Argentina's power reform doesn't remove counterparty risk. It redistributes it.
Decree 450/2025 requires Argentina's electricity distributors to source at least 75% of their supply through direct corporate PPAs, and cuts CAMMESA's role down to technical dispatch and settlement, per reporting on the decree. The pitch is deregulation unlocking a bilateral contracting market. The mechanics say something narrower: the obligation to pay a renewable generator is moving off one aggregator everyone already watches and onto two dozen distributors nobody has graded yet.
Every deck on Argentine power this year reads the same way. CAMMESA's grip is loosening, corporate offtake is coming, this finally looks like the PPA markets lenders already know how to underwrite in Chile or Mexico. That is the consensus case, and it is half right. A bilateral PPA market is coming. Whether it is more bankable than what it replaces is a different question, and it is the one the decks skip.
What CAMMESA's shrinking role actually changes
For a decade, a generator selling into the wholesale market was exposed to one counterparty's solvency, however shaky. CAMMESA cleared the market, and whatever cross-subsidy or treasury-transfer problem sat behind it was at least a single, trackable risk. In September 2025, CAMMESA paid renewable generators roughly 40% of what it owed them because the FODER trust had not received its government transfer that month, per La Política Online's reporting. Bad, but legible. Every lender in the room was pricing the same payer.
Decree 450/2025 does not fix that payer's solvency. It routes the obligation around it. Distributors now have to cover at least three-quarters of their load through direct corporate contracts, with a 24-month transition window to get there, and Resolution SE 400 pushes large industrial users toward the same bilateral structure instead of CAMMESA-cleared supply. CAMMESA keeps the wires running and the settlement clock, but it stops being the thing standing between a generator and its cash.
A PPA is only as good as the balance sheet reading the invoice, and Argentina just swapped one weak, closely watched balance sheet for two dozen untested ones.
Why more payers is not the same as better payers
Argentina's distribution sector is not one credit. Some distributors are provincial, some are private concessions, and tariff-setting authority sits with whichever province or municipality holds the concession, not with a single national regulator. That is a materially different risk shape from a utility like Chile's where tariff policy is set nationally and at least moves on one clock. A province that freezes residential tariffs to manage its own politics squeezes the distributor's margin, and that margin is exactly what funds the PPA payment, with zero connection to whether the wind blew or the panels produced.
DSCR models built for a CAMMESA-cleared PPA assumed one macro-level payment risk, sized against a trust fund's funding cycle. A distributor-cleared PPA needs its own credit file per counterparty, a view into that province's tariff politics, and, ideally, a letter of credit or an escrow structure standing behind the contract rather than a signature on it. None of that exists as a market standard in Argentina yet, because the contracts that would force it into existence are only now being written.
What we think follows
Treat this reform as a credit-diligence expansion, not a credit-quality upgrade. The honest way to underwrite it is distributor by distributor, the way a bank underwrites two dozen separate borrowers rather than one. That is slower and more expensive than pricing a single CAMMESA counterparty, and it should show up as a higher diligence cost line in any Argentine deal closing in the next two years, not as a lower one just because the word "deregulation" is in the memo.
There is a real counterargument. A fragmented, bilateral market is also where credit enhancement tools actually get built, collateral, step-in rights, payment guarantees, the instruments that mature corporate PPA markets elsewhere in the region already use. Argentina might be forced into building that infrastructure precisely because no single aggregator is left to paper over its absence. That would be a genuine improvement, just not on the timeline the current enthusiasm assumes.
Our own pipeline sits in Peru, not Argentina, where COES runs dispatch independently of the offtaker and tariff policy does not sit inside a distributor's own balance sheet. Different structure, same underwriting habit: grade the entity that signs the check, not the law that created the obligation to write one.
The open question
Does Argentina's bilateral market mature into one with real collateral and credit enhancement before the first wave of distributor-cleared PPAs hits a payment problem, the way corporate offtake markets elsewhere eventually did? Or does the country find out, deal by deal, which of its two dozen distributors was never going to be a better payer than CAMMESA, just a less visible one? I don't think the first eighteen months of contracting under this decree will tell us. The test comes at the first provincial tariff freeze that lands on a distributor mid-contract.
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