Chilean senators oppose AES Gener US$1.6bn hydro project

Friday, June 14, 2013

Chile's environmental regulator (SMA) received a requisition calling for the suspension of Chilean generator AES Gener's 531MW Alto Maipo project operating permit and force the company to submit a new environmental impact study (EIS), Rodrigo Weisner, partner at Puga & Ortiz law firm told BNamericas.

The request, backed by six Chilean senators along with tourism and environmental associations and local politicians of the Maipo river valley, argues the 2011 contract between Chilean water utility Aguas Andinas and AES expands the area impacted by the project beyond that stated in the environmental qualification resolution (RCA) issued in 2009.

A new EIS, encompassing the project and the effects on the water supply infrastructure of the metropolitan area of Santiago, needs to be evaluated by the environmental evaluation service (SEA), according to Weisner, who is representing the parties opposing the project.

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According to the 23-page document, which BNamericas had access to, the contract imposes 40-year restrictions on the utility's ability to expand or modify the infrastructure that provides water to the capital.

The project is facing three other legal battles related to corruption in the RCA approval process and two pertaining to the national water authority DGA's approval of the waterworks.

AES Gener's parent company AES (NYSE: AES) previously said it expects to begin construction this year on the controversial Alto Maipo project with commercial operations starting in 2018.

Gener is looking for options similar to the deal for its US$1.35bn-plus Cochrane coal-fired power project in northern Chile, to finance the US$1.6bn hydro project.