IDB Supports the Modernization of the Energy Subsidy System to Protect Vulnerable Households in Argentina

WASHINGTON – The Board of Executive Directors of the Inter-American Development Bank (IDB) has approved a $500 million operation to support the implementation of Argentina’s new Targeted Energy Subsidies System (SEF), aimed at protecting access to energy for vulnerable households and strengthening the sustainability of the country’s energy subsidy scheme.

The operation will support the transition toward a more targeted, efficient, and fiscally sustainable subsidy system. To this end, it will finance subsidies for natural gas consumption through the gas distribution network and bottled gas (LPG) for eligible households, while also strengthening the institutional capacities required to implement, manage, and monitor the new scheme.

The IDB-supported program will directly benefit approximately 1.2 million households receiving support for natural gas network consumption and 3.5 million bottled gas users.

In addition, the operation will strengthen the technical and institutional capacities of the Secretariat of Energy and the National Gas and Electricity Regulatory Authority through the development of information systems, analytical tools, and improvements to targeting and monitoring mechanisms, contributing to more efficient and transparent program management.

The IDB loan has a repayment term of 25 years, a 5.5-year grace period, and an interest rate based on SOFR.