China Co-Financing Fund for Latin America and the Caribbean provides $36 million loan for 151 MW Calama wind farm (Linked to Project ID#86526)

On December 23, 2020, IDB Invest (formerly Inter-American Investment Corporation, or IIC) -- the private sector institution of the Inter-American Development Bank (IDB) Group -- signed a $125 million financial package with Engie Energía Chile S.A. for the construction, operation and maintenance of the 151 MW Calama wind farm. The loan package consisted of a $74 million senior loan from IDB Invest's own funds, $15 million of blended financing from the Clean Technology Fund (CTF), and $36 million from the People's Bank of China (PBOC) via the IDB Invest-managed China Co-Financing Fund for Latin America and the Caribbean (CHC). The loans carried 12 year maturities. Their other borrowing terms are unknown. The loan proceeds were to be used by the borrower to build, operate and maintain the Calama wind farm, located approximately 12 km east of the city of Calama in the province of Loa, region of Antofagasta, Chile. The energy produced by the farm was intended to replace units U14 and U15 of Engie Energia Chile's Tocopilla Thermoelectric Plant, each of which produced 125 MW, as part of a larger effort to decarbonize Chile's electric grid. The Calama wind farm was originally expected to have an installed capacity of 151.2 MW, produced by 36 wind generators (4.2 MW each) mounted on 100-meter towers. The energy was to be evacuated to the national grid via a connection with the existing Calama-Jama Solar 220 kilovolt (kV) transmission line, which passes approximately 300 meters from the project’s electrical substation. Global Energy Services (GES) and Siemens Gamesa served as contractors for project implementation. Construction began in 2019 and was originally expected to last 18 months. In September 2020, a 175 MVA transformer arrived at the site of the wind farm. As of July 29, 2021, construction was 97% complete. On August 27, 2021, Engie Energía Chile S.A. drew the full amount available ($125 million) under these 3 facilities (loans). The wind farm was officially connected to the electrical grid in October 2021. The coal units to be replaced by the Calama farm and others were subsequently disconnected: U14 in June 2022, followed by U15 in October 2022. In addition to the IDB Invest-led financial package, NDC Acelera -- a multi-donor fund administered by the IDB and funded by the Nordic Development Fund, Austria, the Netherlands and Sweden -- financed the technical work that accompanied the transaction.

Additional details

1. The IDB Invest project identification number is 12995-01 and project title is "Engie Decarbonization Instrument". 2. The U.S.-based firm of Hunton Andrews Kurth LLP advised IDB Invest as international counsel. Chilean legal advice to IDB Invest was provided by Cariola Díez Pérez-Cotapos SpA. The U.S.-based firm of Shearman & Sterling LLP advised Engie as New York counsel, and the Chilean-based firm of Prieto y Cía advised Engie as Chilean counsel. 3. Engie Energía Chile S.A., (“Engie”), a Chilean sociedad anónima. 4. The Clean Technology Fund (CTF), one of two multi-donor trust funds under the Climate Investment Funds (CIF) framework, promotes scaled-up financing for demonstration, deployment and transfer of low-carbon technologies with significant potential for long-term greenhouse gas emissions savings implementation in renewable energy, energy efficiency, and clean transport in emerging market middle-income and developing economies. The CTF is at the forefront of financing promising renewable energy technologies, such as concentrated solar power (CSP). Channelled through the African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development, Inter-American Development Bank, and World Bank Group, the CTF finances 19 country programmes and one regional programme with over 90 individual projects.

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