Engie Decarbonization Instrument (IDBI-12995-01)

Countries
  • Chile
Where the impacts of the investment may be experienced.
Specific Location
Calama, Tocopilla
Whenever identified, the area within countries where the impacts of the investment may be experienced. Exact locations of projects may not be identified fully or at all in project documents. Please review updated project documents and community-led assessments.
Financial Institutions
  • IDB Invest (IDBI)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Proposed
Bank Risk Rating
B
Risk rating varies among banks and may refer only to the particular investment and not to the risk for the project as a whole. Projects marked 'U' have an 'Unknown' risk rating at the time of disclosure.
Voting Date
May 26, 2020
The estimate day the bank will vote on a proposed investment. The decision dates may change, so review updated project documents or contact the EWS team.
Borrower
Engie Energia Chile S.A.
The holder of the loan, grant, or other investment.
Sectors
  • Energy
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
Fund, Loan
The categories of the bank investment: loan, grant, etc.
Investment Amount (USD)
$ 125.00 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please review updated project documents for more information.
Project Cost (USD)
$ 152.90 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please see updated project documentation for more information.
Primary Source

Original disclosure @ IDBI website

Updated in EWS Apr 27, 2020

Disclosed by Bank Apr 24, 2020


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Project Description

The project aims to support Engie Energia Chile ("EECL" or the "Company") in the construction and operation of the Wind Calama (the "Project"), a wind project with an installed capacity of 151.2 megawatts ("MW"), to be located near the city of Calama in the Antofagasta Region, Chile. The energy produced will replace the anticipated decommissioning of units U14 and U15 of EECL, each with a capacity of 125 MW that are part of the Tocopilla Thermoelectric Plant ("TTP"). The estimated cost of the Project is US$152.9 million. IDB Invest will participate in the transaction through a senior loan of up to 12 years, for an amount of US$110.0 million. In parallel, IDB Invest will mobilize resources of the Clean Technology fund ("CTF") for up to US$15.0 million, to complement the Project's financing.

The main objective of this operation is to deploy a pilot financial instrument that supports decarbonization activities in Chile, by monetizing a clean technology project's actual displacement of CO2 emissions of existing fossil fuel fired power assets. In the absence of a carbon credits market, the financing structure will establish a minimum price for the emissions through a lower financing cost in the CTF loan. Methodology of this mechanism is being developed alongside a technical consultant, so that it can be replicated in other projects in Chile and in Latin America and the Caribbean, with the broader objective to foster the development of a carbon credits market.

Investment Description
  • IDB Invest (IDBI)
Private Actors
  • Engie SA -- Implementing Company
Contact Information

For inquiries about the Project, contact:

Client Contact name: Bernardita Infante
Title: Head Corporate Finance
Phone number: +562 2353 3205 / +569 6617 3006
email address:
Bernardita.infante@engie.com

Client Contact name: Jose Miguel Higueras
Title: Corporate Finance Officer
Phone number: +562 2783 1146 / +569 3396 6417
email address:
Jose.higueras@engie.com

ACCOUNTABILITY MECHANISM OF IADB

The Independent Consultation and Investigation Mechanism (MICI) is the independent complaint mechanism and fact-finding body for people who have been or are likely to be adversely affected by an Inter-American Development Bank (IDB) or Inter-American Investment Corporation (IIC)-funded project. If you submit a complaint to MICI, they may assist you in addressing the problems you raised through a dispute-resolution process with those implementing the project and/or through an investigation to assess whether the IDB or IIC is following its own policies for preventing or mitigating harm to people or the environment. You can submit a complaint by sending an email to MICI@iadb.org. You can learn more about the MICI and how to file a complaint at http://www.iadb.org/en/mici/mici,1752.html (in English) or http://www.iadb.org/es/mici/mici,1752.html (Spanish).