Endesa / Colbun Patagonia Partnership Approved with Four Conditions

(Oct. 22, 2007) The Free Competition Defense Board (TDLC) voted Friday to approve the alliance between energy giants Endesa and Colbún, joint owners of the HidroAysén corporation. HidroAysén is the business officially responsible for the proposed US$2.5 billion mega hydroelectric project on the Baker and Pascua Rivers in Region IX.

The TDLC’s decision, which occurred 17 months after the alliance was first proposed, allows the two companies to join forces under four conditions.

The first stipulation deals with the 2,000 km transmission line that will carry the 2,750 MW from Aysén to the Central Interconnected System (SIC) in the central part of Chile. As it stands, the company Translec will design and build this line. But the TDLC’s resolution stipulates that the companies must allow for a six-month period to accept new solicitations from third parties who may want to use the transmission line. This arrangement could allow for another company like Energía Austral, an associate of the Swiss mining company Xstrata, to use the same line to carry 600 MW from its proposed Cuervo River project – another dam project proposed for Chile’s Patagonia.

“The agreements that HidroAysén, Endesa, and Colbún have reached favoring a transmission company in the final design of the transmission line must stipulate a six month period to receive applications from third parties interested in having the ability to transmit on the line,” read the board’s resolution.

The TDLC ruled that the agreements held by these companies cannot establish limitations or restrictions on transmission companies to keep them from designing and constructing a line superior to HidroAysén’s requirements.

Secondly, the TDLC insisted that both Endesa and Colbún sell the water rights that they own, whether they are granted or pending, and that this sale cannot take place between local people or legal branches associated or linked in any way to any of the companies.

Thirdly, the companies must present their definitive sales agreements relating to energy and power stations established between Endesa and Colbún.

Finally, the TDLC ruled that HidroAysén should remain an open or closed autonomous corporation, subject to the regulations of open corporations, while Endesa and Colbún should maintain their driving participation in it.

Given this green light from the TDLC, the future of the HidroAysén project now depends on environmental certification. The company will present its Environmental Impact Study in the first quarter of next year.

Here is the full article.