Pampa Energy Inc. [PAM] Filings

20-F 1 pamform20f_2023.htm FORM 20-F

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 20-F

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2023

Commission File Number: 001-34429

PAMPA ENERGíA S.A.

(Exact name of registrant as specified in its charter)

Pampa Energy Inc.

(Translation of registrant’s name into English)

Argentina

(Jurisdiction of incorporation or organization)

Maipú 1

C1084ABA, City of Buenos Aires

Argentina

(Address of principal executive offices)

María Carolina Sigwald

Maipú 1

C1084ABA, City of Buenos Aires

Argentina

Tel.: + 54 11 4344 6000 / Fax: + 54 11 4344 6473

(Name, telephone, e-mail and/or facsimile number and address of company contact person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange
on which registered

Common Stock

American Depositary Shares, each representing

25 shares of common stock, par value Ps.1.00 per share

PAM

New York Stock Exchange*

New York Stock Exchange

* Not for trading, but only in connection with the registration of American Depositary Shares, pursuant to the requirements of the Securities and Exchange Commission.

Securities registered or to be registered pursuant to Section 12(g) of the Act:

None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:

1,359,641,441 outstanding shares of common stock, par value Ps.1.00 per share, excluding 3,878,939 treasury shares.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

☒ Yes

☐ No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

☐ Yes

☒ No

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

☒ Yes

☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

☒ Yes

☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	☒	Accelerated Filer	☐
Non-Accelerated Filer	☐	Emerging Growth Company	☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (§ 15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ☐

International Financial Reporting Standards as issued by the International Accounting Standards Board ☒

Other ☐

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

☐ Item 17

☐ Item 18

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes

☒ No

TABLE OF CONTENTS

Item 1.	Identity of Directors, Senior Management and Advisers	6
Item 2.	Offer Statistics and Expected Timetable	6
Item 3.	Key Information	6
EXCHANGE RATES		6
RISK FACTORS		7
Item 4.	Information on the Company	38
HISTORY AND DEVELOPMENT OF THE COMPANY		38
OUR BUSINESS		39
Organizational structure		45
Our Generation Business		46
Our Oil and Gas Business		53
Our Petrochemicals Business		66
Our Holding and Other Business		67
Quality, Health, Safety and Environment		71
Corporate Responsibility		73
Property, Plant and Equipment		75
Insurance		75
Patents and Trademarks		75
THE ARGENTINE ENERGY SECTOR		76
Item 4A.	Unresolved Staff Comments	107
Item 5.	Operating and Financial Review and Prospects	107
Item 6.	Directors, Senior Management and Employees	131
Item 7.	Major Shareholders and Related Party Transactions	144
Item 8.	Financial Information	146
CONSOLIDATED FINANCIAL STATEMENTS		146
LEGAL PROCEEDINGS		146
DIVIDENDS		150
SIGNIFICANT CHANGES		151
Item 9.	The Offer and Listing	151
TRADING HISTORY		151
THE ARGENTINE SECURITIES MARKET		152
Item 10.	Additional Information	159
MEMORANDUM AND ARTICLES OF ASSOCIATION		159
MATERIAL CONTRACTS		165
EXCHANGE CONTROLS		166
TAXATION		171
DOCUMENTS ON DISPLAY		180
Item 11.	Quantitative and Qualitative Disclosures about Market Risk	181
Item 12.	Description of Securities Other than Equity Securities	181
Item 13.	Defaults, Dividend Arrearages and Delinquencies	182
Item 14.	Material Modifications to the Rights of Security Holders and Use of Proceeds	182
Item 15.	Controls and Procedures	182
Item 16A.	Audit Committee Financial Expert	184
Item 16B.	Code of Ethics	184
Item 16C.	Principal Accountant Fees and Services	184
Item 16D.	Exemptions from the Listing Standards for Audit Committees	185

Item 16E.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers	185
Item 16F.	Change in Registrant’s Certifying Accountant	185
Item 16G.	Corporate Governance	185
Item 16H.	Mine Safety Disclosure	190
Item 16I.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.	190
Item 16J.	Insider Trading Policies.	190
Item 16K.	Cybersecurity.	190
Item 17.	Financial Statements	191
Item 18.	Financial Statements	191
Item 19.	Exhibits	191

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PRESENTATION OF INFORMATION

This document comprises Pampa’s annual report on Form 20-F for the year ended December 31, 2023. This annual report was approved by our Board of Directors by resolution following its meeting held on April 26, 2024. In this annual report, we use the terms “we”, “us”, “our”, “registrant” and the “Company” to refer to Pampa and its subsidiaries.

Financial Information

This annual report contains our audited consolidated statements of financial position as of December 31, 2023 and 2022, and the related consolidated statements of comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2023, and the notes thereto (the “Consolidated Financial Statements”).

Our Consolidated Financial Statements are set forth in Item 18 beginning on page F-1 of this annual report. Our Consolidated Financial Statements are prepared in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (the “IASB”). The Consolidated Financial Statements included in this annual report have been approved by resolution of the Board of Directors’ meeting of the Company held on March 6, 2024 and by the Shareholder’s meeting held on April 29, 2024.

The Consolidated Financial Statements have been audited by Price Waterhouse & Co. S.R.L., an independent registered public accounting firm in Buenos Aires, Argentina whose report is included in this annual report.

Consistent with Item 18 of Form 20-F, we provide the disclosure required under Accounting Standards Codification (“ASC”) 932 of the Financial Accounting Standards Board (the “FASB”) relating to extractive activities—Oil and Gas (formerly, FASB Statement of Financial Accounting Standards No. 69—Disclosures about Oil and Gas Producing Activities) (“ASC Topic 932”), as is required regardless of the basis of accounting on which we prepare our financial statements.

Functional and Presentation Currency

The information included in the Consolidated Financial Statements has been recorded in the functional currency of the Company, which is the currency of the primary economic environment in which the Company operates. The Company’s functional currency is U.S. Dollars, which is also the presentation currency.

The results and financial position of subsidiaries, joint ventures and associates that have a different functional currency have been translated into the Company’s functional currency and the results from the translation process have been recognized in “Other Comprehensive Income (loss)”. For more information, see Note 4.3 to our Consolidated Financial Statements.

Rounding

Certain figures included in this annual report (including percentage amounts) have been subject to rounding adjustments. Accordingly, certain totals may therefore not precisely equal the sum of the numbers presented.

PRESENTATION OF INFORMATION CONCERNING RESERVES

The proved hydrocarbon reserves included in this report for the year ended December 31, 2023, are those that we have the right to extract and sell based on assignments granted to us by the respective governmental authorities.

The estimates of our remaining proved recoverable oil and gas reserve volumes for the five years ended December 31, 2023 included in this report have been calculated according to the technical definitions required by the U.S. Securities and Exchange Commission. GaffneyCline conducted reserves audits of our estimates of our proved reserves as of December 31, 2023. All reserves estimates involve some degree of uncertainty. For a description of the risks relating to reserves and reserves estimates, see “Item 3. Key Information—Risk Factors—Risk Relating to our Oil and Gas Business—Our estimated oil and gas reserves are based on assumptions that may prove inaccurate,” and “We face significant competition in the acquisition of exploratory acreage and oil and natural gas reserves.”

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FORWARD-LOOKING STATEMENTS

This annual report contains estimates and forward-looking statements, principally in “Item 3. Risk Factors,” “Item 4. Our Business” and “Item 5. Operating and Financial Review and Prospects.” Some of the matters discussed herein concerning our business operations and financial performance include estimates and forward-looking statements within the meaning of the U.S. Securities Act of 1933, as amended (the “Securities Act”) and the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Our estimates and forward-looking statements are mainly based on our current expectations and estimates of future events and trends that affect or may affect our business and results of operations. Although we believe that these estimates and forward-looking statements are based upon reasonable assumptions, they are subject to several risks and uncertainties and are made in light of information currently available to us.

Our estimates and forward-looking statements may be influenced by the following factors, among others:

general economic, business, social and political conditions in Argentina, and any possible changes and/or deterioration in such conditions, and other regions where we, our associates or joint ventures operate, such as the rate of economic growth, fluctuations in exchange rates of the Peso or inflation;

government interventions, resulting in changes in the economy, taxes, tariffs, the regulatory framework or environmental matters, or in the delay or withholding of governmental approvals;

the failure of governmental authorities to approve proposed measures or transactions described in this annual report;

changes in the laws and regulations applicable to the energy sector in Argentina;

uncertainties relating to future government approvals or legal actions, such as provisional remedies, that could affect our tariffs;

the availability of financing at reasonable terms to Argentine companies, such as us;

export limitations to our production;

import restrictions on consumables that are key for the maintenance of our assets;

more severe restrictions on the ability to exchange Pesos into foreign currencies or to transfer funds abroad;

the effect of steep local currency depreciation on our Peso-denominated revenues;

the impact of high rates of inflation on our costs;

changes in the price of hydrocarbons and their derivatives;

competition in the hydrocarbon sector and related industries;

changes in the price of electricity and other related services;

electricity shortages;

competition in the electricity sector, public utility services and related industries;

cybersecurity events, including potential cyberattacks;

climate change and severe weather events;

obsolescence of products manufactured in our petrochemical facilities;

the volume of crude oil, natural gas and derivatives we produce and sell;

our ability to renew certain concessions;

the ability to develop and monetize conventional and unconventional reserves;

our ability to develop our expansion projects and to win awards for new potential projects;

changes to our reserves estimates;

tariff updates;

changes to our capital expenditure plans;

any potential negative consequences arising in connection with our potential mergers, acquisitions, divestitures or other corporate reorganizations; and

other risks factors discussed under “Item 3. Risk Factors.”

The words “believe”, “may”, “will”, “aim”, “estimate”, “continue”, “anticipate”, “intend”, “expect” and similar words are intended to identify estimates and forward-looking statements. Estimates and forward-looking statements speak only as of the date they were made, and we undertake no obligation to update or to renew any estimates and/or forward-looking statements because of new information, future events or other factors. Estimates and forward-looking statements involve risks and uncertainties and are not guarantees of future performance. Our future results may differ materially from those expressed in these estimates and forward-looking statements. In light of the risks and uncertainties described above, the estimates and forward-looking statements discussed in this annual report might not occur, and our future results and our performance may differ materially from those expressed in these forward-looking statements due to factors including, but not limited to, those mentioned above.

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GLOSSARY

Glossary of certain terms used in this Annual Report

Unless the context indicates otherwise, the following terms have the meanings shown below:

“ADR”: American Depositary Receipt;

“ADS” or “ADSs”: American Depositary Shares;

“AFIP”: Federal Administration of Public Revenue (Administración Federal de Ingresos Públicos);

“ANSES”: National Social Security Agency (Administración Nacional de la Seguridad Social);

“Anti-Money Laundering Law”: Law No. 25,246, subsequently amended by, among others, Laws No. 26,087, 26,119, 26,268, 26,683, 26,733, 26,734 and Decree No. 27/2018;

“Authorized Markets”: securities markets in Argentina that require authorization from the CNV to operate;

“BCRA” or “Central Bank”: Central Bank of the Republic of Argentina (Banco Central de la República Argentina);

“Banco Nación”: Banco de la Nación Argentina;

“BASE”: Buenos Aires Stock Exchange;

“bbl”: Barrel of crude oil;

“BCL”: Business Corporation Law;

“Board of Directors”: the board of directors of Pampa Energía S.A.;

“boe”: Barrel of oil equivalent;

“ByMA”: Argentine stock exchange and markets (Bolsas y Mercados Argentinos S.A.);

“CAMMESA”: Wholesale Electric Market Administration Company (Compañía Administradora del Mercado Eléctrico Mayorista Sociedad Anónima);

“Caja de Valores”: Caja de Valores S.A.;

“CC”: Combined Cycle;

“CENCH”: unconventional hydrocarbon exploitation concession;

“CIESA” Compañía de Inversiones de Energía;

“CISA”: Comercializadora e Inversora S.A.;

“CITELEC” Compañía Inversora en Transmisión Eléctrica Citelec S.A.;

“CML”: Capital Markets Law No. 26,831, as amended by, among others, Law 27,440;

“CMIEE”: Average Incremental Charge of Surplus Demand (Cargo Medio Incremental de la Demanda Excedente);

“CNG”: compressed natural gas;

“CNV”: Comisión Nacional de Valores;

“Corporate Criminal Liability Law”: Corporate Criminal Liability Law No. 27,401;

“CPB”: Central Piedra Buena S.A. or “Central Térmica Piedra Buena”;

“CPI”: Consumers Prices Index;

“CSJN”: Corte Suprema de Justicia de la Nación;

“CTB”: CT Barragán S.A.;

“CTEB”: Central Térmica Ensenada de Barragán;

“CTIW”: Central Térmica Ingeniero White;

“CTG”: Central Térmica Güemes S.A.;

“CTGEBA” or “Genelba”: Central Térmica Genelba;

“CTLL”: Central Térmica Loma La Lata S.A. or “Central Térmica Loma La Lata”;

“CTP”: Central Térmica Piquirenda;

“CTPP”: Central Térmica Parque Pilar;

“DNU”: Necessity and Urgency Decree;

“DoP”: delivery or pay;

“Edenor”: Empresa Distribuidora y Comercializadora Norte S.A.;

“Edesur”: Empresa Distribuidora Sur S.A.;

“EMESA”: Empresa Mendocina de Energía Sociedad Anónima;

“ENARSA”: Energía Argentina S.A. (former Integración Energética Argentina S.A.);

“ENARGAS”: Ente Nacional Regulador del Gas or National Gas Regulatory Entity;

“Energy Secretariate”: Secretaría de Energía;

“Energy Plus” or “Energía Plus”: a program under SE Resolution 1,281/2006;

“ENRE”: Ente Nacional Regulador de la Electricidad or Electricity Regulatory Entity;

“ENOPSA”: Energía Operaciones ENOPSA S.A. (former Petrobras Energía Operaciones Ecuador S.A.);

“Exchange Act”: United States Securities Exchange Act of 1934, as amended;

“FCA”: United Kingdom Financial Conduct Authority;

“FO or GO”: Fuel Oil or Gas Oil;

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“FODER”: Fondo para el Desarrollo de Energía Renovables;

“FONINVEMEM”: Fund for Investments required to increase the Power Supply in the Electricity Wholesale Market (Fondo Para Inversiones Necesarias que Permitan Incrementar la Oferta de Energía Eléctrica en el Mercado Eléctrico Mayorista);

“Foundation”: Fundación Pampa Energía S.A;

“GPNK”: Nestor Kirchner Pipeline;

“GaffneyCline”: Gaffney, Cline & Associates;

“G&P”: Gas y Petróleo de Neuquén S.A.;

“GDP”: Gross Domestic Product;

“GHG” Greenhouse gas;

“Greenwind”: Greenwind S.A.;

“GO and FO”: natural gas or liquid fuels;

“GT”: gas turbine;

“GU”: Large Users (Grandes Usuarios);

“GUMA”: Major Large Users (Grandes Usuarios Mayores);

“GUME”: Minor Large Users (Grandes Usuarios Menores);

“GUDI”: Major Distribution Users (Grandes Usuarios del Distribuidor);

“HIDISA”: Hidroeléctrica Diamante S.A.;

“HINISA”: Hidroeléctrica Los Nihuiles S.A.;

“HMRT”: hours with a high thermal demand;

“HPPL”: Pichi Picún Leufú Hydroelectric Complex;

“Hydrocarbons Law”: Law No. 17,319 as amended by Law No. 27,007;

“IGJ”: City of Buenos Aires’s Public Registry of Commerce (Inspección General de Justicia);

“IMF”: International Money Fund;

“INDEC”: National Statistics and Census Institute (Instituto Nacional de Estadística y Censos);

“Independent Reserves Engineers Firm”: Gaffney, Cline & Associates;

“IPIM”: Wholesale Domestic Price Index (Índice de Precios Internos al por Mayor);

“IREC”: International Renewable Energy Certificates;

“J.P. Morgan”: JPMorgan Chase Bank, N.A;

“LNG”: liquefied natural gas;

“LPG”: liquefied petroleum gas;

“MAE”: Mercado Abierto Electrónico S.A.;

“MAT”: Term Market (Mercado a Término);

“MAT ER”: Renewable Energy Term Market;

“MBTU”: millions of British Thermal Units (BTU);

“MDP”: Ministry of Productive Development (former SGE);

“ME&M”: Ministry of Energy and Mining;

“MLC”: Free Exchange Market (Mercado Libre de Cambios);

“National CPI”: a CPI which is based on a survey conducted by the INDEC and several provincial statistical offices in 39 urban areas including each of Argentina’s provinces;

“NYSE”: New York Stock Exchange;

“OCP”: Oleoducto de Crudos Pesados Ltd.;

“OCP S.A.”: Oleoducto de Crudos Pesados Ecuador S.A.

“Official Gazette”: Official Gazette of Argentina (Boletín Oficial de la República Argentina);

“Oldelval”: Oleoductos del Valle S.A.;

“Pampa” or “the Company”: Pampa Energía S.A.;

“Pampa Bloque18”: Pampa Bloque18 S.A.S.;

“PDVSA”: Petróleos de Venezuela S.A.;

“PEA”: Parque Eólico Arauco II;

“PEB”: Pampa Energía Bolivia S.A.;

“PEMC”: Parque Eólico Ingeniero Mario Cebreiro;

“PEN”: National Executive Branch (Poder Ejecutivo Nacional);

“PEO”: Petrobras Energía Operaciones S.A.;

“PEPE II”: Parque Eólico Pampa Energía II;

“PEPE III”: Parque Eólico Pampa Energía III;

“PEPE IV”: Parque Eólico Pampa Energía IV;

“PEPE VI”: Parque Eólico Pampa Energía VI;

“Pesos” or “Ps.”: Argentine Pesos;

“Petrobras Argentina”: Petrobras Argentina S.A.;

“Petrobras”: Petroleo Brasileiro S.A;

“Petrolera Pampa”: Petrolera Pampa S.A.;

“PGSM”: Puerto General San Martin;

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“PISA”: Pampa Inversiones S.A.;

“PIST”: Transportation System Entry Point or natural gas price at the wellhead (Punto de Ingreso al de Sistema de Transporte);

“Plan Gas.Ar”: the Plan to Promote Argentine Natural Gas Production;

“Polisur”: PBB Polisur S.A;

“PPA” or “PPAs”: relevant wholesale electricity supply agreements or power purchase agreements (Contratos de Abastecimiento Mayorista de Electricidad);

“PROCELAC”: Procuraduría de Criminalidad Económica y Lavado de Activos;

“Public Emergency Law”: Law No. 25,561 – the Public Emergency and Exchange Rate Regime Reform Law;

“QHSE”: Quality, Health, Safety and Environment;

“Refinor”: Refinería del Norte S.A.;

“RENPER”: National Registry of Renewable Source Electric Power Generation Projects (Registro de Proyectos de Generación de Energía Eléctrica de Fuente Renovable);

“Reserves Report”: the year-end reserves report by Gaffney, Cline & Associates;

“RTI”: Revisión Tarifaria Integral (Comprehensive Tariff Review);

“SACDE”: Sociedad Argentina de Construcción y Desarrollo Estratégico S.A.;

“SADI”: the Argentine Electricity Interconnected Grid (Sistema Argentino de Interconexión);

“SBR”: styrene butadiene rubber;

“SE”: Secretariat of Energy (Secretaría de Energía);

“SEC”: U.S. Securities and Exchange Commission;

“Securities Act”: U.S. Securities Act of 1933, as amended;

“SEE”: Subsecretariat of Electric Energy, former Secretariat of Electric Energy (Subsecretaría de Energía Eléctrica);

“SGE”: Former Government Secretariat of Energy (former Ministry of Energy (former ME&M)) (former Secretaría de Gobierno de Energía (former Ministry of Energy (former ME&M));

“SHC”: Undersecretary of Hydrocarbons and Fuels (Subsecretaría de Recursos Hidrocarburíferos (former Secretaría de Recursos Hidrocarburíferos));

“Social Solidarity and Productive Reactivation Law”: Law No. 27,541;

“SOFR”: Secured Overnight Financing Rate;

“SRRYME”: Secretary of Renewable Resources and Electricity Market (Secretaría de Recursos Renovables y Mercado Eléctrico);

“ST”: steam turbine;

“TGS”: Transportadora de Gas del Sur S.A.;

“TJSM”: Termoeléctrica José de San Martín S.A.;

“TMB”: Termoeléctrica Manuel Belgrano S.A.;

“ToP”: take or pay;

“Transba”: Empresa de Transporte de Energía Eléctrica por Distribución Troncal de la Provincia de Buenos Aires Transba S.A.;

“Transener”: Compañía de Transporte de Energía Eléctrica en Alta Tensión Transener S.A.;

“UIF”: Financial Information Unit (Unidad de Información Financiera);

“U.S.”: United Stated of America;

“U.S.$ and/ or U.S. Dollars”: U.S. currency;

“UTEs”: joint operations (Unión Transitoria);

“VAR”: Vientos de Arauco Renovables S.A.U.;

“VAT”: Value Added Tax;

“WEM”: Wholesale Electricity Market;

“WEM Large Users”: WEM users with a capacity higher than 300 KW;

“WEMTF”: Wholesale Electricity Market of Tierra del Fuego;

“YPF”: YPF S.A.

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Item 1.

Identity of Directors, Senior Management and Advisers

Not applicable.

Item 2.

Offer Statistics and Expected Timetable

Not applicable.

Item 3.

Key Information

EXCHANGE RATES

Exchange Rates

The following table sets forth the high, low, average and period-end exchange rates for the periods indicated, expressed in Pesos per U.S. Dollar and not adjusted for inflation. There can be no assurance that the Peso will not depreciate or appreciate again in the future. The Federal Reserve Bank of New York does not report a noon buying rate for Pesos.

	*Exchange rates⁽¹⁾*
	*(in Pesos per U.S. Dollars)*
	*High*	*Low*	*Average⁽²⁾*	*Period end*
Year ended December 31,
2019	60.400	36.900	48.234	59.890
2020	84.150	59.815	70.599	84.150
2021	102.720	84.700	95.161	102.720
2022	177.160	103.000	130.810	177.160
2023	808.450	178.150	295.295	808.450


Month
January 2024	826.400	810.700	818.314	826.400
February 2024	842.200	826.900	834.795	842.200
March 2024	858.000	842.500	850.184	858.000
April 2024⁽³⁾	875.000	861.000	868.028	875.000

Source: Banco Nación

(1)

Represents the average of exchange rates on the last day of each month during the period.

(2)

Average of the lowest and highest daily rates in the month.

(3)

Represents the average of the lowest and highest daily rates from April 1 through April 26, 2024.

Pursuant to Argentine law, in the case that we pay dividends, we are required to determine the amount in Pesos. Exchange rate fluctuations will affect the U.S. Dollar amounts received by holders of American Depositary Shares, on conversion by us or by the depositary of cash dividends on the shares represented by such ADSs. Fluctuations in the exchange rate between the Peso and the U.S. Dollar will affect the U.S. Dollar equivalent of the Peso price of our shares on the BASE and, as a result, can also affect the market price of our ADSs.

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RISK FACTORS

The following summarizes some, but not all, of the risks provided below. Please carefully consider all of the information discussed in this Item 3.D. “Risk Factors” in this annual report for a more thorough description of these and other risks:

Risks Related to Argentina

The Argentine economy is vulnerable and any significant decline may adversely affect our business, operational results and financial condition

Economic and political developments in Argentina, and future policies of the Argentine Government may adversely affect the Argentine economy and the sectors in which we perform our activities

Exchange rate volatility may adversely affect the Argentine economy

If high levels of inflation continue, the Argentine economy and our operational results could be adversely affected

Argentina’s ability to obtain financing from international markets could be limited, which may impair its ability to implement reforms and foster economic growth and, consequently, affect our business, results of our operations and growth prospects

Argentine corporations may be restricted from making payments in foreign currencies or from importing certain products

Argentine public expenditure may generate negative consequences for the Argentine economy

Failure to adequately address actual and perceived risks of institutional deterioration and corruption may adversely affect Argentina’s economy and financial condition

The operating costs of the Company could increase as a result of the promotion or adoption of certain measures by the Argentine Government as well as pressure from union sectors

The Argentine Government has intervened in the electricity sector in the past, and may continue intervening to adopt, among others, measures in connection with tariffs on public services and there is no certainty regarding the effects that such measures will have on our business operations, financial condition or results of operations

The Argentine economy is vulnerable to external shocks that could be caused by significant economic difficulties of Argentina’s major regional trading partners, or by more general “contagion” effects. Such external shocks and “contagion” effects could have a material adverse effect on Argentina’s economic growth, and consequently, on our operational results and financial condition

The emergence and spread of a pandemic-level disease or threat to public health may have a material adverse impact on the Argentine and global economy, our business operations, financial condition or results of operations

A global or regional financial crisis and unfavorable credit and market conditions may negatively affect our liquidity, customers, business and operational results

The Argentine economy and finances may be adversely affected as a consequence of a decrease in the international prices of commodities

Risks Relating to our Company

We operate a material portion of our business pursuant to public concessions granted by provincial and national governments, the revocation or termination of which would have a material adverse effect on our business

Our performance is largely dependent on recruiting and retaining key personnel

We employ a largely unionized labor force and could be subject to organized labor action, including work stoppages, that could have a material adverse effect on our business

In the event of an accident or other event not covered by our insurance policies, we could face significant losses that could result in a material adverse effect on our business and operational results

We conduct a portion of our operations through joint ventures and co-controlled companies, and our failure to continue such joint ventures and co-controlled companies or to settle any potential material disagreements with our partners could have a material adverse effect on the success of these operations

If we are not able to effectively hedge our currency risk in full and a devaluation of the Argentine Peso occurs, our results of operations and financial condition could be materially adversely affected

We are involved in various legal proceedings which could result in unfavorable rulings against us

Downgrades in our credit ratings could have negative effects on our funding costs and business operations

Cybersecurity events, such as a cyber-attack could adversely affect our business, financial condition, operational results and cash flows

Our operations could cause environmental risks and any change in environmental laws could increase our operating costs

We may be unable to collect payments of amounts due, or to collect them in a timely manner, from customers, CAMMESA, ENARSA, the Argentine Government and other customers

Certain of our outstanding financial indebtedness includes bankruptcy, reorganization proceedings and expropriation events of default and we may be required to repay all of our outstanding debt upon the occurrence of any such events

Covenants in our indebtedness could adversely restrict our financial and operating flexibility

Our businesses are subject to risks arising from natural disasters, catastrophic accidents and terrorist attacks. Additionally, our businesses are subject to the risk of mechanical or electrical failures and any resulting unavailability may affect our ability to fulfill our contractual commitments and thus adversely affect our business and financial performance

Our activities may be adversely affected by events in other countries in which we do business

The national antitrust authorities could decide not to approve the acquisition of the CTEB and/or the acquisition of the stake in the Rincón de Aranda block

We continue evaluating investment projects to expand our activity, which could imply an increase in our indebtedness

Climate change, energy transition and regulatory framework promoted for such purposes could affect our business, our results of operations and financial condition

Risks Relating to Our Business

Risks Relating to Our Generation Business

There are electricity transmission constraints in Argentina that may prevent us from dispatch, which could materially adversely affect the financial results of our generation business

We could be adversely affected by sudden increases in energy demand given current levels of power generation and difficulty in increasing the capacity of transmission and distribution companies in the short or medium term

Changes in certain regulations may require the adjustment of the facilities of our power plants that may require new investments or may affect the dispatch of our generators

New measures encouraging renewable energy generation projects may affect our generation sales

Our ability to generate electricity in our thermal generation plants depends on the availability of natural gas (and other fuels), and fluctuations in the supply or price of gas could materially adversely affect our operational results

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Penalties may be applied under our energy supply agreements with CAMMESA, which may adversely affect the revenues derived from such contracts or from our generation units

Penalties and or other sanctions may be applied for breaches to applicable regulation or for not having in a timely manner the required permits for the operation of our generation units and authorizations for new power generation, which may adversely affect the availability and revenues derived from our generation units and delay the estimated entry into commercial operations of new projects

A breach to our energy supply agreements with CAMMESA and/or WEM Large Users may cause penalties and, ultimately, the termination of such agreements, which could adversely affect our operational results

Revenues from our wind farms depend on meteorological conditions and the ability to contract the energy to be produced by the wind farms to WEM Large Users

Our ability to generate electricity at our hydroelectric generation plants may be negatively affected by poor hydrological conditions, which could, in turn affect our operational results

Operational difficulties could limit our ability to generate electricity, which could adversely affect our operational results

We may not be able to extend the term of the concession agreements for HINISA and/or HIDISA

We could be exposed to third-party claims on real property where CTB is located that could result in the imposition of significant damages, for which we have not established a provision in our consolidated financial statements for potential losses

Our profits may be affected by our failure to fulfill the require

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