Description: 

A project to scale up large-scale solar PV projects in Chile.

Background:

According to a 2012 ranking by IRENA, Chile is the second least self-sufficient Latin American country in terms of energy production. Fuels for energy production account for 23 percent of the country’s total imports, and of all fuels consumed, 75 percent are fossil fuel based. In recent years, Chile’s government has pushed for energy security through development of domestic sources. Additionally, the government has committed to reducing greenhouse gas emissions by up to 40% by 2030, and in order to do so, it must promote renewable energy production at the domestic level.

In 2013, the government of Chile passed the 20/25 law, which stipulates that the country must produce 20 percent of its energy from renewable sources by the 2025. To make this goal a reality, Chile must develop between 3,500 and 4,000 MW of clean energy projects in the next 10 years. As a result, the government of Chile is working with CIF and other partners to promote renewable energy developments.

Objectives and Outputs:

This project is being undertaken as a partnership between the Government of Chile, Inter-American Development Bank, IFC, and CIF, and was begun in 2013. The purpose of the project is to accelerate private sector participation in solar PV generation in Chile by addressing a number of barriers to entry. $25 million in CTF funding will be used to support large-scale solar PV projects through creating favorable precedents for future investments, as well as stimulating entry of the local banking sector into the industry. Additionally, the program supports Chile’s 20/25 law through development of renewable energy projects.

Chile has a high degree of potential to integrate solar power into its energy portfolio due to the presence of the Atacama Desert in the north of the country. This desert is the driest in the world and receives approximately 3,000 hours of sun per year. However, this resource is as yet untapped because of barriers to the development of a robust market for solar PV power within Chile. The Large-Scale Photovoltaic Program proposes to address these barriers through transitioning to a more favorable atmosphere for solar PV development. Projects will set a favorable precedent by demonstrating PV technologies at an appropriate scale, developing capacity in the advisory market, and mitigating the increased costs that entrants face.

Multiple benefits are expected to result from this project. First, it will support Chile’s plan to diversify its power generation mix. Next, it will provide employment to local populations with an emphasis on equal opportunity for women. It will also create new opportunities for solar development, both within Chile, and in other Latin American countries. Finally, this project alone is expected to reduce greenhouse gas emissions in Chile by 7.4 Mt CO2e, and that number is likely to increase as new projects are developed in later years.

This project summary is drawn from draft project proposals [such as the PAD, PID, SAR, and country investment plan] and may not contain the most up-to-date information.

Project Details:
Project Document | External Review | Reallocation of Resources | Proposed Decision
Approved on March 28, 2013 (Approved Decision)
Approved amount(s):
USD 49.0 million
USD 1.0 million (MPIS)