Germany is supporting Chile in building the first solar thermal power plant in Latin America. The agreement on a development loan of 100 million euros was signed by the KfW Development Bank, the Republic of Chile and the Chilean development bank CORFO. The Federal Environment Ministry supports the project with an interest subsidy and consultations. The power plant is located in northern Chile and will have a capacity of 110 megawatt, saving around 70,000 tonnes of CO2 every year.
Federal Environment Minister Barbara Hendricks commented: "This project will contribute to the economic operation of concentrated solar technology in our planet's sun belt. Owing to its storage capacities, this technology is also suitable for the basic supply of electricity and therefore highly innovative. With this project we demonstrate that there are climate-friendly alternatives to increasing the capacities of fossil-fuelled power plants."
The concentrated solar power plant is being built in the Atacama Desert in northern Chile by Abengoa Solar Chile, a subsidiary of Spanish market leader Abengoa. The investment volume is estimated at 1.2 billion US dollars. The funding, to which other public institutions apart from the KfW Development Bank wish to contribute, also is a model for public-private funding for large-scale investments in climate action. Starting in 2017, the power plant is to produce electricity for mining companies.
The German-Chilean cooperation aims to comprehensively improve the fundamental conditions for the use of solar energy. This part of the project will be carried out by the Gesellschaft für Internationale Zusammenarbeit (GIZ) since summer 2014.
Chile and other emerging economies and developing countries are facing the challenge of having to cover a constantly rising demand for electricity. Many countries are still promoting the expansion of coal-fired power plants, however, which significantly increases greenhouse gas emissions. Eighty percent of the electricity for the large mining companies in northern Chile are still generated through imported coal.
The project is part of the BMUB's International Climate Initiative (ICI), which has been supporting climate and biodiversity projects in developing countries and emerging economies since 2008. After the world's largest solar thermal power plant Ouarzazate in Morocco. the Chilean project is the second largest solar-thermal power plant in the portfolio of projects receiving funding.