Overview

The SCF is providing Technical Assistance to a large-scale Battery Energy Storage System (BESS) in northern Chile’s Antofagasta region to address solar energy curtailment and improve grid stability. The project will store excess daytime solar power and release it during evening peak demand, replacing fossil fuel-based ramp-up energy and supporting Chile’s clean energy transition.

By combining grid-connected storage, clean energy optimization, and strong ESG compliance, the project aligns with Chile’s national Energy 2050 plan and strengthens the country’s climate resilience and renewable energy infrastructure.

The Challenge

Chile has experienced a rapid expansion of solar PV capacity, particularly in its northern desert regions. However, grid bottlenecks and timing mismatches between generation and demand have led to significant curtailment of solar energy—with renewable power going unused. The lack of battery storage prevents shifting clean energy to evening hours, forcing reliance on coal-fired ramp-up generation.

Without sufficient storage infrastructure, solar power continues to be wasted while fossil fuel plants meet evening demand.

SCF’s Involvement

SCF Technical Assistance completed a comprehensive feasibility study for a battery energy storage system (BESS) project, de-risking critical commercial, legal, and technical dimensions:

Legal & Regulatory Feasibility

• Conducted full permitting review covering environmental approvals, grid connection authorizations, land use compliance, and sectorial permits to confirm construction readiness
• Validated corporate structure of special purpose vehicles (SPVs) to ensure proper incorporation and freedom from liens or encumbrances
• Provided legal recommendations on corporate structure for milestone payments and asset acquisition to protect investor interests

Commercial Feasibility & Offtake Security

• Mapped potential off-takers and established competitive tariff and contract tenor benchmarks based on market feedback
• Facilitated engagement with off-takers for power purchase agreements (PPAs) and nearby generators for energy purchase agreements
• Identified optimal PPA structures with comprehensive risk assessment and mitigation strategies to ensure revenue stability

Technical Feasibility & Site Assessment

• Evaluated BESS installation feasibility and site suitability for utility-scale energy storage
• Assessed charging capacity and grid injection capabilities to validate technical viability and revenue potential

Following successful completion of the feasibility study, SCF approved additional technical assistance for a comprehensive Environmental and Social Impact Assessment (ESIA), encompassing:

• Environmental and social baseline establishment with site inspections, ecological assessments including critical habitat and endangered species surveys, and climate change/flood risk analysis
• Risk categorization aligned with IFC Performance Standards to ensure international compliance
• Development of a Stakeholder Engagement Plan compliant with Gold Standard requirements, including stakeholder consultations
• Creation of an Environmental and Social Management Plan (ESMP) to guide responsible project implementation

These studies provide investment-grade due diligence and ESG compliance frameworks, enabling informed capital deployment decisions and supporting regulatory engagement for sustainable energy infrastructure development.

The investment described above is a potential pipeline investment of SCF.  There can be no guaranty that the investment will be completed on the terms described or implied above, that SCF will be able to successfully invest in such investment or that impact targets will be achieved.