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Company name

Fondo de Estabilización de Protección al Cliente

Project number

14915-01

Category C projects are those that are likely to result in very limited or no adverse environmental or social impacts or risks.

E&S category
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C

Country

Chile

Sector

Energy

Status

In implementation

Disclosed date

04/18/2024

Projected date at which a project will be put forward for the Board of Executive Directors’ approval.

Projected board date
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07/16/2024

Approval date

07/30/2024

Signed date

10/07/2024

Sponsoring entity

N/A

Investment Operations Department Contact

Infrastructure and Energy Division

Investment type

Syndicated amount

USD $ 2,160,000,000

Financing amount

USD $ 2,400,000,000

Currency

USD

Project scope and objective

The Chilean Government has presented a new law to stabilize electricity tariffs, amending the current Law No. 21,472, which establishes the Final User Protection Mechanism (known as the "MPC Law"). The aim is to stabilize tariffs and eventually reimburse them. To achieve this, a separate fund, the "Tariff Stabilization Fund" ("FET"), will be used and managed by the General Treasury of the Republic. This fund will periodically issue payment documents with interest in favor of the generators. The amount of the Certificates is estimated to be US$2.4 billion, maturing in 2035. To pay the FET obligations, it will receive payments from regulated customers that will be collected by the distributors. The objective of the project is to structure a new financial facility available to generators, based on the previous Tariff Stabilization project (14300-01) that is currently being disbursed. Similar to the previous transaction, a facility equal to the amount required to purchase all Payment Certificates from the FET will be provided. The Facility will consist of: (a) a committed purchase facility from IDBI ("Facility A") of at least 10% of the transaction amount, estimated to be $240 million as of the date, (b) a fully committed purchase facility for an amount of up to 90% of the Facility Amount ("Facility B") that IDBI will provide through an SPV, which will finance its participation by issuing a B-Bond for an amount that allows the Project to complete the required Facility Amount. Unlike the previous transaction, the Payment Certificates will not have a full government guarantee; instead, 30% of the principal and total interest will be guaranteed.

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Environmental and social review

IDB Invest conducts an environmental and social due diligence (ESDD) commensurate with the nature, scale, and stage of the project, and with its level of environmental and social risks and impacts. The ESDD will confirm the project E&S categorization and assess the project with respect to the client requirements in IDB Invest Environmental and Social Sustainability Policy. The results of the ESDD, including any identified gaps are described in the Environmental and Social Review Summary (ESRS) provided below. For projects approved as of 2016, any gaps with respect to IDB Invest's Environmental and Social Sustainability Policy at the time of the ESDD are addressed in the Environmental and Social Action Plan (ESAP) presented below, to comply with the date mentioned above.

MPC 2 TARIFAS CHILE (PROJECT NEWEN) - ENRIONMENTAL AND SOCIAL REVIEW SUMMARY (ESRS)

174.1 Kb

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Contact information

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Alternatively, you may also use the following contact information :

Client Contact

EMAIL

N/A

PHONE NUMBER

N/A

POST OFFICE ADDRESS

N/A

IDB Invest Contact

EMAIL

requestinformation@idbinvest.org

PHONE

+1(202)-566-4566

ADDRESS

1350 New York Ave NW, Washington, DC 20005

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