German state-owned lender KfW Ipex-Bank is lending US$120mn to Transelec Concesiones, Chile’s largest power grid operator, to finance four power grid projects.
The main construction and operating components will be supplied by German firm Siemens, while Spanish company Abengoa and French construction firm Engie are also each party to one of the projects.
The total investment volume comes to approximately US$435mn. Export Development Canada and Japanese bank MUFG are providing additional debt capital of around US$240mn.
Speaking to GTR about the deal, Ulrich Schoppmeyer, director of power, renewables and water at KfW, says: “As the customer was awarded four different projects by the regulator back in 2015 by a decree, it benefits from a fixed revenue stream for a period of 20 years. The stable revenue profile enables us to guarantee the borrower long-term liquidity.”
Transelec will use the funds to build the Nueva Charrúa and Nueva Puerto Montt substations and their associated transmission lines, and to build and expand two complementary lines including the Los Changos 1 and Los Changos 2 substations.
“With financing this project, KfW Ipex-Bank is now involved in three transmission projects in Chile – this fact underlines Chile’s role as a core market for KfW Ipex-Bank,” says Schoppmeyer, who adds that KfW sees “high growth potential” in the Chilean energy sector.