Chile will seek bids by the first half of next year to build a solar farm of more than 50 MW in its Atacama desert.

The government will grant $20m and lend $400m for building the solar farm in northern Chile, said Energy Minister Jorge Bunster. The European Union will provide an additional $18m grant.

Jorge Bunster

On completion, the plant would be South America’s largest, said Bunster.

Government backing may encourage banks to lend to the project, even without a long-term electricity contract, Maria Gabriela da Rocha Oliveira, a Sao Paulo-based analyst told Bloomberg.

“This move may be to get the ball rolling,” she said.

Two 22 MW solar farms in Peru are currently considered to be the largest in South America. At present, Chile has three solar farms totalling 9 MW.

For more Latin America news