Clean Energy Investments: Solar and Renewables in Chile and Costa Rica

1) Quick snapshot (why these two countries matter)

Chile: One of Latin America’s largest and fastest-growing markets for utility-scale solar and storage. Significant pipeline in the Atacama Desert and active corporate players investing in multi-GW projects. Recent activity includes asset purchases by large utilities and major battery-storage programs.

Costa Rica: A small grid but extremely high penetration of clean power (hydro, geothermal, wind) with growing solar deployment focused on diversifying supply and meeting rising demand. The state utility (ICE) is actively procuring large-scale solar.

2) Policy & market design what investors need to know

Chile

Long-term national commitment to decarbonize and expand renewables (net-zero/neutrality targets in planning frameworks). The government’s action plans and sectoral strategies have supported auctions and storage rollouts. Public documents and ministry plans outline large storage and renewable procurements.

Market structure includes large-scale competitive auctions, merchant opportunities, and corporate offtake (PPAs). Grid access and permitting vary significantly by region; the north (Atacama/Antofagasta) is preferred for solar resources but has grid-connection and environmental permitting bottlenecks.

Costa Rica

Historically dominated by state-led projects through Instituto Costarricense de Electricidad (ICE). Renewables policy favors large hydro and geothermal but ICE is scaling utility-scale solar through tenders and direct development. Public tenders and ICE-led procurement are the main commercial routes for large projects.

3) Recent, concrete developments (evidence of investment activity)

Chile

Utilities are actively buying large solar assets. Example: AES Chile’s acquisition of the 171 MW Atacama Solar plant (operational since 2021) and plans to expand storage and submit further northern projects. This signals an appetite to consolidate operating solar + storage assets.

Large integrated projects are under finance and construction, including multi-GW solar complexes coupled with GWh-scale batteries (examples from developer press and financing announcements). National plans and corporate statements point to a multi-GWh storage pipeline.

Costa Rica

ICE announced a 66 MW solar plant (Guanacaste) as the country’s largest solar farm to date, and has been running procurements to add further solar capacity. These moves reflect a shift from near-100% hydro/geothermal reliance toward more solar/wind mix to stabilise the grid and cover demand growth.

4) Investment opportunities by segment

Chile

Utility-scale solar farms :  best returns in the north (Atacama/Antofagasta) because of high DNI. Expect strong competition and need for firming (storage or hybridization).

Battery energy storage systems (BESS) :  large gap between current MWh and planned deployment; projects tied to renewables and system services are attractive. Utilities and IPPs are pursuing multi-GWh deployments.

Green hydrogen + electrolysis projects :  longer horizon but strategic given Chile’s hydrogen strategy and abundant solar/wind.

Distributed generation & corporate PPAs :  corporate demand (miners, industrials) is significant; behind-the-meter and direct PPAs are available.

Costa Rica

Utility-scale solar and hybrid projects :  close collaboration with ICE provides the primary path: participate in tenders or JV with local developers.

Distributed solar + storage for private offtakers :  corporates, tourism and industrial customers are potential buyers of behind-the-meter solutions.

Grid modernization and firming solutions :  because hydro is seasonal, dispatchable alternatives and storage solutions are increasingly valuable.

5) Typical returns, contract types, and revenue stacks

Revenue streams often include: energy sales under long-term PPAs, capacity/flexibility payments, ancillary services, merchant spot sales, and green H2 (future). Expected returns depend on PPA length (10–20+ years), resource quality, and storage duration. Recent asset trades and project financings show active secondary market interest: an indicator of acceptable risk-adjusted returns for strategic buyers.

6) Financing landscape and major sponsors

Sponsors: major global utilities and developers (AES, ENGIE, Grenergy, ContourGlobal/KKR among others) are active buyers and developers  which reduces technology/market risk for banks and institutional lenders.

Financing types: project finance (non-recourse), corporate balance-sheet, green bonds, and asset sales/rotation strategies used by developers. Export credit agencies and regional development banks also participate for high-impact or innovative projects. Recent phases of large Atacama projects secured bank financing and institutional equity.

7) Grid, permitting and operational risks

Grid constraints: both countries can face grid-connection delays. In Chile, the northern grid is load-limited in places; queue times and upgrade costs can affect timelines. In Costa Rica, integrating new solar while preserving hydro dispatch patterns requires coordinated system planning.

Permitting: environmental and community permitting can be time-consuming, especially for large desert or coastal projects. Social license (local consultations, indigenous/community considerations) matters.

Resource variability & curtailment: high solar yield areas may still face curtailment during low demand or weak transmission :  pairing with storage or firm PPAs mitigates this.

8) Regulatory & political risks

Policy continuity: both countries have public commitments to renewables, but details (incentives, auction rules) change with governments. Investors should track national energy ministry announcements and formal tender documentation. Chile’s national plans and storage procurements have been explicit; Costa Rica remains heavily ICE-centric which reduces policy ambiguity for ICE-led tenders but raises counterparty concentration risk.

9) ESG and social considerations

Land use & water: large desert PV projects need water for washing and construction logistics; water-use plans are required. In Costa Rica, projects near protected areas or watersheds must meet tight environmental standards.

Local content & jobs: many lenders and governments reward projects that include local employment, training, and supply-chain development. For institutional investors, measurable ESG metrics improve bankability.

10) Case studies & recent transactions (short)

AES purchase :  Atacama Solar (171 MW): AES’s acquisition of an operating Atacama plant (and its expressed plans to submit further northern projects) shows utility appetite for operating solar + firming assets. This is an example of a strategic buy to scale renewables + storage.

Grenergy / Oasis de Atacama phases: multi-phase projects with combined PV + storage attracted major project finance and partial asset sales to infrastructure managers :  a model where developers de-risk then rotate assets to institutional buyers. 

ICE’s 66 MW solar farm (Guanacaste): state utility project that showcases the main route for successful large-scale deployment in Costa Rica: direct ICE development or tendered PPAs.

11) Practical due diligence checklist (for investors)

Offtake clarity :  secure long-term PPA or confirm realistic merchant/ancillary revenues. For Costa Rica, confirm ICE rules; for Chile, assess corporate PPA appetite and auction timetable.

Resource assessment :  independent DNI/GHI and loss assumptions (site-specific).

Grid access & curtailment study :  queue position, interconnection upgrade costs, historical curtailment data.

Permitting & social license :  timelines for EIA/SEA and community consultations.

Storage sizing & modelling :  value-stacking of BESS for energy shifting, capacity, and ancillary markets. Chile’s storage pipeline makes this especially relevant.

Counterparty & sovereign risk :  ICE/PPA contract terms; Chilean auction frameworks and rule changes that can affect revenues.

Exit strategy :  buyer appetite in the region (utilities, infrastructure funds) and recent comparable trades.

12) Practical deal structures and how investors win

Greenfield JV with local developer :  developer brings pipeline and permitting; international investor brings equity and off-taker relationships.

Brownfield acquisition :  buying operating assets reduces technical/market risk; attractive for yield-focused investors (example: AES at Atacama).

Platform approach :  consolidate multiple projects into a portfolio to attract institutional investors or enable bond issuance. Recent multi-phase projects sold equity to infrastructure funds follow this model.

13) Key takeaways for an investor deciding between Chile and Costa Rica

Choose Chile if: you want scale (GW projects), high solar resource, active utility and corporate markets, and exposure to a larger project-finance ecosystem. Plan for grid and permitting complexity and consider storage integration.

Choose Costa Rica if: you prefer a stable regulatory environment with strong government-led procurement, smaller-scale projects, and an electricity system already dominated by clean power where new solar is complementary to hydro/geothermal. Expect dealer routes primarily via ICE tenders or JVs.

14) Next-step checklist if you want to pursue deals now

Assemble a small market-entry team (legal, grid/technical, local development partner).

Shortlist target provinces/sites and obtain or commission pre-feasibility resource and grid studies.

Engage with the relevant offtaker (ICE in Costa Rica; potential corporate buyers and the Chilean market operator in Chile).

Prepare to model multiple revenue stacks (PPA-only, PPA + storage, merchant + ancillary services).

Start dialogue with regional lenders and DFIs to design blended financing (lower cost, higher leverage).

15) Sources (selected)

AES Chile acquires Atacama Solar plant (press release).

AES statements on storage expansion and MWh pipeline.

Grenergy / Oasis de Atacama financing and asset sales coverage.

Chile’s Action Plan for Power Sector Decarbonization and national energy strategy.

ICE announced plans to build a 66-MW solar farm in Guanacaste, Costa Rica.

IEA national profile and electricity mix for Costa Rica.