GEF-6 REQUEST for PROJECT ENDORSEMENT/APPROVAL PROJECT TYPE: Full-Sized Project TYPE of TRUST FUND:GEF Trust Fund for More Information About GEF, Visit Thegef.Org

GEF-6 REQUEST FOR PROJECT ENDORSEMENT/APPROVAL PROJECT TYPE: Full-sized Project TYPE OF TRUST FUND:GEF Trust Fund For more information about GEF, visit TheGEF.org

PART I: PROJECT INFORMATION Project Title: Reducing Argentina's greenhouse gas emissions from the energy sector through the utilization of organic waste for energy generation in agriculture and agroindustries. Country(ies): Argentina GEF Project ID:1 9053 GEF Agency(ies): UNIDO GEF Agency Project ID: 140251 Other Executing Partner(s): Ministry of Agroindustry Submission Date: 12-02-2016 Resubmission Date: 01-06-2017 Resubmission Date: 03-02-2017 Resubmission Date: 03-29-2017 Resubmission Date: 08-08-2017 GEF Focal Area (s): Climate Change Project Duration (Months) 60 Integrated Approach Pilot IAP-Cities IAP-Commodities IAP-Food Security Corporate Program: SGP Name of Parent Program N/A Agency Fee ($) 570,000

2 A. FOCAL AREA STRATEGY FRAMEWORK AND OTHER PROGRAM STRATEGIES (in $) Focal Area Trust GEF Co-financing Focal Area Outcomes Objectives/Programs Fund Project Financing CCM-1 Program 1 Outcome A. Accelerated adoption of innovative GEFTF 3,543,741 35,211,997 technologies and management practices for GHG emission reduction and carbon sequestration. Outcome B. Policy, planning and regulatory frameworks GEFTF 2,456,259 3,248,003 foster accelerated low GHG development and emissions mitigation. Total project costs 6,000,000 38,460,000

B. PROJECT DESCRIPTION SUMMARY Project Objective: To reduce GHG emissions from Argentina's energy sector by the utilization of organic residues and waste for the generation of heat and electricity in the agroindustrial sector. (in $) Project Financing Trust GEF Confirmed Components/ Project Outcomes Project Outputs Type3 Fund Project Co- Programs Financing financing 1. Policy and TA 1.1 Policy, regulation 1.1.1 Development and GEFTF 850,000 1,350,000 regulatory and financial submission for framework incentives adopted to endorsement of policies, accelerate the market resolutions and financial penetration of incentives for distributed bioenergy systems generation at the federal based on level and/or in selected agroindustrial provinces. residues.

1 Project ID number remains the same as the assigned PIF number. 2 When completing Table A, refer to the excerpts on GEF 6 Results Frameworks for GETF, LDCF and SCCF and CBIT programming directions. 3 Financing type can be either investment or technical assistance. GEF6 CEO Endorsement /Approval Template-August2016

1.1.2 Mainstreaming of bioenergy and waste valorization technologies into national rural development programmes.

1.1.3 Development and submission for endorsement of technical regulations and standards for environmental and safety aspects of biomass and biogas energy installations, including management of digestate.

1.1.4 Application of a fast-track mechanism for small-scale bioenergy systems including a simplified EIA process.

1.1.5 Development and submission for endorsement of policy and regulation to promote thermal energy utilization in the agroindustry sector.

1.1.6 Development of proposals to mobilize investment capital for bioenergy projects under climate finance mechanisms.

1.1.7 Design of a MRV system incl. GHG emission calculation methodology specific to the sector. 2. Bioenergy TA 2.1 Knowledge 2.1.1 Establishment of a GEFTF 1,229,300 1,600,000 Network for management coordinating unit for the knowledge mechanisms and Bioenergy Network management and delivery skills for within the Ministry of project delivery project development Agroindustry. strengthened through the operationalization 2.1.2 Establishment of of a national operational focal points Bioenergy Network for the Bioenergy under the Ministry of Network hosted by Agroindustry. designated public agencies in selected provinces.

GEF6 CEO Endorsement /Approval Template-August2016

2.1.3 Supportive studies and tools to enhance the national knowledge base on the utilization of agroindustrial residue streams for energy generation.

2.1.4 Capacity building, liaison activities and promotional events to accelerate bioenergy market development in selected provinces.

2.1.5 Exchange of experience with other similar bioenergy projects in countries in the region through seminars, workshops, site visits and publications. 3. Demonstration TA 3.1 Technical and 3.1.1 Technical GEFTF 2,075,000 2,100,000 and investment economic feasibility of assistance for the in bioenergy bioenergy projects development of a projects based on portfolio of bioenergy agroindustrial residues projects in collaboration demonstrated and a with local project project portfolio for developers and upscaling of partnerships. investment developed. 3.1.2 Implementation of a call for bioenergy project proposals, and ranking thereof in terms of technical and economic feasibility, socio- economic and environmental criteria.

3.1.3 Implementation of feasibility studies and project development for selected bioenergy projects in agroindustries.

3.1.4 Design and implementation of training activities for bioenergy project owners and operators.

GEF6 CEO Endorsement /Approval Template-August2016

Inv 3.1.5 Implementation of GEFTF 1,300,000 32,700,00 seven (7) selected bioenergy pilots based on agroindustrial residues demonstrating representative technologies, business models and GHG emission reduction potentials.

3.1.6 Monitoring and optimization of operational aspects and technical performance of the installed demonstration pilots through technical support. 4. Monitoring and TA 4.1 Monitoring plan 4.1.1 Design and GEFTF 260,000 260,000 Evaluation prepared and implementation of a implemented by Monitoring and UNIDO. Evaluation plan defining roles and responsibilities of implementing partners, reporting protocols, progress indicators and targets.

4.1.2 Monitoring of project progress with respect to project- specific indicators and targets, and compliance with UNIDO and GEF guidelines and safeguards on social (including gender) and environmental impact.

4.1.3 Implementation of Mid-term Review and independent Terminal Evaluation. Subtotal 5,714,300 38,010,000 Project Management Cost (PMC)4 GEFTF 285,700 450,000 Total project costs 6,000,000 38,460,000

4 For GEF Project Financing up to $2 million, PMC could be up to10% of the subtotal; above $2 million, PMC could be up to 5% of the subtotal. PMC should be charged proportionately to focal areas based on focal area project financing amount in Table D below.

GEF6 CEO Endorsement /Approval Template-August2016

C. CONFIRMED SOURCES OF CO-FINANCING FOR THE PROJECT BY NAME AND BY TYPE

Please include evidence for co-financing for the project with this form. Sources of Co- Name of Co-financier5 Type of Cofinancing Amount ($) financing Recipient Government Ministry of Agroindustry In-kind 2,500,000 Recipient Government Ministry of Energy and Mining In-kind 1,000,000 Recipient Government Ministry of Environment and Sustainable In-kind 200,000 Development Private Sector Central Bioeléctrica Uno S.A., Córdoba Equity 5,500,000 Private Sector Pindó S.A., Misiones Equity 9,000,000 Private Sector Prodeman S.A., Córdoba Equity 20,000,000 GEF Agency UNIDO Grants 110,000 GEF Agency UNIDO In-kind 150,000 Others BICE / FODER6 Loans 0 Total Co-financing 38,460,000

D. TRUST FUND RESOURCES REQUESTED BY AGENCY(IES), COUNTRY(IES), FOCAL AREA AND THE PROGRAMMING OF FUNDS (in $) GEF Trust Country Programming of GEF Focal Area Agency Fund Name/Global Funds Project Agency Fee Total Financing a) (b)2 (c)=a+b (a) UNIDO GEF TF Argentina Climate Change (select as applicable) 6,000,000 570,000 6,570,000 Total Grant Resources 6,000,000 570,000 6,570,000

a ) Refer to the Fee Policy for GEF Partner Agencies

E. PROJECT’S TARGET CONTRIBUTIONS TO GLOBAL ENVIRONMENTAL BENEFITS7 Provide the expected project targets as appropriate. Corporate Results Replenishment Targets Project Targets

1. Maintain globally significant biodiversity Improved management of landscapes and hectares and the ecosystem goods and services that it seascapes covering 300 million hectares provides to society

5 Please refer to Annex W for a listing of attached co-financing letters. 6 Please note that in addition to the in-kind co-financing stated in Table C, the Ministry of Energy and Mines (MINEM) has issued an additional letter confirming USD 23,500,000 in loans and guarantees that can be accessed by the private sector for bioenergy investments through the national FODER trust fund or other instruments. In addition, the national Bank for Investment and Foreign Trade (Banco de Inversión y Comercio Exterior - BICE) has opened a credit line worth USD 150,000,000 with the objective to finance renewable energy projects submitted under MINEM’s RenovAr Programme. BICE also acts as the trustee for FODER. The cofinancing letters provided by MINEM and BICE, respectively, are presented to the GEF upon submission. Note that the committed loan and guarantee amounts are not included in Table C to avoid any double accounting of co-finance resources. 7 Update the applicable indicators provided at PIF stage. Progress in programming against these targets for the projects per the Corporate Results Framework in the GEF-6 Programming Directions, will be aggregated and reported during mid-term and at the conclusion of the replenishment period. GEF6 CEO Endorsement /Approval Template-August2016

2. Sustainable land management in production 120 million hectares under sustainable land hectares systems (agriculture, rangelands, and forest management landscapes) 3. Promotion of collective management of Water-food-ecosystems security and conjunctive Number of transboundary water systems and management of surface and groundwater in at freshwater basins implementation of the full range of policy, least 10 freshwater basins; legal, and institutional reforms and investments contributing to sustainable use 20% of globally over-exploited fisheries (by Percent of and maintenance of ecosystem services volume) moved to more sustainable levels fisheries, by volume

4. Support to transformational shifts towards a 750 million tons of CO2e mitigated (include Direct emissions: low-emission and resilient development path both direct and indirect) 353,000t CO2e Indirect emissions: 2,330,000t CO2e Total: 2.68 million metric tons 5. Increase in phase-out, disposal and reduction Disposal of 80,000 tons of POPs (PCB, obsolete metric tons of releases of POPs, ODS, mercury and pesticides) other chemicals of global concern Reduction of 1000 tons of Mercury metric tons

Phase-out of 303.44 tons of ODP (HCFC) ODP tons

6. Enhance capacity of countries to implement Development and sectoral planning frameworks Number of Countries: MEAs (multilateral environmental integrate measurable targets drawn from the agreements) and mainstream into national MEAs in at least 10 countries and sub-national policy, planning financial and legal frameworks Functional environmental information systems Number of Countries: are established to support decision-making in at least 10 countries

F. DOES THE PROJECT INCLUDE A “NON-GRANT” INSTRUMENT? No (If non-grant instruments are used, provide an indicative calendar of expected reflows to your Agency and to the GEF/LDCF/SCCF/CBIT Trust Fund) in Annex D.

PART II: PROJECT JUSTIFICATION

A. DESCRIBE ANY CHANGES IN ALIGNMENT WITH THE PROJECT DESIGN WITH THE ORIGINAL PIF8 1. Work carried out during the PPG phase was aimed at complementing information and validating the assumptions underlying the Project Identification Form (PIF), as well as engagement with project counterparts. After an inception workshop (September 2015), contracted consultancies and activities effectively took off after the change in national Government (December 2015). Some adjustments were made to the original project strategy (as outlined in the PIF) in order to respond to changes in Project context and the identified barriers and needs. Please refer to below table for an overview of changes incurred in alignment between the project design and the original PIF. Kindly note that project duration was also increased to 60 months from 48 months to assure that the revised project activities, including those that will depend on initial results generated such as from the call for bioenergy project proposals, can be completed within the project timeframe.

8 For questions A.1 –A.7 in Part II, if there are no changes since PIF , no need to respond, please enter “NA” after the respective question. GEF6 CEO Endorsement /Approval Template-August2016

Changes in Project’s Strategic Results Framework between PIF and CEO ER Components at Outputs - location at PIF Outputs - location at CEO Comments / Rational for changes PIF stage stage Endorsement 1. Strengthening of 1.1.1. National strategy for 1.1.2 Mainstreaming of Due to the Government’s high ambition the policy and small-scale, on- and off-grid bioenergy and waste and level of commitment to renewable institutional electricity generation and co- valorization technologies energy, the incorporation of renewable framework. generation based on biomass into national rural energy into national policy has been waste prepared. development programmes. accelerated, making this output largely obsolete. During the PPG phase it was found that off-grid situations in Argentina are basically limited to remote rural areas with low energy demand. Since these areas are addressed by national development programmes with established outreach and financing mechanisms in place, mainstreaming of bioenergy is considered the most effective way forward to achieve impact. 1.1.2. Policy proposals for 1.1.5 Development and Biomass waste utilization is already agricultural and agro- submission for endorsement integrated into Renewable Energy Law industrial organic waste of policy and regulation to 27.191; however, there remains a void in utilization prepared and promote thermal energy terms of policy, incentives and regulation submitted to the Government. utilization in the agroindustry of biomass for thermal energy sector. applications. The output has been rephrased to narrow its scope.

1.1.3. Regulatory framework 1.1.1 Development and During the PPG phase it was found that for interconnection of small- submission for endorsement distributed electricity generation (DG) is scale biomass generators to of policies, resolutions and governed by the provinces, which makes the electricity grid financial incentives for harmonization less straightforward. At the harmonized. distributed generation at the federal level, law proposals enabling DG federal level and/or in have been submitted to the Congress and selected provinces. are under review, but small-scale generators still face obstacles to enter the market. Therefore, this output has been rephrased to target both levels and expand the scope to include policy and financial incentives. 1.1.3 Development and This new output has been inserted to submission for endorsement further detail PIF output 1.1.2, since of technical regulations and during the PPG phase a series of standards for environmental regulatory barriers, which were not and safety aspects of biomass specified in the PIF, have been identified. and biogas energy installations, including management of digestate. 1.1.4 Application of a fast- The implementation of the fast-track track mechanism for small- mechanism was mentioned in the PIF. It scale bioenergy systems offers an attractive solution to small including a simplified EIA renewable energy generators to access the process. wholesale market, but was never promoted. It is therefore explicitly pursued

GEF6 CEO Endorsement /Approval Template-August2016

under this new output. The requirement of a full environmental impact assessment for small projects has been identified as a large barrier for smaller bioenergy projects targeted by the fast-track mechanism; moreover, there is a lack of criteria with respect to social and environmental impact. This output follows up on recommendations issued by national experts to prepare specific guidelines for environmental impact for perusal by municipalities to review and process bioenergy project applications. 1.2.1. Financial incentives for 1.1.6 Development of FODER, established during the PPG biomass waste-to-energy proposals to mobilize phase, constitutes a public financing systems designed and investment capital for mechanism for renewable energy. In submitted for approval. bioenergy projects under addition, the BICE has opened a credit line climate finance mechanisms. for investment in RE projects under the RenovAr programme. In response to ongoing policy development, MINEM may raise the payback tariffs for selected technologies (such as biomass and biogas) to facilitate financial closure for investors. As such, this PIF output is already covered under the baseline. During the PPG phase mobilization of climate funding was identified as a new opportunity to attract additional finance; with the additional advantage of articulating the bioenergy agenda with national climate change policy and instruments. The output has been rephrased to express this objective. 1.1.7 Design of a MRV This new output aims to create a sector- system incl. GHG emission specific MRV system and calculation calculation methodology methodology for monitoring GHG specific to the sector. emission reductions. 2. Strengthening of 2.1.1. Technical Center of 2.1.1 Establishment of a Given the policy support from MINAGRI the knowledge base Excellence (TCE) in biomass coordinating unit for the for integrating Probiomasa into the and competencies. waste technology established Bioenergy Network within ministry, this output has been rephrased to and put into operation within a the Ministry of Agroindustry. represent the situation at the time of CEO national host institution. ER. The PPG phase further made clear that a Bioenergy Network would be the preferred structure rather than a formal institute. 2.1.2 Establishment of Based on the proposal detailed during the operational focal points for PPG phase, a network structure based on a the Bioenergy Network central coordinating unit (output 2.1.1) and hosted by designated public focal points in selected provinces (output agencies in selected 2.1.2) was chosen. This new output provinces. pursues the establishment of the focal points including an annual budget to perform operations. 2.1.2. Coordinating unit for This output has been eliminated. Given the national and international network’s location within the Ministry and

GEF6 CEO Endorsement /Approval Template-August2016

waste-to-energy programmes the improved inter-institutional established within the TCE. coordination compared to PIF stage, this PIF output is considered obsolete. 2.1.3 Baseline information 2.1.3 Supportive studies and The output has been reformulated allowing concerning organic waste tools to enhance the national a more flexible set of studies and tools. streams validated and knowledge base on the The reference to the TCE has been integrated into a knowledge utilization of agroindustrial eliminated. management system hosted by residue streams for energy the TCE. generation. 2.2.1. Promotional campaign 2.1.4 Capacity building, The PIF output has been revised to targeting agro-businesses, liaison activities and specifically address capacity building in authorities and financiers promotional events to the regions (provinces) and strengthen the implemented and business accelerate bioenergy market effectiveness of outreach activities. models for on- and off-grid development in selected Promotion and liaison at the national level biomass waste-to-energy provinces. is done directly by the Bioenergy Network investments developed. coordinating unit and/or the Ministry. 2.1.5 Exchange of experience This new output has been included to with other similar bioenergy cover the exchange of information and projects in countries in the know-how on bioenergy technologies with region through seminars, other countries in the region (especially workshops, site visits and those with UNIDO/GEF bioenergy publications. projects under implementation). 3. Demonstration 3.1.1. Pre-feasibility studies to 3.1.1 Technical assistance for Findings during the PPG phase led to a of low-GHG support selection of waste-to- development of portfolio of revision of the selection process for the energy generation energy demonstration projects bioenergy projects in demonstration pilots. technologies based conducted. collaboration with local First a pipeline of potential bioenergy on agricultural and project developers and projects will be developed (including agro-industrial partnerships. existing initiatives). This output 3.1.1 waste utilization. provides technical assistance to accelerate portfolio development and enhance the quality of project proposals (typically to the level of pre-feasibility evaluation). 3.1.2 Implementation of a The new output 3.1.2 represents the call for bioenergy project second step in the design and selection proposals, and ranking process of the demonstration pilots by thereof in terms of technical means of a public call to which proposals and economic feasibility, (as prepared under 3.1.1) can be socio-economic and submitted. environmental criteria. 3.1.2. Detailed feasibility 3.1.3 Implementation of The output has been rephrased (and the studies for selected projects feasibility studies and project budget for feasibility studies has been conducted. development for selected increased significantly based on findings bioenergy projects in from the PPG phase). agroindustries. 3.1.6 Monitoring and This new output has been inserted offering optimization of operational the Project the opportunity to ensure aspects and technical successful operation and sustainability of performance of the installed the pilots by corrective actions and demonstration pilots through complementary investments. technical support. 3.1.3. Detailed engineering 3.1.5 Implementation of four The new output 3.1.5 includes engineering studies and project plans for (4) selected bioenergy pilots (PIF output 3.1.3) and procurement (PIF selected sites prepared. based on agroindustrial output 3.2.2). It is expected that future residues demonstrating contractors will include final engineering representative technologies,

GEF6 CEO Endorsement /Approval Template-August2016

business models and GHG in their offers. emission reduction potentials. 3.1.4. Capacity building 3.1.4 Design and The output has been rephrased. activities of project staff and implementation of training supply chain actors activities for bioenergy completed. project owners and operators 3.2.1 Dedicated funds for This output has been eliminated given its agricultural and agro- redundancy with PIF output 1.2.1, and the industrial organic waste existence of FODER. utilization established. 3.2.2. Installation of 2- 3 This output has been integrated into the biomass energy systems, new outputs 3.1.5 and 3.1.6. including subsequent monitoring of technical performance and operational issues. 4. Monitoring and 4.1.1 Design and This new output covers monitoring Evaluation. implementation of a activities during the inception phase of the Monitoring and Evaluation Project. plan defining roles and responsibilities of implementing partners, reporting protocols, progress indicators and targets. 4.1.1. Project monitoring, 4.1.2 Monitoring of project This output has been rephrased. including expert support on progress with respect to indicator tracking for project- specific indicators environmental and gender and targets, and compliance aspects carried out. with UNIDO and GEF guidelines and safeguards on social (including gender) and environmental impact. 4.1.2. Best practices collected This output has been eliminated. Foreseen and lessons learnt collated and activities are now covered under the new disseminated. outputs 2.1.5 (exchange of experiences) and 3.1.4 (operational monitoring). 4.1.3. Mid-term review and 4.1.3 Implementation of This output has been rephrased. terminal project evaluation Mid-term Review and conducted. independent Terminal Evaluation.

A.1. Project Description. Elaborate on: 1) the global environmental and/or adaptation problems, root causes and barriers that need to be addressed; 2) the baseline scenario or any associated baseline projects, 3) the proposed alternative scenario, GEF focal area9 strategies, with a brief description of expected outcomes and components of the project, 4) incremental/additional cost reasoning and expected contributions from the baseline, the GEFTF, LDCF, SCCF, CBIT and co-financing; 5) global environmental benefits (GEFTF) and/or adaptation benefits (LDCF/SCCF); and 6) innovativeness, sustainability and potential for scaling up.

9 For biodiversity projects, in addition to explaining the project’s consistency with the biodiversity focal area strategy, objectives and programs, please also describe which Aichi Target(s) the project will directly contribute to achieving.. GEF6 CEO Endorsement /Approval Template-August2016

(1) The global environmental and/or adaptation problems, root causes and barriers that need to be addressed. 2. Anthropogenic emissions of Greenhouse Gases (GHGs) have continued to increase over 1970 to 2010 with larger absolute increases toward the end of this period. About half of cumulative anthropogenic CO2 emissions between 1750 and 2010 have occurred in the last 40 years, accelerating the pace of global warming. Argentina, as a signatory to the United Nations Framework Convention on Climate Change (UNFCCC) has made a voluntary commitment to reducing global GHG emissions through national mitigation measures. According to Argentina’s Third National Communication (TNC, 2015), total GHG emissions in 2012 ascended to 429,437 Gg CO2eq, of which 63.7% corresponded to CO2, 19.1% CH4, and 17.1% to N2O. The attribution per sector is as follows: energy 42.7%, agriculture and livestock (27.8%), land use and land conversion (21.1%), waste (4.8%) and industrial processes (3.6%). The agriculture and livestock, and energy sectors together account for 71% of total GHG emissions (89% of total if land use and land conversion is excluded). The share of the agriculture and livestock sector is predominant with respect to methane emissions (60% of a total of 3,899.8 Gg CH4). 3. Over the period 1990-2012 national GHG emission rose at an average rate of 2.15% per year. Argentina’s recent INDC (2015) set an unconditional goal to reduce GHG emissions by 15% in 2030 compared to the projected bsiness-as- usual scenario. The TNC highlights diversification of the energy matrix, the increased utilization of renewable energy, and rational use of energy, among the key measures to combat national GHG emissions. The TNC and INDC acknowledge the vulnerability of the country to climate change, considering that agriculture and livestock occupy an important place in the national economy, which becomes even more relevant given Argentina’s role major role in the global food production systems. 4. Barriers, that hinder the greater uptake of low carbon solutions contributing to GHG emission reductions and that need to be addressed, are elaborated upon in the following section (baseline).

(2) The baseline scenario or any associated baseline projects. Baseline scenario Electricity sector: 5. Electricity generation in Argentina is dominated by fossil-based thermal power plants (63% of generated energy), followed by large hydropower (30%) and nuclear (6%). Non-conventional renewable energy technologies (mainly wind and solar) account for less than 1% of total.10 The total installed capacity in 2014 was 31 GW. Declining national oil and gas production is complemented by imports of natural gas from Bolivia and Chile. Since 2003, the sector has built up a large financial deficit11 leading to investments in new infrastructure being postponed.12 By consequence, power outages have become more common in Argentina 13 . The Argentinian Chamber of Renewable Energy (CADER) estimates that at least 2,000 MW generating capacity must be brought online to restore the capacity reserve of the national electricity system SADI (Sistema Argentino de Interconexión – Argentine Interconnected System); another 7,000 MW of new capacity would be needed to meet increasing electricity demand by 2021. 6. Electricity Law 24.065 (1998), which envisaged an electricity market open to private generators and consumers, has been by-passed by subsequent resolutions and state interventions, which put supply and pricing of fossil fuel under state control and transformed the market administrator CAMMESA14 into a direct contract party. Financial triggers for

10 Source: “La hora de las Energías Renovables en la matriz eléctrica argentina”, Cámara Argentina de Energías Renovables (CADER), Buenos Aires, 2015. 11 The commercial balance of the energy sector is estimated at USD 5 billion deficit per year in 2015. Source: “El estado del Estado”, published in March 2016 by the Presidency of the Nation. Available at www.minem.gob.ar. 12 Ibidem. Between 2001 and 2012 residential electricity tariffs dropped by 80% in terms of real costs, while public expenditures in energy production and energy subsidies rose from 1.2% (2008) to 4.1% of GDP (2015). 13 Ibidem. From 8.3 hours/yr per household in 2003 to 32.5 hours/yr in 2015, in the metropolitan area of Buenos Aires. 14 The Compañía Administradora del Mercado Mayorista Eléctrico Sociedad Anónima (CAMMESA), created in 1992, has among its principal functions the coordination of dispatch operations, the determination of wholesale electricity prices, and the administration of the economic transactions within the National Interconnected System (SADI). GEF6 CEO Endorsement /Approval Template-August2016

producers and large consumers were mostly removed from the market; with subsidized consumer prices far below cost level, incentives for efficient energy generation and consumption disappeared. To trigger private investment in new generating capacity, the Government repeatedly issues Special Programmes offering preferential tariffs and conditions to circumvent the structural disfunctionalities in the electricity market – with limited success. An example of these was the GENREN programme, enacted by Resolution Nº 712, 9 October 2009 (Secretary of Energy), which offered special prices for a range of renewable energy technologies selling to the wholesale market.15 The prices offered were fixed for a 15-year period. While initially 32 projects were approved under GENREN, amounting to 895 MW capacity (of which 754 MW were wind power), only 7 projects were finally built totalling 139 MW.16 This reflects the severe structural problems faced by the sector, as investors declined to accept the PPAs offered through state-owned electricity company ENARSA (Energía Argentina Sociedad Anónima). 7. In fact, in spite of Argentina’s long-term ambitions to develop its immense renewable energy potential, their uptake has been very slow. Biomass accounts for only 5% of primary energy consumption, which is very low for the region. Argentina is known for its excellent wind resources in Patagonia, which featured the first wind turbine developments in Latin America in the early 1990s. However, the traditional focus on large-scale, centralized electricity and natural gas supply, a complex institutional framework with sometimes conflicting competences, a lack of transparency, and the structural sector problems outlined above, make renewable energy projects unattractive for private investors. 8. In December 2006, the national Congress approved Law 26.190, which declared renewable energy-based electricity generation (feeding the national system) a subject of national interest. The Law set a goal of 8% of total electricity consumption to be supplied by renewable energy sources to be reached by 2016. The Law applied to all common types of renewable energy technologies, including biomass, landfill gas and biogas, and hydropower up to 30 MW; excluded were the biofuels targeted under Law 26.093. The Law 26.190 provided the legal basis for the mentioned GENREN programme, and offered tax benefits for renewable energy projects (VAT exemption and income tax benefit). 9. In September 2015, Renewable Energy Law 27.191 was enacted, which modifies the earlier 26.190. It declares the use of renewable energy for electricity generation as a national priority. It sets a goal of 10% renewable energy share of total electricity consumption by 2017, and of 20% by 2025. Projects up to an installed capacity of 50MW are eligible and applicable tax benefits are widened and further detailed. Electricity consumers above 300 kW are obliged to source 8% of their demand from renewable energy sources, either on the market or through self-supply. As a major step forward, the Fund for Renewable Energy Development (FODER) has been created, governed by the Ministry of Economy and Public Finance and administered by the Bank for Investment and Foreign Trade. The FODER offers flexibility in terms of the supported financial instruments, including: (i) purchase of bonds issues by investors; (ii) provision of venture capital, (iii) interest reduction on commercial bank loans, and (iv) guarantee for PPA contracts on the wholesale market (CAMMESA). Resolution 531 (2016) declares Law 27.191 also applicable to renewable energy systems for self-supply of electricity and co-generation. Furthermore, on April 18, 2016, the Government of Argentina launched the new Programme “RenovAr-Ronda 1” aimed at issuing public tenders for 1,000 MW renewable energy- based electricity generating capacity serving the wholesale market.17,18 10. However, it must be noted that the country still lacks an integral long-term energy strategy, covering the role of decentralized electricity production and its implications for the transmission and distribution grids. In fact, in 2008 only,

15 Wind energy 126.9 US$/MWh; biofuel-based thermal power 287.6 US$/MWh; small hydro 162.4 US$/MWh; and solar PV 571.6 US$/MWh. 16 Wind power: 3 project, 131 MW; small hydro: 1 project, 1 MW; solar PV: 3 projects, 7 MW. Source: “La hora de las Energías Renovables en la matriz eléctrica argentina”, Cámara Argentina de Energías Renovables (CADER), Buenos Aires, 2015 (p.30). 17 Resolutions 71/2016 and 72/2016 by the Ministry of Energy and Mining. The programme aims at the incorporation of the following technologies: wind power: 600 MW; solar power: 300 MW; biomass: 65 MW; small hydro: 20 MW; and biogas: 15 MW. The maximum construction time under the contracts is 24 months; the total investment is estimated in the range US$ 1,500-2,000 million. The annual savings due to reduced fiscal expenditures are estimated of the order of US$ 300 million. Source: https://www.minem.gob.ar/www/706/24712/articulo/noticias/1237/el-presidente-lanzo-el-programa-renovar-de-energias- renovables.html. 18 Useful information about the financing modalities under FODER is provided in the presentation of the RenovAr programme “Plan de Renovables 2016-2025”, July 2016. See: http://scripts.minplan.gob.ar/octopus/archivos.php?file=6548. GEF6 CEO Endorsement /Approval Template-August2016

the Secretary of Energy created a legal figure for self-consumers interconnected to the grid (Resolution 269/2008). It must also be noted that the structural disfunctionality of the electricity market has not yet been addressed (and is outside the scope of Law 27.191). A vision for efficient thermal energy generation is lacking altogether. The new Government, through the Ministry of Energy and Mining, acknowledges that additional measures are needed to support the use of renewable energy for heat production and for off-grid electricity generation.

Bioenergy: 11. Argentina, due to its size, geographic location, natural resources and socio-economic profile, counts with immense reserves of renewable biomass. In 2009, the Government and FAO completed a study on the energy balance of biomass in Argentina, applying the WISDOM methodology.19 A total, sustainable production volume of woody biomass of 193 mln ton was estimated, of which 143 mln tons were assessed as being technically available. Residues from sawmills and fruit plantations would add another 2.7 mln ton of woody biomass and 2.3 mln ton of organic residues would be available from agroindustries. Out of this total of 148 mln ton, about 124 mln ton biomass would be commercially available (37,200 ktoe/yr).20 This volume nearly exceeds the estimated internal biomass energy consumption (5,000 ktoe/yr) by a factor of 7.5.21 The study indicates that biomass resources are significantly larger than accounted for in official energy, agricultural and forestry statistics at that time. Traditional biomass uses were not included in the national energy balance and the study recommends strengthening data collection systems and applying WISDOM at the provincial level to obtain more refined estimates. 12. Large-scale (10 MW and more) cogeneration plants have been implemented in the forestry and sugar cane sector and are being disseminated to other sectors such as oil seed and cereal processing. The PIF presented a list of identified (dry) bioenergy projects by province and status. Out of a total of 109 energy projects (1,065 MW), 42 projects were operational with an average capacity of 14.2 MW (total 598 MW). As of May 2016, 136 bioenergy projects were identified (984 MW), out of which 63 are operational with an average capacity of 7.0 MW (total 438 MW). While the number of projects increased by 29 compared to the time of the PIF, overall electricity generating capacity was reduced by 86 MW – primarily due to the removal of 177 MW projects in the province of Santa Fe (for a detailed comparison, please see Annex L). The list of projects under construction remains basically unaltered (with the exception of 3 small projects in Cordoba), which reflects the difficulties of proponents to attract investment capital and finalize the project development cycle.22 13. Companies in this market segment are generally large and have the capital to attract know-how and project development expertise. Scale benefits allow them to enter the wholesale electricity market, although the primary driver is likely the search for alternative thermal power in response to curtailing of natural gas supply by the Government.23 Technology for steam cycle boilers is basically mature and available in Argentina or Brazil. Although thermal power demand is less in the forestry sector, project scale is adequate to supply the electricity market. In most cases, the biomass resources are essentially business-owned and free of cost (although they may have an opportunity cost).

19 Análisis del Balance de Energía derivada de Biomasa en Argentina, Análisis espacial de la producción y consumo de biocombustibles aplicando la metodología de “Mapeo de Oferta y Demanda Integrada de Dendrocombustibles” (Woodfuel Integrated Supply / Demand Overview Mapping), project TCP/ARG/3103, FAO in collaboration with INTA, May 2009. 20 The presently available biomass is somewhat below this figure as result of restrictions resulting from the national forestry law (Ley N° 26.331 de Presupuestos Mínimos de Protección Ambiental de los Bosques Nativos). 21 37,200 ktoe/yr is equivalent to 432,636 GWh/yr (11.63 GWh/ktoe), which is 3.5 times the total electricity volume delivered to the national system (132,000 GWh) in 2014. 22 Note: caution must be taken when drawing firm conclusions from this table, as the information held is provided “as is” by the proponents. Probiomasa is not in a position to verify whether indicated project plans and generating capacities are realistic; not all proponent respond to enquiries, while others wish not to appear on the list. 23 Cut-offs in natural gas supply especially affected the industrial sector, and rose from 3% in July 2003 to 17% in July 2015. Source: Source: “El estado del Estado”, published in March 2016 by the Presidency of the Nation. Available at www.minem.gob.ar. GEF6 CEO Endorsement /Approval Template-August2016

BIOENERGY PROJECTS – PROJECT INVENTORY PROBIOMASA (MAY 2016) PIPELINE CONSTRUCTION OPERATIONAL TOTAL PROVINCE N° MW N° MW N° MW N° MW MISIONES 8 56 2 5 10 112 20 173 TUCUMÁN 3 68 2 70 4 11 9 149 BUENOS AIRES 13 52 0 0 11 91 24 143 SANTA FE 6 27 3 1 12 64 21 92 CORRIENTES 4 74 1 40 5 17 10 131 JUJUY 1 5 0 0 3 52 4 57 CHACO 3 47 0 0 2 5 5 52 ENTRE RÍOS 8 41 0 0 4 7 12 48 SALTA 0 0 0 0 1 40 1 40 MENDOZA 2 35 0 0 0 0 2 35 SAN LUIS 0 0 1 2 2 25 3 27 CÓRDOBA 3 2 4 12 5 11 12 25 FORMOSA 1 2 0 0 0 0 1 2 CHUBUT 1 2 0 0 0 0 1 2 LA PAMPA 3 1 0 0 3 1 6 2 NEUQUÉN 1 2 0 0 0 0 1 2 SAN JUAN 0 0 1 1 1 1 2 2 TIERRA DEL FUEGO 2 1 0 0 0 0 2 1 SANTIAGO DEL ESTERO 0 0 0 0 0 1 0 1 TOTAL 59 415 14 131 63 438 136 984

14. The subject “bioenergy” exceeds the traditional delimitations between economic sectors, public administration competences and professional and academic disciplines. As such, it involves a large number of public and private institutions at the national, provincial and municipal level, which all aim to push forward the bioenergy agenda. Since activities are poorly coordinated and articulated, there is substantial doubling of efforts and resources spent, which has a detrimental effect on the overall effectiveness. A detailed overview of the national actors involved in bioenergy was compiled during the PPG phase.24 Note that, in line with current perceptions in Argentina, the primary and secondary forestry, agriculture and livestock sectors are synthesized as the “agroindustry sector”, governed by the new Ministry of Agroindustry.

24 See: L. Grassi, “Descripción y Análisis del Marco Institucional para la Bioenergía en Argentina – Informe Final”, May 2016 (p.4) [Annex P]. GEF6 CEO Endorsement /Approval Template-August2016

RECENT INSTITUTIONAL CHANGES 15. In 2012, the Government started execution of the Probiomasa programme with technical In December 2015, the new Government introduced a number of 25 structural changes in the organization of the ministries at the federal level and administrative support of FAO. The main (Central Public Administration – CPA). The purpose of these changes is: objective was to increase biomass-based energy (i) to promote inter-institutional cooperation; (ii) improve coordination of generation by setting up an inter-institutional activities; (iii) increase transparency with respect to the production, platform linking together the three key management and publication of information; and (iv) and to increase dimensions of bioenergy: energy, agriculture, public-private participation. Moreover, a Ministry of Modernization was and environment. Specifically, the Government created to design and coordinate policies targeting professionalization of of Argentina set a goal for Probiomasa to boost the public sector. By Decree 117/2016, a Plan was launched to enable biomass-based electricity generating capacity to public access to official information. In relation to bioenergy, four 1,325 MW by 2030. Probiomasa aims to entities of the CPA were involved: mobilize resources and investment through capacity building, technology transfer and A. The Ministry of Agriculture, Livestock and Fisheries was changed into the Ministry of Agroindustry. The extension of its competences institutional strengthening but does not make include: (1) preparation and implementation of policies, plans, and direct investments in plants or infrastructure. It programmes targeting production, commercialization, technology, and pursues the establishment of provincial-level quality of bioenergy; (2) development and competitiveness of bioenergy bioenergy strategies aligned with the indicated value chains; (3) design of policies for the utilization and protection of dimensions at the national level. natural resources for primary bioenergy production. 16. The Probiomasa programme generated a B. The Secretariat of Energy was elevated in level, becoming the present wealth of information on available forestry Ministry of Energy and Mining. New competences are: (1) development biomass resources, and systematized bioenergy of renewable energy-based, sustainable electricity generation; (2) project initiatives. However, the programme preparation and coordination of policies, plans and standards to ensure the adequate functioning and development of the renewable energy sector had difficulties to effectively support project in Argentina; (3) promotion of public and private investment in the developers, partly as a result of an unfavorable renewable energy sector; (4) evaluation and recommendation of projects; political situation, partly due to the lack of (5) promotion of public access to information related to renewable effective engagement mechanisms with the energies; and (6) political authority and technical support for Law regions – to some extent limited by 27.191. Under the Ministry, a Subsecretariat for Renewable Energies has Probiomasa’s mandate. Diffusion of been created. information to potential beneficiaries in the C. The Secretariat of Environment and Sustainable Development was regions therefore remains a great challenge. transformed into the new Ministry of of Environment and Sustainable Development. Among its new competences are: (1) implementation of 17. The PPG phase identified differentiated environmental policy at the highest government level; (2) coordination of barriers and market drivers for dry and wet national policies affecting the national environment and global climate biomass technology. While dry biomass change; (3) coordination and articulation of environmental management technology is basically mature, the key by national government entities; and (4) establishment of a public system challenge is to make this available to smaller providing information about the status of the environment in Argentina agribusinesses, promote further deployment and and applicable policies. A Secretariat of Environmental Policy, Climate increase market penetration levels to reach the Change, Environment and Sustainable Development was created. established goal of 1,325 MW by 2030. For wet D. The Secretariat of Industry was elevated in hierarchy, becoming the biomass, which can be transformed into Ministry of Production. Its new competences include: (1) definition of energetic biogas by anaerobic digestion, a industrial policy; the design, funding and implementation of instruments different picture emerges. A recent survey by fostering growth and development of the industrial sector and technological and productive services; (2) promotion of industrial the National Institute for Industrial Technology reconversion at the regional and sectoral level; and (3) promotion and enhancement of competitiveness in industry. (See Annex P, p.96 and Table 11, p.88-89).

25 Project “Proyecto para la promoción de la energía derivada de biomasa – PROBIOMASA” (UTF/ARG/020/ARG), a joint initiative by the (former) Ministry of Agriculture, Livestock and Fishery (MAGyP) and the Secretary of Energy (SE) under the (former) Ministry of Federal Planning, Public Investment and Services. Probiomasa runs from 2012-2017 and receives USD 5,488,975 from the Government in funding. See website: http://www.probiomasa.gob.ar/. GEF6 CEO Endorsement /Approval Template-August2016

(INTI) 26 reveals that only a small fraction of existing anaerobic digestion plants in Argentina was built specifically for energy generation. There is a substantial gap in technological complexity between biodigestors owned by private companies and those run by public entities, cooperatives, and others. Private biodigestor plants are mostly (85%) used for effluent treatment. Especially the smaller systems (<1,000 m3) are operated in a very rudimentary way; control decisions being based on visual information and practical experience. None of the surveyed biodigestor plants was found to be equipped with adequate safety measures. As most plant operators lack specific knowledge about biogas technology, their expectations often remain unfulfilled. Technological concepts imported by foreign suppliers are not adapted to the specific conditions of Argentina, resulting in deficient operation and increased operational costs. The following two graphs reflect the low technological level of anaerobic biodigestors installed in Argentina and the current under-utilization of biogas for energy purposes. A brief summary and transcription of the INTI survey is provided in Annex K.

26 Source: “Relevamiento Nacional de Biodigestores – Informe Final”, Instituto Nacional de Tecnología Industrial (INTI) - Programa de Energías Renovables, 17 March 2016. GEF6 CEO Endorsement /Approval Template-August2016

18. While know-how and components are in principle available in Argentina, there is a lack of system integration to ensure technical availability and performance. With the exception of large private companies, most owners aim to save on capital costs but run into operational difficulties and eventually abandon the systems. The differences in market maturity between dry and wet biomass technology are in line with observations made by IRENA as presented in the following figure.

GEF6 CEO Endorsement /Approval Template-August2016

19. The utilization of biomass waste by national agroindustries increases the reliability of electricity and heat supply for energy consumers and diversifies the national energy matrix. Moreover, by incorporating biomass waste and residues into the industry's value chain, these resources are valorized contributing to the competitiveness and financial strength of the sector and the national economy. Local biomass utilization is further supportive to decentralized development and the emergence of circular economies. Anaerobic digestion technology is a valuable asset to transform environmentally nocive effluent streams from livestock breeding into energy and organic fertilizer, while preserving local aquifers and soils, avoiding releases of GHGs and reducing local air pollution and nuisance. Although these socio- economic and environmental benefits are acknowledged by most experts and policy makers in Argentina, there is no policy as yet supporting the monetarization thereof. It must be noted that the key driver for biogas development is environmental (effluent control) rather than (large-scale) energy production. Energy generation is pursued in a number of wastewater treatment facilities and is also explored by the municipal waste sector under leadership of the Ministry of Environment and Sustainable Development (MAyDS)’s ‘Integrated Municipal Solid Waste Programme (GIRSU)’ with GEF support.27 20. The development of bioenergy under the baseline scenario in Argentina would be characterized by: a stagnant project portfolio; an ineffective, fragmented institutional framework for knowledge management, technical assistance and technology development; a poorly articulated regulatory framework elevating the risk profile of investments; weak ownership of the subject bioenergy impeding full recognition of the socio-economic and environmental benefits of bioenergy; low, insufficient market prices paid for biomass-based electricity supplied to the grid; a lack of policy and financial incentives for thermal bioenergy applications and solid biofuels. As a result, targets set by the Government for biomass-based electricity generation would not be attained. In the absence of a strong market pull and long-term vision, Argentina’s manufacturing and service industries will be reluctant to enter the bioenergy market, which would be a lost opportunity in terms of job creation, indigenous technological research and development, and economic value creation.

Baseline project 21. The overall baseline project consists of a set of public and private initiatives and activities aimed at pushing forward the bioenergy agenda in Argentina. Many of these have been created following recent government reshuffling and as such are still rather new, but expected to be taken forward strongly – not least, due to the institutional capacities that have been put into place. Given the federal structure of the country, with decentralized public agencies and replicated, autonomous government structures in the provinces, the total number of stakeholders and initiatives is very substantial. Reference is made here to the compilation of the institutional framework produced during the PPG phase and annexed to this document (Annex P). In the following, further details on the institutional changes are provided and the key baseline activities at the federal level, the prioritized six provinces of Corrientes, Misiones, Entre Rios, Province of Buenos Aires, Santa Fe, and Cordoba and at non-governmental organizations are highlighted.

Federal Government: 22. At the federal level, bioenergy is promoted by three centralized entities of the national government: the Ministry of Agroindustry (MINAGRI), of Energy and Mining (MINEM), and of Environment and Sustainable Development (MAyDS). During the PPG phase, the ministries expressed that ownership of the bioenergy agenda lies with MINAGRI in coordination with the other ministries and in concordance with established competences. Please refer to the text box (pg. 13) for a brief explanation of the institutional changes at the federal government level since the time of the PIF. 23. - The Ministry of Agroindustry (MINAGRI) is responsible for promoting competitiveness of Argentina’s substantial agroindustrial sector. The change of Government in December 2015 induced several changes in the ministry, including an extension of its competences for bioenergy through the creation of the National Bioenergy Directorate (Dirección Nacional de Bioenergía) under the umbrella of the Secretariat for Value Addition (Secretaría de Agregado de Valor) (see figure below).

27 The GEF-5 initiative “Sustainable business models for biogas production from organic municipal solid waste.” (GEF ID 5734), implemented by the GIRSU programme (Gestion Integral de Residuos Solidos Urbanos) under the Ministry of Environment and Sustainable Development (MAyDS). GEF6 CEO Endorsement /Approval Template-August2016

24. The competences of this Directorate include: (i) bioenergy policy and strategy design and implementation; (ii) promotion of strategies and activities to foster the use of sustainable energy by the sector, adding value to the production chains; and: (iii) coordination and articulation of plans, programmes and projects in the field of bioenergy to ensure its alignment with sector policies and government competences. The Directorate functions under the Under- Secretariat of Bio-Industry and is thus a party to the Bioeconomy Policy Group led by the Under-Secretary. The Bioeconomy initiative is being coordinated with and will involve the participation of different agencies within the Ministry having competencies related to the advancement of the bioeconomy. It has also resulted in a cooperation agreement involving the Ministries of Agroindustry, of Production and of Science and Technology, which has been agreed upon and will be formally signed in December 2016. 25. In 2010, the ministry – then known as the Ministry of Agriculture, Livestock and Fisheries – launched the Probiomasa programme as a joint initiative with the (now) Ministry of Energy and Mining with participation and methodological support from FAO (see §15). Probiomasa was designed as a platform to mobilize resources and investment through capacity building, technology transfer and institutional strengthening and coordination with decentralized public institutions such as INTA and INTI. Although primarily focused on biomass resources from forestry and sugar cane, it covered all relevant bioenergy technologies, including biogas production. Through Probiomasa, the ministry acquired competences with respect to: data collection, development of sustainability indicators for bioenergy under the Global Bioenergy Partnership (GBEP), bioenergy project development for self-supply, and monitoring of market statistics. By December 2015, Probiomasa had established Letters of Intent with 14 provinces with the objective to work jointly on the development of bioenergy. 26. - The Ministry of Energy and Mining (MINEM), created by Decree 231/2015 (2015) absorbs the functions of the former Secretariat of Energy, which depended on the Ministry of Federal Planning, Public Investment and Services. Simultaneously, a Subsecretariat for Renewable Energy was formed under the Secretariat of Electric Energy (see figure below).

GEF6 CEO Endorsement /Approval Template-August2016

27. MINEM is the competent authority for energy policy and regulation, and the electricity, hydrocarbon and mining sectors. The ministry has pushed forward renewable energy technologies for electricity generation since the approval of Law 26.190 in 2007 and its successor, Law 27.191. It is further responsible for implementation of the Law 26.093 on (liquid) biofuels. MINEM is responsible for regulation of FODER and for increasing renewable energy-based electricity generation through programmes such as RenovAr (2016). The ministry is initiating partner in the Probiomasa programme to which it has assigned fiscal resources. Another initiative implemented by MINEM is the rural electrification programme WB/GEF PERMER. The Ministry has established an agreement with the Ministry of Science and Technology (MINCyT) to boost technological development in the field of renewable energy. 28. - The Ministry of Environment and Sustainable Development (MAyDS) was formed by Decree 231/2015, which assumes the tasks of the earlier Secretariat (SAyDS). This elevation in hierarchy allows environmental aspects of national development to be represented at the highest strategic level in the Government. Besides being responsible for monitoring and supervision of environmentally relevant activities, MAyDS is responsible for policy development for environment, climate change and sustainable development, thus assisting the the Secretary in the formulation and implementation of a National Policy on Climate Change and Sustainable Development. Furthermore, they evaluate, promote and implement policies, programs and projects related to sustainable development, climate change and pollution prevention as well as promote the development of clean technologies, energy saving schemes and the use of renewable energy. 29. The MAyDS, through the Subsecretariat for Climate Change and Sustainable Development, plays a pivotal role in the design of national policy to promote sustainable development and in the mainstreaming of climate change mitigation and adaptation into sectoral policies and measures. The Subsecretariat of Climate Change and Sustainable Development includes the National Climate Change Directorate and the National Directorate of Sustainable Development (see figure).

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30. The National Climate Change Directorate (Dirección Nacional de Cambio Climático) has among its competences the fostering of new (low-emission) energy generation technologies and the promotion of coordination and cooperation between public entities in the field of energy. In this context, through the Decree N°891/2016 a National Climate Change Cabinet was established, an inter-ministerial instance to respond to the climate change phenomenon in the country, focusing on all relevant sectors for climate change mitigation and adaptation in Argentina. The National Climate Change Cabinet includes regular meetings of 14 national ministers, meeting of technical focal points, and meetings of sectoral roundtables to address the definition, calculation and implementation of mitigation and adaptation measures included in the NDC, as well as financing and climate change education. The NCCC also articulates activities with civil society through regular open-ended roundtables, as well as with Provinces through the COFEMA (Federal Environmental Council - Consejo Federal de Medio Ambiente). 31. The National Directorate of Sustainable Development focuses on programs and strategies to promote of sustainable development. The National Directorate of Sustainable Development also includes the Directorate of New Technologies for Sustainable Development, the Directorate of Clean Production and Sustainable Consumption and the Directorate of Environmental and Social Impact. The Directorate of New Technologies for Sustainable Development promotes the development of new technologies for sustainable development and the implementation of research projects to reduce negative environmental impacts. The Directorate of Clean Production and Sustainable Consumption aims to promote cleaner production and sustainable consumption, foster industrial reconversion towards higher levels of competitiveness and resource efficiency, and build alliances with local governments and private and societal organizations. Finally, the Directorate of Environmental and Social Impact promotes the evaluation of environmental impact assessment at the national level and also elaborates guidelines for environmental impact assessments. 32. With respect to biogas, the municipal waste management programme GIRSU, executed by the Head of Cabinet of MAyDS, has started the GEF-5 Project “Sustainable business models for biogas production from organic municipal solid waste” (GEF ID 5734), implemented by UNDP. The project will promote utilisation of landfill gas and biogas from anaerobic digestion plants for energy production in medium- and small-sized cities in Argentina. Through the valorization of municipal solid waste, the GIRSU programme pursues the creation of additional revenue streams that contribute to a financial and environmentally more sustainable waste sector. 33. - The Ministry of Science and Technology (MINCyT), through its Secretariat for Planning and Science Policy, Technology and Productive Innovation (Secretaría de Planeamiento y Políticas en Ciencia, Tecnología e Innovación Productiva - SEPP), is responsible for the design of policy measures and programmes in the fields of science and technology in function of identified sectorial and societal problems and demands. Worth mentioning is the national plan “Argentina Innovadora 2020”, which outlines lines of action to promote innovation and competitiveness in strategic, productive sectors. An important element is the regionalization of national science and technology capacities towards the provinces and the enhancement of partnerships with industry; among others, through the establishment of new CONICET 28 research and transfer centers. In the field of bioenergy, an agreement was signed in 2013 with the University of Wageningen (The Netherlands) for the establishment of a bi-national center to promote the exchange of researchers between both countries and foster human resources development. 34. An important instrument for the ministry to implement policies is the Sectoral Fund (FONARSEC), which encompasses Sectoral and Regional Funds for Technological Innovation (FITS, resp. FITR). Funding is provided through the federal budget. Applications to the funds are reviewed by Sectoral Technological Councils (CTS); specialized CTS have been created to cover the agroindustry, renewable and non-renewable energy, as well as the environment and climate change fields. The following table lists some of the bioenergy projects co-funded under FONARSEC.

APPROVED PROJECT GRANTS FOR BIOENERGY UNDER THE MINCYT SECTORAL FUND (FONARSEC) PROVINCE SECTOR PROJECT BUDGET (ARS) Formosa Energy Biopalma Formosa. Energía renovable y desarrollo $ 17,000,000 sustentable

28 CONICET = Consejo Nacional de Investigaciones Científicas y Técnicas. GEF6 CEO Endorsement /Approval Template-August2016

Chaco Energy Generación de energía eléctrica a partir del residuo $ 16,875,000 del algodón en Chaco Santa Fe Energy Generación eléctrica con biogás de la industria $ 15,997,500 lechera Córdoba Energy Valorización energética de los subproductos de la $ 14,506,831 industria frigorífica

Decentralized public institutes: 35. - The National Agricultural Technology Institute (INTA) is an autonomous national institution established in 1956 by Decree 21.680/56, ascribed to the Ministry of Agroindustry. INTA is based in Buenos Aires but has a strong presence across the national territory through its system of regional centers and experimental stations. INTA executes research and innovation activities along (agroindustrial) value chains according to regional and provincial priorities, in an effort to improve competitiveness and foster sustainable development in rural Argentina. Outreach of innovations to the sector is achieved through training, information campaigns and inter-institutional cooperation. INTA’s track record in the field of bioenergy (biogas) dates back to the 1980s from the perspective to incorporate organic residues to add value to the production chain and improve the economic yield of local farm businesses. INTA was in charge of the Argentina’s National Bioenergy Programme focused to support national policies in the field of biofuels and energy crops. INTA is very well positioned to engage with agroindustries in Argentina to promote bioenergy development, especially the primary agriculture and livestock sector. 36. - The National Institute of Industrial Technology (INTI) was created in 1957 (Decree 17.138/57) with the objective to strengthen Argentina’s productive systems through innovation, technology development and the optimization of industrial processes. The institute provides a broad range of technical services to the public sector and the industry, including research and development, technical assistance, testing and prototyping, analysis, metrology, certification and technology transfer. INTI is ascribed to the Ministry of Production. INTI is organized in regional centers and national business units and programmes. In 2008, INTI created a Strategic Technological Area for renewable energy to build internal capacities anticipating support services to third parties. 37. Currently, three groups have been created for bioenergy under the Management of Special Projects (Gerencia de Proyectos Especiales), covering wet biomass, dry biomass, and biofuels. Priority is given to wet and dry biomass as other large players exist for biofuels. In 2016, INTI completed a survey of installed anaerobic digestion plants in Argentina and as such, the institute has a good overview of the market and the gaps in the biogas supply chain in Argentina. In dry biomass, INTI started research with boilers but moved its focus to gasification being considered a more versatile and scalable technology. Part of the research is focused on upgrading of organic residues into fuels (for gasification) with stable, known properties, such as pellets, wood chips, and other solid fuels.

Sector organizations: 38. The Argentinian Chamber of Renewable Energy (CADER) is a multi-sectorial chamber of commerce, which represents all sectors and actors involved in renewable energy in Argentina, including bioenergy. CADER’s mission is to ensure a growing market for renewable energy in Argentina and promote business development for its members. The organization links companies and renewable energy professionals together and establishes a platform for dialogue to push development of the sector. CADER plays an active role as a lobby organization engaging with policy makers and offers inputs for the design of policy and regulation, as well as and viewpoints for the development of a sustainable energy sector. In 2015, CADER produced a detailed review including proposed amendments for the Renewable Energy

Law project 27.191.

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Barriers and gaps related to the baseline 39. An exhaustive assessment of the barriers for renewable energy technologies in Argentina was performed under a project of the Secretary of Energy, REEEP and Fundación Bariloche in 2009.29 The consultancies carried out during the PPG phase confirmed the situation described. 30 The main barriers are: (a) policy and regulation; (b) access to technology; (c) availability and access to information; (d) business models and delivery mechanisms; and (e) finance. 40. The effect of these barriers on bioenergy development varies according to biomass type, project scale, energy end- user, and profile and size of the agribusiness (project owner). Bioenergy projects with smaller installed capacities, and especially wet biomass (biogas) projects, tend to be affected by these barriers. The policy framework for electricity generation is more developed than for thermal energy generation, commercialization of solid biofuels, and biogas. Large agribusinesses are in a significantly better position to attract the necessary capital and know-how for implementing bioenergy systems. Larger projects benefit from economies of scale and can sell surplus electricity on the wholesale market under a negotiated PPA. 41. Moreover, a range of systemic barriers and country circumstances are in place affecting market development for bioenergy and renewable energy technologies in general, including: (i) a complex and fragmented pattern of public mandates and competences; (ii) a traditional focus within energy policy on large-scale electricity generation; (iii) persistency of subsidized energy prices and inadequate cost-recovery of the electricity service; (iv) distorted functioning of the electricity market, including the role of market administrator CAMMESA; (v) weak position of the Argentinian state to access sources of capital; (iv) weak articulation between research institutes, universities, private sector and government programmes; and (vi) relatively poorly developed systems to collect, analyze and publish socio-economic data to assist social and economic development processes. As a positive note, the Government of Argentina has recently set important steps to improve this general picture, notably by attempting to make the public administration more efficient and by normalizing Argentina’s position on the international capital markets.

(a) Policy and regulation barrier 42. The current policy and market framework for renewable energy projects in Argentina is focused on large-scale electricity generation to supply the wholesale market. Since legislation (Law 27.191 and Decree 531/2016) has been issued very recently, its impact on the market is still to be seen. However, the financial conditions set may be insufficient for small-scale bioenergy projects to achieve financial closure. The value of avoided externalities is not monetarized under the current model. There is no policy to develop a market for thermal bioenergy applications; successful biomass projects are primarily driven by a demand for internal process heat and are sufficiently large to sell surplus electricity on the market. For biogas production based on wet biomass (effluents) there are no strong market drivers as yet. 43. The process for admission to the electricity wholesale market is complex, which particularly affects proponents of smaller projects. The introduction of a simplified fast track mechanism allowing the inclusion of renewable energy projects up to 2 MW was not promoted. Incentives for renewable energy projects under the recent Law 27.191 are focused on electricity supply under the wholesale market, with a price cap of US$ 113 per MWh. At the level of secondary regulation there are number of voids, extending to safety and environmental impacts; the definition, management and disposal of digestate; and the development of technical code and commercial terms to connect to the distribution grid. On the upside, several provinces are developing a framework for distributed electricity generation. 44. The institutional framework in Argentina remains complex with potentially conflicting mandates and competences. The federal system that gives rise to a plethora of provincial legislation, making harmonization tedious. In practice, the provinces have large autonomy to dictate their political agendas and adhere or not to federal legislation, except in those areas, such as environment, where federal law imposes minimum standards.31 A void has been identified in terms of

29 For details, please consult the report "Estudio prospectivo de energías renovables destinado a remover barreras técnicas, económicas, regulatorias y financieras a la generación de electricidad", Fundación Bariloche, Argentina, June 2009. 30 See: (1) “Descripción y Análisis del Marco Institucional para la Bioenergía en Argentina – Informe Final”, L. Grassi, May 2016 [Annex P]; (2) “Análisis de Proyectos de Bioenergía en Sectores Prioritarios de la Argentina - Evaluación de la situación actual en relación a las barreras para el desarrollo de la bioenergía en la Argentina”, by Centro de Tecnología Climática y Energía, Fac. de Ingeniería, UNICEN, 15 June 2016 [Annex S]. 31 The so-called “presupuestos mínimos”. GEF6 CEO Endorsement /Approval Template-August2016

agroindustrial policy to promote bioenergy applications, resource efficiency and effluent control. Current bioenergy legislation has emanated primarily from the energy sector (based on the definition of biofuels); which is not the natural partner of agroindustrial businesses. By consequence, policy for thermal energy utilization has hardly developed. This may improve in the near to medium term as a result of increased coordination between the Ministries of Agroindustry, and Energy and Mining.32 45. Argentina does not have specific policy in place that seeks to exploit the value of biomass residues for heat generation. The constitution assigns responsibility to the national government to preserve natural resources and look after their rational use (Art.41). Decree PEN 91/2009 instructs the design and implementation of a National Plan for the Development of Biomass. Open-field burning is prohibited since 2008 by National Law No.26.562, which sets minimum requirements to prevent and control such burning. Crop harvest residues and waste from forestry should be disposed of in a controlled manner but a market for biomass waste has not developed, among other reasons due to weak enforcement by provinces and municipalities, as well as logistical and cost constraints. Therefore, biomass utilization for heat production basically takes place in industries with a substantial heat demand that possess sufficient own biomass waste. Voids in regulation of an internal market for solid biofuels (such as pellets and woodchips) include: (a) the absence of standards for chemical and physical properties; (b) the lack of technical standards (including minimum performance standards) for boilers and biomass appliances; (c) the absence of safety standards for biomass and biogas installations; and (d) the absence of a certification and sustainability criteria for solid biofuels.

(b) Technology barrier 46. In general, conversion technologies for dry biomass are more mature than those for wet biomass. Technological barriers for dry biomass, including from the forestry sector, are mainly related to the lack of integration of the overall value chain. In particular, biomass sourcing strategies and logistics are poorly developed and data for economic optimization of the chain is lacking. Information about alternative (non-energy) uses of agroindustrial residues in the regions is also incomplete. Better data, however, is available for the forestry sector, which was generated under the Probiomasa programme. A market for solid biofuels such as pellets has hardly developed though. In fact, most dry biomass energy plants are based on company-owned residues with low opportunity costs. Potential biomass streams that require changes in agronomical practices (for example, a separate harvesting cycle) have not been exploited so far and technologies for collecting such waste including rice stalks, sugar cane and corn trash etc. are not commercially available in Argentina.33 47. Experience with the anaerobic digestion of wet biomass is rather limited in Argentina. A recent survey by INTI34 estimates the total number of installations at about 80, many of which are poorly maintained or even abandoned. Large, operational systems are exclusively found for effluent treatment by private industries, and for wastewater treatment. The biogas is not commonly used for energy purposes. Some small plants have been built to produce heat and electricity but the technology is low-cost or even rudimentary – in line with the lack of capital of the owners (schools, municipalities, small farmers). Process parameters are seldom monitored and controlled. Weaknesses are found all along the value chain (components, materials, project design, construction quality, system integration, and operation and maintenance). A summary of the INTI biogas survey is provided in Annex K. Extensive expertise with anaerobic digestion can be found in public research institutes (regional INTI centers) and universities (UNICEN, Olvarría; UnCuyo, Mendoza) but in the absence of a strong market pull, a biogas industry for energy production has not developed.

32 A detailed overview of the status of the electricity sector and its implications for bioenergy policy development is provided in the following set of reports: “Servicios para el relevamiento y fortalecimiento del marco normativo de la producción y aprovechamiento de la biomasa destinada a generación de energía, informes I-VI”, Centro de Estudios de la Actividad Regulatoria Energética – Universidad de Buenos Aires (CEARE-UBA), 2015. Prepared under a contract with Probiomasa. 33 The GEF Project Sugar Cane Renewable Energy (SUCRE) implemented by UNDP in Brazil targets trash collection and utilization for energy generation (GEF ID 2778. 34 Programa de Energías Renovables, “Relevamiento Nacional de Biodigestores – Informe Final”, Instituto Nacional de Tecnología Industrial (INTI), 17 March 2016. GEF6 CEO Endorsement /Approval Template-August2016

(c) Information barrier 48. During the PPG phase, information about ongoing research and development programmes, mapping of supply chains and service providers for biogas and bioenergy projects, and the status of existing biomass and biogas projects in Argentina, was found to be scattered and incomplete, and could not always be validated. This situation is due to the fragmented institutional landscape, the lack of effective coordination and a lack of culture to share information. The need for more detailed and consolidated data, as input for effective policy development, was already observed by FAO in 2009. Technological achievements in the private sector seem not to be widely shared with public institutions and/or civil society organizations, including sector associations. These issues are difficult to address and would require changes in the interaction between the private and public sector, including cultural changes. 49. There is a general lack of characterization of the demand, end-use and type of heat demand in the industry, which is a large impediment to exploit this market. The absence of a biomass market for thermal applications brings along a general lack of awareness of this technology and its benefits compared to conventional options such as natural gas and electric heating. This barrier can be addressed by tailored promotion and by the establishment of successful demonstration projects. A market for solid biomass is further hampered by a lack of data enabling reliable, cost- effective sourcing by consumers, as well as standardization and information of biofuel products in the market.

(d) Business models and delivery mechanisms barrier 50. In general, bioenergy project developers face substantial legal voids and conflicts as well as operational uncertainties; these contribute to the overall risk profile of investments. Uncertainties include: (a) pricing of externally sourced biomass; (b) lack of guarantees to buyers and suppliers to enter into long-term supply contracts; (c) poorly controlled technical risks, extending to quality and suitability of equipment, overall project design, and operation; (d) lack of regulation and assurance about the sustainability of external biomass; (e) lack of environmental and nuisance regulation; (f) lack of regulation and roles concerning ownership and investment for interconnection infrastructure; (g) lack of understanding by agroindustry owners concerning O&M needs for bioenergy plants, personnel qualifications, and labor costs; (i) a generally poor relation between project costs and revenues; (j) increase of technological complexity leading to perceived risks among agroindustry owners; (k) the lack of an established supply chain providing adequate information and after-sales services.; and (l) the current lack of market scale, inhibiting potential project owners and biomass technology suppliers to enter the market. By consequence, both the supply side, intermediaries and demand side of the bioenergy value chain are not well developed. 51. An important barrier for the development of effective business models for bioenergy installation is the lack of monetarization of non-energy (socio-economic and environmental) benefits, including the elimination of externalities that may impede sector growth in the future. Clear examples are effluent control in pig farming and feedlots, opportunities for valorization of sawmill residues, rice husk, etc. Such benefits may be incorporated into strategies to promote circular economies, low-carbon agriculture, and can be combined with enforced environmental regulation. Lessons may be obtained from the parallel GEF-5 GIRSU project, which focuses on the design and implementation of sustainable business models for biogas production by the municipal waste sector.

(e) Finance barrier 52. Access to capital at internationally competitive interest rates has been mentioned by renewable energy stakeholders as one of the key barriers impeding project development to take off. The lack of cheap capital is a systemic barrier in Argentina due to the country’s position in the international financial system. An associated problem is the exchange rate risk: while advanced equipment and components are imported in hard currency (US$), the revenues of economic activities (including energy generation) are in local currency (ARS). Attempts to assure prices in hard currency have failed due to a lack of guarantee mechanisms, including by the State. The Fund for Renewable Energy (FODER), created by Law 27.191, has been designed as a guarantee. Recent government negotiations have led to additional backup of FODER by MIGA and one may expect that capital costs in Argentina will tend to decrease in the future. The opening of a 150M USD credit line by Argentina’s Bank for Investment and Foreign Trade (BICE) and the positive market response to the RenovAr Renewable Energy programm (Round 1, 2016) are indications that finance is improving.

GEF6 CEO Endorsement /Approval Template-August2016

53. Notwithstanding, smaller businesses face difficulties to access capital and have deferred reinvestment in capital assets during the last decade. Sustained technical and financial assistance programmes are needed to upgrade technological capital, improve sector competitiveness and facilitate access to finance. Bioenergy is generally not a key investment priority for the sector, but this would change once energy projects could be a new source of revenues with the potential to hedge financial risks in the primary business sector. In order for this situation to take place, rewarding payback prices for bioenergy must be offered under long-term contracts with the energy consumer.

Problem statement 54. The development problem associated with the utilization of biomass residues and organic waste in agroindustries is formulated as follows: “The utilization of sector-own dry and wet biomass resources for energy self-supply or sales to third parties is hampered by a range of barriers which affect the deployment of bioenergy technologies by agroindustries in Argentina.” This problem leads to a series of social, economic, environmental and public health externalities, including the production and release of the greenhouse gases CO2 and CH4 into the atmosphere, contributing to global warming.

(3) The proposed alternative scenario, GEF focal area35 strategies, with a brief description of expected outcomes and components of the project.

Development objective 55. The objective of the Project has been formulated as follows “To reduce GHG emissions from Argentina's energy sector by the utilization of organic residues and waste into the generation of heat and electricity in the agroindustrial sector.”

Long-term solution 56. A two-pronged solution is proposed, i.e.: (i) to enhance and consolidate the know-how, skills and mechanisms for the efficient delivery of bioenergy projects to the target beneficiaries; and (ii) to establish a conducive policy and regulatory framework for bioenergy projects, including access to finance. Enhanced coordination between stakeholders is a transversal theme and involves line ministries, public research institutes, local authorities and sector organizations. 57. The proposed solution builds on the assumptions that: (a) required bioenergy technology is available in Argentina; (b) the investment climate in Argentina will normalize during the project period; and (c) the Government will continue support for renewable energy technologies and extend incentives to bioenergy projects. Demonstration is deemed particularly relevant for wet biomass technology (biogas produced by anaerobic digestion plants) to fine-tune operational aspects and generate a body of positive experiences. 58. The Project will increase market penetration of bioenergy technologies by enabling agribusinesses, project developers, and local authorities to develop and promote technologically mature energy projects based on standardized components and approaches. Finance for a pipeline of projects will expectedly be made available by the Ministry of Energy and Mining through BICE/FODER or other mechanisms; commercial banks may also enter the market once investment prospects are positive. 59. The Project is aligned with GEF-6 CCM-1 Program 1 by timely development, demonstration and deployment of mitigation options (renewable energy technologies); by accelerating market uptake through the design and implementation of supportive policies and mechanisms; and by enhancing articulation between stakeholders and increasing technical capacity levels and know-how. Bioenergy options thereby cover a broad range of sectors and energy applications, ranging from grid-connected, biomass-based power generation to smaller biogas systems for heat and electricity self-supply. Obtained greenhouse gas reductions extend to the replacement of fossil fuels by the national energy sector, as well as the avoidance of CH4 from effluents produced by agroindustries such as feedlots, pig farms and slaughterhouses.

35 For biodiversity projects, in addition to explaining the project’s consistency with the biodiversity focal area strategy, objectives and programs, please also describe which Aichi Target(s) the project will directly contribute to achieving.. GEF6 CEO Endorsement /Approval Template-August2016

Project strategy 60. The Project “Reducing Argentina's greenhouse gas emissions from the energy sector through the utilization of organic waste for energy generation in agriculture and agroindustries. (PIMS 9053)” will pursue its objective through the following components: 1. Policy and regulatory framework. 2. Bioenergy Network for knowledge management and project delivery. 3. Demonstration and investment in bioenergy projects. 4. Monitoring and evaluation. 61. The estimated total project budget is US$ 44,460,000, including a contribution of US$ 6,000,000 that is sought from the GEF to cover incremental costs. The proposed GEF-funded activities trigger market development for biomass- based renewable energy technology technologies, which would not take place under the baseline project alone. GEF- funded activities will further create investment opportunities, thereby mobilizing capital resources from third parties.

Project components 62. The envisaged Project outcomes and outputs are described in the following paragraphs. Please refer to the Strategic Results Framework for the proposed progress indicators and targets.

COMPONENT 1. STRENGTHENING OF THE POLICY AND REGULATORY FRAMEWORK Outcome 1.1: Policy, regulation and financial incentives adopted to accelerate the market penetration of bioenergy systems based on agroindustrial residues (GEF US$ 850,000; co-finance US$ 1,350,000). 63. The objective of this project component is to implement conducive policy and regulation for small and medium- scale biomass and biogas energy systems at the federal level and in selected provinces in Argentina. The Project aims to deliver robust inputs for specific legislation and technical regulation, while maintaining flexibility with respect to policy development. This approach is deemed appropriate in a context of political transition under which substantial changes in the energy and electricity sector are likely. It must be noted that the institutional and juridical environment for bioenergy policy is highly complex in Argentina as competences between Government levels and sectors are not always clear. On the other hand, renewable energy is declared a national priority and baseline policy development is encouraging, although thermal energy is still poorly addressed. The approach followed attempts to control Project risks by promoting inter-institutional coordination and supporting high-level policy development where possible and appropriate. 64. Specifically, this component aims to fine-tune and consolidate initiatives for distributed electricity generation, which is the most feasible interconnection modality for most small-scale renewable energy technologies (typically up to 5 MW). It will further develop environmental regulation and safety standards for bioenergy equipment, as well as for the management and transport of digestate from various biomass sources. To this purpose, the Project will closely engage with competent authorities and decentralized public agencies, including the Ministry of Energy and Mining, provincial Governments, the National Gas Regulation Entity (Ente Nacional Regulador del Gas, ENARGAS), and the National Food Safety and Quality Service (Servicio Nacional de Sanidad y Calidad Agroalimentaria, SENASA). This component will further support operationalization of the existing fast-track mechanism for biomass projects intending to sell electricity at the wholesale market. Specific guidelines will be drafted to streamline and simplify environmental permitting procedures, thereby improving legal security for project developers. 65. Since a market for solid biomass fuels such as pellets has not developed yet and minimum standards for biomass conversion systems (boilers and appliances) are not yet in place, this component aims to promote the economic utilization of biomass residues, thereby contributing to increased sector competitiveness and potentially, reducing the GHG footprint of the value chains. Among other aspects, the Project aims to facilitate access to finance for thermal bioenergy plants. With a view on socio-economic development, it is envisaged to mainstream bioenergy technologies into rural socio-economic development programmes in Argentina such as the Programme of Provincial Agricultural Services (Programa de Servicios Agrícolas Provinciales – PROSAP) and access financing options thereunder. This

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output is directly supportive to the multiple small-scale renewable energy initiatives by municipalities supported by decentralized entities of INTI and INTA, and others. 66. In collaboration with MAyDS, this component will support the preparation of proposals under identified climate finance mechanisms, such as sector NAMAs, performance-based incentive mechanisms, and grants and loans from multilateral banks and agencies, including the Green Climate Fund. 67. At the end of the Project, it is expected that: (i) regulation for electricity generation is approved by the federal Government and several provinces, including a fast-track mechanism for access to the electricity market; (ii) bioenergy technology has been mainstreamed into sector programmes for agroindustry and rural development; (iii) effective and efficient regulation for environmental and safety aspects of bioenergy systems has been adopted; (iv) national policy and incentives have been adopted to promote thermal applications and efficient utilization of biomass residues; (v) financing for investment in bioenergy projects has been mobilized through national and/or international climate finance mechanisms, and (vi) a robust MRV system and related tools specific to the agro- and agro-industrial waste-to-energy sector has been designed. Output 1.1.1 Development and submission for endorsement of policies, resolutions and financial incentives for distributed generation at the federal level and/or in selected provinces. 68. This output will provide technical inputs and facilitate the policy-making process towards the adoption of conducive legislation for distributed electricity generation in Argentina. This output builds upon law projects and initiatives by a range of national stakeholders, including congressmen (Law project 2965-D, J.C. Villalonga, May 2016), sector association CADER, and several provinces, including: Chubut (Law XVII-No.95), Salta (Law No.7824, June 2914), Mendoza (Law 7549 and EPRE Resolution 019/15, March 2015), San Luis (Law IX-0921/2014) and Jujuy (law project net metering); as well as provincial electricity distribution companies (Santa Fe, EPE Resolution No. 442- 13, October 2013). 69. This output further seeks to complement proposals for enhancement of financial incentives (i.e. fiscal and tariff) for renewable energy generators as being developed under the baseline (law project M. Guinle) by ensuring eligibility of small-scale bioenergy projects. Specifically, the Project aims to facilitate access to project finance for bioenergy projects connected to the distribution grid.36 As and if appropriate, this output can support the preparation of a special call for distributed bioenergy-based electricity generation by the Ministry of Energy and/or by the authority or distribution company in selected provinces, both with back-up from FODER. 70. With respect to technical regulation, this output will develop proposals to address aspects including: (i) administrative procedures to access distribution grids; (ii) technical code for distributed generators; (iii) transparency and harmonization of transport costs37; and (iv) arrangements for dispatch and net metering. This work can build upon regulation under development in several provinces, with the aim to expand technical regulation for distributed generation to other areas and achieve a certain degree of harmonization.38 As and if appropriate, the Project will promote the incorporation of such arrangements into the national Electricity Law 24.065 and its regulations. 71. Given the extensive work on energy policy development at the national level under the baseline, GEF funds will be used to focus on supporting the regulatory process in the targeted provinces, in collaboration with provincial governments and regulatory bodies, electricity companies, sector organizations and financiers. At the federal level, GEF resources will primarily finance liaison and inter-institutional coordination activities to support the policy-making and legislative process. Output 1.1.2 Mainstreaming of bioenergy and waste valorization technologies into national rural development programmes. 72. The objective of this output is to incorporate bioenergy technology options into national programmes addressing rural development, including PROSAP implemented by UCAR (Ministry of Agroindustry); the rural electrification programme PERMER (Ministry of Energy and Mining); as well as municipal and provincial programmes targeting

36 Either directly or as proposed in Law project 2965-D Villalonga, Art. 13-17. 37 Note that in January 2015 Presidential Decree 117/2016 was issued, instructing a plan to provide openness of information held by centralized and decentralized public entities. 38 As a starting point may serve the technical code PRO-103-101 issued by the provincial energy company EPESF in Santa Fe “Procedimiento Técnico para la Conexión de Grupos Generadores en Isla o en Paralelo con la Red de la EPESF”. GEF6 CEO Endorsement /Approval Template-August2016

small-scale energy uses, for example heating of public buildings such as schools and medical centers in rural areas. This output will draw upon output 1.1.5 (promotion of thermal biomass) and 2.1.4 (project development), while linkages also exist with the GIRSU programme (processing of organic waste from markets and animal waste) supported under the GoA/UNDP GEF-5 initiative (GEF ID 5734). Project funds will be used to draft proposals for small-scale bioenergy projects to access parallel funding instruments including PROSAP, FONARSEC, PERMER, and others. Output 1.1.3 Development and submission for endorsement of technical regulation and standards for environmental and safety aspects of biomass and biogas energy installations, including management of digestate. 73. This output aims to close several regulatory voids that affect the legal status and operation of biomass and biogas energy systems. Additional regulation is needed to provide minimum standards for noise immission levels and hindrance, emissions of solid particles and contaminants (NOx, CO, and SO2). Such regulation would feed into federal Law No.24.051 (hazardous substances) and Decree No.831/93, and analogous provincial legislation. 74. Specific regulation is also needed concerning technical specifications and safety aspects of biogas installations. The competent authority for issuing such regulation is the Ministry of Energy and Mining (in alignment with Law No. 26.093 on biofuels). As a minimum, regulation of biogas plants should cover the following aspects: (i) definitions and concepts; (ii) classification of installations (buildings, vessels and containment facilities, drainage and piping, charge and discharge, fire protection and control); (iii) zoning of risk areas; (iv) active and passive protection measures; containment measures; special measures for biogas storage; (v) fire hazard management and control. 75. Similarly, the Ministry of Energy and Mining is responsible for regulation of transport, distribution and final use of biogas. It can draw on specific regulation for natural gas as issued by ENARGAS under Law No. 24.076 (1992). This project output will support ENARGAS to incorporate specific regulation for biogas into the Argentinian Minimum Security Standards NAG-100 (gas distribution networks), NAG-200 (internal installations) and NAG-300 (biogas appliances). 39 76. Digestate from biogas installations is not defined by law. This output pursues to: (i) establish technical and environmental parameters to be met by digestate in function of the biomass feedstock used; (ii) define and regulate the procedures and technical measures related to transport and disposal of digestate; (iii) incorporate the production of digestate into the register for agroindustrial activities of the incumbent authority (province); and (iv) incorporate and regulate the use of digestate as an organic fertilizer in alignment with SENASA Resolution No. 264/11 and its Annex I.40 In addition, this component can provide inputs for the Ministry of Agroindustry to foster local or national markets for organic fertilizer to replace mineral nutrients. Output 1.1.4 Application of a fast-track mechanism for small-scale bioenergy systems including a simplified EIA process. 77. This output will review and complement regulation of the fast-track mechanism for renewable energy projects to enter the electricity whole-scale market, as created under Resolution 280/08 (Ministry of Energy and Mining, 2008). This simplified mechanism initially targeted small hydro power plants with a capacity of up to 2 MW and was opened to wind energy projects (Nota 608/08) and later to all defined renewable energy technologies (Nota 580/09). Given the difficulties to finance projects selling electricity on the wholesale market, the mechanism was not promoted. Anticipating that financial prospects will improve in the near future, this output will amend the existing regulation where needed to match the situation of small-scale biomass systems (including cogeneration) and to extend applicability to capacities of 10 MW.41 78. In support of the fast-track mechanism, this output further pursues (i) the preparation of specific guidelines to evaluate the environmental impacts of bioenergy projects under the guidance of the Ministry of Energy and Mining and the MAyDS; and (ii) adoption thereof by the local authorities (provinces). In this respect it must be noted that the establishment of minimum criteria under the National Environment Law No.25.675 (2002) would involve a lengthy

39 See also: CEARE, Report 2 “Recomendaciones para la Superación de las Barreras Normativas para la Producción y Uso de Biogás”, Section 2.4 (April 2015). 40 Ibidem, Section 3.2. 41 For a possible classification of modalities for small generators to operate in the electricity market, see: CEARE, Report 2 “Recomendaciones para la Superación de las Barreras Normativas para la Producción y Uso de Biogás”, Section 4.3 (April 2015). GEF6 CEO Endorsement /Approval Template-August2016

process within the Federal Council for the Environment (COFEMA)42 with the participation of several sector ministries (Energy, Environment, Agroindustry); such a process cannot be controlled by this Project. As a more practical approach, the preparation of guidelines is proposed. 43 Aspects to be covered (for biogas plants) include: (i) emission control (NOx, SO2, particles); (ii) management of water resources and siloxane removal; (iii) plant operation and management; and (iv) management of digestate, along with other site specific aspects such as odours and impacts on neigbouring communities. Output 1.1.5 Development and submission for endorsement of policy and regulation to promote thermal energy utilization in the agroindustry sector. 79. Steps towards an increased valorization of biomass residues include: (i) promotion of a national programme to develop the value chain for boilers and stoves based on solid biofuels (such as pellets); (ii) standardization of chemical and physical properties of solid biofuel products; (iii) minimum performance standards for boilers and biomass appliances (stoves and heaters); (iv) safety standards for biomass and biogas systems; (v) certification of biofuels from sustainably managed forests44. Another line of action is: vii) promotion of rewarding prices to owners of biogas installations to take benefit from the gas for heat production, thereby offsetting natural gas. Financing could take place through a provincial or national trust fund, or by expanding eligibility under BICE and FODER instruments. Other incentives could depart from the principle of reducing sector GHG emissions, which would demand an increased resource efficiency overall. 80. This output will fund the development of studies and proposals to promote thermal heat applications of solid biomass and biogas. The main challenge is to increase market demand from potential industrial users by providing information about the potential of wood chips and pellets as a substitute for natural gas and oil. The lack of product standards for solid biofuels has been identified as a key barrier affecting the demand and supply side. Under this output, appropriate activities will be selected in close dialogue with the Ministries of Agroindustry and Energy and Mining. Support can also be provided to provinces with proactive policies concerning market development for solid biofuels. Output 1.1.6 Development of proposals to mobilize investment capital for bioenergy projects under international climate finance mechanisms. 81. Argentina presented its Intended Nationally Determined Contributions (INDC) at the COP21 in Paris in 2015. According to MAyDS’s Subsecretariat for Climate Change and Sustainable Development, several economic sectors will be invited to prepare Sectoral Mtigation and Adaptation Plans during 2017. The Government is currently in the process of exploring finance opportunities including carbon pricing, results-based payments, NAMA instruments and Green Climate Fund investments. GEF resources under this output will be used for the preparation of specific proposals to access climate finance mechanisms that can leverage investment in bioenergy systems. The specific activities to be financed will be coordinated between the Project and MAyDS. Output 1.1.7 Design of a MRV system incl. GHG emission calculation methodology specific to the sector. 82. GEF funding will be used to design a Monitoring, Reporting and Verification (MRV) system specific to the agro- and agro-industrial waste-to-energy sector, strengthening existing sector-specific policies and procedures and including a GHG methodology to estimate GHG emission reductions achieved by the sector. Emphasis will be placed on providing quality input data for the national system as well as harmonisation with the national MRV and GHG inventory system. This output will follow up on the guidelines for GHG monitoring and reporting as provided by GEF in 2015.45 Due to limitations of the baseline data (which are questionable, scattered or not available) these could not be implemened during the PPG. Among other aspects, this output will assess carbon leakage levels and propose measures and protocols for their reduction and/or for ensuring proper accounting of achieved GHG benefits.

42 COFEMA: Consejo Federal del Medio Ambiente. 43 In alignment with CEARE, Report 3 “Recomendaciones para la Superación de las Barreras Normativas para la Generación de Energía Eléctrica a partir de Biomasa Sólida”, Section 1.3 (April 2015). 44 Argentina has an established forest certification system, CERFOAR, which is a voluntary initiative of national stakeholders to establish forest certification requirements for both native forests and plantations. This system can provide a basis for certification of the origin of solid biofuels products. The CERFOAR was developed in a multi-stakeholder process with participation of representatives from every link in the value chain. The system was set up in 2009. See: http://pefc.org/about- pefc/membership/national-members/43-Argentina. 45 GEF/C.48/Inf.09, May 07, 2015 “Guidelines for GHG emissions accounting and reporting for GEF projects GEF6 CEO Endorsement /Approval Template-August2016

83. The specific activities to be financed will be coordinated between the Project and MAyDS. The contracting of a specialist to work on the development of technical guidelines for GHG inventory and MRV for the agro- and agroindustrial waste-to-energy sector, as well as in the design of sectoral mitigation measures that may be included in the NDC and in portfolios for funding or results-based payments, is foreseen. In addition, capacity building for the adequate management of such a system and related tools will be financed, targeting existing gaps at MINAGRI, MINEM and MAyDS. GEF funding will also be used to develop MRV methodologies for other non-GHG related, environmental and social impacts specific to the bioenergy sector, taking into account specific criteria of agro- and agro-industrial waste- to- energy projects, such as location, production systems and scale, technology, and capabilities.

COMPONENT 2. BIOENERGY NETWORK FOR KNOWLEDGE MANAGEMENT AND PROJECT DELIVERY Outcome 2.1: Knowledge management mechanisms and delivery skills for project development strengthened through the operationalization of a national Bioenergy Network under the Ministry of Agroindustry (GEF US$ 1,229,300; co-finance US$ 1,600,000). 84. The objective of this project component is to implement and operationalize an organizational structure in Argentina able to: (i) concentrate information and know-how on biomass resources and bioenergy technologies; (ii) initiate activities to complement the existing knowledge base; (iii) act as a clearinghouse on bioenergy information and know- how; (iv) promote inter-institutional coordination for bioenergy policy development within the federal Government; (v) engage effectively with project developers, authorities and other stakeholders in regions with a high-potential to develop bioenergy projects; and (vi) provide effective support to bioenergy project developers to accelerate the project implementation cycle (thereby generating tangible impact). 85. During the PPG phase, a network for bioenergy development (the Bioenergy Network) was identified as the most appropriate structure to cover these functions. The network will be centralized within the Ministry of Agroindustry and will, to some extent, provide continuity to the baseline Probiomasa programme while aiming to avoid its weaknesses, in particular its inability to effectively push forward projects in the field. Acknowledging that a “one-solution-fits-all” approach will not work given the diversity of project types, business types and scale, and political and socio-economic context in the provinces, an attempt is made to strengthen the delivery of bioenergy know-how and expertise for project development by engaging with identified “clusters” of stakeholders in the prioritized regions. 86. The Project will build upon the Letters of Intent signed between the former Ministry of Agriculture, Livestock and Fisheries (Probiomasa) and the provinces and aims to implement a local support unit (focal point) in prioritized regions. A substantial commitment will be requested from the selected provinces to host the network and provide institutional support. Strong local commitment is a key condition for sustainability and a critical factor to achieve tangible results within the Project’s time horizon. At the end of the Project, the local network units are expected to be absorbed by the regional clusters either as an independent unit or as part of a larger institution designated by the province and the Ministry of Agroindustry. Since conditions are currently (2016) not in place for firm institutionalization, this approach allows flexibility to adjust to local stakeholder constellations in a rapidly changing context. 87. Specifically, this project component will establish a coordinating unit for the Bioenergy Network within the Ministry of Agroindustry and focal points (operational units) in selected provinces. The network will deliver studies to enhance national knowledge on available biomass resources and enhance the platform for knowledge sharing as initiated by Probiomasa. In addition, the network will implement training and awareness raising activities in the provinces and provide tailored support to project developers. Finally, experiences and knowledge gained will be shared with public and private peer organizations from other countries in the region. In this respect, UNIDO’s comparative advantage in the field of bioenergy development in agroindustries in the Cono Sur region must be highlighted. Output 2.1.1 Establishment of a coordinating unit for the Bioenergy Network within the Ministry of Agroindustry. 88. This project output will establish a coordinating unit for the Bioenergy Network within the Ministry of Agroindustry, thereby building upon existing human resources, office facilities and other support provided under the baseline. To some extent, the network coordinating unit will provide continuity to the existing Probiomasa programme although under an adjusted mandate and following a different approach to develop the bioenergy market. The unit is expected to consist of three national consultants, to be hired with GEF funds.

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89. The Network Manager (NM) will be in charge of coordinating network activities and representing the Bioenergy Network, assisted by a senior bioenergy expert to act as the Technical Advisor (TA). The TA will play a key role in promoting inter-institutional coordination and linkages with energy policy, climate change policy and environmental protection. The Technical Advisor will form a tandem with the NM combining specific knowledge and expertise on bioenergy and energy policy on one hand, and on biomass waste strategies and technologies on the other hand. They will act as a task force capable of promoting bioenergy market development among a variety of stakeholders and be able to liaise with the focal points under the network in the selected provinces (see output 2.1.2). The functions of Network Manager and Technical Advisor are foreseen as long-term individual (consultancy) contracts to provide continuity to the network. 90. The third identified position in the network is that of a Thematic Expert (TE), who will cover specific aspects of the bioenergy market development in function of the demands of the Project as it evolves over time. This position will be covered through consultancy contracts based on an annual selection process. Tentatively, the expertise profiles are as follows: (i) Year 1: electricity market specialist; (ii) Year 2: environmental regulation and safety specialist; (iii) Year 3: expert in renewable energy project development; (iv) Year 4: solid biofuels specialist; and (v) expert in bioenergy market development programmes and projects. The activities foreseen for the last Project year should be focused on securing the network’s exit strategy and maximizing long-term impact. Output 2.1.2 Establishment of operational focal points for the Bioenergy Network hosted by designated public agencies in selected provinces. 91. Among other aspects, the PPG identified the difficulties encountered by Probiomasa to effectively engage with project developers in the provinces to accelerate project implementation. Besides systemic barriers including low energy prices and adverse financing conditions, weaknesses in the delivery chains were not fully acknowledged and the pursued “top to bottom support” proved less effective than initially hoped for. The proposed Project aims to address this weakness by applying a differentiated approach under the network according to region, agroindustrial sector and business scale, and project and technology type. Moreover, the network activities will start in the provinces where the prioritized sectors are located. 92. Building upon the Letters of Intent signed between Probiomasa and a number of provinces, this Project output will set up focal points for the Bioenergy Network in the prioritized provinces. Local institutional support is a critical condition to operate effectively and ensure sustainability. Therefore, commitment from the provincial government and a designated host institute will be required as a condition for establishing the focal point. The strategy pursued aims to insert the Bioenergy Network into regional economic development clusters to benefit from synergies between local stakeholders, enabling them to incorporate bioenergy technologies for local development. Potential host institutes include the regional centers of INTI and INTA, local agroindustry associations, provincial energy agencies and agroindustry agencies, among others. 93. The Bioenergy Network in the selected provinces will be headed by a coordinator versed in bioenergy project development, preferably with a focus on the technologies relevant for the region. It is foreseen to start in 2 provinces and expand to 4-5 provinces during the Project. GEF funds will be used to finance the position of the regional coordinators under a long-term (consultancy) contract. Funds are also available for procurement of equipment, including vehicles for site visits to projects, and to cover travel costs under the network. 94. The regional coordinator will proceed according to a work plan agreed with the network to support identified bioenergy project initiatives; engage with regional stakeholders, including policy makers, private sector, financiers and civil society organizations; identify needs for specific (technical or legal) support from the network, including conceptual terms of reference for such support; identify opportunities for promotion and capacity building of bioenergy in the region; and represent the Bioenergy Network when required. Output 2.1.3 Supportive studies and tools to enhance the national knowledge base on the utilization of agroindustrial residue streams for energy generation. 95. This output comprises the implementation of studies and surveys as well as training (as deemed necessary) aimed at complementing existing knowledge on bioenergy technology in Argentina as developed under the baseline. Building

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upon earlier work46, this output will collect and validate existing sources of information on biomass flows in the country, and refine the assessment of the technical and commercial bioenergy potential for selected agroindustrial sectors. This output will further analyze technical, legal and financial aspects of bioenergy projects and initiatives and systematize project parameters. The information and analysis will be made available to stakeholders, prospective project developers and the financial community through a dedicated ICT-platform47. It is envisaged to integrate specific tools and calculators to evaluate project concepts, thereby promoting awareness on project opportunities. The ICT platform will be instrumental for the network to fulfil its role as the national information and knowledge clearinghouse on bioenergy. To broaden the financial possibilities, partnerships with key stakeholders including CADER, the Ministry of Energy and Mining as well as provincial sector associations will be considered. 96. GEF funds under this output will further be used to assess the supply chain for anaerobic digestion technology and issue recommendations for standardization of project designs, used materials and components. This work will build upon baseline surveys48 and focus on prospective market applications for biogas – from the perspectives of both energy generation and effluent treatment. Benefit will be taken from similar work on biogas market development in neighboring countries. Voids and weaknesses in the national technology value chain will be assessed, including national production costs versus imported components. Applicable international material and safety standards will be reviewed and recommendations issued for the national situation. 97. Supportive studies and training are also foreseen addressing the development of a national market for solid biofuels (such as pellets) including logistics and transportation costs. Note that biomass waste requiring agronomical changes (such as different land management practices, pest protection strategies, water management, harvest methodologies, etc.) are in principle beyond the scope of the present Project. Activities under this output are foreseen to be contracted from specialized firms and/or individual consultants under short-term contracts. GEF funding will be used to complement supportive studies financed by the Ministry of Agroindustry under the baseline (Government cofinance). Output 2.1.4 Capacity building, liaison activities and promotional events to accelerate bioenergy market development in selected provinces. 98. This project output will finance complementary activities of the Bioenergy Network 49 in the Ministry of Agroindustry as well as in the prioritized provinces, specifically aimed at capacity building and promotion at the national, provincial and municipal levels. Envisaged activities include short training courses and workshops for public officers on specific aspects of bioenergy projects, such as: (i) social and environmental impact in collaboration with MAyDS, (ii) applicable regulation and permitting procedures; (iii) project development cycle; and (iv) socio-economic benefits and opportunities. Targeted beneficiaries at provincial level include: policy makers, officers from electricity distribution companies and cooperatives, electricity system regulators, environmental authorities, civil society organizations, and others. 99. This output is expected to deliver specific inputs for the identified regional socio-economic clusters enabling them to assess the opportunities of bioenergy technology projects for relevant agroindustrial sectors. Tangible outputs in the regions include: white papers by sector organizations and/or local authorities, road maps, action plans, the establishment of public-private partnerships, and concrete project proposals. The regional network coordinator is expected to assume a proactive approach, provide guidance to the local stakeholders, and identify specific support activities such as workshops and site visits, as and if required. Moreover, ownership of the outputs generated should be anchored at national level and a sustainability strategy developed to assure that activities – especially those targeting capacity building – can be continued beyond the end of the Project. 100. GEF funding under this output will be used for contracting of identified services, including event hosting, local travel, printing costs, and the design and implementation of short capacity building programmes (training).

46 A good overview is provided in the document: “NAMA for the Promotion of Energy from Biomass (NAMA Probiomasa)”, by G. Haensel, F. Roeser, et.al., Ecofys (2014). Produced by the Probiomasa programme with CAF funding. 47 See also: “Propuesta de Conformación de una Red Tecnológica de Excelencia, Red Argentina de Bioenergía – Informe Final”, L. Grassi, June 2016 [Annex Q]. 48 Including: (1) “ Análisis de Proyectos de Bioenergía en Sectores Prioritarios de la Argentina”, by Centro de Tecnología Climática y Energía, Fac. de Ingeniería, UNICEN, 2 May 2016 [Annex R]; and (2) Programa de Energías Renovables, “Relevamiento Nacional de Biodigestores – Informe Final”, Instituto Nacional de Tecnología Industrial (INTI), 17 March 2016. 49 I.e. activities that are not financed under outputs 2.1.1 and 2.1.2. GEF6 CEO Endorsement /Approval Template-August2016

Output 2.1.5 Exchange of experience with other similar bioenergy projects in countries in the region through seminars, workshops, site visits and publications. 101. This output will finance a range of activities aimed at the exchange of experiences and know-how on bioenergy systems with stakeholders in Argentina and the Cono Sur region, with a focus on the application of biogas technology in small-and medium-scale agroindustries, and the development of solid biofuel markets (pellets). This output builds upon the baseline work done under the Probiomasa programme to engage with national and regional stakeholders. Specific activities include: national and regional workshops (3), seminars (2), the development of promotional material, site visits, and travel expenses of international experts with experience in countries in the region (e.g. Brazil, Chile, Uruguay) and in biogas.

COMPONENT 3. DEMONSTRATION AND INVESTMENT IN BIOENERGY PROJECTS Outcome 3.1: (TA) Technical and economic feasibility of bioenergy projects based on agroindustrial residues demonstrated, and a project portfolio for upscaling of investment developed (GEF US$ 2,075,000; co-finance US$ 2,100,000). 102. The objective of this component is to implement a number of bioenergy systems to demonstrate their technical maturity and the sustainability of the chosen business models. This demonstration will increase trust by sector stakeholders and investors, while generating inputs for further optimization and policy development. The pursued approach consists of the following steps: (i) assisted portfolio development for bioenergy projects; (ii) selection and ranking of initiatives submitted to a call for proposals under the Project; (iii) grant funding of feasibility studies and project development cost for selected project; and (iv) technical assistance to ensure project sustainability and optimize performance. The investment costs (hardware and contractor services) will be borne by the project owners. 103. During the PPG phase, a prioritization of agroindustrial sectors was undertaken with a view to their potential for bioenergy applications. A subset of 7 sectors has been identified including primary livestock and agriculture (including forestry) as well as secondary industries. These sectors are: (i) slaughterhouses, (ii) dairy processing facilities, (iii) feedlots, (iv) dairy farms, (v) pig farms, (vi) rice mills, and (vii) forestry (sawmills). Background information about the sectors has been collected under a consultancy by CTEA, UNICEN 50 . The identified sectors are geographically concentrated in two regions of Argentina, NEA (Northeast) and Center, comprising six provinces as shown in the next table.

PRIORITY SECTORS – GEOGRAPHIC CONCENTRATION 51 SECTOR PROVINCES 52 TYPE CATEGORY NEA CENTRO COR MIS ENT BAS SFE CDB Slaughterhouses SL X X X Dairy processing facilities SL X X X Feedlots PL X X X X X Dairy farms PL X X X X Pig farms PL X X X Rice mills PA X X X Forestry (sawmills) SF X X X X (X) (X)

50 Sector studies provided by the Centro de Tecnología Climática y Energía (CTEA), Universidad Nacional del Centro (UNICEN), Provincia de Buenos Aires, as part of the consultancy “Análisis de Proyectos de Bioenergía en Sectores Prioritarios de la Argentina”, 15 June 2016 (see Annex R). 51 COR = Corrientes; MIS = Misiones; ENT = Entre Rios; BAS = Province of Buenos Aires; SFE = Santa Fe; CDB = Cordoba. 52 F = Forestry; SF = Secondary Forestry; PA = Primary agriculture; PL = Primary livestock; SL = Secondary livestock. GEF6 CEO Endorsement /Approval Template-August2016

104. The sectors are chosen based on their potential for energy generation and socio-economic relevance according to the following indicators: (1) energy production (MWh/yr); (2) number of establishments (-); (3) production figures (ha, tons, animals/year); (4) number of direct jobs in sector (-); and: (5) economic value of sector (US$). 105. The projects selected will demonstrate energy applications of both dry and wet biomass, thereby covering a range of sectors. Based on the identified socio-economic indicators (see Annex M), the focus will be on the following sectors: (a) dry biomass: forestry and rice husk; and (b) wet biomass (biogas): feedlots, dairy farms, pig farms, dairy processing facilities, and slaughterhouses (bovine or pork). These agroindustrial sectors are clustered in six provinces in the regions North-East Argentina (Corrientes, Misiones and Entre Ríos) and Center (Buenos Aires, Santa Fe, and Cordoba). The Bioenergy Network will have geographical coverage in these provinces to provide technical backstopping and support development of a project pipeline. The following table summarizes the socio-economic indicators.

PRIORITY SECTORS – SUMMARY SOCIO-ECONOMIC KEY FIGURES SECTOR KEY FIGURES ESTABLISH- TYPE CATEGORY PRODUCTION DIRECT JOBS SECTOR VALUE MENTS (-) (-) (%) MUS$ (%) Slaughterhouses SL 226 2,452,000 ton meat (domestic) 47,000 15% 530 4% Dairy processing SL 900 1,749 mln litre milk 30,000 10% 6,250 47% facilities Feedlot PL 1,815 710,500 ton meat 67,800 22% 1,891 14% Dairy farm PL 10,224 11,330 mln litre milk 99,767 32% 3,600 27% Pig farm PL 53,276 281,250 ton meat 30,000 10% 667 5% Rice mills SA N/A 946,981 ton rice (milled) N/A - 152 1% Forestry (sawmills) SF 2,639 231,566 m3 cut wood 38,274 12% 188 1% TOTAL 100% 100%

106. The following table depicts the energy generation potential for the seven prioritized (sub)sectors (see Annex N). During the PPG phase, it proved highly difficult to obtain reliable socio-economic information, as well as detailed insight into the actual thermal and electric energy demands of establishments in the prioritized sectors. Available data was often found to be incomplete and scattered, and used methodologies and system boundaries were not described as part of the data. Cross-checking of information sometimes evidences invalid results (for example the electricity generating potential of 24.9MW for the sawmill sector in the next table, which is far too low). The lack of consistent data also inhibited the selection of subsectors based on a rigorous analysis of socio-economic and technical criteria, as foreseen under the PPG phase.

BIOENERGY SYSTEMS – ELECTRICITY PRODUCTION POTENTIAL PER SECTOR ELECTRICITY AGROINDUSTRY CAPACITY PRODUCTION SECTOR SECTOR SIZE (UNITS) (UNITS/MW) (MW) (MWH/YR) Slaughterhouses 12,200,000 animals per year 848,000 14.4 126,000 Dairy processing 1,749,000 m3 processed milk/yr 1,291,000 1.4 12,000 facility Feedlot 3,415,000 animals 30,900 111 968,000 Dairy farm 3,499,621 animals 53,700 65.2 571,000 Pig farm 3,234,133 animals 51,000 63.4 556,000

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Rice mills 946,981 ton processed rice/yr 8,330 114 996,000 Forestry (sawmills) 231,566 ton wood/yr 9,300 24.9 218,000 TOTAL 393 3,447,000

107. Based on a stratification of businesses per sector (see Annex I), the average size of the prioritized agribusinesses has been determined, as presented in the Table below. The average business scale represents the lower range for feasibility of dry bioenergy technology (boilers for electricity production). With respect to wet biomass technology, this scale represents still considerable challenges with respect to financial and technical (including operational) barriers. Acknowledging that larger businesses are generally in a better position to attract capital and technology for implementing bioenergy systems, the indicated business scales (in above table, §106) provide a good entry point for the Project to promote market penetration downward the pyramid and deliver successful, representative showcases per sector. 108. For each priority sector, unit figures have been determined to calculate energy production, GHG abatement potential, capital costs, operational costs, and cost of biomass feedstock (for dry biomass). The GHG abatement potential for wet biomass technologies is based on approved CDM methodologies. For more information, please refer to Annexes I and N.

BIOENERGY SYSTEMS – TENTATIVE DEMONSTRATION PILOTS AND SUBSECTORS

AGROINDUSTRY ELECTRICITY GENERATION PROJECT COSTS

SPECIFIC INSTALLED ELECTRICITY SPECIFIC OPEX/ SECTOR PRODUCTION SCALE 53 CAPEX 54 CAPACITY CAPACITY PRODUCTION COST CAPEX UNIT W/UNIT (KW) (MWH/YR) (US$/KW) (US$) (%) Slaughterhouses 27,000 animals per year 1.18 32 279 8,611 274,337 3.9% Dairy processing 21,900 m3 processed milk/yr 0.775 17 149 13,466 228,543 3.8% facilities Feedlot 5,000 animals 32.4 162 1,419 4,164 674,648 4.4% Dairy farm 1,000 animals 18.6 19 163 12,556 233,550 3.8% Pig farm 7,000 animals 19.7 138 1,208 4,355 600,516 4.3% Rice mills 18,020 ton processed rice/yr 120 2,162 18,943 2,800 6,054,720 4.8% Forestry 46,720 ton wood/yr 107 4,999 35,033 2,700 13,497,408 4.6% (sawmills) TOTAL 7,529 57,194 21,563,723

109. The results from Round 1 of the RenovAr Call for Tenders55 demonstrate the interest of agroindustries to invest in bioenergy projects. The call saw a total of 123 bids for grid-connected renewable energy systems submitted, of which 6 were for biogas and 5 for biomass. The round closed with 29 bids awarded including all six linked to biogas (for a total of 8.6 MW, including from swine manure) in the provinces of Santa Fe, San Luis and Córdoba and two linked to biomass (total of 14.5 MW in Corrientes and Misiones, both from forestry residues). These projects are summarized in the table below:

53 Investment costs for estimated based on IRENA [7]. For the biogas systems, investment costs have been interpolated based on figures from J. Vos and K. Zwart [19} using the following formula: CAPEX (US$) = 176,366 + 3,076* P (kW); in which P is the installed electricity generation capacity. 54 Operational expenditures consist of a fixed and a variable part. The costs of feedstock are not included in the figure. 55 The “Convocatoria Abierta Nacional e Internacional en el marco de la Resolución MEyM Nº136/2016 – Abastecimiento de energía eléctrica a partir de fuentes renovables a través de CAMMESA en representación de los Agentes Distribuidores y Grandes Usuarios del Mercado Eléctrico Mayorista (MEM) – Programa RenovAr Ronda 1”. GEF6 CEO Endorsement /Approval Template-August2016

56 BIOENERGY SYSTEMS – RECENT INVESTMENT PROPOSALS SELECTED UNDER CAMMESA RENOVAR – ROUND 1 CAPACITY INVESTMENT PROJECT NAME PROVINCE BID CONSORTIUM SUBSTRATE (MW) (US$) BIOGAS BG-01 C.T. Río Cuarto 1 Cordoba Biomas Crop 2.0 Vinasse 2,364,297 BG-02 C.T. Río Cuarto 1 Cordoba Biomas Crop 1.2 Vinasse 4,728,685 BG-03 C.T. Yanquetruz San Luis Aca / Fersi 1.2 Swine manure -- BG-04 C.T. San Pedro Verde Santa Fe Adeco Agro 1.4 Swine manure 2,979,797 Fecofe / Coop. Huinca Swine manure, silage BG-05 C.T. Huinca Renancó Cordoba 1.6 3,904,795 Ranancó and MSW BG-06 C.T. Biogás Ricardone Santa Fe Nacarato / Otros 1.2 LFG -- BIOMASS Papelera Mediterránea BM-01 C.T. Gen. Biomasa Santa Rosa Corrientes 12.5 Forestry residues 42,983,925 / Lucena BM-05 C.T. Pindó Eco-Energía Misiones Pindó 2.0 Forestry residues --

110. It is important to highlight that, alongside more conventional grid-electricity generators as found in the forestry sector, innovative business models are also being proposed now. As an example may serve the plant Huinca Renancó (BG-05 in the table), which is a joint enterprise of two cooperatives: (i) FECOFE in the agroindustrial sector, seeking technological innovation and value addition to primary production; and (ii) CEHR, the cooperative in charge of electricity and public services in the town of Huinca Renancó, which aiming at exploitation of local renewable energy resources for distributed generation. A consortium was set up between both to develop the project submitted under Renovar. Apart from its relatively small electricity generating capacity, remarkable features of this plant include the mix of feedstock (swine manure, maize silage and organice municipal organic waste), thermophylic biodigestion, and multiple outputs (biogas, thermal and electric energy, and biofertilizers). The technology is delivered by IFES Srl (national contractor) and Austep SpA (Italy). 111. Three private sector companies have expressed their committment to invest in bioenergy projects to the tune of US$ 34,500,000, financed by private equity and loan. These companies are: (1) Prodeman S.A in Gral. Dehesa, Córdoba Province, specialized in peanut processing and using peanut shells for co-generation. (2) Bioelectrica Uno S.A. in Rio Cuarto, Córdoba, using agroindustry waste; and (3) Pindó S.A. in Misiones, for electricity production from forestry residues. The three companies have expressed their willingness in sharing project development experiences in the sector and receive expert inputs under the GEF project for process optimization and monitoring of emission reductions (see outputs 3.1.5-6). Cofinancing letters from the companies as included as part of the submission of the CEO Endorsement Request. 112. At the end of the Project, it is expected that: (i) installed bioenergy systems have demonstrated their performance in a commercial business environment; (ii) operational aspects of biogas systems have been optimized and viable business cases for anaerobic digestion technology as well as their GHG emission reduction potential have been demonstrated; (iii) a portfolio of bioenergy projects has been developed; and (iv) lessons learned and experiences have been collected and disseminated. Output 3.1.1 Technical assistance for development of portfolio of bioenergy projects in collaboration with local project developers and partnerships. 113. This project output aims to: (i) increase the quality of bioenergy project proposals to ensure response to a call for proposals (see Output 3.1.2), (ii) accelerate the development of a project pipeline for investment; and (iii) enhance market penetration of bioenergy technology among smaller agroindustries (which is particularly relevant for wet biomass). This output will hire short-term consultancies to assist the network’s regional focal points to provide technical assistance to prospective project owners for developing their proposals. The consultants will be coordinated by the

56 Please also see http://www.chamb.mrecic.gov.ar/userfiles/Argentina%20Renovable%20Dic16.pdf for further details. GEF6 CEO Endorsement /Approval Template-August2016

network’s regional focal points under supervision of the Technical Advisor, aiming at an output of 3-4 mature proposals (pre-feasibility level) in each province addressed. As such, portfolio development provides a test case to assess the effectiveness of the network to engage with local stakeholders and draw lessons for improving its modus operandi. 114. On request of the owner, the consultants can provide backstopping for interacting with local authorities and other stakeholders to clarify legal issues and permitting requirements, and during contacts with provincial electricity companies for and financiers. Technical backstopping will also be provided to assess environmental and social aspects of proposed bioenergy projects. Project proponents must comply with applicable regulation for environmental protection, public health and personnel safety, among others. All projects shall be compliant with national legislation and UNIDO and GEF standards and guidelines. Project proposals developed during the first year of the Project are expected to arrive in time for submission under the envisaged call for proposals. Output 3.1.2 Implementation of a call for bioenergy project proposals, and ranking thereof in terms of technical and economic feasibility, socio-economic and environmental criteria. 115. This output encompasses the design and implementation of a call for bioenergy project proposals, to be issued by the Project on behalf of the Ministry of Agroindustry and the Ministry of Energy and Mining. The purpose of this call is to establish a short-list of bioenergy project initiatives for implementation under the Project’s time horizon. The focus will be on the sectors: (a) dry biomass: forestry and rice husk; and (b) wet biomass (biogas): feedlots, dairy farms, pig farms, dairy processing facilities, and slaughterhouses (bovine or pork). 116. Received proposals will be ranked in terms of technical and economic feasibility, socio-economic, environmental and gender criteria. The selected demonstration pilots shall be representative of the bioenergy portfolio in terms of size, geographical coverage and technology, applied business models and energy end-use. The ranking will be done by a Technical Committee set up by the three Ministries and UNIDO under the Project Steering Committee; formal approval being done by the latter. Awarded project proponents will receive a grant for financing of the feasibility studies and project development (see Output 3.1.3). 117. The submitted proposals should include, as a minimum: functional specification and design, technological options, business model, source and logistics of biomass, technical and financial prefeasibility analysis, site requirements and site ownership, potential social and environmental constraints; motivation of proposed project; and a financing proposal. Output 3.1.3 Implementation of feasibility studies and project development for selected bioenergy projects in agroindustries. 118. This project output will deliver feasibility studies, engineering studies and technical plans and manuals for selected biomass and biogas energy projects. These studies will be fully financed by the Project (using GEF resources) once an investment agreement is made with the respective project owners. This modality ensures confidentiality of the studies for the project owner and addresses the barrier of upfront, high-risk project costs. The studies will be carried out by specialized national or international firms under supervision of the Project with support from UNIDO (if deemed necessary). 119. Project grants will be awarded up to a budget limit as determined with the counterpart. Tentatively, at least 2 studies will target dry biomass resources (forestry; rice husk). Another 4-6 studies will involve smaller-scale projects based on wet biomass in the sector: feedlots, dairy farms, pig farms, dairy processing facilities, and slaughterhouses (bovine or pork). Synergies will be sought with other entities to expand the budget available. In principle, the selected projects will receive additional support from the Project to ensure sustainable operation and optimize performance (see Output 3.1.4). Specific terms of reference and/or minimum requirements defining the scope and quality of the envisaged project studies will be drafted. Besides technical and financial aspects, the impact of pursued projects on the environment, natural habitat, and neighboring communities will be assessed. Output 3.1.4 Design and implementation of training activities for bioenergy project owners and operators. 120. This output will design and implement training activities for system owners and operators, including the preparation of manuals and procedures. Critical operational aspects include: (i) training of technical staff on process monitoring and operation; (ii) economics and logistics of biomass sourcing; (iii) monitoring of feedstock composition for anaerobic digestion plants; (iv) control and optimization of process parameters for anaerobic digestion plants; (v)

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safety of biogas installations; and (vi) planning and execution of maintenance and repair activities. Sustainable production approaches shall also be considered.

Outcome 3.1: (INV) Technical and economic feasibility of bioenergy projects based on agroindustrial residues demonstrated, and a project portfolio for upscaling of investment developed (GEF US$ 1,300,000; co-finance US$ 32,700,000). Output 3.1.5 Implementation of seven (7) selected bioenergy pilots based on agroindustrial residues demonstrating representative technologies, business models and GHG emission reduction potentials. 121. This project output encompasses the specification, detailed engineering and procurement of equipment, civil works, electrical systems and auxiliary systems for seven (7) selected bioenergy pilots: a total of US$ 32.7 million will be invested in dry biomass power generation and wet biogas projects under this Output (complemented by US$ 1.8 million for feasibility studies (Output 3.1.3), therefore bringing the total to US$ 34.5 million). Procurement of the systems will take place under responsibility of the respective project owners (mostly private sector companies). Contractors shall include a training programme for operators in their offers, as well as extensive after-sales services and provisions for technical failure. 122. The bioenergy pilots will serve as a test bench for the envisaged regulation and guidelines delivered under the Project, and provide valuable experiences and lessons learned for their further refinement. Specifically, the pilots will provide an opportunity for the application of the technical standards, regulation, and incentives developed under the Project (Output 1.1.3) and for the fast-track mechanism for smaller electricity generating projects (see Output 1.1.4). 123. As indicated above, the seven (7) pilot projects will be chosen to demonstrate dry and wet biomass energy applications in some of the following, prioritized sub-sectors: (a) dry biomass: forestry and rice husk, amongst others; and (b) wet biomass (biogas): feedlots, dairy farms, pig farms, dairy processing facilities, slaughterhouses (bovine or pork), amongst others. Geographically, these sectors are clustered in six provinces (Corrientes, Misiones, Entre Ríos, Buenos Aires, Santa Fe, and Cordoba)57. Typical data for the selected pilots are provided in the tables under Outcome 3.1. 124. The electricity generating pilot projects are expected to participate in a call for tender for grid-connected capacity based on bioenergy (see Output 1.1.1), or calls for distributed generation and/or self-supply (net metering). Grid- connected renewable energy investments can fall back on financial support from FODER and/or the special renewable energy credit line from BICE (Investment and Foreign Trade Bank). Eligibility of smaller bioenergy projects for funding under BICE/FODER will be ensured under project Outcome 1.1. It is, for example, expected that future calls for tender will lower the minimum capacity threshold to 0.5 MW. It is noted that a substantial share of project proponents manage to secure investment through own equity and bank loans, limiting FODER’s role primarily as a guarantee instrument. Cofinance to a total of US$ 34.5 million has been secured from several private agroindustries as outlined in § 111, of which US$ 1.8 million is associated with project development costs (Output 3.1.3) and US$ 32.7 million to investment (this Output). 125. Thermal biomass energy projects are not yet eligible under FODER (co-generation, however, is eligible). The Government of Argentina is initiating actions to develop incentives for thermal projects, and communication is underway between the Directorate of Bio-Energy (MINAGRI) and the Under-Secretariat of Renewable Energy (MINEM) in order to put together a common work program. In addition, dialogue with national and foreign banks on the subject of establishing financing instruments for these types of projects have also been initiated. 126. The following table provides an indicative cost-breakdown for a smaller biogas-based electricity generator connected to the distribution grid (120 kWe). Note that detailed feasibility and engineering studies exist for the (typically larger) projects submitted under RenovAr Programme as well as for other initiatives. Specific information of some private projects was shared with the PPG Project team but is otherwise confidential. The figures in the table indicatively reflect project costs in the current market.

57 However, if suitable pre-conditions exist, pilots could also be located in other provinces as well as in additional sectors. GEF6 CEO Endorsement /Approval Template-August2016

TYPICAL PROJECT COSTS BIOGAS CO-GENERATION (120 KWE)

ITEM COST (US$) (USD) (%) 1 Project development 65,000 3% 2 Site preparation and foundations 270,000 12% 3 Biodigestor tank (2,000 m3) and pre-mixing vessel (150m3) 580,000 26% Piping and auxiliary systems (pumps, gasometer, valves, mixers and 4 280,000 13% crushers) including installation 5 Underground HDPE ducts 14,000 1% 6 Inox steel ducts 14,000 1% 7 Safety railing and stairs 4,000 0% 8 Generator (120 kWh) - imported 160,000 7% 9 Import duties and VAT 18,000 1% Digestor control systems (lublar pumps, stirrers, foam traps, 10 temperature, flow, pressure, level sensors), additives pump, heat 595,000 27% exchanger, SCADA) – imported 11 Import duties and VAT 150,000 7% 12 Fleet costs 35,000 2% 13 Environmental impact study 5,000 0% 14 Other costs 40,000 2% TOTAL COSTS 2,230,000 100%

Output 3.1.6 Monitoring and optimization of operational aspects and technical performance of the installed demonstration pilots through technical support. 127. The purpose of this output is to ensure technical and financial sustainability of the implemented demonstration projects and optimize system performance when possible. GHG emissions reductions and environmental performance parameters will also be taken into consideration. This output will fund the costs of services, maintenance and technical support not covered under the procurement contracts to implement corrective action when needed. It can cover unforeseen follow-up investments, for example for management and processing of digestate, storage and handling of biomass feedstock, improvement of process control systems, additional measures for compliance with environmental requirements (noise, emissions), if needed.58 As such, the use of GEF funds under this output will expectedly be linked to improvement of auxiliary systems and control systems (categories #4 and #10 in above table). GEF funds can also be used to cover the costs of extended warranties by the system suppliers. As such, this output offers flexibility for system optimization under the Project, enabling the extraction of operational experiences and lessons learned. 128. This project output will set up a protocol for monitoring of the technical performance and operational parameters (including GHG emissions and environmental performance) of the biogas energy systems installed under Output 2.1.3. Events will be recorded and analyzed, and made available for stakeholders through the Bioenergy Network. To this purpose, project owners and the Project will make agreements detailing provisions for sharing of information, respecting confidentiality of critical information for the project owners where necessary. Lessons learned will be used as input for future project development and technical regulation and will also be shared with key stakeholders. 129.

58 The installation of permanent sensors for methane leakage detection will be limited to critical points where this is economically feasible, or necessary from the perspective of safety (inhalation or explosion hazard). Pressure tests to ensure system sealing will be part of the commissioning process. The use of specialized equipment for gas detection (lasers, gas cameras) will be included as part of training activities where relevant. GEF6 CEO Endorsement /Approval Template-August2016

COMPONENT 4. MONITORING AND EVALUATION Outcome 4.1: Monitoring plan prepared and implemented by UNIDO (GEF US$ 260,000; co-finance US$ 260,000). 130. Monitoring of project progress is essential for the adequate and timely delivery of results. This component covers project monitoring and oversight by UNIDO in close coordination with the Executing Partner and the other partners represented in the PSC, as well as the mid-term review and terminal evaluation of the Project. Output 4.1.1 Design and implementation of a Monitoring and Evaluation plan defining roles and responsibilities of implementing partners, reporting protocols, progress indicators and targets . 131. This output covers the organization of an inception workshop, the definition of progress and impact indicators and the design and implementation of a detailed monitoring plan and methodology that takes into consideration GHG emission reductions. Gender aspects will be paid careful attention to in order to facilitate gender mainstreaming throughout project implementation. The following activities will be implemented using GEF and UNIDO resources: (i) hosting of inception workshop; and (ii) design of monitoring plan and tools for data collection and recording, taking into consideration GHG emission reductions; and (iii) M&E and gender specialists to provide backstopping. Output 4.1.2 Monitoring of project progress with respect to project- specific indicators and targets, and compliance with UNIDO and GEF guidelines and safeguards on social (including gender) and environmental impact. 132. This output covers backstopping to review project progress and compliance with UNIDO guidelines, best practices and safeguards concerning social, economic, environmental, and human development. Special attention will be given to identify opportunities to strengthen the position of women. Relevant project activities, specifically related to training, communication with civil society groups, and bioenergy usage involving small and medium agroindustries will be reviewed on gender-specific issues and opportunities. The activities implemented will be: (i) short- and/or longer-term consultancies to measure and validate project progress and identify key issues; (ii) short-term consultancies to follow up upon environmental issues, including preservation of natural resources (forests, soils and aquifers); gender aspects; and human development aspects. As well as regular monitoring and site visits by the Project Manager (UNIDO) and the PMU (Ministry of Agroindustry). Output 4.1.3 Implementation of Mid-term Review and independent Terminal Evaluation. 133. This project output consists of the mid-term review and the GEF terminal evaluation, to be carried out by independent consultants. The mid-term review will be carried out after the second PIR. The GEF terminal evaluation will be implemented in the last three months before operational project termination. Both evaluations will be carried out by independent international and national consultants contracted by UNIDO. The activities to be implemented are: (i) national and international consultancy for the mid-term review; and (ii) national and international consultancy for GEF terminal evaluation.

(4) Incremental/additional cost reasoning and expected contributions from the baseline, the GEFTF, LDCF, SCCF, and co-financing. 134. The development problem outlined in the PIF remains valid but has been made explicit and put into the current context for bioenergy technology in Argentina. An important lesson learned during the latest years is the persistence of systemic factors hampering large-scale investment in renewable energy in Argentina. By consequence, many projects proposed under the GENREN programme did not materialize. Recent Law 27.191 aims to widen the scope for investment in grid-connected renewable energy but a range of technical, financial and regulatory issues will still need to be addressed. Moreover, a clear differentiation had to be made between the maturity of wet and dry biomass technologies, the latter being closer to large-scale market deployment. Therefore, the Project approach is no longer exclusively focused on demonstrating large bioenergy plants (presumably under a PPA with CAMMESA), for which market development primarily depends on policy development, the establishment of appropriate financial conditions, and acceleration of project development. (See Component 3., outputs 3.1.1-3.1.4). 135. The social, economic, and environmental relevance of wet biomass energy projects has been acknowledged by the Ministry of Agroindustry and the Ministry of Energy and Mining. Although energy production is typically 10-20 times smaller compared to dry biomass systems, such systems can meet on-site business energy demand (thermal and

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electricity) and simultaneously, convert harmful organic effluents into innocuous material. Law proposals promoting distributed electricity generation have been submitted to congress and several provinces have already adopted legislation into this direction. However, the economic feasibility of wet biomass (biogas) is – at best – marginal, while there is a void of specific regulation and valorization of the delivered environmental services ad by-products (bio- fertilizer). The Project will provide inputs to accelerate policy development and advocate for full recognition of smaller energy projects. Baseline in-kind contributions include policy development, studies and legislative processes by both ministries. (See Component 1., outputs 1.1.1-1.1.6) 136. The Project aims to address the identified regulatory voids, advocate for financial incentives, facilitate project development, and provide technical assistance to biogas demonstration pilots in prioritized sectors. Through this approach, operational barriers will be addressed and confidence of prospective project owners and financiers in biogas technology will increase. In this respect, the Project is supportive to the parallel GEF-5 GIRSU project targeting MSW- based biogas in Argentina.59 Under the baseline scenario, project portfolio development would not take place and regulatory issues would largely remain unaddressed. By pursuing a broader set of demonstration pilots, the Project’s overall impact to achieve a market transformation will expectedly increase, and implementation risks are reduced, resulting in a more robust and more cost-effective project design. (See Component 3., outputs 3.1.5-3.1.6) 137. The Project builds upon the institutional framework of the Ministry of Agroindustry (formerly: Ministry of Agriculture, Livestock and Fishery) and the results of the Probiomasa programme. Building upon provided baseline support from the ministry, the Project aims to provide continuity to the achievements of Probiomasa while strengthening its capacities to engage with stakeholders in the provinces and effectively push forward the identified bioenergy project portfolio. This is pursued through the establishment of a Bioenergy Network headed by the Ministry of Agroindustry. The Project takes benefit from recent changes at the federal government level, specifically the transformation of the former Secretary of Energy into a ministry, which facilitates inter-ministerial coordination of agro-industry and energy policies. Cofinancing (in-kind) has been provided by the Ministry of Agroindustry to support the Bioenergy Network (directly and through related agencies in the provinces), worth US$ 2,500,000. 138. Under the baseline scenario, the application of bioenergy technology for processing of organic residues and waste from agribusinesses is expected to be limited to cogeneration systems in large private companies. Market penetration among smaller agribusinesses would not take place due to a lack of technological downscaling, financial constraints and barriers to enter the electricity market. In the absence of market triggers, particularly anaerobic digestion technology would not reach technical maturity and a robust value chain would not develop. Available know-how and expertise in Argentina would remain fragmented and coordination between key stakeholders would lack articulation, causing high transaction costs and inefficient project development cycles. GEF support under CCM Program 1 is deemed critical to address the identified barriers and assure an integrated approach towards the development of a market for bioenergy technologies in Argentina. 139. Bearing in mind that the GEF allocation of resources for this project is US$ 6,000,000, the cost-effectiveness is estimated at US$ 17 / ton CO2eq, considering only the direct GHG benefits over the initiative's lifetime (353,000 tons CO2eq). If the indirect GHG benefits (total 2,330,000 tons CO2eq) are included, the cost-effectiveness improves to approximately US$ 2.57 / ton CO2eq.

(5) Global environmental benefits (GEFTF) and/or adaptation benefits (LDCF/SCCF). 140. The global environmental benefits of the Project are associated with (i) the implementation of bioenergy plants for electricity and heat generation, thereby off-setting grid electricity and fossil fuel (natural gas); (ii) the avoidance of methane releases into the atmosphere as a result of anaerobic digestion of effluents combined with biogas capture and utilization; and (iii) market development of bioenergy renewable energy based electricity generating capacity. The following table (based on the GEF Manual)60 summarizes the methodology used:

Type of GHG Direct (A) Indirect (B, C)

59 The GEF-5 CCM Project “Sustainable business models for biogas production from organic municipal solid waste” (GEF ID 5734), implemented by UNDP. 60 GEF/C.33/Inf.18, April 16, 2008, page 3. GEF6 CEO Endorsement /Approval Template-August2016

emission reduction Component of Direct implementation of RE The Project does not Market transformation GEF technologies establish a direct intervention replication mechanism. that can cause GHG benefits obtained this type of from leveraged GHG emission investments are reduction considered as effects of market transformation. Logframe Outputs 3.1.3, 3.1.5, 3.1.6 n/a Medium-term impact after project (SRF) level termination (10 years) Quantification Direct evaluation of the n/a Top-bottom approach based on expected method environmental benefits over market development of bioenergy lifetime of an assumed portfolio technologies for electricity and heat of 7.5 MW bioenergy systems. generation in Argentina. For wet biomass processing by anaerobic digestion, avoided methane releases are estimated in accordance with approved CDM methodologies. Quality of Based on expected performance n/a Based on: (i) assumption that 41 MW Assessment of bioenergy systems in electricity generation capacity based on Argentina. Error range is dry and wet biomass is being added estimated at +/-50%. annually; (ii) baseline shift of 20%; (iii)

CO2-intensity of electricity generation

sector in Argentina is 0.46 tCO2/ MWh: (iv) average technical availability of 80%; (v) other effects (displaced fossil energy for thermal uses, solid biofuels, avoided methane releases) are not considered.

Direct GHG benefits 141. The Project aims to mobilize about US$ 21.7 million for direct investment in bioenergy installations, of which US$ 19.7 is foreseen for dry biomass power generation (forestry and rice husk) and about US$ 2.0 million for wet biomass (biogas) projects. A total electric capacity of about 7.5 MW would be installed under the Project. The expected annual energy production is 57,194 MWh/yr. Based on the indicated CO2-intensity of the power system, the direct GHG emission reductions are: 57,194 MWh * 0.46 tons CO2eq/MWh = 26,288 tons CO2eq (26.3 kton CO2eq). Avoided methane releases by biogas installations amount to 9,042 tons CO2eq per year (9.0 kton CO2eq). The total direct GHG emission reductions are thus: 26.3 + 9.0 = 35.3 kton CO2eq per year. Over a 10-year economic lifetime of the investment, the total electricity production would be: 10 yr * 57,200 MWh/yr = 572,000 MWh (572 GWh). The total direct GHG emission reductions are estimated at: 353 kton CO2eq. 142. The following table provides a summary of the (tentative) demonstration projects with the associated GHG emission reductions. Note that emission reductions are somewhat higher if all biogas would be used to replace natural gas. For more details, including the definition of the used GHG emission factors, please refer to Annex I.

DIRECT GHG EMISSION REDUCTIONS DEMONSTRATION BIOENERGY ELECTRICITY GENERATION SYSTEMS

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INSTALLED ELECTRICITY AGROINDUSTRY GHG EMISSION REDUCTIONS CAPACITY PRODUCTION SECTOR PRODUCTION SCALE METHANE ELECTRICITY (KW) (MWH/YR) (TON CO2EQ/YR) Slaughterhouses 27,000 animals per year 32 279 1,355 127 Milk factory 21,900 m3 processed milk/yr 17 149 723 68 Feedlot 5,000 animals 162 1,419 3,530 645 Dairy farm 1,000 animals 19 163 263 74 Pig farm 7,000 animals 138 1,208 3,171 546 Rice mill 18,020 ton processed rice/yr 2,162 18,943 - 8,714 Forestry 46,720 ton wood/yr 4,999 35,033 - 16,115 TOTAL 7,529 57,194 9,042 26,289

Indirect benefits 143. The Project further contributes to GHG emission reductions as a result of the attained increased market penetration of (renewable) bioenergy technologies. A calculation of these benefits is subject to large uncertainties as market data are not always consolidated and error margins difficult to assess. For simplicity, only grid-connected bioenergy systems are considered, which replace fossil-based electricity (grid GHG intensity factor 0.46 ton CO2/MWh). The total market for bioenergy-based electricity generation is assumed to be equal to the goal set by Probiomasa for 2030 (1,325 MW installed capacity). For simplicity, thermal energy generation and solid biofuel markets are not considered here. It is further assumed that larger dry biomass projects will develop as part of the baseline, so that the impact of the GEF Project is limited to capacities below 10 MW (31% of the market). The target market volume hence is: 410 MW (electric power). It is assumed that this potential is brought online progressively during the period 2020-2030. The GEF causality factor has been determined at 40% (modest). Considering Argentina’s ambitions to develop large wind and solar energy projects in the near future, a baseline shift of 20% is assumed. The following table summarizes the input data and estimations made.

GHG emission reductions 728,270 ton CO2eq/yr 0.46

Baseline shift 145,654 ton CO2eq/yr

Net GHG emission reductions 582,616 ton CO2eq/yr

GEF causality factor 233,046 ton CO2eq/yr 40%

Net GHG emission reductions over 10-year period 2,330 kton CO2eq

144. Based on these assumptions and input data, the GHG emission reduction are estimated at 233 kton CO2eq/yr, or 2.3 Mton CO2eq over a 10-year impact horizon.

Other environmental benefits

GEF6 CEO Endorsement /Approval Template-August2016

145. Through the treatment and utilization of biomass waste and residues, the promoted bioenergy technologies will contribute to the preservation of soils and aquifers in the impact zones of agroindustries that release organic effluents directly into the environment under the baseline scenario. This is typically the case in pig farming, feedlots, and slaughterhouses. The retention of minerals such as phosphates and the reduction of the chemical oxygen demand of the effluent are critical measures to revert hypertrophication, thereby promoting recovery of life forms and habitats in the areas affected. The utilization of dry biomass residues for energy generation assists in reducing uncontrolled, open air stocks, with positive effects including reduced releases of particles, dust and odors, reduced fire hazard due to spontaneous ignition and reduced risk of animal plagues.

(6) Innovativeness, sustainability and potential for scaling up. 146. The Project is innovative as it aims to strengthen Argentina’s energy sector by building upon drivers within agribusinesses to increase competitiveness and manage the organic residues and waste from production processes. Following a bottom-up approach, the Project will link up with the policy level to develop and implement supportive regulation. While the Argentinian energy sector is traditionally focused on large-scale, centralized power generation, the Project will exploit opportunities for distributed generation; fast-track access to the wholesale electricity market; and the promotion of thermal energy production and solid biofuels offsetting natural gas. The incorporation of these modalities into national energy policy would open the way for new approaches to energy production in Argentina and the design of smarter distribution grids in the provinces. 147. Another innovative aspect is the technical support modality for pursued demonstration pilots, covering up-front project development costs and leaving capital expenditures to the respective project owners. This approach will avoid a range of issues related to confidentiality of information and expectedly increases the effectiveness of GEF resources dedicated to demonstration and the extraction of operational experiences. The approach also integrates the selection of demonstration pilots with project portfolio development, enabling a faster uptake of post-project investment for replication. 148. The Project pursues sustainability of the identified outcomes by building upon critical baseline conditions and inputs, including: (i) inter-ministerial coordination between the Ministries of Agroindustry and Energy and Mining, facilitating engagement with key public agencies in both sectors; (ii) establishment of FODER as a public financial facility for renewable energy with a long-term time horizon; (iii) initiatives for distributed generation by the congress and several provinces; (iv) incorporation of the Probiomasa programme into the Ministry of Agroindustry, providing an appropriate institutional framework for the Project and defining ownership for bioenergy policy at the federal level; (v) conceptualization of the Bioenergy Network taking benefit from the legacy of Probiomasa, specifically from working relations and agreements with provinces; (vi) streamlining of the Project with parallel initiatives under the Ministry of Agroindustry such as those implemented by UCAR; (vii) exploitation of existing synergies between stakeholders in the provinces around the concept of clusters for economic development; as well as, (viii) exploitation of synergies with relevant stakeholders in the region, fostering an enabling environment across countries. 149. The Project design has moved away from direct co-investment in demonstration pilots; GEF funds will be used for project preparation and portfolio development instead. This modality is expected to increase commitment of prospective project owners and ensure economic and financial sustainability. Extensive technical assistance will be given to the demonstration projects to ensure technical and operational sustainability and optimize system performance. As and if appropriate, project activities will be channelled through the Bioenergy Network, contributing to its operationalization in the provinces and assisting it to generate goodwill in the sector. Moreover, close cooperation will be sought with stakeholders at the more technical level, including CADER, INTA and INTI. 150. The potential for up-scaling of bioenergy investments in Argentina is very substantial. As a reference may serve the number of establishments producing dry biomass residues such as sawmills and rice mills (> 1,000). The market for anaerobic digestion of wet biomass residues and effluents includes secondary agroindustries such as dairy processing facilities and slaughterhouses (> 1,000) and primary livestock production such as dairy farms, feedlots and pig farms (>

GEF6 CEO Endorsement /Approval Template-August2016

10,000). As another reference may serve the goal of 1,325 MW electricity generation capacity by 2030 set under the Probiomasa project. In order to materialize this goal, nearly 100 MW bioenergy projects would need to become operational annually during the coming 15 years. To this goal can be added the market potential for thermal energy applications, which is of a similar magnitude.

A.2. Child Project? If this is a child project under a program, describe how the components contribute to the overall program impact. N/A

A.3. Stakeholders. Elaborate on how the key stakeholders engagement, particularly with regard to civil society organizations and indigenous peoples, is incorporated in the preparation and implementation of the project. 151. As highlighted in the analysis prepared during the PPG phase61, the institutional framework for bioenergy in Argentina is complex, fragmented, and characterized by a large number of actors at the three levels of the federation (national, provincial, and municipal). The report (see Annex P) provides an exhaustive overview of relevant actors across the national territory. The following figure attempts to group the relevant types of stakeholders in relation to bioenergy in Argentina.

152. The mandates, track record and role of the most relevant stakeholders is outlined in the next table. To this can be added the national capacities on bioenergy that exists within universities, as well as private businesses with specific expertise and interests.

STAKEHOLDERS FOR BIOENERGY DEVELOPMENT IN ARGENTINA TYPE NAME ROLE Ministerio de Agroindustria The Ministry of Agroindustry is the line ministry for the Project NATIONAL GOVERNMENT (MINAGRI) and the overall executing partner. It is responsible for promoting – CENTRALIZED competitiveness of Argentina’s huge agroindustrial sector. Its

61 L. Grassi, “Descripción y Análisis del Marco Institucional para la Bioenergía en Argentina – Informe Final”, May 2016 [Annex P]. GEF6 CEO Endorsement /Approval Template-August2016

INSTITUTIONS competences for bioenergy development are assumed by the National Bioenergy Directorate under the umbrella of the Secretariat for Value Addition. Presently, the bioenergy unit within the ministry counts with one (1) director and eight (8) professionals (agronomists, forestry engineers and biologists). MINAGRI will be the main executing partner for the Project and has committed co- financing resources to the Project to an amount of USD 2,500,000 (in-kind). Unidad para el Cambio Rural The Unit for Rural Change will be the executing entity of the (UCAR) Project, within the structure of the line ministry (MINAGRI). It manages the Ministry of Agroindustry’s public investment portfolio of internationally financed programs and projects, promoting and facilitating equitable development in rural areas. UCAR’s actions are carried out centering on the following three cornerstones: infrastructure for agrifood production, agrifood development and sustainable management of natural resources, and coordination of strategical public sector policies. Its current portfolio includes the programmes PISEAR (WB), PRODAF (IDB), PRODERI (IDAF), PROICSA (CAF) and PROSAP (several lenders) totaling over US$ 1 bn. Ministerio de Energía y The Ministry of Energy and Mining, created by Decree 231/2015, Minería (MINEM) is the competent authority for energy policy and regulation, and the electricity, hydrocarbon and mining sectors in Argentina. MINEM is responsible for regulation of FODER and for increasing renewable energy-based electricity generation through programmes such as RenovAr (2016). MINEM has committed co-financing resources to the Project to an amount of USD 1,000,000 (in-kind) and USD 23,500,000 (cash), accessible as a guarantee or loan to facilitate financing of bioenergy investments by third parties (private sector). MINEM will be a member of the Project Steering Committee (PSC) and provide high-level orientation for shaping the Project strategy and key components in coordination with the other PSC members. Ministerio de Ambiente y The Ministry of Environment and Sustainable Development is Desarrollo Sustentable responsible for policy development for environment, climate (MAyDS) change and sustainable development. It incorporates a special unit for sustainable energy development. MAyDS will be member of the PSC, technical lead for activities on MRV of GHG emissions and provide back-up for mainstreaming of bioenergy into environmental and climate change policy. Ministerio de Ciencia, The Ministry of Science, Technology and Productive Innovation is Tecnología e Innovación responsible for the design of policy measures and programmes in Productiva (MINCyT) the field of science and technology. MINCyT implements the Sectoral Fund (FONARSEC), which provides funding for the private sector, including renewables and bioenergy. MINCyT will be an important partner for the project to improve coordination of technology-oriented project activities. Ministerio de Relaciones The Ministry of Foreign Affairs and Worship is responsible for the Exteriores y Culto (MRECIC) coordination of international cooperation programmes in Argentina. Ministerio de Producción The Ministry of Production is responsible for promoting industrial (MINPROD) activity and enterprise development in Argentina, as well as for the implementation of standards and quality assurance systems. Within the organization, a National Directorate for Sustainable Industrial Development has been created. Proposals and projects aimed at the

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development of technical standards for bioenergy (including safety aspects) will involve support from MINPROD. Instituto Nacional de The National Agricultural Technology Institute is an autonomous Tecnología Agropecuaria national institution ascribed to the Ministry of Agroindustry. INTA (INTA) has a strong presence across the national territory through its system of regional centers and experimental stations. INTA is very well positioned to engage with agroindustries in Argentina to promote bioenergy development, especially the primary agriculture and livestock sector. INTA is a candidate for hosting the Bioenergy Network and/or for implementing outreach activities in one or more provinces. Instituto Nacional de The National Institute of Industrial Technology ascribed to the Tecnología Industrial (INTI) Ministry of Production provides a broad range of technical services to the public sector as well as industry, including research and development, technical assistance, testing and prototyping, NATIONAL GOVERNMENT analysis, metrology, certification and technology transfer. – DECENTRALIZED Currently, more than 20 experts work on renewable energy, INSTITUTIONS including bioenergy under the Management of Special Projects (Gerencia de Proyectos Especiales). In 2016, INTI completed a survey of installed anaerobic digestion plants in Argentina. INTI is a candidate for hosting the Bioenergy Network in one or more provinces, and is the institute of reference for the Project for biogas development in Argentina. Consejo Nacional de The National Scientific and Technical Research Council created by Investigaciones Científicas y Decree 1.291 in 1958 is the national entity in charge of promoting Técnicas (CONICET) scientific and technological research in Argentina. CONICET executes a range of financial instruments, grants and subsidies to promote scientific activity, operation of laboratories and research centers, as well as scholarships for academic personal. The Project will coordinate programmed capacity building activities with CONICET to ensure optimized utilization of GEF funds. Estación Experimental The Experimental Agroindustrial Station Obispo Colombres is an Agroindustrial Obispo autonomous institution, which depends on the Ministry of Colombres (EEAOC) Productive Development of the province of Tucuman. Founded more than a century ago, its mission is to provide technological inputs for the agroindustrial sector in Tucuman (predominantly the sugar cane industry) and other entities in the northern part of Argentina. It is a national reference in terms of laboratory capacity, with over 50 qualified staff. Its expertise in bioenergy includes liquid biofuels, biogas, biorefineries, energy crops (sweet sorghum), and gasification of harvest residues for distributed TECHNOLOGICAL electricity generation. EEAOC is candidate for implementing CENTERS specialized technical services, research and capacity building activities under the Project. Instituto de Investigaciones en The Research Institute on Non-Conventional Energy was created in Energía no Convencional 1980 under an agreement between the Universidad Nacional de (INENCO) Salta and CONICET. The institute performs research and development in the field of renewable energy including solar, wind, biomass, and geothermal energy, as well as rational energy use. INENCO is candidate for implementing specialized technical services, research and capacity building activities under the Project. RELEVANT SECTOR Cámara Argentina de Energías The Argentinian Chamber of Renewable Energy is a multi- ORGANIZATIONS AND Renovables (CADER) sectorial chamber of commerce, which represents all sectors and FOUNDATIONS (CSOS) actors involved in renewable energy in Argentina, including

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bioenergy. CADER’s mission is to ensure a growing market for renewable energy in Argentina and to promote business development for its members. The organization has one (1) professional staff who coordinates the internal committee for biomass and biogas. CADER is a key civil society partner for the Project with the capacity to influence the policy making process. Asociación Forestal Argentina The Argentinian Forestry Association, established in 1946, is a (AFoA) national association for the forestry sector, which joins businesses, professionals and other stakeholders from the sector. Its mission is to advocate for competitive and socially and environmentally sustainable development of the forestry industry and related services. AFoA incorporates a bioenergy commission and has hosted several seminars on this topic in recent years. AFoA will be an entry point for the Project to accelerate forestry-based bioenergy development in Argentina. Fundación Agropecuaria para The Agricultural Foundation for the Development of Argentina, el Desarrollo de Argentina based in Cordoba, was founded in 2009 by business people from (FADA) the agrifood sector to foster economic development of the sector. FADA aims to influence policy-making processes and carries out studies and analysis to this purpose. Since its creation, it has prepared more than ten national law projects. The foundation has expertise in policy analysis, socio-economic studies and strategies involving new production schemes, including the use of bioenergy. The Project will seek synergies with FADA to design strategies and policies for implementing bioenergy production schemes in the agroindustry. Unión Industrial Argentina The Argentinian Industrial Union is a sector association of national (UIA) industries, established in 1887. Its mission is to represent the industries in Argentina together with provincial and sector entities and foster competitiveness and market development. It participates in the national platform “Energy Scenarios Argentina 2035”. The Project will seek synergies with UIA to incorporate bioenergy into sectoral development strategies and instruments. Federación Argentina Industria The Argentinan Federation for Timber and Related Products was de la Madera y Afines founded in 1933 with the objective to unite all businesses in the (FAIMA) wood sector ranging from production to commercialization. It represents the sector through 27 provincial chambers, covering a broad range of industries including packaging and pallets, floors and wall wood paneling and molding, sawmill industry, carpentry, construction wood, conglomerate, and others. It is member of the National System for Forestry Certification (CERFOAR). FAIMA can be an entry point for the Project to incorporate bioenergy into sectoral development strategies and instruments. It will be a key partner for designing and reviewing market models for sustainable solid biofuels based on forestry residues. FINANCIAL SECTOR FODER (Fondo Fiduciario The Fund for Renewable Energy Development (FODER) was para el Desarrollo de Energías created under Law 27.191. and is governed by the Ministry of Renovables) Economy and Public Finance and administered by the Bank for Investment and Foreign Trade. FODER offers flexible financial instruments to facilitate renewable energy investments, including: (i) purchase of bonds issues by investors; (ii) provision of venture capital, (iii) interest reduction on commercial bank loans, and (iv) guarantee for PPA contracts. Regulation of the FODER is under MINEM. The FODER is a key instrument to enable bioenergy market development under the Project. Engagement with FODER

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under the Project will be through MINEM. BICE (Banco de Inversión y The national Bank for Investment and Foreign Trade (BICE) is a Comercio Exterior) publicly-owned bank providing medium- and longterm loans to promote production and foreign trade. BICE further acts as a second-tier bank channeling loans through commercial banks in Argentina. Its mission is to act as the national Development Bank - complementary to the role of commercial banks- and increase access to credit facilities by promoting inclusiveness and creditworthiness. See also: www.bice.com.ar. BICE has expressed its commitment to the GEF project through a letter (attached). BICE has opened a credit line for USD 150M to support investment in grid-connected renewable energy projects (including bioenergy) under MINEM’s RenovAr programme, offering a maximum of 70% financing of the project sum; the loan is to be paid back in 10-years. BICE further acts as the trustee for the FODER and as such, is a key actor for securing investment in RE in Argentina. Multilateral Banks Multilateral banks, including the World Bank Group (WB), Inter- American Development Bank (IDB) and the Corporacion Andina de Fomento (CAF) are active in Argentina providing concessional loans to strategic economic sectors, including the energy sector. MIGA, part of the WB group, provides a guarantee backing up FODER. The WB further cofinances the MINEM PERMER programme, and stood at the basis of the GIRSU municipal waste programme (involved in biogas and landfill gas development). The IDB provides financial support to economic sectors including agroindustries. UNIDO will maintain an open dialogue with the multilateral banks at the institutional level. Specific financing requests and/or opportunities under the Project will be led by the incumbent ministries. International investment banks International investment banks reduced activities in Argentina during recent years, but will likely re-enter the market in the near future. In fact, foreign investors in renewable energy projects prefer lending on the international capital markets given the – still - large spread with domestic interest rates. Engagement with external financiers under the Project will be through MINEM or the private sector. PRIVATE SECTOR Agroindustries, electricity Companies that produce agricultural and agroindustrial waste and cooperatives and project residues (providers of biomass feedstock), companies and other developers legal entities (such as cooperatives) providing electricity services, and developers of renewable energy projects in Argentina. These companies are the envisaged direct beneficiaries of the Project and providers of venture capital (equity) for investment. Several companies have expressed their commitment to the Project and presented letters of co-finance reflecting their interest and capacity to invest (attached).

153. The network of stakeholders can be refined in the provinces, where often initiatives exist to foster collaboration between public entities and the private sector, for example, through the concept of socio-economic clusters. On the other hand, the Probiomasa programme entered into agreements (Letters of Intent) with a series of local authorities to develop bioenergy in the region. The programme envisaged to implement Provincial Execution Units (UPEs) with working relations with local key actors. A similar approach will be followed by the local Bioenergy Network focal points. Tentatively, a mapping of the stakeholder relations has been made for the six prioritized provinces: Misiones, Corrientes, Entre Rios in the NEA; and Buenos Aires, Santa Fe and Cordoba in the Center. The stakeholder maps for these provinces are graphically presented in Annex O. A basic stakeholder engagement plan has been included as part of

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the Environmental and Social Management Plan (ESMP) and will be refined during the Project. The Project itself does not expect the planned activities to affect vulnerable communities or indigenous people as they are not traditionally found in the prioritized sectors. However, this aspect has been considered in the ESMP and will be further considered during the development of each pilot project’s environmental and social management plan (see also Annex G).

A.4. Gender Equality and Women's Empowerment. Elaborate on how gender equality and women’s empowerment issues are mainstreamed into the project implementation and monitoring, taking into account the differences, needs, roles and priorities of women and men. 154. UNIDO recognizes that gender equality, empowerment of women and access to sustainable energy are interrelated and have a positive impact on economic growth and inclusive industrial development, which are key drivers of poverty alleviation and social progress.62 The Project aims to demonstrate good practices in mainstreaming gender aspects wherever possible, and to avoid negative impacts on people in general, including due to their gender. Although the Project was not found sensitive in terms of gender and energy access, gender dimensions will be considered throughout the whole project cycle. Please also see the preliminary gender analyses conducted (Annex H). Opportunities to include gender dimensions into the design of project activities mainly extend to: (i) capacity building and training activities, by promoting equal participation of women and men in training activities, both at managerial and technical levels, as participants and trainers; and (ii) design and selection of demonstration pilots, to ensure that socio-economic benefits are delivered in an equitable and inclusive manner. In addition, relevant gender focal points and experts as well as local and international associations and/ or agencies promoting gender equality and women’s empowerment, in particular those focusing on the nexus between gender and energy, industry and agroindustry will be consulted. 155. It must be noted that the targeted sectors (energy, forestry, agroindustry) are typically male-dominated. Due to diverging needs and rights regarding energy consumption and production, women and men are expected to be affected differently by clean energy interventions. Structural changes in this respect involve long-term social and cultural processes that stretch well beyond the time horizon of the Project. Notwithstanding, the Project will promote awareness among key stakeholders about the relevance of gender equality for development and the guiding principle (shared by the Government of Argentina, UNIDO and the GEF) that both women and men must have equal opportunities to access, participate in, and benefit from the Project. Gender-sensitive recruitment will be practiced at all levels where possible, especially in selection of project staff. Gender-responsive Terms of Reference will be used to mainstream gender into subcontracted activities and services. The Project will strive at a gender ratio of 50% : 50% with respect to staff and contracted (individual) services. 156. Direct beneficiaries of the Project are: energy consumers served by the national grid; local consumers (including self-suppliers) of bioenergy (heat and electricity); plant operators; project developers and managers; and, to a lesser extent, policy makers and public agents. In principle, male and female users equally benefit from bioenergy-based grid electricity. Gender-disaggregated information about other beneficiary groups targeted by the Project could not be retrieved; apparently such data is not available. The absence of a quantitative baseline is an impediment for defining project targets. The Project will therefore regularly perform gender analyses (Output 4.1.2) and specifically, establish a gender baseline for the demonstration pilots as part of the selection process. All effort will be made to collect sex- disaggregated data. This will enable: (i) men and women staff to take part in the Project; (ii) understanding in more detail of the specific roles of both genders in the production processes (both internal and outsourced business activities); (iii) the design of training and capacity building activities in a targeted manner; and (iv) to balance the total project portfolio in terms of gender benefits. Tentatively, the Project will aims at a share of at least 40% female participants in training activities. Gender-disaggregated indicators have been provided in the results framework. 157. Special attention will be given to potential gender issues resulting from informal labor and the effect of environmental externalities. Although assumed to be of less relevance for the type and scale of agribusinesses targeted by the Project, the recollection and transport of forestry and agricultural residues is often gender-biased. Land tenure issues may play a role affecting rights of women. Weak enforcement of effluent control may contaminate soils and aquifers affecting health and livelihoods of neighboring rural settlements, where women, children and elderly typically

62 See: UNIDO Policy on Gender Equality and the Empowerment of Women (2015). GEF6 CEO Endorsement /Approval Template-August2016

make up the larger share of the population. The envisaged gender screening is aimed at identifying such situations, propose corrective actions and raise red flags if necessary. 158. Both the mid-term review as well as the terminal evaluation will take the gender dimension into account in the assessment to be conducted.

A.5 Risk. Elaborate on indicated risks, including climate change, potential social and environmental risks that might prevent the project objectives from being achieved, and, if possible, the proposed measures that address these risks at the time of project implementation.(table format acceptable):

Risk Likelihood Impact Mitigation actions 1. Inadequate Low High Since PIF approval, policy support for renewable energy in governance structures Argentina has increased, as reflected in Law 27.191 and its and weak policies regulation. As such, biomass and biogas are now formally would hamper the recognized as renewable energy sources and are eligible under implementation of Special Programmes to deliver electric energy to the wholesale bioenergy technologies market. While the importance of distributed generation (DG) is in Argentina. acknowledged, a supportive legal framework for DG is not yet in place at the federal level; this limits the opportunities for smaller projects to sell surplus electricity to the grid and achieve financial closure. As yet, there is no policy to promote thermal applications of bioenergy. The recent transformation of the former Secretary of Energy into a Ministry (MINEM) is an important step forward. MINEM has become increasingly involved in the PPG phase to ascertain alignment of the Project with sector priorities. Communication channels between the Ministry of Agroindustry and the MINEM are open and a shared agenda for bioenergy is evolving. Policy support for renewable energy will expectedly increase during the Project period. This project risk is therefore deemed low. 2. The Executing Entity Low Medium The managerial and technical capacities of the Executing Partner would lack managerial (Ministry of Agroindustry and its designated executing entity and technical capacities UCAR) have been assessed by UNIDO following a due diligence to implement the process, the outcomes thereof being positive. As such, this risk is Project. evaluated as low. UNIDO will organize targeted workshops and training activities to ensure familiarity of the counterparts with UNIDO and GEF procedures. 3. Lack of adequate Medium Medium Although bioenergy is investigated by science and technology technology support institutions and universities in Argentina, there is a lack of would affect the coordination between research programmes and articulation with success of biogas the industry and agricultural sector is rather poor. The PPG phase energy projects. encountered serious difficulties to establish a clear baseline and to verify and consolidate information. The supply chain for bioenergy systems is not yet mature: suppliers tend to deliver ‘as is’ rather than assuring satisfactory system performance. This situation especially affects smaller agribusinesses and wet biomass applications. Since renewable energy project developers are mostly focused on grid-connected wind and solar power systems, initiatives for bioenergy projects mostly come from the agroindustries (including forestry). The Project will establish and deploy a Bioenergy Network to foster the exchange of know-how and information among stakeholders, and to actively support the development of a project portfolio in prioritized provinces. This approach aims to contribute to the professionalization of the bioenergy supply chain. With respect to

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Risk Likelihood Impact Mitigation actions the demonstration pilots, the Project will monitor operational performance and implement a series of activities to assure system performance (see output 3.1.4) and generate useful lessons for the sector. Notwithstanding, technical and operational issues will likely occur and need to be addressed carefully. Therefore, this risk is assessed as medium. 4. Financing of Low Medium The implementation of several demonstration pilots is intended to bioenergy projects prove the economic, financial and technical feasibility of bioenergy would be hampered by technologies for the prioritized agroindustries in Argentina. The a lack of confidence in demonstration plants are expected to address existing operational the sustainability and issues and accelerate the learning curve. Policy work in the field of scaling up potential of installation safety and regulation will contribute to a higher level of bioenergy projects and standardization and compliance with components standards. high operational and Guidelines and/or regulation for environmental and social impact financial risks. can avoid potential legal issues and as such will contribute to reducing project risks. Furthermore, the private sector has shown a continued high level of commitment to the utilization of organic residues and wastes for power and heat generation, as evidenced in their commitment of equity investment for such initiatives. In addition, the availability of guarantees/loans from FODER for bioenergy projects serves to further increase the attractiveness of investment in such projects. Under the assumption that the current interest in renewable energy by policy makers and investors is maintained, a positive financing climate for bioenergy projects can also be expected. As such, this risk has been assessed as low. 5. Lack of financial Medium High Financial closure for bioenergy projects remains a challenging, incentives would affect especially for smaller projects that will not sell electricity to the biogas market wholesale market and for biogas projects in general. Specific development after incentives to promote heat and cogeneration are not in place. In Project termination. order to widen the options for generating revenues, the Project aims to operationalize the fast-track mechanism for accessing the wholesale market, support legislation and regulation of distributed electricity generation, and promote markets for heat and solid biofuels. The Project will further advocate for opening FODER and/or other government facilities to smaller bioenergy projects. This will assist in starting up the market and achieving technical maturity. Since policy-making processes are not controlled by the Project, the likeliness of this risk is evaluated as medium; the impact of inadequate financial conditions on market development however, is high. The prevailing subsidized prices for natural gas and electricity are a key barrier that affects financial feasibility of renewable energy systems even for self-supply purposes. Political and social resistance to reduce these subsidies is considerable. By consequence, a competitive market for renewable energy technologies in Argentina may only develop in the medium/long term – and is beyond control of the Project. 6. Implementation of Medium Low Inflation and currency risks are relevant for Argentina. Early 2016 project activities and the ARS exchange rate with the USD was released, causing a drop pilot systems would be of about 50% in its value. By consequence, local products and affected by inflation wages have become cheaper in USD. This would increase the value and currency risks. of the GEF grant. However, inflation is likely to increase over the following years. As a mitigation measure, a 15% margin on local

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Risk Likelihood Impact Mitigation actions costs has been taken as a buffer for price inflation. 7. Social and gender Low Medium Gender equality, empowerment of women and access to sustainable issues with bioenergy energy are interrelated. It must be noted that the targeted sectors systems would hamper (energy, forestry, agroindustry) are typically male-dominated. replication and/or Although the Project was not found sensitive in terms of gender and exacerbate social and energy access, gender dimensions will be considered throughout the gender inequalities. whole project cycle. Opportunities to include gender dimensions into the design of project activities mainly extend to: (i) capacity building and training activities, by promoting equal participation of women and men in training activities, both at managerial and technical levels; and (ii) design and selection of demonstration pilots, to ensure that socio- economic benefits are delivered in an equitable manner. The Project will regularly perform gender reviews (Output 4.1.2) and specifically, establish a gender baseline for the demonstration pilots as part of the selection process. Special attention will also be given to potential gender issues resulting from informal labor and the effect of environmental externalities. Although assumed of less relevance for Argentina, situations may occur affecting the position of women and vulnerable groups (elderly, children) in rural settlements, such as: recollection and transport of forestry and agricultural residues; land tenure; contamination of soils and aquifers. The envisaged gender screening is aimed at identifying such situations, propose corrective actions and raise red flags is necessary. 8. Environmental Low Medium Local environmental factors are assessed during the feasibility and factors, including the commissioning phase of the demonstration pilots. Where bioenergy effects of global systems are planned, these bring along transport of organic climate change, would material, and some additional space for handling. The impact of cause bioenergy biogas systems involves safety aspects related to the collection and projects being delayed piping of the combustible gas. Other risks include contamination of or abandoned. aquifers, nuisance, odors and public health risks and animal plagues. The GEF project will prepare the environmental, safety and social studies and paragraphs applicable to the bioenergy projects as required for the permitting process. A due diligence project development process, monitoring of operations, and corrective measures are foreseen to ensure operation will be within established parameters and in compliance with applicable regulation. Hereby the Environmental and Social Management Plan (Annex G), which outlined and assessed potential risks of the project overall as well as the pilots, will be consulted. Under these conditions, it is unlikely that bioenergy projects would be delayed or postponed during Project implementation. No climate change risks have been identified affecting the operation and sustainability of wet biomass systems (anaerobic digestion), as these are based on residues and effluents produced by the project owner. Moreover, effluent treatment systems fit into a strategy of adaptation to climate change by preserving local soils and aquifers. The supply of dry biomass may be affected by global climate change. Forestry and rice production are likely susceptible to changes in rainfall and temperature, or the increased occurrence of plagues; as a result production schemes may become less competitive. However, the effect of climate change on the

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Risk Likelihood Impact Mitigation actions feasibility of bioenergy projects will likely be small in the short to medium term.

159. A.6. Institutional Arrangement and Coordination. Describe the institutional arrangement for project implementation. Elaborate on the planned coordination with other relevant GEF-financed projects and other initiatives.

Institutional arrangements 160. The GEF Implementing Agency for the Project will be UNIDO. The executing partner will be the Ministry of Agroindustry (MINAGRI) of the Government of Argentina. MINAGRI has been constituted recently following re- structuring of the Ministry of Agriculture, Livestock and Fishery after the last elections (please also see pages 14 and 17 for further details). During the PPG phase, MINAGRI nominated the Unidad para el Cambio Rural (UCAR) as the national entity that will execute the project63. UCAR has extensive experience with the administration of internationally financed programmes on behalf of the Ministry of Agroindustry as well as with executing some of its own programmes. Further information can be found in paragraph 145. UNIDO conducted a due diligence of UCAR’s capacities to execute project activities in line with UNIDO and GEF guidelines. This led to the conclusion that a contractual relationship with UCAR for execution can be recommended. Hence, UCAR and UNIDO will enter into a contractual relationship for the amounts of Components 1.-3.and the PMC to be transferred according to a detailed work plan and operational manual to be developed. The agreement shall be concluded once the project approval cycle is completed. In case that any large scale procurements need to be undertaken by UNIDO directly, funds will be assigned accordingly. Funds for Component 4. will remain with UNIDO and will be directly administered. This means that UNIDO will maintain oversight of project implementation, including supervision of the execution of key activities, as well as organize planned evaluations. 1. With regards to procurement, full or partial title and ownership of equipment purchased under the project may be transferred to national counterparts and/or project beneficiaries during the project implementation as deemed appropriate by the UNIDO Project Manager in consultation with project stakeholders.

Management arrangements 161. As such, the responsibility for the Project’s execution lies with UCAR, as a national entity that forms part of the line ministry MINAGRI. MINAGRI will designate a person who will act as National Project Director (NPD) and who will be based at MINAGRI in Buenos Aires. The NPD will be responsible for assuring that the Project is represented on the national level and that all communication is channelled correctly between the relevant (governmental) actors. Following figure shows schematically how the counterparts and stakeholders relate with each other:

63 Please see Annex T. GEF6 CEO Endorsement /Approval Template-August2016

162. The Project will establish a Project Steering Committee (PSC) as the highest decision-making authority, the preliminary composition of which is as follows:  Representative of UNIDO;  Representative of MINAGRI;  Representative of MINEM;  Representatives of MAyDS (GEF Operational Focal Point and Sub-Secretariat for Climate Change and Sustainable Development)  National Project Coordinator (UCAR).

The Steering Committee will be chaired by the NPD and convoked on a biannual basis. If considered necessary, UNIDO and MINAGRI can request extraordinary meetings of the Steering Committee. This project document shall guide the overall work of the Project Steering Committee, in particular, the budgeted work plan as per Annexes E and F. 163. The responsibilities of the Steering Committee include, amongst others: i. Coordinating and managing the overall project activities at a macro level. ii. Facilitating coordination of project activities across institutions. iii. Reviewing project activities and their adherence to the work plan set forth in the project document, in line with the GEF regulations on major and minor amendments. iv. Reviewing and commenting on each year’s proposed work plan and budget. v. Requesting and reviewing financial and progress reports. vi. Taking decisions on the issues brought to its notice by UNIDO and other cooperating institutions and advice regarding efficient and timely execution of the project. vii. Initiating remedial action to remove impediments in the progress of project activities that were not envisaged earlier.

164. UNIDO’s role in the PSC is to provide supervision and technical support. The UNIDO Project Manager (PM) will facilitate the work of the Project Management Unit (PMU) in coordinating and networking with other related initiatives

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and institutions in the country and region. UNIDO will fulfill this responsibility by appointing a Project Manager and mobilizing services of its other technical, administrative and financial branches at UNIDO Headquarters and at the UNIDO Regional Office in Montevideo, Uruguay. The PSC will conduct its activities fully in line with the GEF and UNIDO rules and regulations (particularly GEF Council Documents C.39.09 and C.39.03/Inf.3). All decision-making processes will consider gender dimensions through efforts to achieve gender representation also in Steering Committee meetings. 165. For daily management and coordination of project activities, a project management unit (PMU) will be set up by UCAR. The PMU will be responsible for the project at local level and will be the main point of contact for government institutions and stakeholders. The PMU will also be responsible for elaborating the annual work plans. The PMU will include as a minimum the National Project Coordinator (NPC). The National Project Coordinator will be responsible for the day-to-day management and supervision of the project, including overall technical aspects of the project, the coordination of contracting (consultants, sub-contracts), close coordination with other experts including the Network Coordinator, and monitoring activities. S/he will be supported by a Project Assistant (PA) as well as technical staff. PMU members will either be national consultants (Argentina) or seconded from the national counterparts (MINAGRI, MINEM, MAyDS), unless otherwise agreed, and will be based in the offices of the Ministry of Agroindustry in Buenos Aires. All staff shall satisfy the selection criteria described in the Terms of Reference (TOR) to be developed and be hired using the Project’s GEF resources. MINAGRI will provide in-kind support (office, communication, transport, local staff). The PMU will be responsible for coordinating the communication and dissemination of the project results, lessons learned and success stories that are important for the sustainable and future development of the involved market sectors in Argentina.

Reporting 166. UCAR is required to regularly report to the PSC as well as UNIDO on technical as well as financial matters in line with the conditions set out in the contractual agreement to be signed. An accounting and financial transaction reporting mechanism for the project is to be established and maintained. Certified periodic financial statements are to be provided to UNIDO. An annual audit of the financial statements relating to the status of UNIDO (including GEF) funds according to the procedures set out in the UNIDO Financial Manual is to be conducted in line with national legal requirements.

Coordination 167. The Project has been aligned with the priorities and sector policies in the field of renewable energy development and climate change mitigation as set forth by the new Government. The Project will be closely coordinated with the parallel GEF-5 initiative “Sustainable business models for biogas production from organic municipal solid waste.” (GEF ID 5734), implemented by UNDP with a GEF budget of US$ 2,779,849. Among other objectives, this project aims develop business models to incorporate MSW-based biogas energy technologies into integrated waste management systems. This project is managed by the national GIRSU programme under the Ministry of Environment and Sustainable Development (MAyDS). The project aims to implement a number of demonstration pilots based on landfill gas and anaerobic digestion technology. 168. During the PPG phase, important synergies between the two projects were identified, including the opportunity to develop partnerships between agroindustries and pioneering municipalities for the treatment of agroindustrial waste. Another relevant aspect shared by both projects is the establishment of supportive legislation, and technical regulation, for distributed electricity generation. The GIRSU programme, through the GEF project, envisages advocating for the incorporation of biogas energy applications into national energy policy instruments (such as FODER) and as such, can add to the impetus sought by the GoA/UNIDO Project. Other GEF initiatives in Argentina are mainly related to biodiversity and persistent organic pollutants. No specific elements requiring coordination have been identified. 169. With a view on maximizing impact at the policy level, the Project will take advantage of UNDP activities targeting policy and institutional development including the Low-Emission Capacity Building (LECB) programme. The

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institutional dialogue with multilateral lenders including IDB, World Bank and CAF will be maintained with the objective to ensure eligibility of bioenergy projects under their lending programmes.

Additional Information not well elaborated at PIF Stage: A.7 Benefits. Describe the socioeconomic benefits to be delivered by the project at the national and local levels. How do these benefits translate in supporting the achievement of global environment benefits (GEF Trust Fund) or adaptation benefits (LDCF/SCCF)?

Socio-economic benefits at national level 170. The proposed Project fits into national policies to enhance sector productivity and competitiveness, preserve natural resources, protect the local and global environment and diversify the country’s energy mix by increasing the share of renewable energy. The Project is expected to deliver tangible socio-economic benefits for Argentina’s energy and agroindustry sectors, as well as for individual businesses and the men, women and their families involved. Socio- economic benefits at national level are obtained as a result of avoided imports of fossil fuels for electricity generation and heat applications. Distributed bioenergy systems, as well as other grid-connected renewable energy plants can displace thermal power and improve the utilization rate of the transmission network, thereby postponing public investments in infrastructure. The direct replacement of diesel-based electricity represents very substantial savings of public expenditures given its high marginal costs during peak hours. Moreover, diversification of Argentina’s energy mix enables a more economical operation of the national electricity system in function of fuel market prices and improves the country’s position for negotiating long-term contracts with foreign suppliers. The electricity produced by bioenergy systems will expectedly benefit energy consumers (men and women) at the end of the Project by replacing fossil-fuel based electricity. 171. With increasing energy prices in Argentina, bioenergy provides an opportunity for agroindustrial “prosumers” to cut operational expenditures and become more competitive. In fact, agroindustries with large thermal energy demand already switch to alternative energy sources (biomass) in response to restrictions in natural gas supply. Biogas technologies enable effluent management and treatment to reduce environmental impact. Especially export-oriented businesses increasingly need to comply with market demands for responsibly produced commodities and therefore seek opportunities to reduce their GHG footprint. Proactive companies view this challenge as an opportunity to add value to their products and strengthen business competitiveness and innovation capacity. The design and operation of bioenergy plants within agroindustrial businesses requires qualified human resources, which add value to a company and the sector as a whole.

Socio-economic benefits at local level: 172. Through the establishment of the Bioenergy Network, the Project contributes to the development of a professional biomass sector able to design, implement and operate energy systems and equipment, including the provision of adequate after-sales services. This entails high-quality jobs in the field of engineering, agronomy, consultancy and project development with increased value creation, thereby offering opportunities for local professionals to attain higher incomes and sustain the development of human capital in the country. While data on numbers of jobs created varies with biomass systems normally requiring more human resources than biogas systems, it can be conservatively assumed, on the basis of experience with similar types of projects, that around 1-4 jobs new jobs per bioenergy system will be generated64. Gender will be mainstreamed throughout project implementation. It is expected that social and economic benefits from the implementation of bioenergy technologies will be shared equally by male and female workers in the respective sectors. Direct creation of jobs is an important opportunity that will benefit both men and women.

A.8 Knowledge Management. Elaborate on the knowledge management approach for the project, including, if any, plans for the project to learn from other relevant projects and initiatives (e.g. participate in trainings, conferences,

64 See also Environmental and Energy Studies Institute (EESI). Fact Sheet: Jobs in Renewable Energy and Energy Efficiency (2015). November 6, 2015.

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stakeholder exchanges, virtual networks, project twinning) and plans for the project to assess and document in a user- friendly form (e.g. lessons learned briefs, engaging websites, guidebooks based on experience) and share these experiences and expertise (e.g. participate in community of practices, organize seminars, trainings and conferences) with relevant stakeholders.

173. Access to and management of knowledge on bioenergy resources and technologies has been acknowledged as one of the key barriers for bioenergy market development in Argentina. The pursued Bioenergy Network will collect and validate relevant information by drawing upon existing data and analysis from different sources and new inputs generated by the Project (Output 2.1.3). Operational experiences will be systemized from field projects in the forestry and larger agribusinesses, building upon initial reviews carried out during the PPG. The envisaged demonstration pilots will expectedly generate a wealth of new data and insights to expand the body of knowledge on bioenergy in Argentina (Output 3.1.4). Building upon the existing website and database implemented under Probiomasa, it is envisaged to set up a dedicated ICT-platform to make available the information and analyses to prospective project developers and owners, the financial community and other stakeholders. 174. Sharing of knowledge and promotion are also subject of Outputs 2.1.4 and 2.1.5 involving policy makers, energy market regulators, civil society organizations, as well as expert stakeholders from neighboring countries. The Project will make a large effort to enhance partnerships between national technological agencies including INTA, INTI, universities, provincial authorities and private sector, foster coordination of national research programmes and strengthen articulation with extension activities. To this purpose, the Project envisages setting up work sessions with key stakeholders, including agribusiness sector organizations and CADER. The consolidation of gathered knowledge and experiences within the Bioenergy Networks is a key element of the Project’s exit strategy. 175. Capacity building and training is covered by two outputs. Output 2.1.4 is targeted at policy makers, officers from electricity distribution companies and cooperatives, electricity system regulators, environmental authorities, and civil society organizations on aspects of bioenergy projects including: (i) social and environmental impact, (ii) applicable regulation and permitting procedures; (iii) project development cycle; and (iv) socio-economic benefits and opportunities. Output 3.1.4 is aimed at the design and implementation of training activities for system owners and operators. The preparation of manuals and procedures is foreseen to facilitate the implementation of quality assurance systems in bioenergy plants, thereby contributing to operational safety and system availability. The Project is expected to deliver key contributions to the national knowledge base on bioenergy technology for wet biomass, given its current, modest level of maturity. 176. All knowledge management activities will be gender mainstreamed. This includes integration of gender dimensions into publications, for instance, through the presentation of sex-disaggregated data, gender-energy nexus theory, gender sensitive language, photos showing both women and men and the avoidance of stereotypes. In addition, it will be assured that women, men and youth have access to and benefit from the knowledge created. 177. Finally, UNIDO will ensure that relevant information and lessons learned will be collected as input for the Mid- term Review and Terminal Evaluation. UNIDO will further promote the exchange of experiences and technical information and know-how between related GEF projects in the region, including biogas initiatives in Uruguay (GEF ID 4890), Chile (GEF ID 5335) and Brazil (GEF ID 9057): and with the GIRSU biogas project implemented by UNDP (GEF ID 5734). These projects will also provide useful orientation for the design of national policy and regulation, specifically concerning safety of biogas installations, standards for composition and innocuity of digestate, guidelines for environmental protection, financial incentive schemes, and others.

B. Description of the consistency of the project with: B.1 Consistency with National Priorities. Describe the consistency of the project with national strategies and plans or reports and assessements under relevant conventions such as NAPAs, NAPs, ASGM NAPs, MIAs, NBSAPs, NCs, TNAs, NCSAs, NIPs, PRSPs, NPFE, BURs, INDCs, etc.: 178. The proposed initiative is aligned with the National Climate Change Strategy, Lines of Action 7 “To promote energy production and its rational and efficient use”, and 8 “To promote and expand the integration of clean, and technically, economically, environmental and socially acceptable, energy sources in the national energy matrix”. The

GEF6 CEO Endorsement /Approval Template-August2016

potential of biogas capture from sanitized landfills was identified in Argentina’s recent Third National Communication (TNC) to the UNFCCC (2015).65 The TNC further highlights the potential of grid-connected renewables supplying the wholesale market (38 Mton CO2eq reduction over 2018-2030) and for distributed electricity generation (560 kton CO2eq reduction). The TNC reconfirms the role and mandate of Probiomasa to promote electrical and thermal energy generation from biomass, with the objective to attain 1,325 MW installed capacity for electricity; and a similar volume for thermal energy production. 179. Biomass and biogas are firmly embedded in national legislation and sector policies and the recently enacted Renewable Energy Law 27.191 (2015)66 and its regulation Decree 531 (2016). The project is also consistent with Argentina's Mitigation Technology Needs Assessment (TNA), which has one report focused on agroindustrial and urban waste management and clearly identifies biogas based generation as a potential renewable energy source.67 Concerning the energy sector, it prioritizes cogeneration plants in the forestry industry as well as food processing, including the dairy and yerba mate (tea) industries.68 180. Argentina’s recent INDC (submitted October 1, 2015) acknowledges the vulnerability of the country to climate change, considering that agriculture and animal husbandry occupy an important place in the national economy, which becomes even more relevant given Argentina’s major role in the global food production systems. Argentina has set an unconditional goal to reduce GHG emissions by 15% in 2030 compared to the projected business-as-usual scenario; the increased utilization of renewable energy such as biogas is among the measures considered. With external technical assistance and adequate international financing, a tentative goal of 30% emission reduction has been set (INDC, 2015), covering all relevant sectors as quantified in the national GHG inventory (2012). Argentina ratified the Paris Agreement on 21 September 2016 and is currently revising its NDCs.

C. Describe the budgeted M &E Plan: 181. Project monitoring and evaluation (M&E) are conducted in accordance with established UNIDO and GEF procedures. The M&E activities are defined by Project Component 4. and the concrete activities for M&E that are specified and budgeted in the M&E plan (please refer to the table below). Monitoring will be based on indicators defined in the Strategic Results Framework (which indicates the means of verification), and the Annual Work Plans. Monitoring and Evaluation will make use of the GEF CCM Tracking Tool, which will be submitted to the GEF Secretariat three times during the duration of the project: at CEO Endorsement, at mid-term review, and at project closure. 182. UNIDO as the GEF Implementing Agency will involve the GEF Operational Focal Point and project stakeholders at all stages of the project monitoring and evaluation activities in order to ensure the use of the evaluation results for further planning and implementation. According to the Monitoring and Evaluation policy of the GEF and UNIDO, follow-up studies like Country portfolio evaluations and thematic evaluations can be initiated and conducted. All project partners and contractors are obliged to (i) make available studies, provide reports or other documentation related to the project and (ii) facilitate interviews with staff involved in the project activities.

Type of M&E activity Responsible Parties Budget USD* Time frame Gov’t GEF UNIDO (in-kind)69

65 It is noted that the TNC only acknowledges the role for biogas energy from landfills, public sewage systems (ARD), and industrial wastewater (ARI). 66 “A efectos de la ley se definen como fuentes renovables de energía: energía eólica, solar térmica, solar fotovoltaica, geotérmica, mareomotriz, undimotriz, de las corrientes marinas, hidráulica (menor a 50 MW), biomasa, gases de vertedero, gases de plantas de depuración, biogás y biocombustibles.” 67 Evaluación de Necesidades Tecnológicos ante el Cambio Climático, Informe de Sintesis Tecnologías de Mitigación, Sector Report III, p.47-53, Ministerio de Ciencia, Tecnología e Innovación Productiva (2013). Source: http://unfccc.int/ 68 Ibidem, Sector Report I. 69 PMC resources will be utilized. GEF6 CEO Endorsement /Approval Template-August2016

Type of M&E activity Responsible Parties Budget USD* Time frame Gov’t GEF UNIDO (in-kind)69 Inception Workshop UNIDO Project Manager (PM); Within first months of (IW) and inception 0 10,000 10,000 Project Management Unit (PMU) project start up report UNIDO Project Manager (PM); 15,000 10,000 10,000 Within first months of Design of M&E plan Project Management Unit (PMU); project start up expert consultancy Backstopping by specialists (general 25,000 10,000 10,000 Expert consultancy As needed monitoring, gender, social aspects, etc.) Periodic progress reports UNIDO Project Manager (PM); and monitoring of Project Management Unit (PMU); 100,000 100,000 100,000 Quarterly project impact indicators Project Steering Committee (PSC); (as per LogFrame) expert consultancy Periodic review on UNIDO Project Manager (PM); gender aspects and 25,000 90,000 30,000 Project Management Unit (PMU); Semi-Annually follow-up on social and expert consultancy environmental issues UNIDO Project Manager (PM); Measurement GEF Project Management Unit (PMU); 5,000 10,000 10,000 Mid of project and at Tracking Tool specific Project Steering Committee (PSC); project completion indicators expert consultancy UNIDO Project Manager (PM); Mid-term review Project Management Unit (PMU); 45,000 15,000 20,000 Mid of project expert consultancy Project completion (at least one month Independent terminal Independent evaluators managed by prior to the end of the UNIDO ODG/EVA. 45,000 15,000 10,000 project evaluation project and no later than six months after project completion) 260,000 260,000 200,000 TOTAL indicative cost

Legal Context 183. The Government of the Argentine Republic agrees to apply to the present project, mutatis mutandis, the provisions of the Standard Basic Assistance Agreement between the United Nations Development Programme and the Government, signed on 26 February 1985 and entered into force on 31 August 1987.

GEF6 CEO Endorsement /Approval Template-August2016

PART III: CERTIFICATION BY GEF PARTNER AGENCY(IES)

A. GEF Agency(ies) certification

This request has been prepared in accordance with GEF policies70 and procedures and meets the GEF criteria for CEO endorsement under GEF-6.

Agency Date Project Contact Telephon Email Coordinator, Signature (MM/dd/yyyy) Person e Address Agency Name Mr. Philippe R. Ms. Nina Zetsche, +43 (1) n.zetsche Scholtès, Industrial 26026 @ Managing 08/08/2017 Development Officer, 3569 unido.org Director, PTC/ENE/RRE, Programme Development and UNIDO Technical Cooperation - PTC, UNIDO GEF Focal Point

70 GEF policies encompass all managed trust funds, namely: GEFTF, LDCF, SCCF and CBIT GEF6 CEO Endorsement /Approval Template-August2016

LIST OF ANNEXES

Annex A Strategic Results Framework Annex B Responses to Project Reviews Annex C Status of Implementation of PPG Activities Annex D Calendar of Expected Reflows Annex E Budget Allocation Annex F Annual Budget Annex G Environmental and Social Management Plan Annex H Preliminary gender analysis for Argentina Annex I Estimation of GHG benefits Annex J Tracking Tool for Climate Change Mitigation Projects Annex K Summary of anaerobic digester survey in Argentina Annex L Inventory of dry biomass projects in Argentina Annex M Sector Information for Prioritization Agroindustrial Sectors Annex N Energy Potential of Prioritized Agroindustrial Sectors Annex O Stakeholder Relations in Prioritized Provinces Annex P Document “Descripción y Análisis del Marco Institucional para la Bioenergía en Argentina – Informe Final”, L. Grassi, May 2016 Annex Q Document “Propuesta de Conformación de una Red Tecnológica de Excelencia ‘Red Argentina de Bioenergía’ – Informe Final”, L. Grassi, June 2016 Annex R Document “Análisis de Proyectos de Bioenergía en Sectores Prioritarios de la Argentina”, by Centro de Tecnología Climática y Energía, Fac. de Ingeniería, UNICEN, 2 May 2016 Annex S Document “Análisis de Proyectos de Bioenergía en Sectores Prioritarios de la Argentina - Evaluación de la situación actual en relación a las barreras para el desarrollo de la bioenergía en la Argentina”, by Centro de Tecnología Climática y Energía, Fac. de Ingeniería, UNICEN, 15 June 2016 Annex T Nomination of UCAR Annex U Review of Barriers Addressed in Final Project Design Annex V List of Acronyms and Abbreviations Annex W List of Cofinancing Letters

GEF6 CEO Endorsement /Approval Template-August2016

ANNEX A: PROJECT RESULTS FRAMEWORK (either copy and paste here the framework from the Agency document, or provide reference to the page in the project document where the framework could be found).

UNIDO/GEF Project: Reducing Argentina's greenhouse gas emissions from the energy sector through the utilization of organic waste for energy generation in agriculture and agroindustries. Applicable GEF Strategic Objective and Program: CCM-1 program 1 Applicable GEF Expected Outcomes: Outcome A. Accelerated adoption of innovative technologies and management practices for GHG emission reduction and carbon sequestration. Outcome B. Policy, planning and regulatory frameworks foster accelerated low GHG development and emissions mitigation. Outcome C. Financial mechanisms to support GHG reductions are demonstrated and operationalized. Applicable GEF Outcome Indicators: Indicator 1. Tons GHG reduced or avoided. Indicator 2. Volume of investment mobilized and leveraged by GEF projects for low GHG development.71 Indicator 5. Degree of support for low GHG development in the policy, planning and regulatory framework.72 Project Objective To reduce GHG emissions from Argentina's energy sector by the utilization of organic residues and waste for the generation of heat and electricity in the agroindustrial sector. Indicator Baseline value Target value (EOP) Means of verification Assumptions

A (GEF Indicator 1). Total A. No reductions (0 A. 353,000 ton CO2eq direct GHG emission reductions ton CO2eq); (over lifetime); (ton CO2eq); B (GEF Indicator 2). Volume of B. No investment B. US$ 21.7 mln; investment mobilized (US$); mobilized (US$ 0) C (GEF Indicator 5) Degree of C. Level “3” (policy C. Level “8” (strong support for low GHG proposed and policy and regulatory development in the policy, consultations ongoing. frameworks design- planning and regulatory ed); framework. D. No energy D. 57,194 MWh/yr: D. Annual production of production (0 electricity of installed MWh/yr); demonstration pilots (MWh/yr); E. 50 new jobs created E. No new jobs E. Number of new jobs created (25m/25f). created (0m; 0f). in bioenergy market (m/f). Component 1. Policy and regulatory framework. Indicator Baseline value Target value (EOP) Means of verification Assumptions

71 Disaggregated between public and private investments. 72 Measured by a qualitative rating 1..10, according to GEF 6 Programming Directions, Annex II. GEF6 CEO Endorsement /Approval Template-August2016

Outcome 1.1: Policy, regulation and (1.1a) Federal Distributed (1.1a) Level “2” (1.1a) Level “5” Sector reports, Policy support for distributed generation financial incentives adopted to Generation Law and supportive (policy/regulation (policy/regulation interviews with federal is maintained in the pioneering provinces accelerate the market penetration of regulation for bioenergy enacted discussed and adopted and enforced) and provincial and the federal government. 73 bioenergy systems based on (0..5) ; proposed) (1.1b) Six (6) authorities. Potential conflicts in mandates and agroindustrial residues. (1.1b) Number of provinces (1.1b) Three (3) provinces have competences between authorities are with comprehensive regulation provinces with partial adopted controlled. for distributed generation and regulation in place.74 comprehensive biomass utilization (-). regulation. 1.1.1 Development and submission for (1.1.1) Number of proposals (1.1.1) to be (1.1.1) 21 in total (7 project reports, official Policy support for distributed generation endorsement of policies, resolutions submitted to authorities, determined entities: 1 federal and publications, sector is maintained in the pioneering provinces and financial incentives for distributed classified per legislative entity. 6 provinces; 3 areas: reports. and the federal government. generation at the federal level and/or energy, environment, Potential conflicts in mandates and in selected provinces. and grid access). competences between authorities are controlled. 1.1.2 Mainstreaming of bioenergy and (1.1.2) Number of rural (1.1.2) Nil (0) (1.1.2) At least two project reports, Effective inter-ministerial coordination waste valorization technologies into development programmes (2) programmes eligibility criteria of and problem ownership within the federal national rural development supporting bioenergy initiatives programmes, official government. programmes. in agroindustries. publications. Willingness among the multilateral financing community to accept bioenergy as an eligible option for investment. 1.1.3 Development and submission for (1.1.3) Status technical (1.1.3) No regulation (1.3) Comprehensive official publications, National stakeholders agree upon specific endorsement of technical regulations regulation and standards for and standards regulation and sector documents. technical regulation and standards for and standards for environmental and bioenergy systems at federal proposed and made standards submitted biomass and biogas installations. safety aspects of biomass and biogas level. effective. for endorsement. Effective inter-ministerial coordination energy installations, including and problem ownership within the federal management of digestate. government. 1.1.4 Application of a fast-track (1.1.4a) Status fast-track (1.1.4a) Level “3” (1.1.4a) Level “4” official publications, Policy support for smaller electricity mechanism for bioenergy systems mechanism for bioenergy (proposed but not (adopted but not sector documents, generation projects is maintained at the including a simplified EIA process. projects (0..5); adopted). enforced). provincial regulation federal government. (1.1.4b) Proposal guidelines (1.1.4b) No proposal (1.1.4b) Proposal and decrees. Consensus achieved about environmental bioenergy projects; (0) submitted and and social impact guidelines and accepted (1) procedures. 1.1.5 Development and submission for (1.1.5) Status policy proposal (1.1.5) Level “1” (no (1.1.5) Level “4” official publications, Effective inter-ministerial coordination

73 Ranking in alignment with GEF CCM Tracking Tool. 74 See Annex P for a detailed overview of the baseline. The project aims to expand legislation for DG to other provinces and improve regulation for small-scale bioenergy systems and heat production. GEF6 CEO Endorsement /Approval Template-August2016

endorsement of policy and regulation for thermal bioenergy (0..5). policy/regulation in Policy/regulation sector documents and problem ownership within the federal to promote thermal energy utilization place) adopted but not government. in the agroindustry sector. enforced. Thermal energy is included Argentina’s long-term vision on the energy sector. 1.1.6 Development of proposals to (1.1.6) Number of proposals (1.1.6) No (0) (1.1.6) At least one (1) project reports, sector Effective inter-ministerial coordination mobilize investment capital for submitted to climate financiers. proposals submitted. proposal submitted. documents, national and problem ownership within the federal bioenergy projects under climate climate change reports government. finance mechanisms. to the UNFCCC Increased mainstreaming of climate change and climate finance into the national public administration. 1.1.7 Design of a MRV system incl. (1.1.7) Status MRV system. (1.1.7). No (0) sector (1.1.7) Design for project reports, sector Effective inter-ministerial coordination GHG emission calculation specific MRV system sector specific MRV documents, national and problem ownership within the federal methodology specific to the sector. in place. system (1) developed climate change reports government. and ready for roll-out. to the UNFCCC Availability of robust data. Component 2. Bioenergy Network for knowledge management and project delivery. Indicator Baseline value Target value (EOP) Means of verification Assumptions Outcome 2.1 Knowledge management (2.1a) Bioenergy Network (2.1a) No Bioenergy (2.1a) Bioenergy sector reports, project Sustained political and institutional mechanisms and delivery skills for established (yes/no); with Network in place; no Network hosted by reports, minutes of support by MINAGRI to the Bioenergy project development strengthened presence in a number of selected presence in Ministry; presence in training events held. Network. 75 through the operationalization of a provinces (-); provinces; four (4) provinces; Sustained interest by regional national Bioenergy Network under the (2.1b) Number of partnerships, (2.1b) No (0) (2.1b) Four (4) stakeholders in bioenergy development. Ministry of Agroindustry. clusters, and businesses partnerships etc. partnerships prepared; prepared for bioenergy prepared; (2.1c) 150 development by the network; (2.1c) No (0) professionals trained (2.1c) Number of bioenergy professionals trained. (90m/60f). professionals trained (m/f). 2.1.1 Establishment of a coordinating (2.1.1) Status of coordinating (2.1.1) No (2.1.1) Coordinating project reports, financial Sustained political and institutional unit for the Bioenergy Network within unit within Ministry. coordinating unit in unit established (1). reports, official reports, support by MINAGRI to the Bioenergy the Ministry of Agroindustry. place (0). interviews with key staff Network. MINAGRI 2.1.2 Establishment of operational (2.1.2) Number of operational (2.1.2) No operational (2.1.2) Operational project reports, sector Sustained interest by regional authorities focal points for the Bioenergy focal points hosted. focal points in focal points in four (4) reports, official reports and key stakeholders in bioenergy Network hosted by designated public provinces (0). provinces. by provinces and development.

75 Note that the Ministry of Agroindustry hosts the Probiomasa programme, which will terminate in 2016. Letters of intent have been signed with 14 provinces, but local outreach capacity has not been established. GEF6 CEO Endorsement /Approval Template-August2016

agencies in selected provinces. counterpart institutions. 2.1.3 Supportive studies and tools to (2.1.3) Number of studies and (2.1.3) No studies and (2.1.3) At least 4 project reports, Project activities are implemented as enhance the national knowledge base tools delivered. tools delivered (0). studies and 1 tool interviews with expected. on the utilization of agroindustrial delivered stakeholders residue streams for energy generation. 2.1.4 Capacity building, liaison (2.1.4a) Number of bioenergy (2.1.4a) No (2.1.4a) 150 project reports, minutes Project activities are implemented as activities and promotional events to professionals trained (m/f); professionals trained professionals trained of events and training expected. accelerate bioenergy market (2.1.4b) Number of liaison and (0); (90m/60f); activities Sustained interest by key stakeholders in development in selected provinces. promotional events held. (2.1.4b) No events (2.1.4b) At least six bioenergy development. held (0) (6) events held.

2.1.5 Exchange of experience with (2.1.5) Number of international (2.1.5) No events held (2.1.5) Two events project reports, official Project activities are implemented as other similar bioenergy projects in events held. (0). held (2) publications expected. countries in the region through Sustained interest by regional authorities seminars, workshops, site visits and and key stakeholders in bioenergy publications development. Component 3. Demonstration and investment in bioenergy projects. Indicator Baseline value Target value (EOP) Means of verification Assumptions Outcome 3.1 Technical and economic (3.1a) Number of bioenergy (3.1a) No bioenergy (3.1a) Seven (7) project reports, official Sustained interest by regional authorities feasibility of bioenergy projects based pilots developed and pilots developed; bioenergy pilots publications, sector and key stakeholders in bioenergy on agroindustrial residues operational; developed and reports development. demonstrated, and a project portfolio operational (2 dry (3.1b) Annual electricity (3.1b) 0 MWh/yr; 0 Projects are technically and financially for upscaling of investment developed. biomass, 5 biogas); generated (MWh/yr). GJ/yr; feasible. (3.1.b) 57,194 Investment capital for demonstration MWh/yr pilots can be secured.

3.1.1 Technical assistance for (3.1.1) Number of bioenergy (3.1.1) No (3.1.1) At least 15 project reports, Sustained interest by authorities and key development of portfolio of bioenergy projects with completed prefeasibility studies. projects with interviews with stakeholders in bioenergy development. projects in collaboration with local prefeasibility studies.. completed stakeholders Project activities are implemented as project developers and partnerships. prefeasibility studies. expected. 3.1.2 Implementation of a call for (3.1.2) Status call of projects. (3.1.2) No call issued (3.1.2) Call has been project reports, Sustained interest by authorities and key bioenergy project proposals, and (0) issued and submitted interviews with stakeholders in bioenergy development. ranking thereof in terms of technical project proposals have stakeholders, official Project activities are implemented as and economic feasibility, socio- been ranked. reports expected. economic and environmental criteria. 3.1.3 Implementation of feasibility (3.1.3) Number of feasibility (3.1.3) No feasibility (3.1.3) Seven project reports, Sustained interest by authorities and key GEF6 CEO Endorsement /Approval Template-August2016

studies and project development for and engineering studies studies (0). feasibility studies interviews with stakeholders in bioenergy development. selected bioenergy projects in conducted.. completed (7). stakeholders Project activities are implemented as agroindustries. expected. Projects are technically and financially feasible. 3.1.4 Design and implementation of (3.1.4) Number of plant (3.1.4) No operators (3.1.4) 30 operators project reports, minutes Project owners are committed to high training activities for bioenergy operators trained (m/f). trained (0; 0). trained (18m; 12f). of training events, quality standards. project owners and operators. interviews with Project activities are implemented as stakeholders expected.

3.1.5 Implementation of seven (7) (3.1.5a) Installed capacity for (3.1.5a) 0 MW. (3.1.5a) 7.5 MW project reports, site Project activities are implemented as selected bioenergy pilots based on electricity generation (MW). electricity. visits, interviews with expected. agroindustrial residues demonstrating stakeholders (3.1.5b) Number of jobs (3.1.5b) 0 jobs. (3.1.5b) 15 jobs Projects are technically and financially representative technologies, business created. created. feasible. models and GHG emission reduction Investment capital for demonstration potentials. pilots can be secured. 3.1.6 Monitoring and optimization of (3.1.6a) Technical availability (3.1.6a) not defined; (3.1.6a) Average project reports, process Projects are technically and financially 76 operational aspects and technical per installed pilot plant (hr/yr); above 95%; monitoring data, site feasible. performance of the installed visits, supplier (3.1.6b) Lessons learned (3.1.6b) No lessons (3.1.6b) Operational Supply chain is committed to high quality demonstration pilots through technical warrantees. learned. lessons learned, standards. support. systematized and shared.

76 Excluding downtime due to scheduled maintenance; and based on the anticipated operation cycle (which may be season-bound). GEF6 CEO Endorsement /Approval Template-August2016

ANNEX B: RESPONSES TO PROJECT REVIEWS (from GEF Secretariat and GEF Agencies, and Responses to Comments from Council at work program inclusion and the Convention Secretariat and STAP at PIF).

Reference Comments in documents Response Comments from the GEF Council Germany: welcomes the proposal for reducing GHG emissions in Argentina’s

Energy Sector. The proposal identifies an area with significant potential for low- carbon development and growth in Argentina’s agronomy sector. The proposal is ambitious regarding what it plans to achieve in 48 months, and the majority of the co-financing is slated to come from a “tentative” source (a CAF loan of USD 16 million), which does raise some questions about the feasibility of project implementation, which should be addressed in the final project proposal. Germany requests that the following requirements are taken into account during the design of the final project proposal: 1. Germany seeks further clarification on At PIF stage it was foreseen that private bioenergy projects could Cofinancing why the CAF-loan is listed as tentative. benefit from favorable loans from multilateral lenders. CAF was table, p. 4-5 mentioned given its active role in the agrosector (for example, through PROICSA targeting the sugar cane sector). In the absence of a formally expressed commitment or interest in the GEF project, it was listed as tentative. Due to the changes experienced during the PPG phase (please refer to Part II, Section A of this document for a detailed description), the co-financing strategy of the project at CEO Endorsement stage focuses on private sector investment commitments to the tune of US$ 34.5 million 2. Barriers: Beginning on p.6 the PIF A table has been provided. Annex U outlines numerous and significant barriers that have been identified by the Secretary of Energy for the deployment of renewable energy in Argentina. It would be helpful to add a column to the table and include action items to be undertaken by the GEF project to overcome the barriers and manage risk. 3. Put Megawatts into context: the PIF This is noted. The commercial bioenergy potential was quantified by §11-12 describes the use of biomass as being in FAO (2009) at about 124 million ton biomass (37,200 ktoe/yr), which its nascent stages. Furthermore, it states is 3.5 times the total electricity volume delivered to the national that the government of Argentina set a system (132,000 GWh). Previous renewable energy goals set by the goal to boost energy from biomass to 400 Government were not always realistic or consistent. However, the MW by 2016. According to the table target set for Probiomasa (1,325 MW by 2030 - the 1,650 MW figure provided on p. 8, there is already 393 in the PIF is probably an inconsistency) represnts about 10% of the MW installed and 74 MW currently annual expansion of total electricity generating capacity (900 MW per under construction, meaning the 2016- year according to CADER) – in the range of 6-15 biomass projects per goal is likely to be met and surpassed by GEF6 CEO Endorsement /Approval Template-August2016

2016 even without this project. It is year. strongly recommended to clarify how Given the current installed capacity of 31 GW (2015), one would this project fits into the national goals. expect around 50 GW at by 2030 to keep up with growing demand. Will the project be focusing on increased Biomass (1,325 MW) would account for about 2.5% of total by then. dissemination with a look towards the 1650 MW goal set for 2030? What Note further that the project portfolio depicted in the PIF (table) percentage of national energy supply proved to be stagnant, partly because of the adverse financial climate would come from biomass in 2030? 8%? during the most recent period, partly because of the identified barriers for bioenergy. This justifies involvement of the GEF. 4. PROBIOMASA as Executing Agency: With presidential elections imminent upon the start of the PPG phase, §15-16 The PROBIOMASA program has laid a and Probiomasa to be terminated in 2016 (originally), the conclusion lot of the groundwork for the project. was drawn that Probiomasa could not be the executing agency for this Some of the proposed activities, such as project. Early 2016, a firm statement was made by the Ministry of §25, §135-137 policy development and capacity Agroindustry to lead the project with consent of the Ministry of building, overlap between Energy and Mining. Moreover, the creation of a National Bioenergy PROBIOMASA and the project. Please Directorate within the Ministry of Agroindustry effectively translates clarify in Component 1 how this project into an institutionalization of Probiomasa – which is taken as the complements and builds on the work of baseline for the final project design. PROBIOMASA. Is PROBIOMASA The GEF project will provide technical assistance enabling the essentially merging with the project? Ministry to establish and roll out the envisaged Bioenergy Network and amend one of the main weaknesses of Probiomasa, i.e. to effectively engage with project developers in the provinces and accelerate project pipeline development and project implementation (pursued under Component 2.).

The groundwork for policy development delivered by Probiomasa consists of analysis and studies rather than approved regulation. For Component 1., the project design firmly draws upon a study by CEARE initiated and funded by Probiomasa. The present GEF project instead, aims to prepare detailed proposals and advocate for their §63-83 approval by the incumbent legislative entities. 5. Focus on SMEs: It is suggested to Note that the final project design is not specifically focused on SMEs; §39-41 provide a sentence in the justification as however, it is understood that large companies usually have access to to why the biomass approach is most capital and know-how to pursue investments in bioenergy, while suitable for SMEs rather than the smaller companies still face significant barriers. construction of larger-scale, centralized Given the lack of consolidated information on resource availability, biomass power plants. §46-49 costs and logistics, a comparative study into the feasibility of

centralized biomass power plants versus local plants is hardly possible in the baseline scenario. The Project aims to generate more data enabling the construction of scenario of developing a market for dry biomass feedstock. Given the large distances in Argentina and resulting high transport costs, smaller (dry) biomass plants will play an important role. In this context, the large share of the transport sector in national GHG sector is mentioned (as reported in the Third National Communication). 6. GHG Emissions reductions: The PIF Reference is made to the estimated indirect emission reductions to be states that project plans to arrive at GHG attained by the Project, which are indeed of the order of 2.3 Mton over §140-142 benefits of 1,500 ktons (or 1,500 Gg). Is a 10-year impact horizon (230 kton per year). it possible to put this figure into context Indeed, this figure is very substantial compared to the mitigation of the potential for the biomass sector as potentials presented in the NCs (TNC). The project proponents tried to a whole? (The 2nd National retrieve the assumptions underlying the TNC estimates for the correct Communication states that biomass has interpretation thereof; but such information could not be obtained. The potential to reduce GHG emissions by proponents believe that projected GHG emission reductions from on- 2,483 Gg between 2000-2015. Does that §178-180 grid and distributed renewable energy generators (38 Mton, resp. 560 mean that this project will result in GEF6 CEO Endorsement /Approval Template-August2016

reductions equivalent to more than half kton CO2eq over the period 2018-2030) are substantially (1,500Gg) of the sector’s potential (2,483 underestimated in the TNC. Gg) from the previous 15 years? Is there updated information about the potential for the sector, or is that forthcoming in the TNC?) 7. Third National Communication: the Please note that this expectation set forth in the PIF did not §178-180 PIF states that the TNC will include materialize, The TNC became available during the PPG (end 2015) but studies of relevance to the project, i.e. makes very little reference to biomass energy. regarding technical, economic, financial, Note that a comprehensive national energy strategy, which could have institutional aspects of biomass- energy provided more guidance to the TNC, is still lacking. generation. Will the TNC findings be made available for the preparation of the final project proposal? Comments from the GEF Secretariat at Work Plan Inclusion (no remaining comments) Comments from STAP The aim of the project is to better utilize the biomass resources from the agro-food chain for bioenergy. STAP has the following comments/suggestions: 1. What international waste-to-energy Kindly note that this is no longer being pursued. Linkages with “IEA programmes will be targeted? Argentina Bioenergy” will be investigated within the framework of the is already a member of GBEP. What Bioenergy Network. would be the objective of joining more? Having said that, “IEA Bioenergy” is one worth investigating (1). 2. There are major differences between The diversity of bioenergy technologies and feedstock is fully on-farm biomass that is diverse and acknowledged. The PPG contracted a consultancy to identify existing requires collection and concentration at a and proposed bioenergy plants in the primary and secondary cost (e.g. straw, forest residues), and food agroindustry (which includes forestry, agriculture and livestock). processing biomass that is already Criteria were defined to identify relevant sectors and technologies for collected on one site as a co-product Argentina. The following sectors are proposed: forestry (sawmills), resulting from the main product (e.g., rice (mills), feedlots, pig farming, dairy farming, meat processing and §19, §103-109 tallow from meat processing, whey from dairy processing facilities. milk processing, rice husks, bagasse, Biomass feedstock involving changes in harvesting or other agronomic pulp from olive or tomato processing). processes are excluded to avoid adding more technical complexity to The Table on page 8 is of interest but the Project. would be more useful if the biomass resources being used in each region were The PPG process faced serious difficulties to retrieve reliable sector also presented along with the conversion data; information was often found inconsistent and/or incomplete. routes, the information that could be Consolidation of relevant data on waste flows is therefore set forth as useful to collect during project one of the tasks of the proposed GEF project – supported by a range of preparation. policy measures implemented by the Government to promote quality of and access to information of public interest. 3. Component 1 is around bio-power and The project proponents share the concern about the best use of §79-80 grid connection for small scale projects. biomass. First, financial incentives for cogeneration and heat

Consideration should be given to what is production are weak, which may lead to poor overall energy the “best” use of biomass (2). It may not conversion efficiencies of the biomass consumed. On the other hand be for electricity generation. large biomass plants tend to be cogeneration as they are driven by heat demand. Second, there is no market mechanism defining a price for solid GEF6 CEO Endorsement /Approval Template-August2016

biomass (biofuels). High transport costs and poor logistics are further impediments to the development of such a market. Some (dry) biomass has alternative (non-energy) uses, which translate into an opportunity cost for the owner. Third, an economic valorization of biomass resources from the national perspective has not taken place yet. Methodologies and input data to develop scenarios for policy development are not available in Argentina as yet. 4. Component 2 is sound. Of additional Acknowledged and consulted. value would be the STAP advisory document: Optimizing the global environmental benefits of transport biofuels available at: http://www.stapgef.org/optimizing-the- globalenvironmental-benefits-of- transport-biofuels/, with the key messages of relevance to biomass for heat and power as well as biofuels. Please consult STAP's website for additional information. 5. Establishing a National Technical In fact, analysis carried out during the PPG phase focused on the §84-101 Centre of Excellence is a good concept critical functions to be fulfilled by the Center. Identified functions but perhaps more practical would be include: liaison with the supply chain; improved coordination at the supporting an industry association who government level; presence at the policy level (for lobby); training; can share learning experiences, provide information clearinghouse; extension to project developers; sharing of education and awareness opportunities, know-how and best practices. and lobby government for necessary A network was found to be the more suitable vehicle for implementing support. these functions, rather than a formal center. 6. Component 3. "Outcome 3.1 will Note that the approach to Component 3. has been thoroughly revised §102-128 consist of a set of fully developed to address these concerns, in the understanding that: (a) dry and wet biomass-to-energy projects in biomass need a differentiated approach; (b) GEF support for dry agricultural and agro-industry biomass should foster deployment rather than demonstration; while businesses." Demonstration projects wet biomass needs effective system integration, optimization of serve a useful purpose, but the world of operational aspects, and successful demonstration; (c) the market is bioenergy is very complex, so the range not ready for more complex technologies, and GEF support for R&D can be very broad. How will the "set" of would not be commendable. technologies to be demonstrated be Based on identified criteria including: (1) energy production selected from the range of combustion, (MWh/yr); (2) number of establishments (-); (3) production figures gasification, anaerobic digestion, (ha, tons, animals/year); (4) number of direct jobs in sector (-); and: enzymatic hydrolysis, fermentation, etc.? (5) economic value of sector (US$), potential pilot investments have This is especially the case since the "set" been proposed for dry and wet biomass. is 2-3 demonstration plants. It is assumed these will have the greatest potential for Note that supply chain readiness could not be assessed in detail, given replication but how will that be included the small number of operational projects. For wet biomass, the recent in the selection process? Among suitable INTI survey highlights the lack of adequate after-sales services. Most criteria could be cost-effectiveness, large dry biomass projects are developed “in-house” sourcing services market potential, readiness of supply and equipment from a range of national and international suppliers. chain including continuous availability of feedstocks, as well as appropriate infrastructure. 7. The PIF states "The proposed project The Project is aligned with the TNA in terms of prioritization of is closely aligned with the project ideas biomass energy technology, but primarily aims to accelerate biomass- §174; §178-179 suggested in the TNA: (i) construction of based electricity generation, as this is declared a national priority by a 3 MW co-generation plant (heat and the Government. Revenues from electricity sales is the predominant GEF6 CEO Endorsement /Approval Template-August2016

electricity) based on a biomass source of cash income necessary to pay back the investment (with the combustion and rankine cycle for exception of large cogeneration projects characterized by own biomass forestry residues (sawmill); and (ii) residues and a large heat demand). installation of a biodigester for electricity For simplicity reasons, the estimation of indirect GHG benefits in the self-supply in a cattle farm (feedlot) in CEO Endorsement Request is limited to the avoided thermal-based the Buenos Aires province (p.25-26)". If grid electricity. It is likely that some of the demonstration pilots will these are the final project selection, then produce heat – the associated direct GHG emission reductions will be §141-142 CHP is an option but this doesn't match evaluated for these cases and reported by the Project. the GHG emission calculations.

8. The GHG emission reduction Please refer to the answer to Q3 and Q7, and to Annex I (estimation of Annex I calculations (section 5 of Part II, page GHG benefits). 12) assume the biomass in the demonstration plants is all to be used for electricity generation. Is that likely? Use of biomass for heat is more efficient. CHP plants are common in order to maximize the efficiencies. What is the justification for assuming biomass to bio- electricity is the only route? Furthermore, additional GHG emissions in the supply chain should be considered in the calculations. In estimating GHG emissions, STAP recommends using new Guidelines for GHG accounting and reporting for GEF projects to be released at the June 2015 GEF Council meeting. 9. What criteria will be monitored in the The expressed concern is fully shared. Operational monitoring is Output 3.1.6 demonstration plants? To be useful and included under a separate output, including measurement and (§127-128) to encourage replication, the biomass recording of relevant process parameters (including those listed in volumes, moisture contents, feed-in rate, Q9). Training of operator skills is a key aspect for technical stack emissions, electricity output, heat performance and sustainability, and is covered under a new output. Output 3.1.4 output, will be useful. Plant efficiency (§120) will depend mainly on the biomass moisture content as well as operators' skills. These will need careful monitoring for variations over the demonstration period. 10. Component 4. Monitoring and Please refer to Q4 of the GEF Council Comments (by Germany) on Annex A: evaluation. It is commendable the the role of Probiomasa. Project Results PROBIOMASA programme is in place. Framework In order to measure the effect of the GEF project, (1) SMART What is not clear is, if that sets the indicators have been defined in the Results Framework; and (2) a baseline, what additional value will the methodology to evaluate direct and indirect GHG emission reductions GEF project provide? The baseline is not has been devised and documented. See also the section on incremental that clearly defined. Given the existing reasoning in the CEO Endorsement Request. programmes to support bioenergy activities, how will the additional benefits from the GEF investment be able to be identified and hence monitored?

GEF6 CEO Endorsement /Approval Template-August2016

ANNEX C: STATUS OF IMPLEMENTATION OF PROJECT PREPARATION ACTIVITIES AND THE USE OF FUNDS77

A. Provide detailed funding amount of the PPG activities financing status in the table below:

PPG Grant Approved at PIF: USD 100,000 GETF/LDCF/SCCF/CBIT Amount ($) Project Preparation Activities Implemented Budgeted Amount Spent Amount Amount Todate Committed Analysis of policy & regulatory framework as 5,000 3,000 2,000 well as technical capacities Proposal for bioenergy center / network 5,000 3,833 1,167

Analysis of bioenergy project activities 30,000 27,900 2,100

CEO Endorsement Request 60,000 39,280 20,720

Total 100,000 74,013 25,987

Activities conducted during the PPG phase include:

- Kick-off meeting with counterparts - Contracting of national consultant and national university to carry out research and analysis on the following:  existing regulatory and policy framework,  available technical capacities,  development of a comprehensive proposal for the bioenergy network relying on active stakeholder engagement,  consolidated and updated overview of bioenergy projects in the country  existing barriers, and  support for the development of the ESMP - Validation workshop/meetings with key counterparts to finalize the CEO Endorsement Request

77 If at CEO Endorsement, the PPG activities have not been completed and there is a balance of unspent fund, Agencies can continue to undertake the activities up to one year of project start. No later than one year from start of project implementation, Agencies should report this table to the GEF Secretariat on the completion of PPG activities and the amount spent for the activities. Agencies should also report closing of PPG to Trustee in its Quarterly Report. GEF6 CEO Endorsement /Approval Template-August2016

ANNEX D: CALENDAR OF EXPECTED REFLOWS (if non-grant instrument is used)

Provide a calendar of expected reflows to the GEF/LDCF/SCCF/CBIT Trust Funds or to your Agency (and/or revolving fund that will be set up)

Not applicable as no reflows to the GEF Trust Fund are foreseen under this Project.

GEF6 CEO Endorsement /Approval Template-August2016

ANNEX E: BUDGET ALLOCATION

BUDGET ALLOCATION (INDICATIVE) COMPONENTS &

ACTIVITIES

GEF UNIDO Other Partners Project Inputs78 cash & in‐ in‐kind cash kind Description (US$) (US$) (US$) (US$) COMPONENT 1. Policy and regulatory framework. 1.1.1 Development (i) several contracts and submission for with legal, fiscal and endorsement of electricity market national experts 110,000 0 300,000 0 policies, resolutions experts to develop / consultants and financial requested incentives for 1.1.1 proposals distributed generation at the (ii) domestic travel federal level and/or 15,000 0 0 0 project travel and DSA in selected provinces. 1.1.2 (i) one or more Mainstreaming of subcontracts with bioenergy and rural energy / waste valorization biomass expert for national experts technologies into 1.1.2 75,000 0 150,000 0 integration of / consultants national rural biomass into rural development development programmes. programmes

1.1.3 Development (i) one or more and submission for subcontracts with endorsement of installation safety / national experts technical environmental 90,000 0 150,000 0 / consultants regulations and protection expert to standards for develop requested 1.1.3 environmental and proposals safety aspects of (ii) one or more biomass and biogas subcontracts with energy installations, specialized public or 100,000 0 130,000 0 subcontracts including private institutions management of to develop AMSS

78 Depending on Depending on the outcome of the negotiations with the proposed Executing Entity, large scale contractual arrangements may be undertaken by UNIDO directly and the budget would then be adjusted into respective UNIDO budget lines accordingly. GEF6 CEO Endorsement /Approval Template-August2016

BUDGET ALLOCATION (INDICATIVE) COMPONENTS &

ACTIVITIES

GEF UNIDO Other Partners Project Inputs78 cash & in‐ in‐kind cash kind Description (US$) (US$) (US$) (US$) digestate. gas standards

(iii) reproduction 10,000 0 20,000 0 Sundries costs (i) one or more subcontracts with 1.1.4 Application of electricity sector / national experts a fast‐track 35,000 0 50,000 0 legal experts to / consultants mechanism for develop requested small‐scale proposal bioenergy systems 1.1.4 (ii) subcontract with including a specialized firm to simplified EIA prepare specific process. 65,000 0 50,000 0 Subcontracts environmental

guidelines for bioenergy projects (i) one or more subcontracts with 1.1.5 Development energy expert to experts / and submission for 100,000 0 100,000 0 develop proposals consultants endorsement of for thermal biomass policy and utilization regulation to 1.1.5 (ii) one or more promote thermal subcontracts with energy utilization in biomass / forestry the agroindustry experts / expert to develop 50,000 0 100,000 0 sector. consultants programme for

solid biofuels market 1.1.6 Development (i) one or more of proposals to contracts with national experts mobilize investment national climate 55,000 0 100,000 0 / consultants capital for 1.1.6 finance specialist to bioenergy projects develop proposals under climate (ii) (inter)national 20,000 0 50,000 0 project travel finance mechanisms travel and DSA

GEF6 CEO Endorsement /Approval Template-August2016

BUDGET ALLOCATION (INDICATIVE) COMPONENTS &

ACTIVITIES

GEF UNIDO Other Partners Project Inputs78 cash & in‐ in‐kind cash kind Description (US$) (US$) (US$) (US$) 1.1.7 Design of a (i) one or more MRV system and contracts with MRV GHG emission and GHG inventory experts / calculation specialists for the 100,000 0 100,000 0 consultants OR methodology design of a robust, subcontract specific to the sector‐specific MRV sector. 1.1.7 system (ii) one or more contracts with MRV experts / and GHG inventory 25,000 0 50,000 0 consultants OR specialists for subcontract related training activities Subtotal 850,000 0 1,350,000 0 COMPONENT 2. Bioenergy network for knowledge management and project delivery. (i) long‐term contracts with 2 national experts to assume the roles of 2.1.1 Establishment Network national experts 300,000 0 400,000 0 of a coordinating Coordinator, / consultants unit for the Technical Advisor; Bioenergy Network 2.1.1 one or more within the Ministry contracts for of Agroindustry. Thematic Experts (ii) domestic travel 50,000 0 50,000 0 project travel and DSA (iii) reproduction and communication 10,000 0 50,000 0 Sundries costs 2.1.2 Establishment (i) four or more of operational focal contracts with points for the national experts to national experts 254,300 0 470,000 0 Bioenergy Network 2.1.2 assume the role of / consultants hosted by regional Network designated public Coordinators agencies in selected (ii) procurement of 60,000 0 20,000 0 Equipment

GEF6 CEO Endorsement /Approval Template-August2016

BUDGET ALLOCATION (INDICATIVE) COMPONENTS &

ACTIVITIES

GEF UNIDO Other Partners Project Inputs78 cash & in‐ in‐kind cash kind Description (US$) (US$) (US$) (US$) provinces. project vehicles (iii) insurances and 30,000 0 10,000 0 Sundries fuel (iv) reproduction and communication 10,000 0 100,000 0 Sundries costs (v) domestic travel 100,000 0 50,000 0 project travel and DSA 2.1.3 Supportive (i) subcontract for studies and tools to design and enhance the implementation of 40,000 0 50,000 0 Subcontracts national knowledge ICT platform for base on the Bioenergy Network 2.1.3 utilization of (ii) one or more agroindustrial subcontracts with residue streams for specialized firms to 170,000 0 50,000 0 Subcontracts energy generation. perform requested studies and training (i) one or more temporary contracts with national experts 60,000 0 50,000 0 biomass experts to / consultants support regional 2.1.4 Capacity networks building, liaison (ii) one or more activities and subcontracts for promotional events design and to accelerate 2.1.4 implementation of 60,000 0 150,000 0 Subcontracts bioenergy market capacity building development in and promotional selected provinces. events

(iii) reproduction costs for training manuals and 10,000 0 50,000 0 Sundries promotional material 2.1.5 Exchange of 2.1.5 (i) one or more 40,000 0 70,000 0 international

GEF6 CEO Endorsement /Approval Template-August2016

BUDGET ALLOCATION (INDICATIVE) COMPONENTS &

ACTIVITIES

GEF UNIDO Other Partners Project Inputs78 cash & in‐ in‐kind cash kind Description (US$) (US$) (US$) (US$) experience with short‐term experts / other similar contracts with consultants bioenergy projects international in countries in the bioenergy experts region through from the region seminars, (ii) international 30,000 0 20,000 0 project travel workshops, site travel and DSA visits and (iii) reproduction 5,000 0 10,000 0 Sundries publications. costs Subtotal 1,229,300 0 1,600,000 0

(i) three or more contracts with 3.1.1 Technical national experts to national experts assistance for the 275,000 0 100,000 0 perform requested / consultants development of a project studies and portfolio of support activities. bioenergy projects 3.1.1 in collaboration (ii) domestic travel 45,000 0 0 0 project travel with local project to project sites developers and (iii) reproduction partnerships. and communication 5,000 0 0 0 Sundries costs 3.1.2 (i) one or more Implementation of a contracts with call for bioenergy energy expert to national experts 0 0 200,000 0 project proposals, develop call for / consultants and ranking thereof bioenergy in terms of technical 3.1.2 proposals. and economic feasibility, socio‐ (ii) reproduction economic and and communication 0 0 0 0 Sundries environmental costs criteria.

GEF6 CEO Endorsement /Approval Template-August2016

BUDGET ALLOCATION (INDICATIVE) COMPONENTS &

ACTIVITIES

GEF UNIDO Other Partners Project Inputs78 cash & in‐ in‐kind cash kind Description (US$) (US$) (US$) (US$) (i) one or more subcontracts with specialized consultancy firms 1,100.000 0 0 1,300,000 Subcontracts for implementation of requested studies (ii) two or three contracts with biomass expert / industrial engineer / legal expert to national experts 180,000 0 0 0 support project / consultants development activities and 3.1.3 supervise Implementation of contracted services feasibility studies (iii) one or more and project subcontracts with 3.1.3 development for specialized firms to selected bioenergy collect data for projects in specifying civil 220,000 0 0 500,000 Subcontracts agroindustries. works, electrical systems and environmental protection measures (iv) one subcontract with specialized firm to develop a 40,000 0 0 0 Subcontracts communication plan for selected projects, (v) domestic travel 50,000 0 0 0 project travel to project sites (vi) reproduction and communication 10,000 0 0 0 Sundries costs GEF6 CEO Endorsement /Approval Template-August2016

BUDGET ALLOCATION (INDICATIVE) COMPONENTS &

ACTIVITIES

GEF UNIDO Other Partners Project Inputs78 cash & in‐ in‐kind cash kind Description (US$) (US$) (US$) (US$) 3.1.4 Design and (i) one or more implementation of subcontracts with training activities for 3.1.4 specialized firms for 150,000 0 0 0 Subcontracts bioenergy project training of project owners and staff operators. 3.1.5 Implementation of seven (7) selected bioenergy pilots based on agroindustrial residues 3.1.5 (i) financing secured 0 0 0 32,700,000 demonstrating representative technologies, business models and GHG emission reduction potentials. (i) one or more subcontracts with suppliers of 3.1.6 Monitoring bioenergy systems 400,000 0 0 0 Subcontracts and optimization of for extended operational aspects technical support and technical and services performance of the 3.1.6 (ii) one or more installed subcontracts with demonstration equipment pilots through suppliers for 900,000 0 0 0 Equipment technical support. adaptation and optimization of project hardware Subtotal 3,375,000 0 300,000 34,500,000

COMPONENT IV. Monitoring and Evaluation. GEF6 CEO Endorsement /Approval Template-August2016

BUDGET ALLOCATION (INDICATIVE) COMPONENTS &

ACTIVITIES

GEF UNIDO Other Partners Project Inputs78 cash & in‐ in‐kind cash kind Description (US$) (US$) (US$) (US$) 4.1.1 Design and (i) hosting of 0 10,000 0 0 Subcontract implementation of a inception workshop Monitoring and (ii) one contract Evaluation plan with international international 15,000 5,000 0 0 defining roles and expert on project experts responsibilities of 4.1.1 M&E implementing (iii) one contract partners, reporting with national expert international protocols, progress 5,000 5,000 0 0 for gender experts indicators and mainstreaming targets. (i) international 15,000 70,000 0 0 staff travel travel and site visits 4.1.2 Monitoring of (ii) contracts with project progress national and/or with respect to experts / international expert 100,000 75,000 0 0 project‐ specific consultants for progress indicators and monitoring targets, and (iii) one contract compliance with 4.1.2 with national expert national experts UNIDO and GEF 20,000 35,000 0 0 for gender / consultants guidelines and mainstreaming safeguards on social (iv) one subcontract (including gender) with national expert and environmental national experts for collection and 15,000 30,000 0 0 impact. / consultants publication of lessons learned (i) contract with national and international experts / 45,000 15,000 0 0 4.1.3 experts for Mid‐ consultants Implementation of term Review incl. Mid‐term Review 4.1.3 travel and independent (i) contract with Terminal Evaluation. national and experts / international M&E 45,000 15,000 0 0 consultants experts for Terminal Evaluation GEF6 CEO Endorsement /Approval Template-August2016

BUDGET ALLOCATION (INDICATIVE) COMPONENTS &

ACTIVITIES

GEF UNIDO Other Partners Project Inputs78 cash & in‐ in‐kind cash kind Description (US$) (US$) (US$) (US$) incl travel

Subtotal 260,000 260,000 0 0 TOTAL (COMPONENT I‐IV)

TOTAL 5,714,300 260,000 3,250,000 34,500,000

GEF6 CEO Endorsement /Approval Template-August2016

ANNEX F: ANNUAL BUDGET

ANNUAL BUDGET PLANNING (INDICATIVE) BUDGET BUDGET PLANNING GEF UNIDO Other Partners GEF cash & in‐kind Cash YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 in‐kind (US$) (US$) (US$) (US$) (US$) COMPONENT I. Policy and regulatory framework. Development and submission for endorsement of policies, resolutions and financial 1.1.1 125,000 0 300,000 0 60.000 65,000 0 0 0 incentives for distributed generation at the federal level and/or in selected provinces. Mainstreaming of bioenergy and waste valorization technologies 1.1.2 75,000 0 150,000 0 0 0 20,000 30,000 25,000 into national rural development programmes. Development and submission for endorsement of technical regulations and standards 1.1.3 for environmental and 200,000 0 300,000 0 40,000 60,000 50,000 50,000 0 safety aspects of biomass and biogas energy installations, including management of digestate.

GEF6 CEO Endorsement /Approval Template-August2016

ANNUAL BUDGET PLANNING (INDICATIVE) BUDGET BUDGET PLANNING GEF UNIDO Other Partners GEF cash & in‐kind Cash YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 in‐kind (US$) (US$) (US$) (US$) (US$) Application of a fast‐track mechanism for small‐scale 1.1.4 bioenergy systems 100,000 0 100,000 0 50,000 50,000 0 0 0 including a simplified EIA process. Development and submission for endorsement of policy and 1.1.5 150,000 0 200,000 0 0 40,000 60,000 50,000 0 regulation to promote thermal energy utilization in the agroindustry sector. Development of proposals to mobilize investment 1.1.6 capital for bioenergy 75,000 0 150,000 0 0 25,000 40,000 10,000 0 projects under climate finance mechanisms. Design of a MRV system and GHG emission 1.1.7 125,000 0 150,000 0 25,000 25,000 25,000 25,000 25,000 calculation methodology specific to the sector. Subtotal 850,000 0 1,350,000 0 175,000 265,000 195,000 165,000 50,000

GEF6 CEO Endorsement /Approval Template-August2016

ANNUAL BUDGET PLANNING (INDICATIVE) BUDGET BUDGET PLANNING GEF UNIDO Other Partners GEF cash & in‐kind cash YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 in‐kind (US$) (US$) (US$) (US$) (US$) COMPONENT II. Bioenergy network for knowledge management and project delivery. Establishment of a coordinating unit for the Bioenergy Network 2.1.1 360,000 0 500,000 0 75,000 75,000 70,000 70,000 70,000 within the Ministry of Agroindustry. Establishment of operational focal points for the Bioenergy 2.1.2 Network hosted by designated 454,300 0 650,000 0 94,300 90,000 90,000 90,000 90,000 public agencies in selected provinces. Supportive studies and tools to enhance the national knowledge base on the 2.1.3 210,000 0 100,000 0 30,000 80,000 70,000 30,000 0 utilization of agroindustrial residue streams for energy generation. Capacity building, liaison activities and promotional 2.1.4 events to accelerate bioenergy 130,000 0 250,000 0 30,000 20,000 30,000 30,000 20,000 market development in selected provinces. Exchange of experience with other similar bioenergy projects 2.1.5 75,000 0 100,000 0 0 0 40,000 0 35,000 in countries in the region through seminars, workshops, GEF6 CEO Endorsement /Approval Template-August2016

ANNUAL BUDGET PLANNING (INDICATIVE) BUDGET BUDGET PLANNING GEF UNIDO Other Partners GEF cash & in‐kind cash YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 in‐kind (US$) (US$) (US$) (US$) (US$) site visits and publications.

Subtotal 1,229,300 0 1,600,000 0 229,300 265,000 300,000 220,000 215,000 ANNUAL BUDGET PLANNING (INDICATIVE) BUDGET BUDGET PLANNING GEF UNIDO Other Partners GEF cash & in‐kind cash YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 in‐kind (US$) (US$) (US$) (US$) (US$) COMPONENT III. Demonstration and investment in bioenergy projects. Technical assistance for the development of a portfolio of 3.1.1 bioenergy projects in 325,000 0 100,000 0 25,000 100,000 75,000 75,000 50,000 collaboration with local project developers and partnerships. Implementation of a call for bioenergy project proposals, and ranking thereof in terms of 3.1.2 0 0 200,000 0 0 0 0 0 0 technical and economic feasibility, socio‐economic and environmental criteria. Implementation of feasibility studies and project 3.1.3 development for selected 1,600,000 0 0 1,800,000 0 500,000 600,000 500,000 0 bioenergy projects in agroindustries.

GEF6 CEO Endorsement /Approval Template-August2016

ANNUAL BUDGET PLANNING (INDICATIVE) BUDGET BUDGET PLANNING GEF UNIDO Other Partners GEF cash & in‐kind cash YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 in‐kind (US$) (US$) (US$) (US$) (US$) Design and implementation of 3.1.4 training activities for bioenergy 150,000 0 0 0 0 40,000 40,000 40,000 30,000 project owners and operators. Implementation of seven (7) selected bioenergy pilots based on agroindustrial residues 32,700,00 3.1.5 demonstrating representative 0 0 0 0 0 0 0 0 0 technologies, business models and GHG emission reduction potentials. Monitoring and optimization of operational aspects and 3.1.6 technical performance of the 1,300,000 0 0 0 0 200,000 500,000 500,000 100,000 installed demonstration pilots through technical support 34,500,00 Subtotal 3,375,000 0 300,000 25,000 840,000 1,215,000 1,115,000 180,000 0

GEF6 CEO Endorsement /Approval Template-August2016

ANNUAL BUDGET PLANNING (INDICATIVE) BUDGET BUDGET PLANNING GEF UNIDO Other Partners GEF cash & in‐kind cash YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 in‐kind (US$) (US$) (US$) (US$) (US$) Design and implementation of a Monitoring and Evaluation plan defining roles and 4.1.1 responsibilities of 20,000 20,000 0 0 20,000 0 0 0 0 implementing partners, reporting protocols, progress indicators and targets. Monitoring of project progress with respect to project‐ specific indicators and targets, and 4.1.2 compliance with UNIDO and 150,000 210,000 0 0 30,000 30,000 30,000 30,000 30,000 GEF guidelines and safeguards on social (including gender) and environmental impact. Implementation of Mid‐term 4.1.3 Review and independent 90,000 30,000 0 0 0 0 40,000 0 50,000 Terminal Evaluation. Subtotal 260,000 260,000 0 0 50,000 30,000 70,000 30,000 80,000

ANNUAL BUDGET PLANNING (INDICATIVE) BUDGET BUDGET PLANNING GEF UNIDO Other Partners GEF cash & in‐kind cash YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 in‐kind (US$) (US$) (US$) (US$) (US$)

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ANNUAL BUDGET PLANNING (INDICATIVE) BUDGET BUDGET PLANNING GEF UNIDO Other Partners GEF cash & in‐kind cash YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 in‐kind (US$) (US$) (US$) (US$) (US$) COMPONENT I‐IV (Project total excl. Project Management) 34,500,00 TOTAL 5,714,300 260,000 3,250,000 479,300 1,400,000 1,780,000 1,530,000 525,000 0 (8%) (24%) (31%) (27%) (9%)

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ANNEX G: ENVIRONMENTAL AND SOCIAL MANAGEMENT PLAN

Environmental and Social Management Plan (ESMP) for

“Reducing Argentina’s greenhouse gas emissions from the energy sector through the utilization of organic waste for energy generation in agriculture and agroindustries”

The purpose of the ESMP is to ensure that social and environmental impacts, risks and liabilities identified are effectively managed during the phase of procurement of selected bioenergy pilot projects and during the implementation of the technical assistance components of the proposed project. The ESMP specifies the mitigation, adaptation, prevention and management measures and shows how the project will mobilize organizational capacity and resources to account for the factors evaluated in order to implement the compiled measures. The ESMP also shows how mitigation and management measures will be scheduled.

The key objectives of the ESMP are:

 To outline mitigation measures against the possible degradation of the areas;  To enhance positive aspects brought by the project;  To ensure that the project will comply with relevant environmental legislation of Argentina;  To identify roles and responsibilities and the cost involved;  To propose mechanisms for monitoring compliance;  To provide adequate channels of input for the different stakeholders throughout the project activity; and  To establish proven mechanisms to correct/adjust the findings resulting from the monitoring activity and to include the input received throughout the project activity. The ESMP is a live document for project activities that will be updated as and when required. The ESMP acts as a quick guide for contractors and project implementers to enhance positive impacts and eliminate or minimize the occurrence of negative impacts through proposed mitigations measures. The ESMP relies on the following key principles:

Compliance with local, national and international laws

The project will empower individuals and groups, particularly the most marginalized, to realize their rights and interests, and to ensure that they fully participate throughout the development and implementation of projects.

Transparency and inclusivity

The project development team will engage in meaningful and transparent consultation with affected communities, particularly with vulnerable groups, to ensure that they can participate in a free, prior and informed manner in decisions about avoiding or managing environmental or social impacts. The inclusivity will be achieved inter alia via face‐to‐face open stakeholder consultations in the local

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communities, door‐to‐door invitations through the local social networks etc. The project will also aim at achieving at least 40% female representation within capacity building and awareness raising activities.

Systematic assessment and tracking of environmental and social impacts and risks

The project will aim at providing clear and constructive responses to individuals, groups, and communities potentially affected by projects on potential grievances related to the social and environmental performance of the projects, corrects non‐compliance where it has occurred, and shares the results of its review and any actions taken. During project implementation, any changes likely to have negative social and environmental impacts must be communicated to UNIDO prior to implementation. The key risks to be considered and tracked in a systematic way are described in Section 3 and in Section 4 of this ESMP.

Information will be collected on a real‐time and quarterly basis by the project team and will be treated as confidential within the project, to be kept in computerized form and backed‐up by the central UNIDO office. It will be kept for a minimum of 10 years after project completion.

Harmonisation with other projects and programs

The project will aim at maximizing efficiency and minimizing costs in complying with environmental and social safeguards. The project development team will lead discussions at country level to decide on the use of the most appropriate environmental and social safeguards procedures.

Gender equality

The project will identify and integrate the different needs, constraints, contributions and priorities of women and men and where possible, it will aim at enhancing the positive gender impacts of projects by undertaking to develop mitigating measures to reduce any potential gender specific and disproportionate adverse gender impact.

Climate resilience

The project will ensure that supported activities enhance climate resiliency and avoid unwarranted increases in greenhouse gas emissions.

1. Project Description The project falls under Category B for UNIDO projects and is likely to have less adverse impacts, which will be few in number, site‐specific, and few if any will be irreversible. In most cases impacts can be readily minimized by applying appropriate management and mitigation measures or incorporating internationally recognized design criteria and standards.

The project is expected to deliver tangible socio‐economic benefits for Argentina’s energy and agroindustry sectors, as well as for individual businesses and the men, women and their families

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involved. Socio‐economic benefits at national level (country) are achieved as a result of avoided imports of fossil fuels for electricity generation and heat applications. Distributed bioenergy systems, as well as other grid‐connected renewable energy plants can displace thermal power and improve the utilization rate of the transmission network, thereby postponing public investments in infrastructure. The direct replacement of diesel‐based electricity represents very substantial savings of public expenditures given its high marginal costs during peak hours. Moreover, diversification of Argentina’s energy mix enables a more economical operation of the national electricity system in function of fuel market prices and improves the country’s position for negotiating long‐term contracts with foreign suppliers.

The proposed project builds upon on‐going biomass related activities in Argentina and makes a contribution to the use of agricultural (including plantation forestry) and agro‐industrial biomass waste utilization for energy generation within the industry – a field in which UNIDO holds a comparative advantage – while promoting innovative business models and up‐stream uses of biomass.

A range of barriers have been found in place impeding the efficient development and implementation of energy projects based on agricultural and agro‐industrial waste in Argentina. These barriers extend to the policy and institutional framework, and knowledge and technical capacities, and inadequate access to investment capital. The identified weaknesses in the biomass energy value chain give rise to increased project risks, including perceived risks, which can be addressed by demonstration and promotion of best practices and benefits.

At the present stage of market development, there is a great need to mobilize investment capital enabling the industries to benefit from energy generation from agricultural and agro‐industrial organic waste and biomass residues. The utilization of biomass waste by national industries contributes to increasing the reliability of electricity and heat supply for energy consumers and diversification of the national energy matrix. Moreover, by incorporating biomass waste and residues into the industry's value chain, biomass energy generation is supportive to the competitiveness and financial viability of the agro‐ industrial sector and the national economy.

The component 1 of the project will support the adoption of policy, regulation and financial incentives to accelerate the market penetration of bioenergy systems based on agroindustrial residues. The component 2 aims to strengthen knowledge management mechanisms and delivery skills for project development, through the operationalization of a national Bioenergy Network under the Ministry of Agroindustry. The component 3 will demonstrate technical and economic feasibility of bioenergy projects based on agroindustrial residues and will also develop a project portfolio for upscaling of investment.

The selected demonstration pilots will be ranked in terms of technical and economic feasibility, socio‐ economic and environmental criteria, and shall be representative for the bioenergy portfolio in terms of size, geographical coverage and technology, applied business models and energy end‐use. These demonstration projects will involve technologies for organic waste collection, technologies for biogas productions (covered lagoons, biodigesters), technologies for electricity generation (internal combustion

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engines, gas turbines), technologies for thermal energy production (biomass boilers), technologies for cogeneration of heat and power, technologies for energy storage.

During the completion process of the portfolio of pilot projects, it will be the responsibility of the selected executing partners to ensure compliance with national environmental and social standards. For each identified demonstration project, an analysis and mitigation plan shall be prepared.

The identified sectors are geographically concentrated in two regions of Argentina (Northeast and Center) comprising the following six provinces: Corrientes, Misiones, Entre Rios, Province of Buenos Aires, Santa Fe, and Cordoba.

The potential negative environmental and social impacts identified in the ESMP are localized and placed in time with the possibility of mitigation actions. The projected environmental and social risks and proposed mitigation measures for the various stages of the project are presented in Section 3.

1.1 Project intervention area

Corrientes: It is in the northeast of Argentina, in the Mesopotamia region. As part of the subtropical area of Mesopotamia, the province has heavy rains and high temperatures with little daily and seasonal variation and no dry season.

Misiones: It is located in the northeast of the country in the Mesopotamia region. The subtropical climate has no dry season, which makes Misiones one of the most humid provinces in Argentina.

Entre Ríos: It is a central province of Argentina, located in the Mesopotamia region. The weather varies from subtropical in the north to temperate towards the Pampas

Buenos Aires: It is located in the central‐east of the country and is part of the Pampas. The weather of the province is strongly influenced by the ocean. Humidity is high and precipitation is abundant and distributed over the year.

Santa Fe: It is located in the center‐east of the country. Summers are hot and humid throughout the province.

Córdoba: It is located just north of the geographical center of the nation. Weather conditions are different depending on the region. The province has generally warm summers and cool winters to temperate by region.

1.1.1 Environment a. Geological and soil formations

Corrientes: The area consists mainly of lowlands, with the highest points in the east. To the west, a series of descending platforms go down to the Paraná River. The Corrientes province is a basement with a structural high, the Dorsal Asunción‐Rio Grande, where the Guaraní Aquifer System and the basaltic

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layer are thinner and the Mesozoic sediments rise near the surface. It is an area prone to local recharge and regional discharge of the Guaraní Aquifer System. Corrientes has been identified as an important depocenter with at least 3500 m of sedimentary and volcano‐sedimentary deposits that suggest the existence of significant pre‐carboniferous sediment units associated to ancient extensional structures of the early Paleozoic. The Iberá Wetlands, an area of lagoons and swamps, is a vast depression from volcanic flow, covered later with fluvial sediments. Red and sandy soils are found in the area.

Misiones: The area of Misiones is mostly a basalt continuation of the Paraná Plateau of Brazil, lying at elevations of 200 to 800 metres. The rocks contain significant quantities of iron which forms a part of the soil. At the center of the plateau rises the Sierra de Misiones, its highest peak, 843 m, near Bernardo de Irigoyen, in the Cerro Rincón. The humid and verdant area of north‐east Argentina provides fast decomposition of organic matter and gives the soil only a thin fertile layer that can easily be washed away.

Entre Ríos: The land has a flat relief, with hills some 100 meters in height. There are two main systems of low hills, the Cuchilla de Montiel in the west and the Cuchilla Grande in the east, which are separated by the Gualeguay River. The area is crisscrossed by rivers with soft undulations of the lomadas entrerrianas hills, also called blades. By the central valley between the two blades runs the Gualeguay River, which divides the province into two parts. Entre Rios has 5 types of soils: Mollisol on the coast of Paraná; Vertisol in the north; Alfisol in the areas of Feliciano, Federal, La Paz, Paraná, and Villaguay Tala; Entisol in the northeast, in a strip parallel to the Uruguay River; and Inceptisol in the valleys of the rivers Gualeguay, Gualeguaychú and Feliciano.

Buenos Aires: The landscape is mainly flat, with two low mountain ranges: Sierra de la Ventana and Sierra de Tandil. The highest point is Cerro Tres Picos (1,239m). Vertisol soil is found in the coastal area of Buenos Aires province at Samborombón.

Santa Fe: Most of the province consists of green flatlands, part of the humid Pampas, bordering in the north with the Gran Chaco region. There are low sierras to the west. The Ituzaingó Formation which is a geological formation consisting mostly of fine to medium sandstone is located in the province of Santa Fe. The highest point of the province is located in the town of Labordeboy, southwest of the province. Alfisol soil is found in the north and Mollisol is typically for the southern part of the province. Entisol is mainly located around the Parana River, which divides the province of Santa Fe and Corrientes. 70% of the provincial area is black or brown mollisol soils which have evolved from mineral sediments.

Córdoba: Córdoba has two distinct areas: The Plain Pampeana in the east and north, and the Sierras Pampeanas in the northwestern part. The soil of the humid pampas is composed of humus, sediments carried by winds and sediment carried by rivers. It is formed by the decomposition of plant and animal remains. It is ideal for developing crops, because it retains and conserves moisture. In the dry pampa, however, the soil is clayey, sandy and saline. In general the surface is flat, but in the southwest, dunes are constantly moving due to abounding winds.

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b. Hydrography

Surface water

Corrientes: The province is surrounded by the Uruguay River to the east, and the Paraná River to the northwest. The low shore of the Paraná produces frequent flooding. Therefore a protective system with barriers has been constructed. The province is situated in the Iberá Wetlands, which are of pluvial origin, having a total area of 15,000–20,000 km2. Part of the wetland is included within a provincial protected area, the Iberá Provincial Reserve and there are ongoing plans to further transfer its protection status to a national park. The Iberá Wetlands are one of the most important fresh water reservoirs in the continent and the entrance to the Guaraní Aquifer. Water resources are exploited for power generation in the hydroelectric dam Yacyreta.

Misiones: Misiones hydrological landscape is water abundant. The province is embraced by the Paraná River in the west , the Uruguay River in the east, and Iguazú River in the north. Iguazu Falls are waterfalls on the Iguazú River in the northwest corner of the province, near the city of Puerto Iguazú. Misiones shares the falls with the Brazilian state of Paraná. The province of Misiones occupies a central south‐east position with respect to the La Plata River Basin and a central position to the Parana River Basin in which the Guarani Aquifer System is contained. The Uruguay River northeast forms river terraces, today largely submerged by the dam of Salto Grande.

Entre Ríos: The region is traversed by many rivers and streams and surrounded by them in all their borders: the Paraná River to the west; the Uruguay River and the Mocoretá River to the east, and the Guayquiraró River to the north. To the south is the Delta del Paraná with low land and island formation. There are also hot springs along the basin of the Uruguay River, located in cities like Federación, Villa Elisa, and Colón.

Buenos Aires: The Parana River, the Rio de la Plata, and the Salado River have part of their route in the province of Buenos Aires. The Salado River is the longest river in the province (700 km long). The Rio de la Plata Basin encompasses 85% of the country’s surface water resources. A lot of lagoons can be found in the province and almost all of them are due to wind erosion of the plains of the pampas. Water pollution from industrial effluents is a considerable challenge and the risk of continued contamination is very likely in the area. There is a particular focus on the Matanza‐Riachuelo River Basin in Buenos Aires where industries are discharging the majority of the total load of contaminants into the Rio de la Plata.

Santa Fe: The province has numerous streams, rivers and lagoons, as the Parana River, Carcaraña River, Arroyo El Rey, Rio Salado, Rio San Javier, Tapenagá River, and Laguna La Picasa.

Córdoba: Suquía River, Xanaes River, Ctalamochita River, Chocancharava River, and Popopis River have part of their route in Cordoba. The province has numerous dams and reservoirs, as the Lake San Roque, Dique Los Molinos, Piedras Moras, Embalse Río Tercero and Dike Cruz del Eje. These dams are multifunctional and serve as reservoirs of freshwater, produce hydroelectric power, regulate water flows and provide water for irrigation.

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Groundwater

Corrientes: In the project area is one main aquifer present, the Guaraní Aquifer. It is one of the world's largest aquifer systems with a volume of about 40,000 cubic kilometres, a thickness of between 50 metres and 800 metres and a maximum depth of about 1,800 metres. It is estimated to contain about 37,000 cubic kilometres of water.

Misiones: The project area is also localized in the region of the Guaraní Aquifer.

Entre Ríos: The province has a big network of shallow and deep water through aquifers and the water is suitable for immediate consumption. The main aquifer which is present in the area is the Guaraní Aquifer.

Buenos Aires: Exploitable groundwater comes from the Pampeano and Puelches aquifers in the Matanza River basin, Buenos Aires. The depth of the Puelches aquifer ranges from 40 to 120 metres, and it supplies 9,900 cubic metres of water a day. It is located between the Pampeano aquifer, which is closer to the surface, and the deeper Paraná aquifer, whose water is salty and used primarily by industry.

Santa Fe: The Puelche aquifer is located in the western region of Santa Fe Province. The depth of the Puelches aquifer ranges from 40 to 120 metres, and it supplies 9,900 cubic metres of water a day. It is located between the Pampeano aquifer, which is closer to the surface, and the deeper Paraná aquifer, whose water is salty and used primarily by industry.

Córdoba: Cordoba has a significant reserve of groundwater. The groundwater in southern and eastern Cordoba is in large parts not suitable for human consumption. c. Biological environment

Flora

Corrientes: The province is situated in the humid and verdant area in Mesopotamia. The Atlantic Forest extends along the waterways of the Parana River and Uruguay River, where cactus, ferns, lianas and vines exist. In the undergrowth the tacuaruzu bamboo, pindo palm, lapacho, and ibapoy are found. The accumulation of aquatic vegetation causes the formation of dammed, floating islands on which land is deposited

Misiones: Misiones is one of the most bio‐diverse areas in the region. Most of the province is located in the south of the Upper Parana Atlantic Forest, an endangered forest biome of 15 ecoregions. The rain forest occupies 35% of the territory of the province. Among the most important species are tabebuia, jucara, peltophorum dubium, incienso, white laurel, black laurel, white mulberry, urunday, parana pine and rosewood.

Entre Ríos: The vegetation of the province includes species like prosobis, chañar, tala, lapacho and tabebuia. The Paraná Delta White Mountains are formed by other tree species like Humboldt’s willow,

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black poplar and cockspur coral tree. In Colon and Concordia palm trees known as butia yatay grow and the aquatic flora of rivers and lakes includes water sprouts, water lilies and cannas.

Buenos Aires: In this area, there are about 1600 species of major plants, with a large variety of grasses typical of the Pampas and trees like ombú, alder, cockspur coral tree or native willow, as well as rush plants, pampas grass, epiphytes and aquatic plants. Climbing plants and lianas are common in the area, especially in the riverside forest. The province has an immense flat grass prairie called “the Pampas”. This is one of the most endangered ecosystems in Argentina, since the whole area is being used for agriculture and cattle ranching.

Santa Fe: Native conditions of the flora have been changed by the adoption of crops. In the northern region hardwood trees like willow‐leaf red quebrach are forming dense forests. In the southern prairie evergreen trees as ombú grow, as well as laurel, ceibales, prosobis and aguaribaye. Among the herbs of the region are redroot pigweed, chamomile, mallow, verbena, xanthium, hemlock and thistle.

Córdoba: Prosobis, espinillos, chañar, and quebrachos are characteristic in lowland areas. By the rivers and marshes are mainly growing arrows, and cattails.

Fauna

Corrientes: Within the wildlife of Corrientes, the most common mammal is the capybara, the world's largest rodent. One of the endangered species is the marsh deer, as well as the maned wolf. Corrientes is also home to the river otter, wild cat, ocelot, nutria, raccoon, gray brocket, and mountain fox. The most common bird species are kingfishers, herons, spoonbills, ducks, coots, chakars, storks, sandpipers, herdsman, cardinal, swans, large toucan, flamingos, lapwings, woodpeckers, doves, and parakeets. The golden surubí, tarpon, pompano, kingfish, catfish, pacu, and tiger fish are part of the diverse fish fauna of the area.

Misiones: The fauna of the province is rich in variety. Because of the continuing disappearance of the rainforest the number of endangered species is rising. The most common species in the province of Misiones are: maned wolf, ornate hawk‐eagle, crested eagle, water opossum, green‐winged macaw, giant anteater, South American tapir, bush dog, giant otter, and armadillo.

Entre Ríos: The fauna of Entre Rios is naturally protected from predation by rivers surrounding the province, as well as by limits to hunting and fishing of species. Birds in the province are primarily found in lakes, rivers and streams, among them are waders, storks, ibis, spoonbills, kingfisher as well as ducks, cormorants and swans. There are reptiles such as caimans, iguanas and lizards, and snakes as coral snakes, boa constrictors, rattlesnakes and yararás. Among the mammals there are capybaras, ferrets, mountain fox, mice, armadillos, weasels. Fish include surubí, sardines, shad, manduví, and pacu. The construction of the underwater tunnel linking the provinces of Entre Rios and Santa Fe, led to the disappearance of pacu in the area of Riacho Victoria. It is believed that one of the causes is the sensitivity to noises of this species.

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Buenos Aires: La Plata dolphins can be found both in the Atlantic coast and estuary, sometimes even in the waters of the rivers Parana and Uruguay. Common in the area is as well the green turtle and loggerhead turtle. Species such as the jaguar or tiger are almost entirely extinct.

Santa Fe: Deers, skunks, rheas, mule, pampas foxes, puma and pampas cats can be found within the wildlife of the province. Especially along the Parana River are yarará snakes, lizards, frogs and birds like the caracara, partridges, plovers, owls, hummingbirds, great kiskadees and thrushes. The fish fauna of Santa Fe is composed of more than 200 species, among them are surubí, sardines, shad, manduví, and pacu.

Córdoba: The animals which are still living in this area are the caracara, weasels, guinea pigs, the chimango, flamenco, lizard, laucha, the woodpecker, the golden dove, duck, frog, and gray fox. The lagoon of Mar Chiquita is a protected area. In this zoological reserve, the lampalagua, wild cat, goose, mara, martineta, otter, swans, herons, gulls, and flamingos can be found. In the north of the lagoon capybaras live at risk of extinction. In the dry pampa are the endangered goat mountain, gray foxes and skunks at home.

1.1.2. Demographics

Corrientes: The population of Corrientes state is around 1 million and has a total surface of 88 thousand km2. Close to 83% of the population lives in urban areas, the capital and the most populous city is Corrientes with 350 thousand inhabitants. The Guaraní indigenous community composes almost one third of the total population in Corrientes. For this reason the Guaraní language has been recognised as an official language besides Castellano.

Misiones: Misiones has an estimated total number of 1.2 million inhabitants and lies on 30 thousand km2. The capital is Posadas with around 300 thousand people. Misiones is considered to have the largest young population among other states. Almost 40 % of the population lives under the poverty line and 12% of the population belongs to an indigenous group.

Entre Ríos: Entre Ríos has a population of 1.2 million and has a surface of 78 thousand km2. The state is decentralized, around 83% of the population lives in one of the ten urbanized areas. The capital is Paraná and its number of inhabitants is around 300 thousand.

Buenos Aires: The province of Buenos Aires has a total population of 16.6 million and lies on 307.5 thousand km2 resulting in the most densely populated state of Argentina. The capital is La Plata with 800 thousand inhabitants. 96.4% of the population lives in urban areas, mostly in the north‐east of the province in the so called “Gran Buenos Aires” metropolitan area.

Santa Fe: Santa Fe’s population is around 3.2 million and has a total surface of 133 thousand km2. The biggest city is Rosario with almost 2 million inhabitants and the capital is Santa Fe de la Vera Cruz with 480 thousand people. At least 20 different indigenous communities are present in this province; the most relevant ones are the Toba and Mocoví tribes.

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Córdoba: The population of the province Córdoba is 3.3 million and lies on 165 thousand km2. Over one third of the total population lives in the capital i.e. in the city of Córdoba. 88% of the population lives in urbanized areas.

1.1.3 Local economies

Corrientes: Agriculture is still one of the main activities with the focus being on sheep and cattle livestock. The province is also centred on the cultivation and processing of citrus fruits, and the cultivation of rice, tea, yerba mate, and cotton.

Misiones: Agriculture makes an important contribution to the population’s income. Especially the cultivation of yerba mate has been a long‐term main source. Misiones is Argentina's leading producer in tea and citrus fruit, and produces as well tobacco, sugar cane, rice, coffee, cocoa and coconut. Forestry production is primarily situated in the northwest of Misiones and in the Alto Parana region.

Entre Ríos: The population’s activity is based primarily on agriculture, livestock and tourism and to a small extent on mining and industry. In the agricultural sector, the emphasis is on the cultivation of rice, soybean, wheat, corn, citrus and afforestation of eucalyptus.

Buenos Aires: The province is Argentina's chief agricultural producer. The most important crops include soybean, maize, wheat, and sunflower. More recently, the local population started to produce premium wines in the south of the province.

Santa Fe: It is in an agricultural and livestock area, and has a high industrial development. The province is part of the most fertile region of the country. Santa Fe’s main crops are soybean, sunflower, maize, wheat, and rice. In smaller scale strawberry, honey, wood, and cotton are produced.

Córdoba: Its climate, topography, soil characteristics favours various productive activities such as agriculture, livestock, forestry and mining. These activities are complemented by a major industrial development in the province.

1.1.4 Environmental pressures Rapid urbanization and industrialization as well as an intensification of agriculture and cattle ranching have resulted in a major environmental threat to North‐Eastern Argentina in the last decades, leading to deforestation, biodiversity loss, air and water pollution along with an increase of GHG emissions, land degradation, a fall in pasture quality and pollution. As a result there have been more frequent and extreme floods in the last decade in the region of Pampas. Furthermore, due to continuous population growth, waste generation has increased, demanding adequate waste management to be provided by the government and municipalities. In addition, Argentina faces the issue of increasing energy consumption, limited management capacity of this demand and the inefficient use of non‐renewable resources.

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1.2 Component risks As the pilot projects will be constructed on sites (farms) where large‐scale agricultural activities are already being carried out, the main environmental and social impacts that may arise from these projects are most likely to occur during the construction phase. Potential impacts encompass air pollution and noise caused by the construction equipment, machinery, soil excavation, in addition to the consumption of large amounts of water and high electricity usage. It is expected that these potential impacts will be of a short‐lasting nature i.e. only entail short‐term effects. The environmental risks that may occur during the operational phase are summarized below:

1.2.1 Effluent leakages Feedstock for biogas plants (i.e. animal manure) may contain contaminants such as bacteria, viruses, trace quantities of toxic materials and the like. In the case that a leakage of effluent from pipelines, storage or bioreactors occurs, this may contaminate the biologically active portion of the soil or could reach groundwater or surface water directly.

1.2.2 Gas leakages Chemical emissions to air from cleaning products, building materials, and fuel transfer may reduce local air quality. A minimal amount of pollution may occur from the substrate/feedstock during operations.

1.2.3 Sulphur emissions

Sulphur (SO2) emission may contribute to acid deposition, which can lead to potential changes occurring in soil and water quality. Furthermore, it may affect aquatic ecosystems in rivers and lakes and damage forests, crops and other vegetation. Sulphur is a pollutant and can have a negative impact on human health.

1.2.4 Increase in agricultural activity The expansion of land utilisation either for expansion of the main agricultural activity and/or to cultivate (energy) crops or plantations for energy may lead to encroachments of virgin land, resulting in associated impacts. In addition, it may contribute to soil erosion. Increased demand on crops for energy can influence food prices, leading to negative market distortions and increases in end‐user prices.

1.2.5 Deforestation Wood as a feedstock for bioenergy systems can constitute a threat to existing forests as it may lead to unwarranted logging. A reduction in forest cover has multi‐fold effects; including, negative impacts on people’s livelihoods and biodiversity. Moreover, it can lead to increases in GHG emissions.

1.2.6 Transportation Emissions of nitrogen and sulfur oxides from the combustion of transport fuels used for the transport of biomass and/or fertiliser may reduce local air quality. The pilot projects will mainly use feedstock material produced on‐farm; however, additional environmental impacts may arise from transporting

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supplementary feed to the system. Similarly, fertilizers are likely to have an end‐use close by, however, increased fuel consumption at least to some extent is likely.

2. Operational Safeguards (OS) UNIDO distinguishes between the following operational safeguards:

OS 1: Environmental and Social Assessment OS 2: Protection of Natural Habitats OS 3: Involuntary Resettlement OS 4: Indigenous People OS 5: Pest Management OS 6: Physical Cultural Resources OS 7: Safety of Dams

Below, each OS is analysed in terms of its application in the country:

OS 1: Environmental and Social Assessment

For each pilot project a health risk for the population related to the quantity and quality of the effluents, emissions or waste produced should be conducted. In the area of influence, the population that could be affected by the atmospheric pollutants released in each stage of the project should be identified. The energy generation through biomass is generally responsible for odours. Because of this, a map with the potential sources and receptors of them has to be prepared, highlighting distances and landforms that impact in their propagation.

OS 2: Protection of Natural Habitats

Although with different levels of diversity and significance as it is described in the regional table below, each province has natural habits to be protected. So it will be essential to assess whether the project produces negative effects over the quantity and quality of the natural resources, namely the soil, the water and the air. For doing this it will be necessary:

 To assess the differences between the levels of noise of the project and the surroundings. The native wildlife that uses the place for nesting, reproduction and feeding should be specially considered. To evaluate the effect of the use of energy during each project phase on the wildlife and the soil or potential geologic fault that could interfere in the vibration propagation.  To identify the wildlife wealth, as well as its quantity and mobility, of the place and surroundings of the project. If the mobility of the wildlife is low, environmental management measures with the aim of protecting these species should be identified, especially for the activities of land preparation.  To characterize the natural flora of the place, its wealth and quantity. It is also important to identify the ecosystems that build up the flora and wildlife, like forests, and to assess the proximity to wetlands specially taking into account the intervention related to the electrical lines.  To determine the characteristics of the basin (if the project is placed in the high, medium or low area of it, if it is endorheic, exorheic or arheic, its drainage divide, its surface runoff regime) and the drainage network. GEF6 CEO Endorsement /Approval Template-August2016

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 To identify if the place where the project will be located encourages erosion as a response of the changes that can occur in the vegetable cover as well as in the soil texture and structure.

OS 3: Involuntary Resettlement

Firstly, it is necessary to identify if there is a population in the area of the project. In this case, it should be characterized in order to know if they form a community with human, economic and cultural relationships. After this, it should be determined whether the project takes into account its resettlement, including the displacement and the re‐localization.

The significance of the change in the life, habits and traditions of the community will have to be assessed by using a geographical, demographical, sociological, socio‐economic and social welfare approach. The distances between the project and the human settlements should be represented considering each part of their activities (such as warehouses, farmyards or barns), the natural resources used by them as well as the access ways.

OS 4: Indigenous People

In almost every province of the country indigenous people can be found. However, their distribution and quantity varies from one to another. In general, they live in small and disperse communities, but there are some exceptions. So, it is important to consider the impacts that the bioenergy pilot projects could produce on these groups of people.

OS 5: Pest Management

When working with biogas projects that include the later utilization of the digestate resulting from the anaerobic degradation, the innocuousness of this sub‐product should be controlled, especially in processes that deal with manure or waste from slaughterhouses. Wrong conditions in one of the processes, like low retention times, could result in a non‐stabilized effluent. Then, if this effluent is scattered on the soil, a proliferation of pathogens, antibiotics and hormones can occur. This should be controlled through an adequate management plan for each pilot project.

OS 6: Physical Cultural Resources

Before the development of each pilot project, the existence of places with scientific value because of their antiquity, singularity or historical heritage should be verified. In any of these cases, the potential alteration or damage of the site should be assessed as well as if it is reversible. Moreover, the interactions with other secondary effects (for example, effect on tourism due to a decrease in the historical or landscape value) need to be assessed. The area of influence of the project should be also assessed with the aim of preventing the alteration of popular expressions of any community or people.

OS 7: Safety of Dams Not applicable.

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In addition to these general observations, the following table describes the province‐specific issues to take into account regarding each Operational Safeguard.

Province Buenos Aires Corrientes Cordoba Entre Rios Misiones Santa Fe ‐ Slaughterhouse ‐ Slaughterhouse ‐ Slaughterhouse ‐ Dairy processing ‐ Feedlot ‐ Dairy processing ‐ Dairy farms ‐ Dairy processing facilities ‐ Rice mills facilities ‐ Feedlot facilities Sector ‐ Forestry (sawmills) ‐ Feedlot ‐ Forestry (sawmills) ‐ Feedlot ‐ Rice mills ‐ Feedlot ‐ Dairy farm ‐ Dairy farm ‐ Forestry (sawmills) ‐ Dairy farm ‐ Pig farms ‐ Pig farms ‐ Pig farms

In addition to the environmental and social management plan that each pilot project should present, each province has specific legislation related to the requirement of Environmental Impact Assessment79.

For rice mills and All the technologies For the dairy farms forestry (sawmills), considered to and feedlot sectors All the technologies All the technologies As combustion combustion produce bioenergy in bio‐digestion considered to considered to produce processes are processes are these sectors have in processes take place. produce bioenergy in bioenergy in these considered, potential considered. Because general the same As the province has these sectors have in sectors have in general atmospheric of this, potential environmental and water streams and general the same the same emissions should be atmospheric social impacts. As bio‐ reservoirs, it is environmental and environmental and specially assessed OS 1: emissions should be digestion processes important to assess social impacts. As bio‐ social impacts. As bio‐ and controlled. Environmental specially assessed take place and the the composition, digestion processes digestion processes In addition to this, as and Social and controlled. province has water quantity and disposal take place and the take place and the working with forest Assessment In addition to this, streams and requirements of the province has water province has water waste, it is important when working with reservoirs, it is effluents produced to streams and streams and reservoirs, to monitor its forest waste, it is important to assess prevent water reservoirs, it is it is important to assess traceability to ensure important to monitor the composition, contamination. important to assess the composition, it is not coming from its traceability to quantity and disposal For rice mills and the composition, quantity and disposal native forest ensure it is not requirements of the forestry (sawmills), quantity and disposal requirements of the exploitations that do coming from native effluents produced to combustion requirements of the effluents produced to not follow a forest exploitations prevent water processes are effluents produced to prevent water sustainable that do not follow a contamination. considered. Because prevent water contamination. management plan. sustainable In addition to this, of this, potential contamination. management plan. the province of atmospheric

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Finally, in the feedlot Cordoba is a place emissions should be sector bio‐digestion where this issue of specially assessed processes take place. odours generated by and controlled. As the province has bioenergy projects In addition to this, water streams and should be specially when working with reservoirs, it is taken into account forest waste, it is important to assess due the different important to monitor the composition, altitudes of its its traceability to quantity and disposal territory. ensure it is not requirements of the coming from native effluents produced to forest exploitations prevent water that do not follow a contamination. sustainable management plan. This is a province with high levels of This is a province biodiversity Since the whole area of with high levels of significant ecological this province is being biodiversity Although with a diversity, natural used for agriculture and significant ecological lower level of resources (such as cattle ranching, it is diversity, natural biodiversity No specific issues the Guarani Aquifer) No specific issues considered to be one of resources (such as compared to other OS 2: Protection have been identified and natural habitats have been identified the most endangered the Guarani Aquifer) provinces of the of Natural in addition to the (for instance, 35% of in addition to the ecosystems in and natural habitats Mesopotamia region, Habitats country application its territory is country application Argentina. Because of (Iberá Wetlands). So many rivers and analysis of this OS. rainforest and it has analysis of this OS. this, it is important to that it will be natural habitats can the Iguazu ensure the protection of essential to assess be also found in this waterfalls). Therefore its natural habitats such whether the project province. it will be essential to as deltas and wetlands. produces negative assess whether the effects. project produces negative effects. OS 3: It is important to evaluate potential involuntary resettlement and their mitigation measure, but there are not specific provincial issues related Involuntary with this OS. Resettlement

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There are no large There are not large indigenous indigenous It is highly vulnerable Indigenous Mapuche and communities in this communities in this There are no large in terms of protection communities (such as OS 4: Indigenous Tehuelche communities province. However, province. However, indigenous of indigenous people Mocovi, Toba and People can still be found in this there are some small there are some small communities in this as the biggest Mbya Huarpe) can be found province. groups of them groups of them province. Guaraní community in this province. especially near the especially near the lives in its territory.80 capital city. capital city. As one of the main As one of the main As one of the main As one of the main As one of the main activities of this activities of this activities of this activities of this activities of this sector sector is based on sector is based on sector is based on No specific issues sector is based on is based on bio‐ bio‐digestion, it is bio‐digestion, it is bio‐digestion, it is have been identified bio‐digestion, it is OS 5: Pest digestion, it is important to ensure important to ensure important to ensure in addition to the important to ensure Management important to ensure the the innocuousness of the innocuousness of the innocuousness of country application the innocuousness of innocuousness of the the sub‐products to the sub‐products to the sub‐products to analysis of this OS. the sub‐products to sub‐products to prevent prevent pest prevent pest prevent pest prevent pest pest propagations. propagations. propagations. propagations. propagations. In this province historical heritage No specific issues have No specific issues No specific issues No specific issues No specific issues such as previous OS 6: Physical been identified in have been identified have been identified have been identified have been identified communities’ ruins Cultural addition to the country in addition to the in addition to the in addition to the in addition to the can be found and it is Resources application analysis of country application country application country application country application import to ensure that this OS. analysis of this OS. analysis of this OS. analysis of this OS. analysis of this OS. the pilot projects do not damage them. OS 7: Safety of N/A N/A N/A N/A N/A N/A Dams

80 Among the six selected provinces for the development of bioenergy projects, Misiones is the most vulnerable in terms of protection of indigenous people as the biggest Mbya Guaraní community lives in its territory. There are 24 communities with a property deed and occupation permit for more than 13.600 Ha that have been transferred from the province to the organization called “Asociación de Comunidades del Pueblo Guaraní”. From this total, there are approximately 240080 Ha of native forest under exploitation (data source: http://indigenas.bioetica.org/base/base-d5.htm). GEF6 CEO Endorsement /Approval Template-August2016

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3. Policy, legal, and administrative framework 184. In October 2015, Argentina issued Law No. 27,191, an amendment to Law No. 26,190 that establishes the national regime for the promotion of renewable sources of energy for power production. New projects or repowered existing plants benefit from an anticipated VAT return for capital goods purchased, accelerated amortization of the income tax, tax certificates for projects with national components and extension to ten years of the period for tax carry‐forwards. In addition, the government will fix an energy purchase price, calculated on a project‐to‐project basis, to guarantee a fair return on investment.

Law No. 27,191 also provides for the creation of the Trust for the Development of Renewable Energies, mainly financed by the National Treasure. This fund will provide a subsidy of US$0.11/kWh to photovoltaic (PV) producers and US$0.005/ kWh for facilities up to 30MW generating electricity from wind, geothermal, biomass, biogas and hydro sources. However, to date, this fund has not been set up and the FiT is unavailable.

The short and long term objectives of Law 26,190 (as amended by Law 27,191) and Decree 531/2016 (“RE Framework”) are for RE to become 8% of the total electrical power consumed in Argentina by the end of 2017 and 20% by the end of 2025 respectively.

Fiscal incentives were included in both Law 26,190 and its predecessor Law 25,019, which allowed for deferred tax payments and provided 15 years of “fiscal stability” to existing projects whereby, during that period, the overall fiscal burden of renewable energy projects cannot be increased by means of augmented, modified, new or additional taxes and fees. Decree 562/2009, which regulates Law 26190, provided for accelerated depreciation and for VAT refunds after 3 years.

Federal laws on renewable energy invite provinces to adhere to the legislation and develop their own province‐level incentives. For instance, Decree 562/2009 developing Law 26,190 of 2006 invited provinces to adhere to Law 25,019 and to establish provincial fiscal incentives such as exemptions from revenue tax, local and administrative fees and property taxes. Some province‐level policies include:

 Province of Buenos Aires – Law 12,603 of 2001 exempts renewable energy projects from property tax for 10 years, provides USD 10/MWh for 10 years, and facilitates financing through long-term low-interest loans from the Buenos Aires Province Bank.  Province of Chubut – Law 4389 of 1998 exempts renewable energy projects from province taxes for 10 years and provides USD 5/MWh for wind power complying with a set of local content requirements  Province of Mendoza – Law 7822 of 2008 sets a target of 15% renewable electricity consumption by 2023 and provides exemption from provincial taxes to renewable energy projects.  Province of Misiones – Law 4439 of 2008 establishes a provincial framework for the promotion of renewable energy and creates a fund for the promotion of renewable energy and biofuels.  Province of Neuquén - Law 2596 of 2008 provides additional USD 1/MWh2 for 15 years.

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 Province of Santa Cruz – Law 2796 of 2005 provides exemption from property tax and all province taxes during ten years to the manufacturing of renewable energy equipment. It also establishes a subsidy of USD 3.45-10.30/MWh. Both the exemption and subsidy are variable depending on the percentage of local content. In 1999, Argentina launched the PERMER programme for rural electrification with renewable energy. PERMER was financed through a World Bank loan (USD 30 million), a UNEP grant (USD 10 million), federal and provincial governments, and contributions from concession companies and users.

PERMER provides companies a 15‐year concession to install and maintain subsidized renewable energy systems. For residential systems 79% of the cost is subsidized by PERMER. Users pay about 2% of the installation cost upfront, and the remaining 19% is covered by the concession company, which then recovers the investment plus O&M costs through a flat monthly fee for the duration of the concession.

At the end of 2012 PERMER had resulted in the electrification of 1894 public schools, 361 public service facilities and 25071 households.

Besides the energy legislation, there are national and sub‐national environmental legislations in Argentine that have to be considered. The most important one are listed below.

However, whether required or not by the legislation, it will be always necessary to present an environmental and social management plan for each project. It should consider all the activities related to the potential risks associated to its different stages: construction, operation and closure.

National environmental legislation framework Law No. 25675 It establishes the minimal requirements to achieve a sustainable and proper environmental management, to preserve and protect the biological diversity and to implement the sustainable development. It defines the principles that must be followed by the environmental policy, among them, the precautionary principle.

Law No. 25612 Integral management of industrial and services waste It establishes the minimal requirements of environmental protection about the integral management of industrial and services waste.

Law No. 24051 Hazardous waste It defines its scope of applicability, lists the different waste streams considered as hazardous and establishes the procedures for conducting the proper management and treatment of them.

Law No. 26331. Decree 91/2009. Native Forest Law Establishes the minimal requirements for environmental protection for enhancement, restoration, conservation, development and sustainable management of native forests and their environmental services. This Law led to the “National Program of Native Forest Protection”.

Law No. 26432 (extent and reform of Law 25080/1998). Investment in Cultured Forest Promotes investments in new forestry enterprises and extending existing forests with an objective of increasing wood supply through forestation.

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Sub‐national environmental legislation framework In addition to the national legal framework, as Argentina is a federal country, there are specific legislation in each of the six selected provinces regarding bioenergy projects and the presentation of the environmental impact assessment of them. These legislations are described below.

Buenos Aires: Ley Nº 11.723. Integral law of environment and natural resources.

Article 10°: Every Project that consists in the realization of constructions or activities that produce or could produce any negative effect in the environment of the province of Buenos Aires and/or its natural resources, should obtain a “Declaración de Impacto Ambiental” (Environmental impact statement) issued by the municipal or provincial environmental authority according to the categories stablished by the regulation as it reads in the expository list included in the annex II of the law.

Article 11°: Every physical or juridical as well as public or private person that owns a project with the characteristics of the previous article must present an environmental impact assessment following the dispositions that the authority determine in accordance to the 13° article.

Article 12°: Before to the administration resolution to be adopted for the realization or authorization of the constructions or activities covered by the 10° article, the competent authority will send the observation that it considers relevant to the provincial or municipal environmental authority about the project so as this organism can issue the “Declaración de Impacto Ambiental” (Environmental impact statement)»

Cordoba: Law No. 7343: Regulatory Decree No. 2131 In the Annex II are listed the projects that mandatorily have to present the “Aviso de Proyecto” (Project notification) and conditionally have to present the Environmental Impact Assessment. Regarding bioenergy projects, it is important to consider the following sections: Section 2: Projects of agricultural, hunting and fishing production. Section 3: Project of infrastructure and equipment Subsection A: Generation, Transport and Distribution of Energy.

Corrientes Law No. 5517 (It modifies the law No. 5067 related to Environmental Impact Assessment) In Annex of the law are listed the activities that should present an Environmental Impact Assessment. The type of bioenergy pilot projects planned to be done are not specifically included there. However, the article No. 2 of law states that in some cases when the activities are not covered, the authority could anyway require an Environmental Impact Assessment of them.

Entre Rios: Decree 4.977/09.

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It approves the regulation of the Environmental Impact Assessment. It also defines the Secretariat of Environmental as the competent authority of the Decree. In its Annex 6 the classification of the activities that should comply with this requirement can be found and it includes: the generation of energy coming from sources such as solar, biomass, wind, geothermal, etc.

Santa Fe: Law No. 11.717 of Environment and Sustainable Development Decree 101/2003 In its article No. 3 it highlights that “Any project capable of modifying the environment should be initiated before obtaining the endorsement of the Environmental Impact Study from the competent authority for the phases involved”. In its Annex II it describes the activities that have to comply with this regulation. The electricity, gas and water related activities and, inside them, the electricity generation through solar, biomass, wind and geothermal sources are listed in this annex.

Misiones: Ley XVI‐35 The law, whose competent authority is the Ministry of Ecology and Natural Renewable Resources, has not a regulatory decree. However, there some ministerial resolutions that regulate the procedures:  No. 464/08: Procedure for the environmental Impact Assessment for every type of project  No. 353/09: Forest, livestock‐forest and agriculture‐forest investment projects for the acquisition of rural facilities in the border zone.  No. 460/11: Procedure for the sustainable management and land use change plans of the native forestry in the framework of the law XVI ‐105.

4. Environmental and social risks and mitigation measures This section describes relevant environmental and social risks identified during the project preparation period (PPG). Since the ESMP should serve as an active tool, additional risks that are identified during the project implementation will be included as they are identified.

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Table 1: Main environmental and social risks

Cost of Mitigation Technical details of the Timeline,

mitigation technology, including (If substantial; Responsibili E&S risks Mitigating process, equipment, Location frequency, to be covered Applicable ty Measure design and operating start and end by the GEF to procedures date grant or non‐ UNIDO co‐ financing)

Effluent Biogas The project will The project will consider Project sites Throughout Project team N/A leakages consider a several solutions to lifetime of Beneficiaries (groundwater sustainable manage effluents, such installations contamination, effluent control as an impermeable and soil digester bottom, tanks pollution) and pipes as well as underground water monitoring

Risks identified Gas leakages Biogas Monitoring of gas The project will consider Project sites Throughout Project team N/A during the PIF production to several solutions to lifetime of Beneficiaries preparation and detect leakages avoid gas leakages, such installations verified during the as the application of project efficient sealing, a gas‐ preparation (PPG) tight construction, installation of a safety flare, continuous maintenance of plant.

Sulphur Biogas, Monitoring of The project will consider Project sites Throughout Project team N/A emissions Biomass sulphur based several solutions to lifetime of Beneficiaries emissions avoid sulphur emissions, installations such as the application of scrubbers or second

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absorbers

Increase in Biogas, Monitoring of The project will not Areas around the Semi‐annually Project team N/A agricultural Biomass agricultural engage in activities that portfolio of pilot with activities (e.g. activities and utilise new land for projects assistance of energy‐crop productivity as energy purposes only. local cultivation for well as Feedstocks used in stakeholders co‐digestion to feedstocks. project sites shall fulfil increase the sustainability criteria. plant’s efficiency)

Deforestation Biomass Monitoring of The project targets the Areas around the Semi‐annually Project team N/A origin of use of sustainable dry portfolio of pilot with feedstock biomass: agricultural by‐ projects assistance of (especially in the products such as rice local / case of wood / husks, forest wastes or national wood‐based pruning. stakeholders residues)

Increased Biogas, Monitoring of The project will target Project sites Throughout Project team N/A transportation Biomass supply distance suppliers that guarantee lifetime of Beneficiaries to minimize the the most installations Suppliers carbon footprint environmentally friendly

caused by the feedstock supply and

transportation of assure that buyers of

residues as well end‐products are as products preferably in the vicinity. generated

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5. Environmental and social sustainability monitoring Table 2: Monitoring of environmental and social risks

Monitoring methods Sampling/ Parameters to Timing/Frequency Detection Definition of E&S risks and procedures used monitoring Responsibility be measured of measurement limit thresholds (e.g. sampling) location

Effluent leakages Amount of Logs of the Frequently Amount of Project sites Project team (groundwater leaking monitored results monitored, annually effluent in m3 contamination, and effluents (if reported Beneficiaries soil pollution) any)

Gas leakages Amount of Logs of the Frequently 4.4% Amount of Project sites Project team leaking gases monitored results monitored, annually gases in (if any) reported m3/sec Beneficiaries

Risks identified Sulphur emissions Amount of Logs of the Frequently Amount of Project sites Project team during the PIF sulphur based monitored results monitored, annually sulphur in preparation and emissions (if reported ppm Beneficiaries verified during any) the project preparation(PPG) Increase in Agricultural National / Regional Annually % increase in Areas around Project team agricultural activities productivity data; beneficiary info agricultural the portfolio of with assistance (e.g. energy‐crop Feedstock to be productivity pilot projects of local / cultivation for co‐ Origin of Logs of the continuously national digestion to increase feedstock monitored results monitored, annually Origin of Project sites stakeholders the plant’s efficiency) reported feedstock Beneficiaries

Deforestation Forest density Satellite imaginary to Semi‐Annually Amount of Areas around Project team

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and surface detect changes in cleared forest the portfolio of with assistance area forest area and in hectares pilot projects of local / density, national communication with stakeholders government

Increased Carbon Logs of calculations Annually Fuel Project sites Project team transportation footprint of potential consumption emissions caused by and distances Beneficiaries transportation of Suppliers feedstock and end

products

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6. Capacity development 185. 186. Management arrangements of the project 187. The institutional arrangement considered at this stage includes the following organs:  The Project Steering Committee (PSC) as the highest decision-making authority, the preliminary composition of which is as follows: o Representative of UNIDO; o Representative of MINAGRI; o Representative of MINEM; o Representative of MAyDS (GEF Operational Focal Point); o National Project Coordinator (UCAR). 188.  For daily management and coordination of project activities, a project management unit (PMU) will be set up by UCAR.  The PMU will include as a minimum the National Project Coordinator (NPC). The Management structure of the EMSP is represented below.

PSC

PMU

NPC

Short term national International Experts experts

Other stakeholders, who will intervene in other aspects (apart from management) of the project, will be identified during project implementation. Capacity building – especially with respect to the pilot projects – is foreseen as part of the project activities.

7. Communication Following the request approval, the project will annually communicate on implementation progress, including evolution of identified risks and impacts on the project implementation using the PIRs. Periodic reports on the project status based on the template of the GEF 6 Tracking tool will also be

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made available. The ESMP and the relevant progress report will be disclosed on the UNIDO public website, under the following link: https://open.unido.org/index.html#/projects.

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ANNEX H: PRELIMINARY GENDER ANALYSIS FOR ARGENTINA

Separate file with file name “Annex H_Argentina_Organic Waste Gender Analysis.pdf”

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ANNEX I: ESTIMATION OF GHG BENEFITS

The global environmental benefits of the Project are associated with (i) the implementation of bioenergy plants for electricity and heat generation, thereby off-setting grid electricity and fossil fuel (natural gas); (ii) the avoidance of methane releases into the atmosphere as a result of anaerobic digestion of effluents combined with biogas capture and utilization; and (iii) market development of bioenergy renewable energy based electricity generating capacity. The following table (based on the GEF Manual)81 summarizes the methodology used:

Type of GHG Direct (A) Indirect (B, C) emission reduction Component of GEF Direct implementation The Project does not Market transformation intervention that of RE technologies establish a direct can cause this type replication mechanism. of GHG emission GHG benefits obtained reduction from leveraged investments are considered as effects of market transformation. Logframe (SRF) Outputs 3.3-3.5 n/a Medium-term impact after level project termination (10 years) Quantification Direct evaluation of the n/a Top-bottom approach based method environmental benefits on expected market over lifetime of an development of bioenergy assumed portfolio of 7.5 technologies for electricity MW bioenergy systems. and heat generation in For wet biomass Argentina. processing by anaerobic digestion, avoided methane releases are estimated in accordance with approved CDM methodologies. Quality of Based on expected n/a Based on: (i) assumption that Assessment performance of 41 MW electricity generation bioenergy systems in capacity based on dry and Argentina. Error range is wet biomass is being added estimated at +/-50%. annually; (ii) baseline shift of 20%; (iii) CO2-intensity of electricity generation sector

in Argentina is 0.46 tCO2/ MWh: (iv) average technical availability of 80%; (v) other effects (displaced fossil

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energy for thermal uses, solid biofuels, avoided methane releases) are not considered.

The following table presents the GHG reduction potential for the prioritized sectors as a result avoided methane releases (anaerobic digesters for wet biomass), substitution of liquefied petrol gas, and grid electricity. The presented figures are per unit of agro-industrial residues from the considered business.

The following references and input data are used:

 Global Warming Potential of methane: 21 (1 kg CH4 is equivalent to 21 kg CO2eq);  GHG emission factor interconnected electricity system in Argentina (SADI): 0.46 kg CO2eq/kWh;  GHG emission factor liquid petrol gas (LPG): 2.98 kg CO2eq/kg LPG;  Avoided methane releases by anaerobic digesters estimated based on the draft CDM small- scale Methodology AMS III-H v.18. (methane recovery in wastewater treatment).

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BIOENERGY SYSTEMS – GREENHOUSE GAS REDUCTION POTENTIAL ANAEROBIC DIGESTER / BIOMASS AGROINDUSTRY THERMAL POWER ELECTRIC POWER SYSTEM GHG GHG GHG REDUCTION AVERAGE REDUCTION AVERAGE REDUCTION SECTOR ENERGY DENSITY POTENTIAL CAPACITY (THERMAL - CAPACITY (ELECTRIC - (METHANE) LPG) GRID) (KG (KG (1/UNIT) (KG CO2EQ/UNIT) (W/UNIT) (W/UNIT) CO2EQ/UNIT) CO2EQ/UNIT) Slaughterhouses 1/animal 2.656 kg CH4 50.2 3.93 6.9 (natural gas) 1.18 4.7 1/m3 Dairy processing processed 1.744 kg CH4 33.0 2.58 5.3 0.775 3.1 facilities milk m3 Feedlot 1/animal 105 706 108 221 32.4 129 CH4/yr m3 Dairy farm 1/animal 61 263 62.1 128 18.6 74 CH4/yr m3 Pig farm 1/animal 64 453 65.6 135 19.7 78 CH4/yr 1/ton rice Rice mills 12.6 GJ/ton - 400 - 120 484 husk 1/ton wood Forestry (sawmills) 11.3 GJ/ton - 360 - 107 345 (humid)

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The next table summarizes the direct GHG emission reductions for the proposed (tentative) demonstration pilots in the prioritized sectors. The indicated installed capacities refer to electricity generation interconnected to the electricity distribution network.

BIOENERGY SYSTEMS - DIRECT GHG EMISSION REDUCTIONS DEMONSTRATION PILOTS INSTALLED ELECTRICITY AGROINDUSTRY GHG EMISSION REDUCTIONS CAPACITY PRODUCTION THERMAL – ELECTRIC – SECTOR PRODUCTION SCALE METHANE LPG GRID (KW) (MWH/YR) (TON CO2EQ/YR) Slaughterhouses 27,000 animals per year 32 279 1,355 186 127 Dairy processing 21,900 m3 processed milk/yr 17 149 723 116 68 facilities Feedlot 5,000 animals 162 1,419 3,530 1,105 645 Dairy farm 1,000 animals 19 163 263 128 74 Pig farm 7,000 animals 138 1,208 3,171 945 546 Rice mills 18,020 ton processed rice/yr 2,162 18,943 - - 8,714 Forestry (sawmills) 46,720 ton wood/yr 4,999 35,033 - - 16,115 TOTAL 7,529 57,194 9,042 2,480 26,289

The following table calculates the relative weight of each element into the total direct GHG reductions. The largest GHG benefits are delivered by the dry biomass systems, which are larger in size than the biogas plants. It is assumed here that the biogas systems will deliver both thermal and electric energy, which may not always be the case.

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BIOENERGY SYSTEMS – RELATIVE SHARE OF DEMONSTRATION PILOTS IN DIRECT GHG EMISSION REDUCTIONS AGROINDUSTRY GHG EMISSION REDUCTIONS SECTOR PRODUCTION SCALE METHANE THERMAL – LPG ELECTRIC – GRID TOTAL (TON (TON (TON (TON CO2EQ/YR (%) (%) (%) (%) CO2EQ/YR) CO2EQ/YR) CO2EQ/YR) ) Slaughterhouses 27,000 animals per year 1,355 4% 186 1% 127 0% 1,669 4% Dairy processing 21,900 m3 processed milk/yr 723 2% 116 0% 68 0% 907 2% facilities Feedlot 5,000 animals 3,530 9% 1,105 3% 645 2% 5,280 14% Dairy farm 1,000 animals 263 1% 128 0% 74 0% 465 1% Pig farm 7,000 animals 3,171 8% 945 3% 546 1% 4,662 12% Rice mills 18,020 ton processed rice/yr - 0% - 0% 8,714 23% 8,714 23% Forestry 46,720 ton wood/yr - 0% - 0% 16,115 43% 16,115 43% (sawmills) TOTAL 9,042 24% 2,480 7% 26,289 69% 37,811 100%

Avoided methane releases represent more than 50% of total GHG emission reductions for all wet biomass pilots. For the chosen pilot sizes, substantial methane emission reductions are delivered by the slaughterhouses (4% of total), feedlots (9% of total) and pig farms (8% of total).

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Direct GHG benefits

The Project aims to mobilize about US$ 21.7 million for direct investment in bioenergy installations, of which US$ 19.7 for dry biomass power generation (forestry residues in sawmills and husk from rice mills) and about US$ 2.0 million in wet biomass (biogas) projects. A total electric capacity of about 7.5 MW would be installed under the Project. The expected annual energy production is 57,194 MWh/yr. Based on the indicated CO2-intensity of the power system, the direct GHG emission reductions are: 57,194 MWh * 0.46 tons CO2eq/MWh = 26,289 tons CO2eq (26.3 kton CO2eq). Avoided methane releases by biogas installations amount to 9,042 tons CO2eq per year (9.0 kton CO2eq). The total direct GHG emission reductions are thus: 26.3 + 9.0 = 35.3 kton CO2eq per year. Over a 10-year economic lifetime of the investment, the total electricity production would be: 10 yr * 57,200 MWh/yr = 572,000 MWh (572 GWh). The total direct GHG emission reductions are estimated at: 353 kton CO2eq. Emissions reductions due to the replacement of thermal energy from LPG are not claimed here.

Indirect benefits

The Project further contributes to GHG emission reductions as a result of the attained increased market penetration of (renewable) bioenergy technologies. A calculation of these benefits is subject to large uncertainties as market data are not always consolidated and error margins difficult to assess. For simplicity, only grid-connected bioenergy systems are considered, which replace fossil-based electricity (grid GHG intensity factor 0.46 ton CO2/MWh). The total market for bioenergy-based electricity generation is assumed to be equal to the goal set by Probiomasa for 2030 (1,325 MW installed capacity). For simplicity, thermal energy generation and solid biofuel markets are not considered here. It is further assumed that larger dry biomass projects will develop as part of the baseline, so that the impact of the GEF Project is limited to capacities below 10 MW (31% of the market). The target market volume hence is: 410 MW (electric power). It is assumed that this potential is brought online progressively during the period 2020-2030. The GEF causality factor has been determined at 40% (modest). Considering Argentina´s ambitions to develop large wind and solar energy projects in the near future, a baseline shift of 20% is assumed. The following table summarizes the input data and estimations made.

MARKET POTENTIAL AND GHG EMISSION REDUCTIONS FOR GRID-CONNECTED BIOENERGY DESCRIPTION UNIT FACTOR Total market potential (2030) 1,325 MW Range <10 MW 410 MW 31% Effective installed capacity over 10-year period 226 MW 55% Technical availability 80% Energy production 1,583,000 MWh/yr GHG emission reductions 728,270 ton CO2eq/yr 0.46 Baseline shift 145,654 ton CO2eq/yr Net GHG emission reductions 582,616 ton CO2eq/yr GEF causality factor 233,046 ton CO2eq/yr 40% Net GHG emission reductions over 10-year period 2,330 kton CO2eq

Based on these assumptions and input data, the GHG emission reduction are estimated at 233 kton CO2eq/yr, or 2.3 Mton CO2eq over a 10-year impact horizon.

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ANNEX J: TRACKING TOOL FOR CLIMATE CHANGE MITIGATION PROJECTS

Separate file with file name “Annex J_GEF6-CCM_-Tracking Tool.xlsx”

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ANNEX K: SUMMARY OF ANAEROBIC DIGESTER SURVEY IN ARGENTINA

The following paragraphs provide a transcription into English of the key findings and conclusions from the National Anaerobic Digester Survey: “Relevamiento Nacional de Biodigestores – Informe Final (OTN 615 000021)”, Instituto Nacional de Tecnología Industrial (INTI) - Programa de Energías Renovables, 17 March 2016. For a full explanation of the work, the reader is referred to the original document.

The survey was performed under an agreement between the National Institute for Industrial Technology (INTI) and Probiomasa. The authors of the final report are: Victor I. Goicoa, M. Alejandra Barlatey, and Agustín Piccoletti. Coordination was in hands of Gustavo Gil. Some additional graphs were added to highlight aspects of anaerobic digestion technology in Argentina that are relevant to the present GEF project.

1. Objective and scope The objective of the survey was to determine the status of anaerobic digestion technology in Argentina. The methodology was defined by specialists of INTI in collaboration with professionals from INTA, among others. As agreed with Probiomasa, at least 60 installations were visited and inspected in situ. Based on extension work by INTI since 2010, the total number of anaerobic digestion plants in Argentina is estimated at more than 80.

BIODIGESTOR PLANTS SURVEYED PROVINCE UNITS Buenos Aires 10 Chubut 2 Córdoba 3 Corrientes 2 Entre Ríos 4 Jujuy 2 La Pampa 5 Mendoza 1 Misiones 3 Neuquén 2 Río Negro 1 Salta 4 San Luis 4 Santa Fe 17 Santiago del Estero 1 Tucumán 3 Total 64

TABLE 1 ANAEROBIC DIGESTION PLANTS SURVEYED IN ARGENTINA. (DERIVED FROM TABLE 8 IN THE ORIGINAL REPORT).

2. Ownership and purpose of anaerobic digestion plants The following figures show the ownership type for the surveyed anaerobic digestion plants, classified into the following categories: public sector, private sector, cooperatives, individual (household), and non-governmental organization (NGO).

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FIGURE 1 OWNERSHIP TYPE FOR THE ANAEROBIC DIGESTION PLANT SURVEYED. (DERIVED FROM FIGURE 12 IN THE ORIGINAL REPORT).

The private anaerobic digestion systems are mostly linked to (agro-) industrial processes and used for effluent treatment. The larger public anaerobic digestion plants are mostly found in combination with wastewater (sewage) treatment plants. Small anaerobic digestion plants in the public domain are found at schools, municipalities, etc. and have a demonstration and educational objective. A minority of the installed systems was installed with the objective to generate (reliable) energy.

FIGURE 2 MAIN PURPOSE OF ANAEROBIC DIGESTION SYSTEMS INSTALLED IN ARGENTINA. (DERIVED FROM FIGURES 14 AND 16 IN THE ORIGINAL REPORT).

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FIGURE 3 END-USE OF THE BIOGAS PRODUCED. ELECTRICITY INCLUDES ELECTRICITY ONLY AND COGENERATION. (DERIVED FROM FIGURE 24 IN THE ORIGINAL REPORT).

3. Size and technology As shown in the next graphs, average anaerobic digestion sizes in the private sector are substantially larger than in the public sector. The applied technologies are more advanced and there is a larger use of imported components.

FIGURE 4 SIZE OF ANAEROBIC DIGESTION IN ARGENTINA OWNED BY PUBLIC ENTITIES. (DERIVED FROM FIGURE 16 IN THE ORIGINAL REPORT).

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FIGURE 5 SIZE OF ANAEROBIC DIGESTION IN ARGENTINA OWNED BY THE PRIVATE SECTOR. (DERIVED FROM FIGURE 14 IN THE ORIGINAL REPORT).

FIGURE 6 CLASSIFICATION OF INSTALLED ANAEROBIC DIGESTERS IN THE PUBLIC AND PRIVATE SECTOR ACCORDING TO TECHNOLOGY APPLIED. UASB = UPFLOW ANAEROBIC SLUDGE BLANKET; RAC = ANAEROBIC CONTACT REACTOR. (DERIVED FROM TABLE 12 IN THE ORIGINAL REPORT).

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FIGURE 7 CLASSIFICATION OF INSTALLED ANAEROBIC DIGESTERS IN THE PUBLIC AND PRIVATE SECTOR ACCORDING TO THE SHARE OF IMPORTED EQUIPMENT. (DERIVED FROM TABLE 13 IN THE ORIGINAL REPORT).

The following table lists the type of imported components and devices as found in the surveyed anaerobic digestion installations.

IMPORTED BIODIGESTOR PLANT COMPONENTS INSTALLED IN ARGENTINA Biogas burners (flaring) Electro-mechanical devices Membranes Generator sets (engines) pumps and fans Measurement and automatic control instruments Sensors Biogas purification units Valves Stirrers

TABLE 2 LIST OF IMPORTED ANAEROBIC DIGESTION COMPONENTS AND DEVICES. (DERIVED FROM TABLE 14 IN THE ORIGINAL REPORT).

4. Control of process parameters. Especially smaller anaerobic digesters in the public sector (as well as in households, NGOs and cooperatives) were found to be rather “rudimentary” and lacking any control of process parameters. The following graphs provide an indication of the level of process and temperature control for the entire sample population.

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FIGURE 8 LEVEL OF PROCESS CONTROL AND AUTOMATION FOR THE COMBINED PUBLIC AND PRIVATE ANAEROBIC DIGESTERS INSTALLED IN ARGENTINA. (DERIVED FROM TABLE 17 IN THE ORIGINAL REPORT).

FIGURE 9 ABILITY OF THE OPERATOR TO STABILIZE THE REACTOR TEMPERATURE. IN MORE THAN 50% OF THE SYSTEMS, TEMPERATURE CONTROL IS TOTALLY ABSENT. (DERIVED FROM TABLE 15 IN THE ORIGINAL REPORT).

In 70% of the cases, the owner does not have any information concerning the quality or composition of the biogas produced. Only 16% of the plants is equipped with a good biogas purification system.

5. Origin of the biomass Associated to the surveyed installations, the following organic waste and residue streams were identified:

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BIOMASS SUBSTRATES USED IN BIODIGESTORS INSTALLED IN ARGENTINA URBAN WASTE AGRICULTURAL RESIDUES Organic fraction of municipal solid waste Waste from milling processes Sewage sludge Maize silage Sewage effluents Fruit horticulture

INDUSTRIAL WASTE LIVESTOCK RESIDUES Effluents from: Poultry waste ‐ citrus industry Horse excrements ‐ beer breweries Cow dung ‐ slaughterhouses Pork manure ‐ paper mills Manure from dairy farms ‐ dairy factories Manure mixtures ‐ yeast production ‐ yerba mate production Glycerin Cassava (mandioca) production Wey from cheese production Vinasse

TABLE 3 ORGANIC WASTE AND RESIDUE STREAMS USED AS SUBSTRATE IN THE SURVEYED ANAEROBIC DIGESTION SYSTEMS. (DERIVED FROM TABLE 18 IN THE ORIGINAL REPORT).

About three-quarters of the installations use biomass residues obtained from internal business operations; one-quarter is obtained from external sources. In none of the cases, biomass is purchased from external suppliers, which makes clear that a market for biomass substrate has not developed.

FIGURE 10 ORIGIN OF THE BIOMASS FEEDSTOCK USED. (DERIVED FROM FIGURE 22 IN THE ORIGINAL REPORT). GEF6 CEO Endorsement /Approval Template-August2016

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6. Other observations Besides the conclusions drawn from the statistical data as presented above, the INTI survey team made a series of observations resulting from the engagement with anaerobic digestion (and biogas) users:

 Many of the (smaller) installations are operated in a very rudimentary way. Control decisions are based on visual information and practice. The owners express a great need for technical assistance.  With a few exceptions, none of the surveyed anaerobic digestion plants is equipped with adequate safety measures. The adoption of safety measures is considered a critical aspect for further developing the technology.  Only 36% of all installations make use of the digestate in one way or another. A market for organic fertilizer does not exist in Argentina, in the first place due to the absence of supportive regulation.  As most plant operators lack specific knowledge about biogas technology, their expectations often remain unfulfilled. Often they are unsatisfied by the services provided by the suppliers (especially from foreign companies).  Technological concepts imported by foreign suppliers are not adapted to the specific conditions of Argentina, resulting in deficient operation and increased operational costs.  No positive correlation was found between project size and overall sustainability. Since systems are poorly integrated into business production systems, potential economies of scale and operational benefits do not materialize.  As key failure factors were identified: (i) lack of knowledge by many users; (ii) unsuitable technologies chosen for specific situations; (iii) use of inadequate construction materials; (iv) poor process and temperature control; and (v) poor preparation of feedstock.

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ANNEX L: INVENTORY OF DRY BIOMASS PROJECTS IN ARGENTINA

BIOENERGY PROJECTS – PROJECT INVENTORY PROBIOMASA (PIF, FEBRUARY 2015) PIPELINE CONSTRUCTION OPERATIONAL TOTAL PROVINCE N° MW N° MW N° MW N° MW MISIONES 10 61 1 0 9 113 20 174 TUCUMÁN 3 68 3 70 3 8 9 146 BUENOS AIRES 11 51 1 0 9 50 21 101 SANTA FE 6 28 0 0 8 241 14 269 CORRIENTES 6 72 1 0 3 44 10 116 JUJUY 1 4 0 0 1 51 2 55 CHACO 3 47 0 0 2 5 5 52 ENTRE RÍOS 9 41 0 0 2 8 11 49 SALTA 0 0 0 0 1 40 1 40 MENDOZA 0 0 SAN LUIS 0 0 1 2 2 25 3 27 CÓRDOBA 4 17 1 1 1 11 6 29 FORMOSA 0 0 CHUBUT 1 2 0 0 0 0 1 2 LA PAMPA 0 0 NEUQUÉN 1 2 0 0 0 0 1 2 SAN JUAN 0 0 1 2 0 0 1 2 TIERRA DEL FUEGO 1 2 0 0 0 0 1 2 SANTIAGO DEL ESTERO 0 0 0 0 1 4 1 4 TOTAL 56 395 9 75 42 600 107 1070

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BIOENERGY PROJECTS – PROJECT INVENTORY PROBIOMASA (CHANGES) PIPELINE CONSTRUCTION OPERATIONAL TOTAL PROVINCE N° MW N° MW N° MW N° MW MISIONES ‐2 ‐5 1 5 1 ‐1 0 ‐1 TUCUMÁN 0 0 ‐1 0 1 3 0 3 BUENOS AIRES 2 1 ‐1 0 2 41 3 42 SANTA FE 0 ‐1 3 1 4 ‐177 7 ‐177 CORRIENTES ‐2 2 0 40 2 ‐27 0 15 JUJUY 0 1 0 0 2 1 2 2 CHACO 0 0 0 0 0 0 0 0 ENTRE RÍOS ‐1 0 0 0 2 ‐1 1 ‐1 SALTA 0 0 0 0 0 0 0 0 MENDOZA 2 35 0 0 0 0 2 35 SAN LUIS 0 0 0 0 0 0 0 0 CÓRDOBA ‐1 ‐15 3 11 4 0 6 ‐4 FORMOSA 1 2 0 0 0 0 1 2 CHUBUT 0 0 0 0 0 0 0 0 LA PAMPA 3 1 0 0 3 1 6 2 NEUQUÉN 0 0 0 0 0 0 0 0 SAN JUAN 0 0 0 ‐1 1 1 1 0 TIERRA DEL FUEGO 1 ‐1 0 0 0 0 1 ‐1 SANTIAGO DEL ESTERO 0 0 0 0 ‐1 ‐3 ‐1 ‐3 TOTAL 3 20 5 56 21 ‐162 29 ‐86

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ANNEX M: SECTOR INFORMATION FOR PRIORITIZATION AGROINDUSTRIAL SECTORS

PRIORITY SECTORS – SUMMARY SOCIO-ENECOMIC KEY FIGURES SECTOR KEY FIGURES ESTABLISHMENT TYPE CATEGORY PRODUCTION DIRECT JOBS SECTOR VALUE S (‐) (‐) (%) MUS$ (%) Slaughterhouses SL 226 2,452,000 ton meat (domestic) 47,000 15% 530 4% Dairy processing SL 900 1,749 mln litre milk 30,000 10% 6,250 47% facilities Feedlot PL 1,815 710,500 ton meat 67,800 22% 1,891 14% Dairy farm PL 10,224 11,330 mln litre milk 99,767 32% 3,600 27% Pig farm PL 53,276 281,250 ton meat 30,000 10% 667 5% Rice mills SA N/A 946,981 ton rice (milled) N/A ‐ 152 1% Forestry (sawmills) SF 2,639 231,566 m3 cut wood 38,274 12% 188 1% TOTAL 100% 100%

FEEDLOTS – KEY SECTOR FIGURES ESTABLISHMENTS (2013) PRODUCTION (2008) PROVINCES (2013) 1,815 3,415,000 sacrificed CENTRO: 80% BUSINESS head 710,500 ton meat Buenos Aires, SCALE (2013) Santa Fe, <750 51% Cordoba, Entre Rios 751-1,500 23% ECONOMIC VALUE NOA 8% 1,501-3,000 14% 1,891 MUSD (estimated) NEA: 6% Corrientes, Misiones 3,001-6,000 8% TOTAL 94% >6,001 4% LABOR TOTAL 100% 67,800 employees

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PIG FARMS – KEY SECTOR FIGURES ESTABLISHMENTS (2010) PRODUCTION PROVINCES (2008) (2013) 53,276 667,496 sows Buenos Aires 28% BUSINESS sows 3,234,133 sacrificed Cordoba 26% SCALE (2013) <10 22% 281,250 ton meat Santa Fe 16% 11-50 31% TOTAL 70% 51-100 15% ECONOMIC VALUE 101-500 18% 667 MUSD (estimated) >500 15% TOTAL 100% LABOR 30,000 employees

DAIRY FARMS – KEY SECTOR FIGURES ESTABLISHMENTS (2016) PRODUCTION (2012) PROVINCES (2013) 10,224 3,499,621 head Santa Fe 43% BUSINESS head litre milk/day 11,339 million litre milk Cordoba 31% SCALE (2013) <100 18% 0-1,000 32% Buenos Aires 17% 100-500 65% 1,001- 35% ECONOMIC VALUE Entre Rios 6% 2,000 501- 14% 2,001- 17% 3,600 MUS$ (estimated) TOTAL 97% 1,000 3,000 >1,001 4% 3,001- 7% 4,000 TOTAL 100% 4,000- 8% LABOR 10,000 >10,000 1% 99,767 employees TOTAL 100%

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DAIRY PROCESSING FACILITIES – KEY SECTOR FIGURES ESTABLISHMENTS (2012) PRODUCTION PROVINCES (2015) (2013) 900 332,396 exports Buenos Aires 34% BUSINESS litre milk/day 1,749 million litre milk Santa Fe 13% SCALE (2009) 0-10,000 47% Corrientes 10% 10,001-50,000 35% Cordoba 9% 50,001-250,000 13% ECONOMIC Entre Rios 9% VALUE >250,000 5% 6,250 MUS$ (estimated) TOTAL 75% TOTAL 100% LABOR 30,000 employees

SLAUGHTERHOUSES (BOVINE) – KEY SECTOR FIGURES ESTABLISHMENTS (2014) PRODUCTION PROVINCES (2015) (2013) 226 12,200,000 sacrificed Buenos Aires 171 BUSINESS SCALE head 2,452,000 ton meat Cordoba 19 (2015) (domestic) N/A 677,432 ton meat Entre Rios 18 (export) N/A Santa Fe 28 ECONOMIC TOTAL 226 VALUE 530 MUS$ (estimated)

LABOR (2013) 47,000 employees

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RICE SECTOR – KEY SECTOR FIGURES ESTABLISHMENTS (2014) PRODUCTION PROVINCES (2013/14) (2013) N/A 243,200 ha Corrientes 43% BUSINESS ha 1,581,810 ton rice Entre Ríos 32% SCALE (2015) 0-50 2% 946,981 ton rice Santa Fe 19% (milled) 51-100 7% 308,109 (exports) ton Formosa 3% 101-200 14% Chaco 3% 201-500 29% ECONOMIC TOTAL VALUE 152,369,000 exports 501-1,000 19% 1,001-1,500 13% LABOR (2013) >1,500 16% N/A TOTAL 100%

FORESTRY (PLANTATIONS) – KEY SECTOR FIGURES ESTABLISHMENTS (2007) PRODUCTION PROVINCES (2013) (2016) 12,000 3,892,127 ton primary forest Corrientes 36% BUSINESS ha 380,373 ton exports Misiones 30% SCALE <500 Entre Rios 13% 500-10,000 ECONOMIC Buenos Aires 5% VALUE >10,000 711 MUS$ exports TOTAL

LABOR (2013) 62,000 employees

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FORESTRY (SAWMILL) – KEY SECTOR FIGURES ESTABLISHMENTS (2003) PRODUCTION PROVINCES (2013) (2016) 2,639 231,566 m3 (cut wood) Buenos Aires 26% BUSINESS turnover (ARS) Misiones 20% SCALE (2011) <$800,000 53% Entre Rios 11% $800,000- 22% ECONOMIC Santa Fe 7% $2,000,000 VALUE (2014) $2,000,000- 14% 186 MUS$ exports Cordoba 6% $5,000,000 >$5,000,000 11% TOTAL 70% TOTAL 100% LABOR (2011) 38,274 employees 57,000 indirect labor

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ANNEX N: ENERGY POTENTIAL OF PRIORITIZED AGROINDUSTRIAL SECTORS

Typical thermal and electric power yields per production unit for the prioritized agroindustries:

BIOENERGY SYSTEMS – TYPICAL ENERGY PRODUCTION CAPACITY BIODIGESTOR / AGROINDUSTRY THERMAL POWER ELECTRIC POWER BIOMASS SYSTEM AVERAGE UNIT AVERAGE UNIT SECTOR ENERGY DENSITY EFFICIENCY CAPACITY FEEDSTOCK CAPACITY FEEDSTOCK (UNITS/MW (UNIT) (W/UNIT) (UNITS/MW) (%) (W/UNIT) ) Slaughterhouses animal 2.656 kg CH4 3.93 254,000 1.18 848,000 Dairy processing m3 processed 1.744 kg CH4 2.58 387,000 0.775 1,291,000 facilities milk m3 Feedlot animal 105 108 9,270 32.4 30,900 CH4/yr m3 Dairy farm animal 61 62.1 16,100 30% 18.6 53,700 CH4/yr m3 Pig farm animal 64 65.6 15,300 19.7 51,000 CH4/yr Rice mills ton rice husk 12.6 GJ/ton 400 2,500 120 8,330 ton wood Forestry (sawmills) 11.3 GJ/ton 360 2,790 107 9,300 (humid)

Estimated current bioenergy potential for electricity generation, based on the typical yields.

BIOENERGY SYSTEMS – ELECTRICITY PRODUCTION POTENTIAL PER SECTOR ELECTRICITY ELECTRICITY AGROINDUSTRY GENERATION PRODUCTION CAPACITY SECTOR SECTOR SIZE (UNITS) (UNITS/MW) (MW) (MWH/YR) Slaughterhouses 12,200,000 animals per year 848,000 14.4 126,000 Dairy processing 1,749,000 m3 processed milk/yr 1,291,000 1.4 12,000 facilities Feedlot 3,415,000 animals 30,900 111 968,000 Dairy farm 3,499,621 animals 53,700 65.2 571,000 Pig farm 3,234,133 animals 51,000 63.4 556,000 Rice mills 946,981 ton processed rice/yr 8,330 114 996,000 Forestry (sawmills) 231,566 ton wood/yr 9,300 24.9 218,000 TOTAL 393 3,447,000

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Electricity production and estimated investment (CAPEX) and operational (OPEX) costs for proposed (tentative) demonstration pilots.

DEMONSTRATION PILOTS FOR BIOENERGY ELECTRICITY GENERATION SYSTEMS

AGROINDUSTRY ELECTRICITY GENERATION PROJECT COSTS

SPECIFIC ELECTRICIT OPEX/ INSTALLED SPECIFIC SECTOR PRODUCTION SCALE CAPACIT Y CAPEX CAPEX CAPACITY COST82 Y PRODUCTION 83 (US$/KW UNIT W/UNIT (KW) (MWH/YR) (US$) (%) ) 27,00 Slaughterhouses animals per year 1.18 32 279 8,611 274,337 3.9% 0 Dairy 21,90 processing m3 processed milk/yr 0.775 17 149 13,466 228,543 3.8% 0 facilities Feedlot 5,000 animals 32.4 162 1,419 4,164 674,648 4.4% Dairy farm 1,000 animals 18.6 19 163 12,556 233,550 3.8% Pig farm 7,000 animals 19.7 138 1,208 4,355 600,516 4.3% 18,02 Rice mills ton processed rice/yr 120 2,162 18,943 2,800 6,054,720 4.8% 0 46,72 Forestry ton wood/yr 107 4,999 35,033 2,700 13,497,408 4.6% 0 TOTAL 7,529 57,194 21,563,723

82 Investment costs for estimated based on IRENA [7]. For the biogas systems, investment costs have been interpolated based on figures from J. Vos and K. Zwart [19} using the following formula: CAPEX (US$) = 176,366 + 3,076* P (kW); in which P is the installed electricity generation capacity. 83 Operational expenditures consist of a fixed and a variable part. The costs of feedstock are not included in the OPEX. GEF6 CEO Endorsement /Approval Template-August2016

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ANNEX O: STAKEHOLDER RELATIONS IN PRIORITIZED PROVINCES

Stakeholder relations Bioenergy Network in Province of Buenos Aires

Stakeholder relations Bioenergy Network in Cordoba

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Stakeholder relations Bioenergy Network in Santa Fe

Stakeholder relations Bioenergy Network in Corrientes

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Stakeholder relations Bioenergy Network in Entre Rios

Stakeholder relations Bioenergy Network in Misiones

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ANNEX P: DOCUMENT “DESCRIPCIÓN Y ANÁLISIS DEL MARCO INSTITUCIONAL PARA LA BIOENERGÍA EN ARGENTINA – INFORME FINAL”, L. GRASSI, MAY 2016

Please see separate file with file name “Annex P_Descripción y análisis del marco institucional para bioenergía.pdf” (in Spanish)

ANNEX Q: DOCUMENT “PROPUESTA DE CONFORMACIÓN DE UNA RED TECNOLÓGICA DE EXCELENCIA ´RED ARGENTINA DE BIOENERGÍA´ – INFORME FINAL”, L. GRASSI, JUNE 2016

Please see separate file with file name “Annex Q_Propuesta de conformación de una red tecnológica de excelencia.pdf” (in Spanish)

ANNEX R: DOCUMENT “ANÁLISIS DE PROYECTOS DE BIOENERGÍA EN SECTORES PRIORITARIOS DE LA ARGENTINA”, BY CENTRO DE TECNOLOGÍA CLIMÁTICA Y ENERGÍA, FAC. DE INGENIERÍA, UNICEN, 2 MAY 2016

Please see separate files with file names “Annex R_part 1_Relevamiento de actividades en bioenergía en Argentina.pdf”and “Annex R_part 2_Relevamiento proyecto bioenergia Argentina.xls” (both in Spanish)

ANNEX S: DOCUMENT “ANÁLISIS DE PROYECTOS DE BIOENERGÍA EN SECTORES PRIORITARIOS DE LA ARGENTINA - EVALUACIÓN DE LA SITUACIÓN ACTUAL EN RELACIÓN A LAS BARRERAS PARA EL DESARROLLO DE LA BIOENERGÍA EN LA ARGENTINA”, BY CENTRO DE TECNOLOGÍA CLIMÁTICA Y ENERGÍA, FAC. DE INGENIERÍA, UNICEN, 15 JUNE 2016

Please see separate file with file name “Annex S_ Análisis de barreras bioenergia en Argentina.pdf”(in Spanish)

ANNEX T: NOMINATION OF UCAR

Please see separate file with file name “Annex T_Nomination of UCAR.pdf”

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ANNEX U: REVIEW OF BARRIERS ADDRESSED IN FINAL PROJECT DESIGN

Upon PIF approval, the GEF Council suggested to provide a table linking project design to the initial barrier analysis as provided in the PIF (Question 2, Germany):

“Barriers: Beginning on p.6 the PIF outlines numerous and significant barriers that have been identified by the Secretary of Energy for the deployment of renewable energy in Argentina. It would be helpful to add a column to the table and include action items to be undertaken by the GEF project to overcome the barriers and manage risk.”

The following table follows the barrier presentation from the PIF and indicates which barriers are addressed by the final project design, and which are not. Please note that the grouping of barriers in the CEO ER deviates slightly from the presentation in the PIF.

FINAL PROJECT DESIGN – RELATION TO BARRIERS IDENTIFIED AT PIF PRESENTATION IN THE PIF TYPE OF BARRIER DESCRIPTION PROJECT OUTPUT COMMENTS 1. Regulatory 1.1 Weak national and provincial policies Outputs 1.1.1- Barriers and strategies supportive for bioenergy 1.1.6 development. 1.2 Complex regulation and diverse Output 1.1.1 transport tariffs at the provincial level for electricity distribution. 1.3 Complex process for admission to the Output 1.1.4 Wholesale Market, particularly affecting medium and small projects. 1.4 Delayed introduction of the simplified Output 1.1.4 “fast track” mechanism allowing the inclusion of renewable energy projects up to 2MW. 2. Economic Barriers 2.1 Prevalence of low energy and not addressed This problem is acknowledged by the Government electricity tariffs and (gradually) being addressed under the baseline. 2.2 Shortage of preferential economic Outputs 1.1.1; policies and price incentives for medium- 1.1.2; 1.1.5; 1.1.6 and small-scale bioenergy projects. 3. Financial Barriers 3.1 Scarcity of local financial resources for not specifically (see 3.3) renewable energy projects: high interest addressed rate, restrictive terms. 3.2 Lack of experience and tools necessary Outputs 2.1.1- to perform technical evaluations of 2.1.5; 3.1.1-3 bioenergy projects. 3.3 Insufficient financial mechanisms or not specifically Important progress is made under the baseline, both incentives for bioenergy projects (trusts, addressed by improvement of the general investment climate in mutual funds, specific lines of funding, Argentina and the creation of FODER under Law non-repayable funds, etc) 27.191. The Project aims to ensure eligibility of (smaller) bioenergy projects by acting upon specific regulation for FODER (and other forthcoming instruments) in collaboration with MINEM. Special attention will be given to financing mechanisms for electricity generation outside the wholesale market, and to thermal energy applications. 4. Institutional Limited awareness of bioenergy options by Outputs 2.1.2; Barriers and the private sector. 2.1.4; 3.1.1

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Promotion Need to address safety, health and Outputs 1.1.3; environmental risks of bioenergy projects 1.1.4; 3.1.5 as part of awareness and outreach programmes. Need to demonstrate proper utilization of Outputs 3.1.1- Note that 3.1.1, 3.1.4 and 3.1.5 are specifically biomass for energy generation, thereby 3.1.6 designed to avoid bad practices. avoiding bad practices. Limited inter-institutional coordination and Outputs 2.1.1- Specifically 2.1.1 is designed to ensure high-level collaboration of agencies, institutes and 2.1.5 coordination under leadership of MINAGRI. universities working in the bioenergy field. 5. Technology Limited accurate information on biomass at Output 2.1.3 Barriers and Delivery local level, although the WISDOM Skills Argentina project has quantified biomass and power generation potential at the country level. Scarce qualified professional and properly Outputs 2.1.4; trained technicians in industries affecting 3.1.4 project design and adding to technical and perceived risks. Limited experience on the preparation and Outputs 3.1.1; evaluation of full feasibility studies for 3.1.3 bioenergy projects. Limited experience with bioenergy Outputs 3.1.1- projects, which affects project maturity and 3.1.4 the potential advantages of biomass energy over other energy sources.

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ANNEX V: LIST OF ACRONYMS AND ABBREVIATIONS

ENGLISH SPANISH AFoA Argentine Forestry Association Asociación Forestal Argentina BICE Bank for Investment and Foreign Trade Banco de Inversión y Comercio Exterior CADER (Argentine Chamber of Renewable Cámara Argentina de Energías Renovables Energies CAF Corporacion Andina de Fomento CAMMESA Electricity Wholesale Market Compañía Administradora del Mercado Administration Company Mayorista Eléctrico Sociedad Anónima CAPEX Capital Expenditure Inversiones de capital CEARE Center for the Study of the Energetic Centro de Estudios de la Actividad Regulation Activity Regulatoria Energética CERFOAR National System for Forestry Sistema Argentino de Certificación Certification Forestal COFEMA Federal Council for the Environment Consejo Federal de Medio Ambiente CONICET National Scientific and Technical Consejo Nacional de Investigaciones Research Council Científicas y Técnicas CPA Central Public Administration Administración Pública Centralizada CTEA Center for Climate and Energy Centro de Tecnología Climática y Energía Technology CTS Sectoral Technological Council Consejo Tecnológico Sectorial DG Distributed Generation Generación Distribuida EEAOC Agroindustrial Experimental Station Estación Experimental Agroindustrial Obispo Colombres Obispo Colombres ENARGAS National Gas Regulatory Entity Ente Nacional Regulador del Gas FADA Agricultural Foundation for the Fundación Agropecuaria para el Desarrollo Development of Argentina de Argentina FAIMA Argentine Federation of Wood Industry Federación Argentina de la Industria Maderera y Afines FITR Regional Funds for Technological Fondos de Innovación Tecnológica Innovation Regionales FITS Sectoral Funds for Technological Fondos de Innovación Tecnológica Innovation Sectorial FODER Fund for Renewable Energy FONARSEC Argentine Sectoral Fund Fondo Argentino Sectorial GBEP Global Bioenergy Partnership GIRSU Integrated Management of Municipal Gestión Integral de Residuos Sólidos Solid Waste Urbanos

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ENGLISH SPANISH ICT Information and Communication Tecnología de Información y Technology Comunicación IDB Inter-American Development Bank Banco Interamericano de Desarrollo INDC Intended Nationally Determined Contribuciones Previstas Determinadas a Contributions Nivel Nacional INENCO Instituto de Investigaciones en Energía no Convencional INTA National Institute of Agricultural Instituto Nacional de Tecnología Technology Agropecuaria INTI National Institute of Industrial Instituto Nacional de Tecnología Industrial Technology LECB Low-Emission Capacity Building Fomento de Capacidades para el Desarrollo Bajo en Emisiones MINAGRI Ministry of Agroindustry Ministerio de Agroindustria MAyDS Ministry of Environment and Sustainable Ministerio de Ambiente y Desarrollo Development Sustentable MIGA Multilateral Investment Guarantee Agency MINCyT Ministry of Science, Technology and Ministerio de Ciencia, Tecnología e Productive Innovation Innovación Productiva MINEM Ministry of Energy and Mines Ministerio de Energía y Minería Ministry of Economy and Public Finance Ministerio de Hacienda y Finanzas Públicas MINPROD Ministry of Production Ministerio de Producción MRECIC Ministry of Foreign Affairs and Worship Ministerio de Relaciones Exteriores y Culto NAG Argentinian Standard Norma Argentina NAMA Nationally Appropriate Mitigation Action Acción Nacional Apropiada de Mitigación NEA Northeast (Argentina) Noreste de Argentina NOA Northwest (Argentina) Noroeste de Argentina

NOx Nitrogen Oxides Óxidos de Nitrógeno NPD National Project Director Director Nacional de Proyecto NPC National Project Coordinator Coordinador Nacional de Proyecto OPEX Operational Expenditure Gastos operativos PA Project Assistant Asistente de Proyecto PERMER Renewable Energies in the Rural Market Proyecto de Energía Renovable en el Project Mercado Eléctrico Rural PPA Power Purchase Agreement Acuerdo de Compraventa de Electricidad PROBIOMASA Promotion of Energy Derived from Proyecto para la Promoción de la Energía

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ENGLISH SPANISH Biomass Project Derivada de Biomasa PROSAP Provincial Agricultural Services Programa de Servicios Agrícolas Programme Provinciales PSC Project Steering Committee Comité Directivo de Proyecto REEEP Renewable Energy and Energy Efficiency Partnership SAyDS Secretariat of Environment and Secretaría de Ambiente y Desarrollo Sustainable Development Sustentable SE Secretariat of Energy Secretaría de Energía SENASA National Food Safety and Quality Service Servicio Nacional de Sanidad y Calidad Agroalimentaria

SO2 Sulphur Oxides Óxidos Sulfúricos TOR Terms of Reference Términos de Referencia UCAR Unit for Rural Change Unidad para el Cambio Rural UIA Argentine Industrial Union Unión Industrial Argentina UNICEN Universidad Nacional de Centro UPE Provincial Executing Unit Unidad Provincial de Ejecución UTN National Technological University Universidad Tecnológica Nacional WB World Bank Banco Mundial AWP Annual Work Program Plan Anual de Trabajo CC Climate Change Cambio Climático CCM Climate Change Mitigation Mitigación de Cambio Climático CDM Clean Development Mechanism Mecanismo de Desarollo Limpio CH4 Methane Metano COP Conference of Parties (UNFCCC) Conferencia de las Partes CO2 Carbon Dioxide Dióxido de Carbono CO2eq Carbon Dioxide Equivalents Equivalentes de Dióxido de Carbono EIA Environmental Impact Assessment Evaluación de Impacto Ambiental FAO Food and Agriculture Organization of the Organización de las Naciones Unidas para United Nations la Alimentación y la Agricultura GDP Gross Domestic Product Producto Interno Bruto GEF Global Environment Facility Fondo para el Medio Ambiente Mundial GHG Greenhouse Gas Gas de Efecto Invernadero GOA Government of Argentina Gobierno de Argentina GWh Gigawatt (GW)-hours (1 x 10^6 kWh) HDI Human Development Index Índice de Desarrollo Humano IW Inception Workshop Taller de Incepción LNG Liquefied Natural Gas Gas Natural Licuado

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ENGLISH SPANISH LPG Liquefied Petrol Gas Gas Licuado de Petróleo MRV Measuring, Reporting and Verification MTR Mid-term Review Revisión de Medio Término MW Megawatt (1 x 10^3 kW) MWh Megawatt (MW)-hours (1 x 10^3 kWh) M&E Monitoring and Evaluation Seguimiento y Evaluación NC National Communication Comunicación Nacional NGO Non-Governmental Organization Organismo no-Gubernamental CSO Civil Society Organization Organismo de la Sociedad Civil PC Project Coordinator Coordinador de Proyecto PIF Project Identification Form Formato de Identificación de Projecto PIR Project Implementation Review Revisión de Implementación de Proyecto PM Project Management Gestión de Proyecto PMU Project Management Unit Unidad de Gestión de Proyecto PPG Project Preparation Grant Donación de Preparación de Proyecto PRODOC Project Document Documento de Proyecto RE Renewable Energy Energía Renovable SRF Strategic Results Framework Cuadro de Resultados Estratégicos S(M)ME Small (Micro) and Medium Enterprise Pequeñas, (Micro), y Medianas Empresas STAP Scientific Technical Assistance Panel (GEF) TA Technical Assistance Asistencia Técnica TNA Technology Needs Assessment Evaluación de Necesidades Tecnológicas TNC Third National Communication Tercera Comunicación Nacional UNIDO United Nations Industrial Development Organización de las Naciones Unidas para Organization el Desarrollo Industrial UNDP United Nations Development Programme Programa de las Naciones Unidas para el Desarrollo UNFCCC United Nations Framework Convention Convención Marco de las Naciones Unidas for Climate Change para el Cambio Climático W watt WISDOM Woodfuels Integrated Supply-Demand Overview Mapping yr year año

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ANNEX W: LIST OF COFINANCING LETTERS

Name of Co-financier File name 1. Ministry of Agroindustry Separate file with file name “Annex W_Ministry of Agroindustry_Cofinance.pdf” 2. Ministry of Energy and Mining Separate file with file name “Annex W_Ministry of Energy and Mining_Cofinance.pdf” 3. Ministry of Environment and Separate file with file name “Annex W_Ministry of Environment and Sustainable Sustainable Development Development_Cofinance.pdf” 4. Central Bioelectrica S.A. Separate file with file name “Annex W_Central Bioelectrica SA_Cofinance.pdf” 5. Pindó S.A. Separate file with file name “Annex W_Pindo SA_Cofinance.pdf” 6. Prodeman S.A. Separate file with file name “Annex W_Prodeman SA_Cofinance.pdf” 7. Investment and Foreign Trade Separate file with file name “Annex W_Investment and Foreign Trade Bank_Cofinance.pdf” Bank (BICE) 8. Ministry of Energy and Mining Separate file with file name “Annex W_Ministry of Energy and Mining - FODER_Cofinance.pdf” - FODER

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