The International Finance Corp (IFC), the development finance institution and member of the World Bank, has approved a $49 million loan to Selray Energias to advance the construction of La Huayca II, a 29.1MW solar power plant in the Atacama region of Chile.

The project will expand the 1.4MW La Huayca I plant completed last year to 30.5MW.

Selray Energias is a joint venture between Germany’s Saferay solar developers and Chilean electrical engineering firm Seltec. Selray Energias has created special purpose vehicle SPS La Huayca to execute construction.

The total cost of La Huayca II is expected to be around US$67.1 million and is expected to be unsubsidised by either feed-in tariff (FiT) or other subsidised tariffs. Conditions in Chile have made it feasible for private investors to sell electricity profitably to the local grid at market prices.

The expanded La Huayca will span 50 hectares with almost 125,000 modules to be used and will connect to Chile’s Northern Interconnected Electricity system (known as SING) via an 18km transmission line, making it the first merchant provider of solar electricity to join the SING grid.

Expected to begin construction this month, project completion is slated for April 2014.

This is the second large-scale solar project in which the IFC has been involved, following the Aura Solar project, Mexico. It follows the news last week that SunEdison and First Solar are both planning utility-scale PV projects in Chile and that US$1.1 billion in foreign investment in PV from China had been approved by the Chilean Foreign Investment Committee (CIEC).

Saferay subsidiary and special purpose company Parque Solar Carrera Pinto submitted to plans to build another US$300 million, 135MW PV plant in Copiapo, also in the Atacama desert, to the Chilean environmental authorities in April 2013, and pending approval construction on the Copiapo plant is expected to begin in September this year.