The Inter-American Investment Corporation (IIC), a member of the Inter-American Development Bank (IDB) Group, has announces it is considering financing a street-lighting project in Chile.

The project was awarded to Itelecom and the municipalities expected to be included in the program will be Melipilla, Cartagena, San Javier, Villa Alemana, and Coyhaique.

The project consists of a senior IIC A loan of up to the Chilean peso equivalent of US$10 million with a 9-year tenor and 1-year grace period. The total project costs are expected to be approx. US$15 million and the structure includes a first-loss guarantee of up to US$6.05 million from the Clean Technology Fund (CTF).

The proposed loan will support Itelecom in developing and installing high efficiency LED technology for public street lighting in the municipalities under an innovative third party, structured financing model. The innovative use of blended climate finance will enable the demonstration of a highly scalable and replicable financing model in the municipal street lighting sector in Chile and throughout the LAC region.

Following a public tendering process, Itelecom has been awarded ten-year operations and maintenance contracts which entail purchasing and installing the equipment as well as providing limited, but ongoing operation and maintenance of the public lighting systems. The project is expected to consist of the purchase and installation of high efficiency LED technology for public lighting.

The energy efficiency projects will reduce energy consumption and therefore lighting expenses, providing monetary savings to the municipalities. The main project outputs will be the replacement of approx. 37,700 luminaries with high efficiency LED technologies. The main outcomes of the project include reductions in energy costs, energy use, and GHG emissions in the municipal public lighting systems.

The project will reduce CO2 emissions across the three municipalities by more than 70,000 tons over the first 10-years of useful life of the fixtures. The lighting system’s electricity consumption will be reduced by approximately 55 percent, saving over 100,000 MWh over the same period. The project will also increase luminosity by more than 100%, improving the quality and quantity of street lighting.