January 31, 2011 / 8:02 PM / in 7 years

Brazil's Rousseff signs energy accords in Argentina

* Presidents sign accords to build hydroelectric plants

* Brazil is Argentina’s biggest trade partner

By Juliana Castilla

BUENOS AIRES, Jan 31 (Reuters) - Brazilian President Dilma Rousseff signed energy cooperation agreements with her Argentine counterpart on Monday during her first official visit abroad since taking office.

South America’s two largest economies are growing briskly and their governments are working to ensure energy supply can keep pace with growing demand from industry and households and sustain long-term growth.

Rousseff and Argentine President Cristina Fernandez pledged to accelerate plans to build two hydroelectric dams on part of the Uruguay River that straddles their border. The Garabi and Panambi dams would have a capacity of 2,200 megawatts.

They also agreed to build two nuclear reactors for investigation purposes and exchange know-how on biofuels. Brazil is one of the world’s biggest ethanol producers and Argentina is a leading exporter of biodiesel made from soyoil.

“I‘m sure the accords we’ve signed will prove fruitful,” Rousseff said in a speech at the presidential palace, vowing to boost bilateral ties and the Mercosur regional trade bloc.

“We will continue to work to strengthen Mercosur and consolidate the customs union ... and we will keep on fighting protectionism by rich countries and policies that distort foreign trade, including exchange rates,” she said.

Brazil is Argentina’s biggest trade partner and the Argentine economy is expected to show growth of 9 percent last year in part thanks to booming exports of automobiles to its larger neighbor.

About 85 percent of Argentina’s auto exports go to Brazil. Brazil exports mainly capital goods to Argentina.

Brazil’s strong currency BRBY is giving a competitive edge to the export sector in Argentina and Argentine business leaders fear any depreciation of the Brazilian real could erode their competitiveness. [ID:nN02241024] (Writing by Helen Popper; Editing by Cynthia Osterman) (helen.popper@thomsonreuters.com; +54 11 4318 0655; Reuters Messaging: helen.popper.reuters.com@reuters.net))

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