Chacayes Hydro Project

Located in a dramatic setting in the Andes Mountains, the Chacayes hydro project will be the first phase of Pacific Hydro's new project development in the Cachapoal Valley. The delivery of this run of river hydro project in October 2011 is critical to solving the supply of capacity into the Chilean energy grid and the reduced reliance on energy from fossil fuels.

Chacayes will generate 558GWh per annum of renewable energy for Chile's power market, which is enough electricity to supply twice the demand of the city of Rancagua and will abate approximately 340,000 tonnes per annum of greenhouse gas pollution.

Chacayes was given environmental approval by COREMA VI Region in July 2008. A few months later, in October 2008, Chilean President Michelle Bachellet unveiled the first stone to mark the commencement of advance works construction for the project.

In October 2008 the consortium Astaldi - Fe Grande, formed by the Italian construction company Astaldi and the Chilean Fe Grande, was awarded the contract for the construction of the hydro station in an Engineering Procurement and Construction (EPC) agreement. In May 2009 Pacific Hydro consolidated a joint venture with Astaldi by which the Italian company entered in the property of Chacayes with a 27% interest. By this strategic joint venture each party looks to contribute their experience and knowledge, sharing the risks and the administration so the project can be finished successfully in time.

The success of the project is closely linked to the welfare of the communities that surround our sites which is why we created the community development fund, "Creciendo Juntos" (Growing Together) in the Cachapoal Valley. This initiative aims to improve the quality life of the communities during construction and operations of the power stations. Applications to the Community Funds are developed and submitted by the communities themselves for projects that improve the health, environment, education and welfare of their communities.

As important as the Community Funds are for improving the infrastructure and living environment of these communities, the greatest economic benefit will come from employment. At the peak of construction of the Chacayes project around 1,200 direct and 3,000 indirect jobs will be created in and around the valley.
Pacific Hydro's commitment to maintaining or improving the environment around our project areas is clearly demonstrated in the way we developed and the undertakings we made in the Environmental Impact Studies for all our Chilean projects and specifically for the Chacayes and other Chacapoal projects. For each of them we have undertaken world class flora, fauna and water management studies. Even though run-of-river hydro projects do not cause inundation or require relocation of communities affected by the project, we take into account the legitimate concerns that the community has on the way that the construction or long term operation of the project will affect their environment.

Pacific Hydro's commitment to providing a healthy and safe working environment for every person involved in our projects is our stated objective. In the construction of our projects in the Chacapoal Valley, as well as in the Tinguiririca Valley we are aiming to achieve Health and Safety standards and results consistent with best practice in Chile.