Chile has a stable political system and leadership, with low risk of inflation. However, the energy sector faces challenges - it imports 60% of its energy needs, electricity prices are highest in South America, and three companies control 90% of the market, limiting competition. The opportunity for First Solar is Chile's Atacama desert, which has some of the best solar radiation in the world and potential for solar energy production. First Solar plans to build a solar plant that would create jobs, supply power to mines and homes, and help balance Chile's energy grid between northern and southern regions.

1. Ajit Pandey, Anil Bhambhani, Jeff Forster, Joerg Schmitt , Rosa Panadero
First Solar

2. CHILE – Country Political Assessment
• Party System – Fragmented
• Credential of President – Good
• Leadership Skills – Good
• Political Consensus - Good
• Risk of Inflation - Low (EIU)

3. Chilean Energy Sector - Political
Assessment
• 60% import of energy resource
• Highest electricity prices in SA
• Annual energy demand: 6-7%
• Argentina cut off gas lines to
Chile in 2008

4. Chilean Energy Sector - Economic
Assessment
• Lack of financing for renewable energy
• Inadequate governance structure of electricity market
• 90% electricity produced by 3 companies
– Lobbying big issue in Chile
– Prevents entry of new players

5. Chilean Energy Sector - Political
Assessment
• Target 20/25 initiative
• Current law - 5% of sales to renewable energy
– 10% of sales in future law
• Carbon Tax – 1st
in SA
• Environment, Supply and Price Stability
– 2008 Argentina incidence
– Reduction in CO2 emmision

6. Opportunity for First Solar
• Atacama desert
– 105,000 Km2
area
– World’s best sun radiation, 330 days
sunshine
– 0.25% of energy requirement produced by
solar, 12% of renewable energy
– 2% of energy requirement produced by
renewable energy

7. Other solar companies in Chile
(160 MW)
(136 MW)
(110 MW)
(136 MW)
(110 MW)

8. First Solar
• Financial Support
– OPIC approval – US$ 230 million
– IFC support – US$ 60 million
• First Solar’s impact
– 370 Construction Jobs
– Supply power to Copper mines and Homes
– Balance between North and South Energy Grid
• Lower energy cost /Kwh

9. Conclusion
• Win - Win
• Chile as role model in SA
• Great opportunity for First Solar to establish in SA
• Better Environmental Control
• Risk Control
– Energy balance between North and South Grid
• Help Chile to be independent from external
energy resources