Endesa Chile and Colbún have agreed to develop the 2400MW Aysén hydroelectric project in Chile’s 11th Region.

The Aysén project involves the construction of two hydro plants on the Baker river, with a further two on the Pascua river. Project costs have been estimated at US$4B of which US$2.5B relates to generation and US$1.5B for transmission.

The Board of Directors of Endesa Chile has agreed to authorise the company’s management to sign a memorandum of understanding (MoU) with Colbún which states that a corporation will be set up to develop the project, with Endesa Chile owning a 51% stake, and Colbún holding the remaining 49%. In recognition of it’s contribution to the project, Endesa Chile will receive 12.3% of the energy generated by the project for 30 years from the start-up dates of each of the plants. The remainder of the energy produced will be delivered 51% to Endesa Chile and 49% to Colbún.

The first plant in the Aysén scheme is expected to enter service in 2012, with the last commissioned by 2018.