December 16, 2016 / 10:40 PM / 3 years ago

Engie Energia Chile secures financing for key power project

SANTIAGO, Dec 16 (Reuters) - Engie Energia Chile said in a note to regulators on Friday that it had secured financing to build an energy transmission line between the nation’s two power grids, shaking up the way consumers receive power in the South American nation.

Chile’s energy transmission network is currently divided into two unconnected grids - one in the north known as the SING, which relies on electricity generated by coal, gas, and increasingly solar, and one in the populated central-southern region known as the SIC, which draws on significant hydropower resources.

The fragmented nature of the grids has led to significant distortions and inefficiencies in recent times. Much of the nation’s solar power, for instance, cannot be transported to metropolitan areas, and hydropower producers have been unable to sell to the nation’s energy-starved mines in the north.

Engie said that its 50 percent-owned unit Transmisora Electrica del Norte secured a $460 million senior international loan, and another senior local loan for 154 billion Chilean pesos ($228.7 million). Both loans have a 2034 maturity.

Engie added that it also secured a loan for up to 73.5 billion Chilean pesos for the purposes of paying value added tax and that The Prudential Insurance Co of America had agreed to purchase $50 million in fixed-rate instruments with a 2042 maturity.

The transmission line to be built will be roughly 600 km (373 miles) in length and have a capacity of 500 kilovolts, the company said.

Among the banks involved in the project are Japan’s SMBC , Bank of Tokyo-Mitsubishi, and Mizuho Bank, as well as local banks Banco de Chile , BCI and Banco Santander-Chile. ($1 = 673.3000 Chilean pesos) (Reporting by Gram Slattery; Editing by Anthony Esposito; Editing by Jonathan Oatis)

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