Investors believe the prospects remain strong for Chile's hot renewables market, despite recent social unrest that caused the nation to relinquish hosting climate talks last year.

Chile was forced to give up hosting the COP 25 United Nations Climate Change Conference in December after cost-of-living protests that started in the capital, Santiago, in October spread to other cities. Violent clashes with police left 29 dead. The COP 25 talks ultimately were held in Spain.

Chile's unrest threatened to stymie foreign interest in clean power investments that had helped the country's renewables market become one of the hottest in Latin America, with a compound annual growth rate of 31.5 percent for non-hydro renewables from 2000 to 2018, according to GlobalData.

Chile's renewables market benefits from big energy demand from the country's mining sector as well as some of best solar resource on the planet. Chile's economy has been one of the better bets in Latin America in recent years.

Arnoldus Mateo van den Hurk Mir, a Spain-based renewables and mining consultant with extensive knowledge of the Chilean market, said the market should recover from any impact from the unrest. The protests would “only delay some investments," van den Hurk Mir said. "Electrification and the relationship with green energy is booming in Chile.”

Recent announcements would seem to bear this out. Last month, the Spanish renewables developer Acciona said it would build 84 megawatts of wind and 64 megawatts of solar in Chile in 2020, taking its Chilean generation portfolio up to 684 megawatts.

“Our commitment to continue investing in Chile remains intact,” said José Ignacio Escobar, Acciona’s director general of energy for South America, in a press statement.

And, as reported by GTM last month, struggling German turbine maker Enercon is counting on a 607-megawatt Chilean wind farm, Horizonte, to help make up for weak sales in its home market.

Return to "relative tranquility"

Peter Horn, CEO at the Chilean solar installer Heliplast, experienced Chile's recent troubles first-hand. “Our office is next to Costanera Center [a commercial district in Santiago] and the metro was closed, so in the first days it was hard to get in and out of the office and clients couldn’t make it,” he said.

Nevertheless, Horn told GTM, business in October ended up being “better rather than...worse,” and as of last month, it had returned to “relative tranquility and normal sales.”

Horn said he did not think overall investment in renewables would be significantly affected by the recent unrest, which has largely died down after the October resignation of eight cabinet members and the November announcement that a new constitution would be put to a referendum this April.

However, “investments in commercial and residential rooftop PV will drop because they are not basic necessities,” Horn predicted. “The country’s image has deteriorated, and the most obvious effect will be higher interest rates."

In the meantime, Chile’s administration is working to quell investor concerns. Andres Perez, head of international finance at Chile’s Finance Ministry, toured North America and Asia last month, and the government rushed out videos of investors voicing their confidence in the Chilean market.

The videos included a testimonial from Ignacio Deschamps, group head of international banking and digital transformation at Scotiabank, which last July joined BBVA and Mizuho Bank in providing a $150 million revolving credit line for Enel Chile.

On balance, Chile’s foreign reputation for sound fiscal management has survived the biggest social upheaval in a generation largely intact, experts have said. Although economic activity shrank 5.4 percent month-on-month in October, market confidence has been recovering, according to reporting from Bloomberg.

Chile's renewables market in 2020

The apparent resilience of the Chilean economy bodes well for the continued development of renewables throughout 2020. The next 12 months should see permitting of the Horizonte wind farm, which developer Colbún says will be the biggest in Latin America and is set to begin construction in 2021.

Also due this year is the commissioning of the largest concentrated solar power plant in Chile and Latin America, developed by Cerro Dominador with funding from EIG Global Energy Partners. Cerro Dominador connected its plant to the grid on Jan. 6.

The 100-megawatt plant is being promoted as the first in Latin America, ignoring the fact that mining company Minera El Tesoro inaugurated what was then considered the world’s largest CSP project just 30 miles away in 2012.

Last month, Cerro Dominador’s CEO, Fernando González, told Chilean news channel Pauta that Chile’s protests hadn’t dimmed his company’s growth ambitions. “We have a long-term vision that has not been affected by the current situation,” he said. “We want to grow as quickly as we can.”