The Development Bank of Latin America and the Caribbean ( CAF ) has structured a green-labelled A/B loan totalling US$400 million for Engie Energía Chile. Proceeds will partially finance the company’s capital expenditure plan focused on renewable energy projects.

CAF acted as lender of record and mandated lead arranger. The US$150 million B loan was provided by Banco Bilbao Vizcaya Argentaria ( BBVA ) New York Branch, Crédit Agricole Corporate and Investment Bank ( CACIB ), and Sumitomo Mitsui Banking Corporation. SMBC also served as green loan coordinator.

The transaction marks the first time BBVA and CACIB participated in a CAF-led A/B loan structure in the past 15 years. It was also the first-ever A/B loan operation by CAF in Chile.

The financing will support the development of photovoltaic solar, wind, and battery energy storage systems under Engie Energia Chile’s 2025–2027 strategic plan.

The company is one of Chile’s largest electricity generators ( ranked fourth nationally ). It has a strong presence in the transmission sector, with over 2,500 kilometres of lines in operation, including the 600km TEN line, which in 2017 enabled the country to unify its electric system.

Twin challenge

The operation addresses one of the main challenges facing the regional energy sector: decarbonizing the power matrix without compromising supply security and stability. Like many countries in the region, Chile faces the challenge of reducing its reliance on fossil fuels while meeting growing energy demand.

Engie Chile’s investment plan aims to transform its energy mix so that renewables and storage systems represent over 70% of its installed capacity by 2027, while maintaining natural gas as a transitional fuel to ensure system stability during the shift.

“This major step in our transformation plan complements the green bond issuance we carried out last September – our first in the local market and a pioneering move in the power generation industry,” says Engie Chile chief financial officer Vincent Sorel.

“This loan also allows us to extend the average life of our debt and access a lower interest rate than our current average. The loan includes a one-year disbursement period, giving us flexibility to advance our strategic projects. Finally, the US$400 million debt issuance is a key milestone in financing our two-year investment programme, securing nearly all of the planned debt portion.”