Green Climate Fund Approves Loan For 143 MW Solar Project In Chile

The Green Climate Fund has approved funding for a large-scale solar project in Chile, giving a further boost to the rapidly growing renewable energy sector in the country.

The South Korea-based Green Climate Fund recently approved a loan worth $49 million to a large-scale solar PV project coming up in the Atacama desert in northern Chile. The project will have an installed capacity of 143 MW (likely AC-rated, while DC-rated capacity would be around 170 MW). The project will have the capacity for expansion up to 250 MW.

The project is being implemented by US-based independent power producer Sonnedix. The project is expected to require a total investment of $265 million, with the $49 million loan being disbursed through the Development Bank of Latin America. The project will start selling electricity at US¢4.4/kWh from 2017 onward, however, this tariff is expected to increase gradually to reach US¢8.0/kWh by 2035.

Funding to the project strengthens the notion that Chile is a rapidly emerging renewable energy market. Over the last few months some of the leading project developers have started operations in the South American country.

The government has taken several significant measures to attract renewable energy investors to the country, and they have worked so far. However, the developers have started to feel some financial unease due to excess regional supply and low demand in certain regions of the country. This has led to developers being forced to sell electricity for free.

Recently, the government approved a legislation that will create a new interconnected transmission network to be established alongside a new independent operator. This will ensure that power generated from renewable energy projects located in remote regions of the country is supplied to population centers.