The Acatama desert in Chile. Source: Flickr/Fotopedia

The Acatama desert in Chile. Source: Flickr/Fotopedia

The Green Climate Fund (GCF), a global initiative launched on the back of the UN climate talks to advance the goal of keeping the temperature increase on the planet below 2°C, has approved a US$49 million loan for a 143MW PV project in Chile.

The plant is to operate at US$44/MWh by 2017, with projections increasing prices upt o US$80/MWh by 2035. The project has potential to make a considerable difference in both fulfilling the country’s renewable energy mandates, and promulgating GCF’s climate change values. Phase I of the project is 143MW, expandable to 250MW; expected to generate 412GWh/year.

GCF’s loan will be extended through the Development Bank of Latin America. The total cost of the PV project, which will be located in Chile’s Tarapacá region, is estimated at US$265 million. Once completed, the plant will be able to displace around 200,000 tonnes of carbon dixiode emission annually; advancing GCF’s mission to invest in low-emission and climate-resilient development.

The project, known as Atacama Solar, is to be handled by Sonnedix, a US solar independent power producer (IPP), and will be siutated in an area with the highest level of solar irradiation in South America. Despite being the first Latin American country to surpass 1GW of solar PV capacity, Chile is still heavily dependent on imported fossil fuels. But with the government’s new and ambitious commitment to have 70% renewables in the country’s energy mix by 2050, now is as good a time as any for Chile to focus on transitioning into an energy system based on renewables.

The energy transition has recently been given a hand by the Chilean Congress passing a law to establish a new national interconnected power system in conjunction with a new independent operator, which will hep the development of both renewable and non-renewable energy projects.

Tags: green climate fund, cop21, chile, finance, renewables integration