When Chilean power transmission company Transelec and Saudi-owned Almar Water Solutions set out to raise $1.18 billion for a new seawater pipeline project in Chile, they were determined to achieve one goal: secure affordable long-term financing in a market where shorter maturities had become the norm.
At the time, the odds were stacked against them. “We did not want to retain refinancing risk, so a seven-year mini-perm would not work for us,” recalls Javier Sauvageot, head of finance at Transelec. “We were looking to finance the full 17 years of the project’s expected life.”
That ambition set the stage for a financing that stands out for its size, complexity and innovation. The sponsors—through their joint venture Aguas Esperanza—devised a hybrid structure that combined long-tenor bank loans with capital markets funding. In June 2024, they closed on a package that included a $510 million, 17-year private placement alongside a $593 million, 12-year term loan arranged by Natixis, Santander, Crédit Agricole, BBVA, KfW and Intesa. An $81 million letter of credit rounded out the financing.
The proceeds will fund Charquicán, a project named after a traditional dish of northern Chile. It involves the construction of 144 kilometers of seawater pipelines and associated transmission lines to supply the Centinela mine, owned by Antofagasta Minerals and Marubeni. Aguas Esperanza also assumed operation of an existing seawater impulsion system, ensuring continuity while building new capacity.
The financing’s structure was designed to spread risk sensibly between banks and institutional investors, while matching the project’s 17-year concession. In a region where lenders have tended to reduce maturities for infrastructure loans, this deal broke ground.
Beyond the financing, Charquicán’s strategic importance is clear. In the arid Antofagasta region, freshwater scarcity is a pressing challenge for both communities and industry. By transporting more than 1,100 liters of seawater per second from the Pacific coast to the mine site, the project reduces pressure on local aquifers and ensures the viability of a flagship copper operation. Antofagasta has committed to sourcing 90% of its mining division’s water from seawater, recycled or reused sources by 2025—an ambitious target that this project helps make possible.
“Water pipelines are something that mining companies have traditionally preferred to develop in- house,” Sauvageot says. “It is necessary to make an important work of convincing counterparties about the value that we can provide.”
The project’s significance extends well beyond one mine. By using seawater instead of scarce inland supplies, it sets a new benchmark for environmentally responsible mining. It also reduces potential conflicts with local communities, safeguards ecosystems and positions Centinela to double copper concentrate production capacity over the next five years.
Technically, the venture required advanced engineering and careful execution. Building and operating two parallel 144-kilometer pipelines across rugged terrain, while maintaining uninterrupted supply to the mine, demanded meticulous planning. The BOOT and AOOT concession structures ensured risk transfer to the private sector, while ultimately guaranteeing that the infrastructure would revert to the client.
For Transelec, the deal also marked a decisive move to expand beyond its traditional power transmission business into water infrastructure and energy storage. “We look for take-for-pay projects with established clients, where we are paid for installed capacity and there is no risk linked to how much energy or water we distribute, or for how much energy we store,” Sauvageot explains.
With a total investment of $1.49 billion, Charquicán is one of the largest privately financed water projects in Latin America. It not only supports Chile’s role as a global copper powerhouse but also sets a precedent for other mining operations confronting water scarcity.
Water Financing of the Year
Charquican – SIAM I & II Seawater Pipeline Project
$1.46bn Financing. Debt: $593m 12-yr term loan; $81m letter of credit facility; $510m project bond due 2041
Sponsors: Almar Water Solutions Chile SpA and Transelec Holdings Rentas Limitada
Joint Lead Arrangers and Joint Bookrunners: Credit Agricole CIB; BBVA; Natixis (Green Financing Coordinator); Intesa Sanpaolo; KFW IPEX; Santander; Scotiabank
Purchasers: Allianz Capital Partners; Carlyle Group; Denham Capital Management; Hanwha Group
Counsel to Lenders: Cuatrecasas; Milbank
Counsel to Sponsors: Barros & Errázuriz Abogados; Latham & Watkins
Chilean Counsel to EPC Contractors: Prieto Abogados
Counsel to Offtaker (Centinela): Jara del Favero; Larrain; Sullivan & Cromwell
Agent: Delaware Trust Company
All supporting financial institutions and law firms were transmitted to LatinFinance by the award category winners. For updates please email awards@latinfinance.com