Engie Chile Gets IDB Invest Loan for Wind Project, Early Decarbonisation
Chile, February, 04 2021 -
Chilean utility Engie Energia Chile SA has secured USD 125 million (EUR 104.2m) in funds to build the Calama wind project and decarbonise its operations as it moves towards closing its coal-fired power plants in Chile.
The financial package was prepared by IDB Invest, which provided a USD-74-million senior loan. Another USD 15 million of blended financing came from the Clean Technology Fund (CTF), while the Chinese Fund for Co-financing in Latin America and the Caribbean granted USD 36 million, IDB Invest said.
The loan will bankroll Engie’s efforts to build and operate the Calama wind farm of some 151 MW of capacity, but also monetise the emission reduction when its coal-fired plants get shut down early and are replaced with clean energy projects. The financing structure sets a minimum price for the offset greenhouse gas emissions (GHG) by lowering the financing cost of the CTF’s loan portion, IDB Invest says.
This innovative financial instrument is now being piloted after IDB Invest and Engie Energia Chile in 2019 first signed the agreement to put a value on lowering emissions through the early phase-out of coal and expediting the decarbonisation process in the South American country.
Engie Energia Chile, which is controlled by French utility group Engie SA (EPA:ENGI), is one of four power producers that signed an agreement with the Chilean government to voluntarily and gradually close its coal-based thermal power plants in the country between 2019 and 2040. The company's near-term plan is to install 1,000 MW of renewables, including the Calama project.