Chile Attracts $7 Billion in Renewable Energy Investment

Chile, the wealthiest nation in Latin America, is attracting $7 billion of renewable investments from Abengoa SA to SunEdison Inc. as the government seeks to reduce its dependence on fossil fuels to supply cheaper power to the mining industry, which provides a third of the world’s copper.

“It’s a good economy with a stable political environment,” Garland said. “Renewables will become a much bigger part of the Chilean electricity supply.”

Pattern Energy Group LP, the developer of Chile’s biggest wind farm, plans to proceed with a solar plant in the top copper-producing nation’s Atacama Desert.

Pattern received an environmental permit for one solar project in Chile and is interested in developing more renewable- energy plants in the country, Chief Executive Officer Michael Garland said in a telephone interview today.

The El Arrayan wind farm 250 miles (402 kilometers) north of Santiago is San Francisco-based Pattern’s first venture outside of North America, where it has 10 wind power projects.

The company’s Pattern Energy Group Inc. unit owns 70 percent of El Arrayan while London-based Antofagasta has 30 percent. The wind farm will provide power to Antofagasta Plc’s Los Pelambres copper mine.

Pattern went public in September with a $319 million initial public offering and sought another $300 million in a secondary offering in May. The shares fell 0.6 percent to $31.05 in New York today.

Garland said the group will tap capital markets twice a year to finance a backlog of renewable energy projects. The publicly traded unit’s board members include John Browne, a former chief executive officer of oil giant BP Plc.

Prices Double

In Chile, power prices have doubled in the last seven years and could increase 30 percent in the next seven, Energy Minister Maximo Pacheco said in a May 15 speech. While Chile isn’t facing blackouts, it needs more contributors to the grid and diversification of sources to avoid further cost increases, President Michelle Bachelet said at the time.

Her government is looking to play a more active role in issuing permits for projects and involve communities from an early stage to avert legal disputes. The country needs to accelerate renewable-power investments, increase the use of solar panels and connect its two grids, Bachelet said.

Bachelet is scheduled to participate in El Arrayan’s opening ceremony tomorrow.

“We are excited about the solar prospects for Chile,” Garland said. “We would like to do more wind and more solar.”

Copyright 2014 Bloomberg

Lead image: Chile flag via Shutterstock

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