To promote the extension of services into rural areas, the Argentinean government has initiated the Electricity Supply Program for the Rural Dispersed Population in cooperation with participating provincial Regulatory Authorities. The program gives priority to photovoltaic panels, small windmills, hydraulic microturbines, and diesel-driven generators. The total estimated investment of $314 million will abe shared, with 45% paid by users, 25% from provincial subsidies, and 30% from national subsidies.

The program grants competitive concessions to one or more private enterprises in each province on the basis of lowest subsidy required per supplied user, technical qualifications, and financial qualifications. The concession will run for 45 years divided into three periods of 15 years. At the end of each period the Regulatory Authority will call for a new bidding process, with the prevailing concessionaire having priority. Rates are negotiated between the concessionaire and Regulatory Authority for five-year periods. The concession shall be exclusive for users of up to 90 kilowatt-hours per month.^*

It is too early to determine the effectiveness of this approach. As of late 1996, three provinces had at least begun the process of awarding concessions, with the remainder expected to do so by 2000. Two bids have been awarded. In each case there were four to five bidders, with a wide range in the bid values offered for combined rural and urban concessions. Concessionaires, who are established utilities elsewhere, are beginning with community applications in order to gain experience in their markets. The next stage will tender separate offers for the urban and rural markets, although the same bidder may bid for both.

* A. Fabris and M. Servant, "Argentina Dispersed Rural Population Electricity Supply Program," Secretaria de Energia, Buenos Aires, Argentina, 22 October 1996.