Why Argentina October 5 th 2016 1 Argentina

Why Argentina? October 5 th, 2016 1

Argentina has strong fundamentals to become a regional economic engine Large and diversified ECONOMY Vast availability of NATURAL RESOURCES High quality HUMAN CAPITAL NATIONAL INFRASTRUCTURE improvement underway • 3 rd largest economy in Lat. Am • 2 nd highest GDP per capita in PPP terms in the region • ~43 MM population + access to 300 MM population in Mercosur • 8 th largest country in the world, with 53% agricultural land • Abundant food, water and renewable energy resources • Large oil & gas and mineral reserves • Qualified labor force, renowned for its technical skills, creativity & versatility • #1 in Latin America’s Indices of Human Development and Education • 98% literacy rate, ~110, 000 higher education graduates per year • Nationwide road & railroad systems, 43 ports & 54 airports • High connectivity, with 75% broadband 141% mobile penetration • Extensive natural gas pipeline and electricity grid coverage

Argentina has potential to capture +USD 25 Bn/year in Foreign Direct Investment Argentina has lagged behind its peers in capturing the strong FDI inflow growth in Latin America We now have the opportunity to reach the level of FDI that corresponds to the size of our economy Foreing Direct Investment (Avg. USD Bn/Year) ’ 08 - ’ 15 FDI/GDP (%, average) ’ 90 -’ 00 ’ 08 -’ 15 5. 0 x Average 4. 5% 1. 9 x 4. 8 x Brazil Mexico Chile 5. 6 x 0. 4 x Colombia Argentina 4. 4 x Peru Argentina’s share of FDI flows fell from 16% to 4% between the 90 s and the last 7 years Source: World Bank, IMF Chile Peru Colombia Brazil Mexico Argentina To reach the regional average, Argentina needs to capture USD 25 Bn a year in FDI flows

President Macri’s Administration has taken concrete steps to resolve investors’ concerns WEF Survey: Main Concerns for Argentina (share of total responses) Key reforms and initiatives Inflation • Instituted inflation targeting policy to reach single–digit CPI by 2018 FX restrictions • • Removed capital controls and repatriation restrictions Access to financing • Resolved defaulted debt and regained access to global financial markets Tax levels • Removed export taxes and import restrictions • Developed Government e-platform for tenders and public accounts • Created the Argentina Investment & Trade Promotion Agency • Enacted a new Public–Private Partnerships (PPP) regulatory framework • Re–launched the National Statistics Bureau (INDEC) • Established 4–year plan to eliminate the primary fiscal deficit Corruption Government bureaucracy Other 24% Floated exchange rate and recovered monetary reserves Country risk declined 130 bps (-22%) in 12 months* Source: World Economic Forum * JPMorgan, Embi+ 08/31/15 = 584, Embi+ 08/31/16 = 454 4

Argentina offers investment opportunities for more than USD 250 Bn Infrastructure $135 Bn Energy & Mining Agribusiness Manufacture/ Industrial Goods Value Added Services $85 Bn $25 Bn $5 Bn • Roads & highways: $48 Bn • Oil & Gas: +$20 Bn • Irrigation: $18 Bn • Automotive industry • Tourism • Water & sanitation: $22 Bn • Mining: +$30 Bn • Food & Beverage • Education & health: $20 Bn • Renewable energy: $15 Bn • Animal protein (beef, pork, poultry): $5 Bn • Urban mobility: $17 Bn • Hydro power: $10 Bn • Forestry/Pulp: $2. 5 Bn • Consumer products • Professional services • Biotechnology • Freight rail: $15 Bn • Thermal power: $4 Bn • Machinery & Equipment • Pharma • Real estate: $5 Bn • Nuclear power: $2. 8 Bn • Basic materials • Telco networks: $5 Bn • Power grid: $5 Bn • Software development • Airports & ports: $3 Bn Note: All values in USD

Renewables will shape Argentina’s new energy matrix 1 CLEAR MANDATE WIDE RESOURCE AVAILABILITY Argentina has a clear mandate to reduce CO 2 emissions by using renewable energy sources… 4 ATTRACTIVE FRAMEWORK …and offering an attractive legal framework and tax incentives to investors 2 …leveraging on its wide availability of resources to develop world-class renewable energy assets… Renewables Development in Argentina STRATEGIC DRIVERS 3 …capturing key strategic benefits for the country based on recent market trends 66

2 Argentina has enormous wind power potential… • Patagonia Region has very stable and strong winds throughout the entire year (with average winds of over 9 m/s) • Windfarms with capacity factors ranging from 35% to 50% Selected Countries: Wind Capacity Factors Argentina: Average Windspeed Map 60% 50% 47% 44% 37% 40% 35% 33% 35% 23% 20% 19% 20% 10% 0% ARG URY PER BRA MEX CHL USA CHI GER Source: Project public data / BNEF; Centro Regional de Energía Eólica 77

2 …as well as solar power potential • Northern Region has exceptional radiation levels and terrain conditions, comparable to those in the Atacama desert in Chile • PV capacity factors expected to range between 25% and 33% (with tracker) Selected Countries: Solar Capacity Factors Argentina: Average Solar Radiation Map 0, 4 0, 35 34% 31% 33% 0, 3 0, 25 25% 20% 0, 2 16% 17% 15% 0, 15 12% 0, 1 0, 05 0 MEX CHL ARG BRA PER UGY GER CHI JPN Source: Project public data / BNEF; National Renewable Energy Laboratory (NREL) 88

The Argentina Investment & Trade Promotion Agency´s misión… Contribute to the creation of quality jobs and sustainable economic development by reinserting Argentina into the world, through investment and trade Ø Single point of contact in the government for companies seeking to invest in Argentina Ø Become a strategic partner throughout the investment period Ø Facilitate investment processes and improve business climate Ø Promote the highest ethical and professional standards, making Argentina a better and more transparent place to conduct business Ø Unlock SMEs and regional economies potential to strategic international markets

We aim to grow investments and exports, through deliberate strategic planning and by promoting a favorable business environment • Re-position Argentina • Promote specific industries • Assist during investment process • Aftercare • Promote reinvestment • Improve the investment and export processes • Promote initiatives to improve competitiveness • Generate an attractive regulatory/ fiscal framework Quality Investments Management INVESTMENTS BUSINESS ENVIROMENT Favorable Conditions Generation Comprehensive Exports Development EXPORTS STRATEGIC PLANNING Integrated Vision • Develop industry/ destination • Convert SMEs into SMEx • Participation in new markets and global value chains • Strengthen local companies’ export capabilities • Identify key value chains/ geographies • Monitor investment status • Market intelligence • Provide analysis to the public and private sectors 10

Andrés Tahta atahta@invest. org. ar Phone: +54 11 5218 8571 www. investandtrade. org. ar Invest. Trade. ARG