Prime Minister Prodi & President Bachelet

Chile’s presidential Palace La Moneda put out the red carpet this week for a quick official visit from Italy’s Prime Minister Romano Prodi. During the day-long visit Prodi announced his country hoped to increase investment in Chile, especially in the renewable energy sector.
“We will make a special effort to increase Italy’s presence in Chile,” said Prodi during a press conference following his meeting with Chile’s President Michelle Bachelet. “We’ve highlighted two particular areas of interest: energy and infrastructure.”

Bachelet reported that Italy was particularly interested in Chile’s potential to produce thermal energy, and energy from butane gas and small hydroelectric dams of 50 – 60 megawatts. She welcomed the promise of stronger bilateral relations and pointed out that trade between the two countries had grown from 1.2 billion US dollars in 2002 to 3.4 billion last year.

Italy’s National Energy Company (ENEL) will lead the investment into renewable energy. It announced two potential projects to produce geothermal energy in the north and south of Chile.

“Our company’s interest generally lies in renewable energy,” said ENEL representative Valerio Cecchi. “Historically, we specialize in geothermal energy, which is why Prodi emphasized geothermal energy. We stand out from the crowd.”

ENEL also has a history of investment in Chile. In April 2005 they signed an agreement with Chile’s National Oil Company (ENAP) to exploit geothermal resources in Regions VII and VIII. ENEL is Italy’s top developer of geothermal resources and the largest electricity firm in the country. It has profits of between 120 and 130 million US dollars a year in the Latin American region.

Energy-hungry Chile is keen to secure reliable, sustainable and sovereign energy sources. Earlier in the year, the Chilean government announced 5.5 million US dollars investment into renewable energy and energy-saving initiatives.

Business aside, both heads of state took the chance to indulge in a bit of diplomatic back-rubbing with Prodi hailing Chile as “an exemplary model of development” and an “extraordinary success story.”

Bachelet returned the compliment by thanking Prodi for harbouring Chilean exiles during the military dictatorship of General Augusto Pinochet (1973/1990). President Bachelet will return the visit and travel to Italy in October to attend Italy’s National Conference on Latin America as guest of honour.