Mendoza took over the temporary administration of the Los Nihuiles hydroelectric complex after the concession operated by Pampa Energía expired. The transfer occurred on July 27 and Governor Alfredo Cornejo will present it through a possession ceremony. Effective management passed to Hidroelectricidad Mendocina, but it has a limit: the province and national government intend to award a new concession before December 31.
The transition stems from an agreement between Cornejo and President Javier Milei to conduct a joint tender. Mendoza owns the dams, the water and the gradient used to produce electricity, while generation remains under national jurisdiction. That division requires coordination of the tender and also determines what each level of government can decide while selecting the future operator.
The national decree opening the tender imposed financial and legal conditions. The province waives litigation against the national government within the process, and all payments, fees, considerations and revenue arising from the national generation concession will go to the national Treasury. Mendoza must still determine how much it will receive for water use and whether a specific royalty or fee will be established; the new Patagonian concessions set a 1% charge for that resource as a reference.
The next concessionaire will receive a system in an emergency. Los Nihuiles operates only slightly above half its installed capacity and two of the three plants managed by the concessionaire, Nihuil II and Nihuil III, are out of service. The latest accounts showed total output falling 67% in one year. Nihuil I also generated less because of reduced water availability, so restoring capacity will require construction work, not merely a change of operator.
The deterioration worsened after the floods of January last year. HINISA's accounts recorded 6.333 billion pesos in costs linked to the incident, while insurance provided 9.271 billion pesos for cleaning and remediation. The company still has more than two million dollars to collect and is seeking an additional USD 2.4 million advance under loss-of-profit coverage. The destination and application of those funds are among the issues accompanying the transition.
The complex includes the El Nihuil and Valle Grande dams, the Aisol and Tierras Blancas reservoirs, the Nihuil I, II and III power plants and a 132-kilovolt transmission line; Nihuil IV was already under provincial control. Construction began in the 1940s, and Mendoza took control of the dams in 1993 after litigation with the national government and La Pampa. The private concession began in 1994, originally expired in 2024 and was extended until July 27, 2026.
For several months Mendoza's administration must sustain a historically valuable asset producing below its potential. The tender will seek an investor capable of financing plant recovery in a context of more up-to-date energy prices. The new operator, investment programme and economic terms for the province must be established before December 31; until then, the takeover is a transition stage rather than the final destination of Los Nihuiles.
