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Argentina Asks to Defer Payments on Power Imports From Brazil, Sources Say

Argentina has asked Brazilian state-run energy firm Petroleo Brasileiro if it can defer payments on some electricity import contracts, three people familiar with the discussions told Reuters on Monday.

Two Brazilian sources said Petrobras is weighing the request. An Argentine source confirmed the government had made the request to Petrobras, which supplies electricity to Argentina from power plants in Brazil.

The move comes as Argentina, which is grappling with rampant inflation and dwindling foreign reserves ahead of presidential elections this year, needs to secure crucial electricity supply to heat homes during South America’s winter.

Argentina is seeking better contract terms to honor its commitments in the face of the country’s fiscal challenges, the sources said.

According to one of the sources, Argentina is pushing to alter its monthly payments to Petrobras under current contracts to make payments every 180 days instead.

All three sources requested anonymity due to the sensitivity of the discussions.

The request to defer payments took place during a meeting between the presidents of the two countries, Luiz Inacio Lula da Silva and Alberto Fernandez, in Brasilia last week, according to the newspaper O Globo, which first reported the talks on Monday.

Petrobras CEO Jean Paul Prates also participated in the meeting, O Globo reported.

Lula and Fernandez are expected to meet again on Tuesday at a gathering of the Mercosur trade bloc in Puerto Iguazu, Argentina.

Petrobras said in a statement it does not have energy export contracts but has agreements with traders in Brazil who carry out “this type of operation” to other countries.

“In 1Q23, Petrobras generated an average of 595 MW to meet the company’s internal demands and specific commercial opportunities arising from exports to Argentina by traders,” it said, adding that the power came from its thermoelectric generators.

Source : Yahoo