is cheaper than Rio de
       Janeiro, Sao Paulo, Bogota, Santiago and Mexico City
     - Tax incentives exist for companies installing themselves
       in certain areas of Buenos Aires (e.g. new technology
       district)
                                                                                          400 employees providing IT      120 employees providing
   • Developed mobile and broadband infrastructure
                                                                                            and accounting services       admin, procurement and
     - 75% of population with broadband access                                                 (opened in 2006)           billing services (opened in
     - 141% mobile phone penetration with wide cell service                                                                          2006)
       availability
                      *Differences can shift by +/- 1 hour during daylight savings time
                      Sources: UN, GSMA, press releases                                                                                            28
In infrastructure, we have ambitious development plans for roads & highways, railways
and airports
  Roads: improvement and construction               Freight rail: rehabilitation of the entire   Airports: modernization & increased
  of roads & highways                               network                                      flight usage
   • ~40% of roads are currently in poor              • Only 5% of freight is transported by      • Growth by 2x of air traffic expected
     conditions                                         railway (18 Mn tones)                       by 2020 (10 Mn to 20 Mn
   • Only 2,800km of highways in place                                                              passengers)
                                                      • Average speed of ~12-15 km/h
   • Plan 2027:                                                                                   • Expanded international connections
                                                      • Plan 2027:
      - 11,400 km of total highways                           - 10,000 km of refurbished rails    • Plan 2019:
      - 13,000 km of roads in good conditions                 - 80-100 Mn tones transported          - 14 airports modernized by 2019
      - Investment of USD 28 Bn                               - Investment of USD 15 Bn              - Investments of USD 900 Mn

   2015                    2027

                                                    Passenger rail: new developments
                                                                                                 Ports
                                                      • The Regional Express Network (RER)
                                                        is a USD 8.5 Bn urban passenger           • Port of City of Buenos Aires bid
                                                        investment

                         Source: Ministry of Transportation                                                                             29
There are a number of public tenders planned in the short term across sectors

                        Transportation                     Federal Infrastructure                              Energy                        Real Estate & Tourism

                     Passenger rail rolling stock                                                     Thermal Tender (large high
                                                                                                         efficiency projects -
                                                           Waste-to-energy electricity                         >700MW)
                    Nationwide road concessions                     plants                                                                         Housing public works
                                                                                                      First HV Transmission Grid
                      Stage 2 Belgrano Cargas              Health related public works                          Tender                           Cafayate tourism project
H2 2016 & H1 2017

                               freight
                                                             Education related public                  “Portezuelo del Viento”                  Various real estate projects
                                                                     works                               multipurpose dam                        in Buenos Aires City (e.g.
                      Regional Express Railway
                                                                                                      Renewable energy (solar,                  Huergo Project, Colegiales
                                                                                                      wind, hydro, biomass etc.)                Station, Houssay Square…)
                        Port of Buenos Aires
                             concession                                                                 Seismic evaluation for
                                                                                                            offshore O&G
                       Buenos Aires Subway                     Nationwide irrigation
                     construction & renovation                       systems                             “Potrero del Clavillo”
                                                                                                          multipurpose dam                      Various real estate projects
                                                                                                     6-8 Vaca Muerta play tender               in Provinces (e.g. North Port
                     Further freight rail projects
                                                                                                                                               Rosario, Mendoza Station…)
                      (e.g. San Martin Cargas,
                          Urquiza Cargas)
 H2 2017

                                                                                                        RenovAr Plan Round 2

                                Note: All tender dates are tentative and approximate; includes only selection of opportunities. Thermal energy tenders to be determined.   30
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