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The International Finance Corporation (IFC), a member of the World Bank Group, announced the signing of a green and sustainability-linked loan to ENGIE Energía Chile. This financing, for a total of US$ 400 million, will help the company, in line with its energy transformation plan, to shift from fossil fuel-based power generation to renewable power generation, and with the installation of Battery Energy Storage Systems.
The loan includes US$200 million from IFC, US$114.5 million from investors under IFC’s Managed Co-lending Portfolio Program and US$35.5 million from SDG-focused investor ILX Fund under IFC’s B Loan Program. An additional US$50 million parallel loan arranged by IFC is expected to close in the next few weeks to complete a total financing package of US$400 million.
This is IFC’s first sustainability-linked loan in Chile’s energy sector, which will contribute to facilitating the supply of clean energy to the National Electric System (SEN), making it more efficient, providing greater security of supply and helping to mitigate the intermittency of renewable generation through the implementation of BESS energy storage technology.
The loan has also been structured with a specific sustainable performance objective for the decommissioning or reconversion of the company’s remaining coal generation assets, contributing to climate change mitigation by reducing greenhouse gas emissions by more than 800,000 tons of CO2 per year.
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Manuel Reyes-Retana, Regional Director of IFC, highlighted: “IFC is mobilizing the necessary capital for sustainable innovation to promote decarbonization initiatives and adapt to global warming. Supporting leading companies such as Engie is vital to face the current climate challenges efficiently, and, for us, it is setting a precedent in green and sustainability-linked loans for the energy industry in Chile.”
Rosaline Corinthien, CEO of ENGIE Chile, commented: “We are very happy to have obtained this support from the IFC, a green loan that accounts for the work we do every day hand in hand with caring for people and the environment. Linked to our ESG performance, we have committed with IFC on targets for non-financial indicators on emissions and diversity, two key elements of our corporate strategy. This financing is a fundamental piece to materialize our ambitious investment plan in renewable energies in Chile, and thus continue leading the country’s energy transition.”
The financing, in addition to having components on the disconnection of coal units and the incorporation of renewable energy to the SEN, also includes a gender target that addresses the existing gaps in the country’s energy sector. In this sense, ENGIE Chile practices a conscious policy in promoting gender diversity and professional equality between men and women. Among the specific actions that they are carrying out is the Fifty-Fifty Program, which aims to advance gender parity in managerial positions, heads and senior professionals.