The ceremony, held at the end of October, was attended by Chile’s Minister for Energy, Rodrigo Álvarez, and follows the Australian firm’s completion of the US$800M La Higuera and La Confluencia hydro projects in Chile 12 months ago.

An investment of over US$450M, the Chacayes run-of-river hydro power plant will contribute 111MW of installed capacity to Chile’s national grid, enough clean energy to supply more than 300,000 local homes.

Pacific Hydro chief executive officer Rob Grant said that the company has long term plans to invest almost US$2B in Chile as the country has proven to be serious about its renewable energy policies, providing a level of investment certainty that is vital for investors.

“Chacayes is the first of a number of run-of-river hydro power projects that Pacific Hydro plans to develop in Chile’s Alto Cachapoal Valley as part of our US$2B investment pipeline in the country,” said Grant. “These projects will add more than 600MW of renewable energy capacity to Chile’s national grid by 2020 when fully operational, avoiding more than 1.13 million tonnes of greenhouse gas pollution from entering the atmosphere every year.”

Chacayes is currently going through the registration process with the Kyoto Protocol’s Clean Development Mechanism (CDM) to issue and trade in carbon credits. Once registered, the plant is expected to create around 340,000 carbon credits annually, which can be traded on international carbon markets.

“The business case for our Chilean assets is supported by revenue gained from the sale of carbon credits in global markets,” added Grant. “With the introduction of a price on carbon in Australia, we can expect to see increased clean energy production, regional jobs and significant investment opportunities over the coming decades.”

Chacayes is co-owned by Italian construction company Astaldi, which holds a 27.3% stake and was responsible for delivering the project under an Engineering Procurement and Construction agreement.

Pacific Hydro is currently awaiting environmental approval for the Nido de Águila run-of-river hydropower project that it plans to build in the same valley.