News Releases

Nov 5, 2009

IDB backs biomass power project in Chile

Energía Pacífico to generate electricity using locally available waste, with nearly zero net CO2 emissions

The Inter-American Development Bank approved a $6.5 million long-term loan for Energía Pacífico to build a 15.6-megawatt biomass power plant in Chile. The facility, which will use locally available agricultural, industrial and forestry waste as fuel to generate electricity and steam, will meet stringent international environmental standards, with close to zero net carbon dioxide emissions.

The power plant will be built adjacent to the factory of paper manufacturer Compañía Papelera del Pacífico (CPP), about 60 km south of Santiago. CPP will purchase nearly half of the electricity and all of the steam produced by the plant. CPP and its parent company, Empresas Coipsa, are shareholders Energía Pacífico, which is expected to come on stream by the end of next year.

Another Coipsa subsidiary, Tirsa, will supply the biomass for the new plant, purchasing much of it from farms, sawmills, packing plants and canneries in the surrounding region. Some of this waste, such as corn cobs, grape vines and fruit pits, is currently burned in open fields. Tirsa will also collect industrial refuse such as discarded pallets and packaging, which is often buried in landfills.

The new plant will help CPP stabilize its energy costs, which spiked in recent years due to the limited availability of natural gas.

“Promoting renewable energy sources and business competitiveness are top priorities for the IDB. In that sense, this project will have a double impact, since Energía Pacífico will use locally available biomass as fuel and will provide electricity to CPP at predictable prices,” said Jaime Sujoy, the IDB Representative in Chile.

Through a grant provided by the IDB’s Sustainable Energy and Climate Change Initiative, the project will also seek to obtain carbon credits under the United Nation’s Clean Development Mechanism.

The IDB non-sovereign guaranteed loan will complement the $8 million in financing for Energía Pacífico provided by the Inter-American Investment Corporation (IIC), the IDB affiliate specialized in small and medium-size enterprises. The participation of the IDB and the IIC in this project encouraged Chile’s Banco Estado to sign on as a parallel lender. CIFI, an infrastructure financing corporation backed by Latin American and Spanish banks and multilateral agencies, is also providing a loan.

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