WB approves $1.78 million grant to help develop geothermal energy in Chile

The World Bank Board of Executive Directors approved a US$1.78 million Clean Technology Fund (CTF) Grant to “strengthen the Chilean Ministry of Energy’s capacity to further develop the country’s geothermal sector and improve its energy security,” energiasrenovables website reported.

The World Bank explained in a statement that “the grant will contribute to Chile’s Energy Agenda (Agenda de Energía. Un Desafío País, Progreso para Todos) and the Energy Policy 2050, which aims to boost the use of non-conventional renewable energy (NCRE) and reduce the cost of electricity. Chile’s abundant geothermal potential provides a good renewable energy option to further diversify the country’s power generation mix, and reduce price volatility.”

Among other elements that justify this donation, the WB assures that “the Government of Chile has made a concerted effort to develop its nascent geothermal energy industry,” remarking, however, that “despite what appeared to be a promising start, a number of issues stymied exploration investments.”

“This project aims at resolving specific barriers to improve the geothermal energy market conditions. By addressing key legal, social and market barriers, this technical assistance will contribute to the development of tradeable geothermal resources.” Consumers in Chile stand to benefit from the long-term development of these resources. “Developing geothermal technology allows Chile to meet its growing energy demand, provide energy security, in an environmentally sustainable manner, boost the country’s economic competitiveness, and promote investments in remote rural areas, where poverty is more concentrated,” said Alberto Rodriguez, World Bank Director for Bolivia, Chile, Ecuador, Peru and Venezuela.

Cerro Pabellon, said to be the first geothermal power plant in South America, is currently under development and is owned by a joint venture between Chilean state-owned oil company Empresa Nacional de Petroleo (ENAP) and Italian firm Enel Green Power.

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