LAJA HYDRO POWER PLANT PROJECT

The project comprises the development, construction, commissioning and operation of a hydro power plant (Laja, 34.4 MW).

The project provides for increasing demand of electricity from renewable energy sources, supporting EU priority objectives related to climate change. The project is in line with ALA mandate by supporting European FDI and promoting environmentally sustainable energy.

The project, if located in the EU, would fall under Annex I of the EIA-Directive, requiring an Environmental Impact Assessment (EIA) to be performed including public consultation. The promoter has carried out an EIA and received the environmental authorisation based on this. The details of the EIA, the requirements of Chilean regulations, their compliance to the Bank’s requirements, including public participation and socio-economic assessment, will be examined during the appraisal.

The procurement of the project is not required to follow public procurement procedures since, under the Bank’s Guide to Procurement, the PPA has been awarded through an open international procedure, which is not considered to have provided any special or exclusive rights to the promoter. Additionally, the Chilean electricity market seems liberalised (to be confirmed at the appraisal). In line with its principles and its statute the Bank will however ensure that contracts for the implementation of the project have followed suitable procurement procedures, ensuring an appropriate selection of works, goods and services offered at competitive prices. Contracts awarded must be negotiated impartially and accord with the project’s best interests.