Chile house committee approves Enap role expansion bill

Wednesday, March 11, 2015

The mining and energy committee of Chile's lower house approved a bill designed to expand the role of national oil company Enap and promote non-conventional renewable energy (NCRE).

The legislation would increase Enap's ability to participate in all types of power generation projects.

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Under current law, Enap is only allowed to participate in geothermal projects or in power projects that are directly related to oil and gas activity.

Under the bill, Enap would only be able to participate as a majority stakeholder in power projects, a reversal from when the bill was first presented in November 2014.

Under the original language, Enap would only be allowed to hold a participation stake of up to 49% in JV arrangements with private companies.

"Several of us said that this restriction was completely unnecessary..." committee head Jorge Insunza was quoted as saying in a house press release.

Enap CEO Marcelo Tokman indicated previously that the firm – which holds a 20% stake in the Quintero LNG terminal – was interested in developing natural gas-fired power plants.

The bill also extends the deadline to take advantage of tax incentives for the installation of solar water heating systems in new homes, and provides a direct subsidy to install the systems in new homes whose construction is funded by the government.

Finally, the bill increases the government's ability to intervene when land rights for NCRE concessions are disputed.

The finance committee will review the bill before it is presented to the house at large, the statement said.

Pictured: Chile's 70MW Salvador photovoltaic solar plant (CREDIT: AFP).