The vast natural resources in the Southern Cone, from minerals to sun and wind for renewables, are keeping law firms that operate in the region busy.
Daniel Bartfeld, partner at Milbank and chair of the firm’s project, energy and infrastructure finance group, says the firm’s market share in the region is not only strong, but expanding.
“We are excited about the energy transition and infrastructure projects, many are in early innings, but there is a lot of money being deployed,” says Bartfeld.
Milbank, which wins the award for Infrastructure Law Firm of the Year – Southern Cone, has a long history in the region but also a long pipeline of projects there.
Chile represents the lion’s share for the firm in the region, but Bartfeld says the firm is seeing an uptick in interest in Argentina, where many expect more deal flow following general elections in October.
“Chile has been good because it is a mix of different industries and products. Lenders and private equity firms are generally quite comfortable investing there,” says Bartfeld.
In the past year, Milbank worked on important renewable energy, transportation projects, and projects like desalinization for projects to support mining. It also worked on a $411 million deal with South Korea’s POSCO on a lithium project in Argentina.
Bartfeld says the energy transition – not just wind and power projects, but hydrogen and lithium projects, too – is starting to gain traction.
Chile is the world’s second lithium producer, with 39,000 tons produced in 2022, according to the US Geological Survey. It also has 11 million tons in resources, following neighboring Bolivia, with 21 million tons, and Argentina, with 20 million tons. The three form the “lithium triangle.”
Bartfeld says clients are not only looking at lithium mining in Chile, but production of batteries as a way to store renewable energy.
Chile is also leading the region in green hydrogen projects. In June, the World Bank approved a $150 million loan for green hydrogen projects in the country. The government forecasts that the loan will help leverage private sector investment in green hydrogen. The government believes it could generate up to $330 billion in investment through its National Green Hydrogen Strategy through 2050, with annual export earnings of more than $30 billion.
Argentina, Paraguay and Uruguay, the other Southern Cone countries, are also actively working to secure financing for ambitious hydrogen and synthetic gasoline projects. Uruguay in June announced potential investment of $4 billion in hydrogen and e-fuel projects.
Lithium could be a game-changer for Argentina. Production of the metal is expected to boom in the coming years, with extraction reaching 120,000 tons in 2024, according to the Mining Secretariat.