Copper is a key ingredient to the clean energy transition, and no country produces more of it than Chile, which provides nearly one-quarter of the global supply. To make copper production greener, Codelco, Chile’s state-owned copper mining company, has committed to become fully renewably-powered by 2030.
A new $600 million debt package from HSBC and Banco Santander will allow Codelco to renegotiate power purchase agreements and to award new contracts to renewable energy providers. The debt is guaranteed by the World Bank’s Multilateral Investment Guarantee Agency, or MIGA, which derisks development and green investments in emerging markets.
This is Codelco’s second round of green financing with a MIGA guarantee, and follows a $532 million loan from Crédit Agricole CIB in 2024.
The new financing should enable Codelco to get to 85% of its renewables goal by the end of the year.
Climate leadership
Chile is ahead of the curve on climate action. Since 2020, it has increased its renewably-generated electricity mix from 46% to 70%. Chile plans to phase-out all coal plants, which today account for about 14% of its electricity mix, by 2040.
Codelco says it consumes about 9% of Chile’s electricity supply.
Business risk
MIGA gave the Codelco debt deal a low risk rating, based on its review of relevant environmental and social risks and Codelco’s labor and working conditions.
A half-dozen other performance standards were deemed by MIGA not applicable to the investment, including community health, safety and security, and Indigenous peoples.
Last year, a legal dispute with Indigenous communities tied up Codelco’s lithium mining deal in the northern part of the country. The collapse of one of its biggest mines last August killed six miners.
