First EIB loan for renewable energy in Chile

The European Investment Bank (EIB) has granted a US$82m loan to IPR-GDF Suez’s Chilean subsidiary Eólica Monte Redondo to finance the construction of the Laja run-of-river hydropower plant.

Located 450km south of Santiago and 70km southeast of Concepción, the plant will generate 34.4MW of electricity, which will feed into the Central Interconnected Grid from May 2012 onwards. Laja will be the first power plant in the country whose turbines will be installed in the bed of the river, making a diversion in the course of the river unnecessary.

The plant is currently 60% completed. When online, Laja will not only serve the growing demand for power through a renewable energy source but will also be part of efforts to diversify the national power grid.

This is the first loan that has been signed in Chile since the entry into effect of the Framework Agreement signed in March 2010. This laid the foundations for EIB operations in Chile. This EIB loan comes under the “Facility for Energy Sustainability and Security of Supply”.