MPC 2 - Tarifas Chile (Project Newen) (IDBI-14915-01)

Regions
  • Latin America and Caribbean
Geographic location where the impacts of the investment may be experienced.
Countries
  • Chile
Geographic location where the impacts of the investment may be experienced.
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
Approved
Stage of the project cycle. Stages vary by development bank and can include: pending, approval, implementation, and closed or completed.
Bank Risk Rating
C
Environmental and social categorization assessed by the development bank as a measure of the planned project’s environmental and social impacts. A higher risk rating may require more due diligence to limit or avoid harm to people and the environment. For example, "A" or "B" are risk categories where "A" represents the highest amount of risk. Results will include projects that specifically recorded a rating, all other projects are marked ‘U’ for "Undisclosed."
Voting Date
Jun 18, 2024
Date when project documentation and funding is reviewed by the Board for consideration and approval. Some development banks will state a "board date" or "decision date." When funding approval is obtained, the legal documents are accepted and signed, the implementation phase begins.
Borrower
Fondo de Estabilización de Protección al Cliente
A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.
Sectors
  • Energy
  • Law and Government
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
Loan
The categories of the bank investment: loan, grant, guarantee, technical assistance, advisory services, equity and fund.
Investment Amount (USD)
$ 240.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Loan Amount (USD)
$ 240.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Project Cost (USD)
$ 2,160.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Bank Documents
Primary Source

Original disclosure @ IDBI website

Updated in EWS Oct 17, 2024

Disclosed by Bank Apr 18, 2024

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Project Description
If provided by the financial institution, the Early Warning System Team writes a short summary describing the purported development objective of the project and project components. Review the complete project documentation for a detailed description.

The Chilean Government has presented a new law to stabilize electricity tariffs, amending the current Law No. 21,472, which establishes the Final User Protection Mechanism (known as the "MPC Law"). The aim is to stabilize tariffs and eventually reimburse them. To achieve this, a separate fund, the "Tariff Stabilization Fund" ("FET"), will be used and managed by the General Treasury of the Republic. This fund will periodically issue payment documents with interest in favor of the generators. The amount of the Certificates is estimated to be US$2.4 billion, maturing in 2035. To pay the FET obligations, it will receive payments from regulated customers that will be collected by the distributors. The objective of the project is to structure a new financial facility available to generators, based on the previous Tariff Stabilization project (14300-01) that is currently being disbursed. Similar to the previous transaction, a facility equal to the amount required to purchase all Payment Certificates from the FET will be provided. The Facility will consist of: (a) a committed purchase facility from IDBI ("Facility A") of at least 10% of the transaction amount, estimated to be $240 million as of the date, (b) a fully committed purchase facility for an amount of up to 90% of the Facility Amount ("Facility B") that IDBI will provide through an SPV, which will finance its participation by issuing a B-Bond for an amount that allows the Project to complete the required Facility Amount. Unlike the previous transaction, the Payment Certificates will not have a full government guarantee; instead, 30% of the principal and total interest will be guaranteed.

Investment Description
Here you can find a list of individual development financial institutions that finance the project.

Contact Information
This section aims to support the local communities and local CSO to get to know which stakeholders are involved in a project with their roles and responsibilities. If available, there may be a complaint office for the respective bank which operates independently to receive and determine violations in policy and practice. Independent Accountability Mechanisms receive and respond to complaints. Most Independent Accountability Mechanisms offer two functions for addressing complaints: dispute resolution and compliance review.

EMAIL: requestinformation@idbinvest.org

PHONE: +1(202)-566-4566

ADDRESS: 1350 New York Ave NW, Washington, DC 20005

ACCESS TO INFORMATION

You can submit a request for information disclosure at: https://www.iadb.org/en/access-information/information-request

ACCOUNTABILITY MECHANISM OF IDB / IDB INVEST

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 (IDB Invest)-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 IDB Invest 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).

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