ABN AMRO finances enormous solar power plant in Chile

ABN AMRO wants 20% of its energy portfolio to consist of renewable energy by 2020. Financing Cerro Dominador, a solar power plant in Chile, takes the bank one step closer to achieving this goal. With the construction of this solar park – one of the largest in the world – Latin America proves once again that the region is a world leader in renewable energy.

The Cerro Dominador Solar Power Plant is being built in the Atacama desert in Chile. The park is a 210 megawatt concentrated thermal solar power plant which will provide stable power to around 210,000 households simultaneously. Cerro Dominador is one of the largest solar power plants in the world and the first large-scale concentrated thermal solar power project in Latin America. This technology uses a series of mirrors to collect solar rays in a tower, generating a great deal of heat and, consequently, a great deal of power.

New technology

The Chilean government approved development of the park in 2013, but construction was delayed when the initiator, the Spanish multinational Abengoa, ran into financial difficulties. In 2016, EIG Global Energy Partners took on the challenge and ABN AMRO Brazil, which finances other sustainable projects in the region, was approached for financing.

Initially, the bank had its doubts, says Fernando Machado, Vice-President of ABN AMRO’s energy division in Latin America. “It was a huge project that largely revolved around new technology which hadn’t yet been proven. The operator was going to use this technology, but without its developers – they’d pulled out of the project.”

Despite all this, ABN AMRO was convinced of Cerro Dominador’s potential and added value, mainly because of its size, the location and the parties involved. Once the park has been completed (this is expected in late 2019), it will reduce annual carbon emissions by 870,000 tonnes compared with today’s levels – the equivalent of emissions produced by 260,000 petrol powered cars. “ABN AMRO has been adding renewable energy to its portfolio since 2016,” notes Fernando. “In the past three years, we’ve already financed ten large, sustainable projects. At this point, we finance more sustainable energy projects than we do oil and gas.”

For those familiar with this region’s energy market, it should come as no surprise that this project is materialising here. Latin America is one of the world’s cleanest regions in terms of power generation. Around one quarter of the energy generated here is renewable – mainly hydro (water) and biofuel – compared with an average of 13% worldwide.

There are promising developments in various Latin American countries: 65% of Brazil’s electricity network relies on hydropower. Mexico wants to generate 35% of its energy from clean sources within five years. And Chile is working hard to reduce its dependence on oil and coal; its geographical location makes the country extremely suitable for wind and solar energy.

Mindset

Fernando: “Companies are changing their mindset as the transition progresses. An increasing number want to generate their own sustainable energy. High-volume users like mining companies are now buying renewable energy. What’s great is that the government doesn’t even need to promote the transition – the private sector is taking the initiative. That creates competition and innovation.”

“ABN AMRO is exploring the possibility of financing other wind and solar energy projects. Latin America is definitely on the right track, and ABN AMRO is eager to provide financial support. We want to accelerate the transition to renewable energy.”