Dec 09, 2019
The $8 billion Climate Investment Funds will help finance a first-of-its-kind program in Chile to monetize efforts to reduce energy-related emissions. The program, co-supported by IDB Invest and ENGIE Energía Chile, is part of Chile’s “Energy Route” initiative aiming to decarbonize the national energy mix.
Benefiting from a $15 million CIF investment, this innovative program would help create financial incentives for energy companies to decommission fossil fuel-powered facilities in favor of renewable energy infrastructure. As part of this pilot, ENGIE Energía Chile would shutter two coal-fired plants in Chile and replace them with renewable energy facilities of equivalent capacity, eliminating up to 1.2 million tons of carbon dioxide emissions.
Harnessing market forces to help nations reduce carbon emissions is a key component of Article 6 of the landmark Paris Climate Accord, which lays the foundation for a system in which an emissions trading system and global price on carbon could be achieved.
Chile rolled out its “Energy Route” program in May 2018, setting a course for systematically converting or deactivating its coal plants to create a more renewable energy mix. The plan was agreed based on inputs from government, the private sector, workers' unions, academia, civil society, and affected communities.
