Red Eléctrica Chile, a subsidiary of Red Eléctrica Internacional, and Engie Energia Chile, a subsidiary of ENGIE, have announced that they had secured financing to build an energy transmission line.
With an investment of over US$780 million, this line will be the first interconnection in Chile between the northern and central electricity subsystems.
The project involves the construction and commercial operation of the Mejillones-Cardones electricity transmission line in Chile, which is being carried out by Transmisora Eléctrica del Norte S. A. (TEN).
TEN secured a US$460 million senior international loan, and another senior local loan for CLP154 billion (US$228.7 million). Both loans have a 2034 maturity.
Japanese and local banks were involved in the project financing: SMBC, Bank of Tokyo-Mitsubishi, Mizuho Bank, Banco de Chile, BCI and Banco Santander-Chile.
TEN also secured a loan for up to CLP73.5 billion (US$108.7 million) for the purposes of paying value added tax and that The Prudential Insurance Co of America had agreed to purchase US$50 million in fixed-rate instruments with a 2042 maturity.
The project forms part of the main transmission system in Chile and consists of a 500 kV line that is 600 kilometres in length that will connect the Sistema Interconectado Central grid (SIC) with the Sistema Interconectado del Norte Grande grid (SING).
The new electricity axis, whose commissioning is scheduled for the second half of 2017, will address the main challenge that the Chilean electricity system faces: the interconnection between its various subsystems to ensure security of supply and to reduce the price of energy.
In May 2015, Red Eléctrica Chile acquired a 50% of the share capital of TEN from Engie for a total of US$218 million.