BMUB supports first solar thermal power station in Latin America

Germany is helping Chile to build the first solar thermal power station in Latin America. The agreement on a development loan of EUR 100 million was signed by KfW Development Bank, the Republic of Chile and the Chilean development bank CORFO. The Federal Environment Ministry is supporting the project with an interest subsidy and accompanying advisory services. Located in the north of Chile, the power station is to have a capacity of 110 megawatts and achieve CO2 savings of around 70,000 tonnes a year.

Federal Environment Minister Barbara Hendricks commented, 'This project will help to demonstrate that operating concentrated solar technology is an economic proposition in the world's "sun belt". In view of its storage potential, this technology is suitable for basic electricity supplies, and is thus highly innovative. It enables us to show that there are climate-friendly alternatives to building additional fossil-fuel power stations.'

The solar thermal (concentrated solar power/CSP) power station is being constructed in the Atacama desert of northern Chile by Abengoa Solar Chile, a subsidiary of the Spanish market leader Abengoa. The investment volume is estimated at around USD 1.2 billion. Its financing, which other public institutions plan to take part in along with KfW Development bank, is also a model for public-private funding of investments in large-scale technical projects for climate change mitigation. Starting in 2017, the power station is scheduled to generate electricity for use by mining companies.

The cooperation between Germany and Chile also aims to bring about wide-ranging improvements in the framework conditions for the use of solar energy. Since the middle of this year, this part of the project has been run by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH.

Like other emerging economies and developing countries, Chile faces the challenge of meeting a steadily growing demand for electricity. To date, however, many countries have focused largely on expanding coal-fired power stations, resulting in a marked rise in greenhouse gas emissions. For example, more than 80% of the electricity for the large mining companies in the north of Chile is still generated from imported coal.

The project is part of the Federal Environment Ministry's International Climate Initiative (IKI), which has been providing targeted support for climate and biodiversity projects in developing countries and emerging economies since 2008. Following the support for the world largest CSD power station at Ouarzazate in Morocco, the Chilean project is the second-largest solar thermal power station in the current project portfolio.