The first stage of the US$170 million two stage development will produce 155 MW of power, which will supply an average of 840 GWh of energy annually to the central Chilean power grid (SIC) following its expected completion in January 2008. The second stage La Confluencia project, with a capacity of 145 MW is expected to follow within 2-3 years.

La Higuera project is powered by water from snow melt, glacial melt and rainfall with river flows increasing over the past 25 years from the impact of global warming.

Recent gas shortages in Argentina have impacted on Chilean electricity generation, and there is now considerable pressure for the development of new hydro generation in Chile, against a background of rising prices for electricity. La Higuera and La Confluencia projects are now both included in the official Chilean power generation expansion program.

Pacific Hydro managing director Jeff Harding said the decision to enter into a joint venture agreement to further develop the project was made in order to benefit from SN Power’s experience in hydro power development and to better position the company for future project developments.

“The joint venture allows us to focus on the two significant hydro projects we already have operating in Chile; the Coya and Pangal projects that we recently acquired from Codelco,” he said.

“We have established a significant platform for growth in Chile, with our excellent operating assets and a strong local management team.”