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Chile's committee of ministers has approved the construction of the 16.6MW El Canelo San José hydroelectric project on the Maipo river in Santiago's metropolitan region.
The run-of-the-river facility, proposed by Chilean generator Energía Coyanco, would inject power into the country's central SIC grid.
El Canelo San José must comply with environmental regulations and Coyanco must undertake remedial work to return land affected during the construction phase to its original condition.
The project still needs the green light from the metropolitan region's environmental evaluation commission, local paper La Tercera reported.
The project had been rejected by the commission in July due to a lack of antecedents for the awarding of the necessary environmental permits for change of land use.
El Canelo would be Coyanco's second hydro plant after Guayacán (12MW). Located in the same area, Guayacán was commissioned in September 2010.