Green electricity for Chile: KfW and the EU participate in financing of first solar thermal energy project in Latin America
Press Release from 2019-03-22 / Group, KfW IPEX-Bank, KfW Development Bank
- Solar electricity 24 hours a day
- Annual savings of approximately 870,000 tonnes of CO2
- European Union providing EUR 15 million grant
KfW and KfW IPEX-Bank are participating in financing for the Cerro Dominador project in the Atacama Desert in northern Chile. The European Union intends to promote the innovative project by providing EUR 15 million through the Latin American Investment Facility (LAIF). The project is the first combined solar thermal power and photovoltaics system in Latin America. KfW is contributing a total of USD 120 million.
With regard to the USD 65 million contributed by KfW Development Bank, a loan will be granted to the government-owned Chilean development bank Corporación de Fomento de la Producción (CORFO) via the Republic of Chile. The development bank will pass the funds on to the Cerro Dominador project via a local bank. The project is part of the International Climate Initiative (IKI) of the German Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety.
Additional debt capital has been provided through project financing from KfW IPEX-Bank in the amount of USD 55 million and from a group of international finance institutions, including Natixis, Deutsche Bank, Société Générale, ABN AMRO, Santander, Commerzbank, ICO Bank, Helaba and BTG Pactual, as well as other institutional investors. Construction work has been resumed in July 2018.
“With the two financings, KfW Group is making an important contribution to the introduction of solar thermal technology to the market, which increases the security of the energy supply in Chile and leads to a significant reduction in CO2,” said Dr Joachim Nagel, Member of the Executive Board at KfW Group.
“CORFO's support for the Cerro Dominador project is an example of the Chilean government's efforts to decarbonise, diversify and further develop our energy supply. This is our contribution to technological innovation and to increased productivity in the industrial sector as a whole, particularly in the energy sector. We are thus assuming a leading role in Latin America,” said Sebastián Sichel, Deputy Director of CORFO.
The Cerro Dominador project is located in one of the sunniest places in the world and will consist of two components: together with the photovoltaic system which is already in operation, the solar thermal system will generate a total capacity of 210 megawatts and will supply the Chilean electricity grid with green energy. One distinctive feature of the solar thermal system is its molten salt storage, which enables the system to operate without direct sunlight and therefore allows electricity to be produced reliably, 24 hours a day.
All of this means that, with the financing, the system will make an important contribution to international climate change mitigation and will save around 870,000 tonnes of CO2 per year.