NGO to Target HidroAysen Financing - Chile

Nathan Crooks
Wednesday, October 29, 2008

Business News Americas

The US-based NGO International Rivers plans to take its campaign against Chile's US$3.2bn, 2.75GW HidroAysen hydro project to the world of international financing, International Rivers Patagonia campaign coordinator Aaron Sanger told BNamericas.

HidroAysen, owned by Spain's Endesa and Chilean generator Colbun, submitted the EIS for the project in August.

International Rivers already has been targeting shareholders in Endesa and Colbun, including Italy's Enel and Chile's Matte Group. The NGO also has been urging US buyers to reduce imports of forestry products produced in Chile by the Matte Group.

"We will engage the process of international finance as it relates to HidroAysen's attempts to solicit support from the international financial community for its plans," Sanger said, adding the NGO would seek to highlight risks it argues have not been addressed by HidroAysen.

"We have established relationships with international financial institutions and will establish relationships with other institutions based upon what we know about Endesa and Colbun's past financing activities," Sanger continued.

Besides the region's geography, which is prone to earthquakes and volcanic eruptions, Sanger argues both the risk of glacial overflows and transmission line failures were not included in the project EIS.

"Investors are going to become pickier," Sanger said. "We don't welcome the uncertainty we are facing in the financial markets but we do welcome more scrutiny of environmentally and socially risky projects. Lenders and providers of capital are becoming more and more sensitive to these kinds of risks."