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MOP analyzes subsidies to promote desalination for irrigation - Chile

Published: Tuesday, November 3, 2009 12:45 (GMT -0400)More news from Chile

By Eva Medalla / Business News Americas

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Chile's public works ministry (MOP) is working with a number of consultants to determine subsidies for seawater desalination concession projects in the north of the country, an official from the ministry's concessions division told BNamericas.

While water demand for human consumption and mining is sufficient to make these plants financially feasible, facilities built to provide water for agriculture will have to be handled differently, the official said.

Desalination plants for irrigation would be carried out in areas where there is currently little or no agricultural activity. These projects would be supported by state subsidies to help cover construction and operating costs in the early stages, until agriculture initiatives begin to produce revenues, the official said.

Ministry officials have been meeting with a number of companies interested in participating in the desalination plan. MOP is still drawing up the framework to develop these concessions.

SPANISH EYES ON DESALINATION

Spanish firms such as Agbar and Acciona have expressed interest in the projects, the official said.

MOP is also working with Spain's environment ministry, which has carried out a number of studies to determine the environmental impact of seawater desalination plants, to define the requirements and/or restrictions to be established for the projects.

The ministry needs to evaluate the long-term ecological effects of disposing the salt concentrate that remains after desalination into the sea, the official said.

At the same time, authorities are aware that time is running out, as Chile's northern regions are already suffering from the effects of water scarcity, the official added.

Desalination presents new opportunities for companies already present in Chile, such as potable water utilities, and is expected to attract billions of dollars in investments, the official said, adding that in region III alone, investment should be around US$5bn, due to the demand for water for mining, human consumption and agriculture.

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