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Chile to jump-start energy efficiency market with assistance from the IDB

Small and medium-sized enterprises and energy efficiency service firms in Chile could see up to $92 million in energy savings and related revenues over the coming decade thanks to a government program that will be supported by the Inter-American Development Bank.

The program will help to connect companies that wish to lower their energy costs with specialized consulting firms that can advise them on how to do so, and with a government fund that will finance the purchase of new machinery and other equipment that can lower energy consumption.

A $2.6 million grant from IDB-Global Environment Fund will be used by the recently established Chilean Energy Efficiency Agency ( AChEE, for its initials in Spanish ) to provide training to energy efficiency (EE) consulting firms  and energy auditors and create a clearinghouse of EE information targeted to the needs of specific industries. These energy auditors and consulting firms will subsequently assist small and medium-sized (SMEs) enterprises that wish to access government credit for EE investments.

The Chilean Government’s Production Development Corporation (CORFO, for its acronym in Spanish) offers up to $1 million in loans for EE investments by commercial and industrial companies. However, many SMEs lack to the expertise to analyze their energy use and determine what technologies can help them to reduce energy costs. The goal of IDB-GEF program is to remove remaining these obstacles and encourage more companies to take advantage of CORFO’s loans.

“Chile has been a pioneer in providing financial support for EE to its industrial and commercial sectors,” said Christiaan Gischler, the IDB project team leader. “This program will help to accelerate the growth the local market for EE services and equipment, it will finance demonstration projects that will show the savings that EE can generate for specific industries.”

Gischler explained that if all the EE investments that are anticipated to result from the program are carried out, Chile will save an estimated 200 GWh (Gigawatt hours), or the equivalent of a 15% reduction in the electricity bill of 1500 of the country’s SMEs. In this case, Chile would also avoid emitting an estimated 2.9 million tons of CO2 over the next 10 years.