Austral Insights #09

Welcome to Austral Insights, your go-to source for understanding Argentina's key developments. Each week, we bring you concise, business-focused insights into the country’s politics, economy, and strategic sectors—providing the local perspective you need to make informed decisions.

Argentina by the numbers:

*_{Emerging Markets Bond Index (JP Morgan)}
**_{The S&P MERVAL Index tracks the largest, most liquid stocks on Argentina’s exchange, meeting size and liquidity requirements}

This week’s highlights:

• Government to privatize energy firm Enarsa, beginning with the USD 200m sale of its stake in Transener, the largest transmission company in the country.

• Tecpetrol and Pluspetrol export gas to Brazil via Bolivia, marking key progress in Argentina’s regional gas strategy.

• 80% public support for Mendoza talc mine signals growing local approval of mining projects, industry starts to benefit from this shift in local perception.

• US Treasury Secretary Bessent suggests Washington could offer Argentina a credit line if Milei’s reforms face global shocks.

• Caputo meets Georgieva in Washington; IMF reaffirms support to Buenos Aires.

• National mourning declared after passing of Pope Francis; political activity paused; high-level Argentine delegation to attend funeral headed by President Milei and his sister.

• Inside Congress: legislative activity paused after Pope Francis’ death; key sessions including $Libra commission rescheduled for next week.

• What do Argentines think about..? Argentines split on IMF deal and Milei’s economic plan; majority sees no credible opposition alternative.

Energy

Milei’s administration is moving forward with plans to privatize Energía Argentina S.A. (Enarsa), a state-owned company active across the energy value chain. Enarsa handles natural gas and LNG imports, infrastructure projects like pipelines and hydroelectric plants, and holds a 50% stake in Citelec—the controlling shareholder of Transener, Argentina’s largest electricity transmission firm.

The privatization will begin with the sale of Enarsa’s stake in Citelec, a move expected to raise approximately USD 200m from the operation. This falls under the scope of the 2024 “Bases Bill”, a key legislative package of Milei’s reform agenda in which Enarsa is listed as one of the state-run companies to be privatized.

Oil & Gas

Tecpetrol, Techint’s oil & gas subsidiary, completed its first natural gas export to Brazil using existing pipeline infrastructure that crosses Bolivia. The transaction involved agreements with Brazil’s Cosan and MGAS.

Pluspetrol also made its first gas export to Brazil from Vaca Muerta, using Bolivian pipeline network. The gas was marketed through Pluspetrol’s Brazilian subsidiary.

Both transactions mark a significant milestone in the regionalization strategy for Argentine gas, offering an alternative to traditional export routes through Chile or LNG shipments. Accessing Brazil—the region’s largest energy-consuming market—represents a key commercial opportunity for Vaca Muerta producers.

Mining

After years of stagnation, mining in Mendoza is seeing a revival—driven by regulatory changes, global market trends, and shifting local sentiment. A notable example of this was the public hearing for the Environmental Impact Report of the Don Ernesto talc mine (Anda Minerales), held on April 22.

Notably, 80% of participants voiced support for the project, signaling growing local acceptance when environmental and community standards are clearly addressed. Mendoza’s return to mining adds strategic weight to Argentina’s overall sectoral outlook.

US-Argentina relations

Following his recent trip to Buenos Aires, US Treasury Secretary Scott Bessent reaffirmed support for Argentina in a closed-door meeting with investors hosted by JP Morgan in Washington. Bessent indicated that the US would consider granting access to the Exchange Stabilization Fund if Milei’s economic reform agenda were threatened by external shocks. This marks the Trump administration’s committment to supporting Milei’s economic direction.

IMF

Finance Minister Luis Caputo arrived in Washington on April 23, where he met with IMF Managing Director Kristalina Georgieva. The meeting was “highly positive”, with Georgieva reaffirming the IMF’s support for Argentina’s reform agenda and encouraging continued progress. Prior to that, Caputo held a private session with investors organized by JP Morgan, where he pledged a structural tax reform as part of the next steps to consolidate its economic program.

Pope Francis

Following the passing of Pope Francis, President Milei declared seven days of national mourning. Political leaders—including Cristina Kirchner and Mauricio Macri—shared tributes on social media, and thousands of Argentines gathered at churches across the country to pay their respects.

A high-level delegation led by President Milei will attend the funeral in Rome, including his sister and Secretary of the Presidency Karina Milei, the Foreign Minister, Chief of Staff, Security Minister Patricia Bullrich, and other top officials.

Politically, the Pope’s passing had an immediate impact: legislative activity was postponed, and campaign events were widely suspended out of respect.

Inside Congress

Congressional activity came to a standstill this week following the passing of Pope Francis. Key proceedings, including the $Libra investigative commission, were postponed to next week. On April 22, the Chamber of Deputies held a special session to honor the late pontiff, and the Senate is scheduled to hold a similar one on April 24.

What do Argentines think about…?

In a week dominated by Pope Francis’ passing, we take a step back to examine public sentiment on Argentina’s recent IMF agreement, based on a new poll by Escenarios.

• 37% support the IMF deal

• 46% oppose it

• Only 23.5% believe it will solve Argentina’s economic problems

• 50% believe it won’t, while 20% think it might solve some and help stabilize the situation

When asked about Milei’s broader economic plan:

• 50% said they do not trust it, while 46% expressed confidence

Regarding the opposition’s economic credibility:

• 55% believe the opposition lacks a clear economic plan

• 40% believe there is no opposition faction capable of handling the economy

The data reveals a deeply polarized society, but it’s particularly troubling for the opposition, which lacks the credibility and leadership to capitalize on the existing public dissatisfaction with the government’s performance.

Are you interested in the risks and opportunities that Argentina presents? Is there an issue you’d like to discuss or understand in greater depth? Reach out for a free 30-minute talk at [email protected].

See you next week with more insights!