[China Co-Financing Fund] IDB approves 13.9 million USD loan from CHC for Arica I Solar PV Project

On 16 December 2014, the Inter-American Development Bank (IDB) approved loan financing for the Arica I Solar PV Project, which would include 27.7 million USD from IDB's ordinary capital (Loan 3404A/OC-CH), 13.9 million USD from the People's Bank of China via the China Co-Financing Fund for Latin America and the Caribbean (CHC) (Loan 3404/CH-CH), and 8.5 million USD from the Clean Technology Fund (Loan 3404/TC-CH). However, the IDB lists this project as cancelled, and it does not appear a loan contract was signed. The IDB refers to this project as "CH-L1079 : Arica I Solar PV Project". Arica Solar Generacion 1 was the planned recipient of this loan financing. The Arica I Solar PV plant was to be located in the Atacama Desert region, approximately 26 km east of the city of Arica, and was expected to have a 44.46 MW capacity. The project was also expected to include an 18 km, 66 kV transmission line (Línea de Alta Tensión 66 kV Pampa Dos Cruces) that would connect to the Parinacota Substation, owned by Empresa de Transmisión Eléctrica (TRANSEMEL). The project was supposed to support the country's power matrix by linking to the Sistema Interconectado Norte Grande (SING), reducing the reliance of SING on thermal energy and help meet growing demand on this part of the energy matrix. SK Ecologia, a subsidiary of Chilean company Sigdo Koppers, was to be responsible for project implementation. The Arica Health Service was to help with hiring contractors to maintain environmental regulation compliance. This project is linked to a China Development Bank (CDB) loan (see project ID #37304) and an investment from Sky Solar (see project ID #37358), which were intended to fund multiple solar projects in Chile, including this one. The statuses of these flows are unclear, given that they were directed generally at solar plant construction by Sky Solar in Chile, and no evidence can be found of plant construction to date, only a handful of pre-existing plant acquisitions.

Additional details

Although the IDB marks the project as cancelled, project status has been set to Pipeline: Pledge. While the loan was authorized, it does not appear a loan contract was ever signed. Thus, because the funds were never committed, the project status cannot be coded as "cancelled".

Number of official sources

14

Number of total sources

18