DNV (an internationally accredited registrar and classification society) has announced that it provided independent market due diligence to support Canadian renewable energy producer Innergex in closing a financing package totalling 156 million USD for a portfolio of renewable and storage assets in Chile.

The transaction combines 114 million USD in new financing for two standalone battery energy storage systems with 42 million USD to refinance existing wind, run-of-river, and hybrid solar-plus-storage plants across the country.

Transaction Structure and Lender Reliance on Independent Analysis

The deal represents both a refinancing of established assets and a commitment to new battery storage infrastructure. The two new standalone battery energy storage systems, known as BESS, are the centerpiece of the new capital deployment, with lenders including SMBC Group relying on DNV's independent market due diligence before committing funds to the transaction.

DNV's scope of work covered marginal spot price forecasts, capacity revenue projections, curtailment and transmission studies, Distribution Companies power purchase agreement modelling, and a dedicated storage evaluation for assets incorporating battery technology.

The analysis was led by DNV's Energy Markets Analytics team in Chile, using models that feed into the company's broader Power Analytics service. Brice Le Gallo, Vice-president and regional director for Southern Europe, MEA and LATAM within DNV's Energy Systems division, described the operating environment as one of rapid and consequential change.

"Chile's electricity system is changing fast, with rapid growth in renewables and storage, which creates new challenges for project bankability," he said. "Our market due diligence helps developers and financiers navigate price volatility, curtailment risk, and changing regulations. This transaction shows that banks trust our analysis to support financing decisions."

Chile's Renewable Curtailment Challenge and the Role of Battery Storage

The financing comes at a pivotal moment for Chile's electricity sector. The country has set a target to phase out coal by 2040, a policy that requires replacing baseload thermal generation with alternative sources capable of providing system reliability.

Battery storage has emerged as a central component of that strategy, and the two new BESS projects financed through this transaction are intended to address some of the most pressing operational problems facing Chile's grid.

Daytime solar generation in Chile has grown rapidly, creating conditions in which electricity supply outpaces demand during peak sunlight hours and results in significant curtailment.

Battery systems can absorb that excess energy and discharge it during the evening hours when demand rises and solar output falls. The two new projects are specifically designed to shift solar energy to evening hours when it is most needed, reduce daytime curtailment, lower evening prices, and provide ancillary services that support grid security.

As Chile continues to add renewable capacity and phase down coal, storage assets are expected to take on a function previously fulfilled by thermal plants running continuously to maintain system balance.

The two new BESS projects financed through this deal are positioned within that transition, reinforcing what DNV described as the growing role of storage in replacing baseload thermal generation.

Curtailment and Price Risk as Bankability Considerations

The financing package highlights curtailment and price volatility as the defining risk factors that lenders must evaluate when considering investment in Chilean renewable and storage assets.

DNV's analysis directly addressed both of these risks through its spot price forecasting methodology and curtailment modelling, providing SMBC Group and other lenders with an independent basis for their credit decisions.

The challenge for project finance in markets experiencing rapid renewable buildout is that the very success of the energy transition can compress electricity prices and strand generation output, undermining the revenue assumptions underpinning project loans. DNV's market due diligence was structured to give lenders a quantified view of how those dynamics are likely to play out across the portfolio being financed.

The refinancing component of the transaction, covering 42 million USD for existing wind, run-of-river, and hybrid photovoltaic-plus-battery plants, suggests that the market analysis covered a range of technologies with different exposure profiles to price and curtailment risk, requiring modelling tailored to each asset type within the portfolio.

Significance for Future Project Finance in the Region

DNV characterized the transaction as a signal to the broader market that financing for battery storage and renewable assets in Chile remains accessible when backed by rigorous independent analysis.

The announcement noted that the milestone sets a precedent for future BESS and renewable projects in Chile, demonstrating that banks are willing to finance storage assets when market risks are clearly understood.

That framing positions the transaction not only as a completed financing but as a proof point for a developing market. Chile has been described as a leader in Latin America's energy transition, and the ability to close project finance deals for standalone battery storage, a technology class that has historically faced greater bankability challenges than generation assets, carries implications for how similar transactions may be structured across the region.

Innergex, the Canadian-based independent international renewable power producer behind the transaction, adds this Chilean portfolio financing to its existing operations as it continues to develop renewable assets internationally.

The involvement of DNV's local Energy Markets Analytics team in Chile reflects the growing importance of country-specific market modelling as electricity systems in Latin America undergo structural transformation driven by renewable energy deployment and the scheduled retirement of fossil fuel generation.

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