Infrastructure to Chile

Trends and opportunities

The market

Chile’s sophisticated infrastructure market has attracted world-class investors, ranging from international and local construction companies and infrastructure operators to private equity and pension funds. With emerging market-level rewards on offer, and risks more closely aligned to developed markets, Chile's business environment offers an attractive investment climate, with transparent and sophisticated financial and market structures. Despite its comparatively small scale and low levels of government investment (the sector is largely private, with investment primarily from private sources) the country is an outperformer on the Risk/Reward Index (RRI), ranking first amongst the 14 Latin America region states (Source: Bloomberg).  

Over the past 30 years, Chile has achieved an important leap forward in connectivity. This is largely the result of public efforts accompanied by the private sector’s participation through the Concessions System (Public-Private Partnerships, PPP) created in 1991. Chile’s Concessions System has become a reference internationally, offering 71 tenders of which 66 have already been awarded. The concession company builds and operates the infrastructure. Most of the companies that have signed PPP are foreign companies from Spain, Italy, Frances, Canada and other countries.

Transport Infrastructure

Industry value in Chile's transport infrastructure sector is driven by strong government support and the push for concessions and public-private partnerships (PPPs)

Improving and expanding the country's freight and public transport networks are instrumental in Chile's future economic growth.

Chile has an estimated $US10 billion worth of projects in the transport infrastructure pipeline. Chile needs to improve airports infrastructure, and after severe delays, the Nuevo Pudahuel consortium has finally started operating the Comodoro Arturo Merino Benítez International Airport in Pudahuel, Santiago.

Railway infrastructure is also benefiting from investment. One of the largest projects underway is the $US2.76 billion expansion of the Santiago Metro, which will undergo significant expansion with the addition of two new lines and 28 new stations.

A total of $US900 million in financing will come from Metro, the company which operates the line, and $US500 million from Corporación de Fomento de la Producción de Chile (CORFO), the government's development agency.

Metro de Santiago also secured $US800 million of loans from a syndicate of international banks in December 2014. BNP Paribas, which leads the syndicate, will lend $US550 million and Sumitomo Mitsui Banking Corporation will provide $US250 million to the firm (Source: Business Monitor International).

A plan to promote rail freight (PICAF) is underway to ensure that the railway network of the National Railway Company (EFE) has at least the minimum conditions of capacity and resistance to capture 11.5 million tons of new rail loads. This would double its current share before the end of the decade.

The Investment Plan of EFE include several infrastructure improvements and new projects for a total investment amount of $US7.6 billion to 2022.

Energy infrastructure

In the hydropower sector, the country is expecting small-scale infrastructure projects to be more common and more successful in their implementation than mega projects.

The development of small-scale hydropower plants will remain a safer choice for investors targeting the Chilean market given the strong government support for projects with a lower environmental impact.

The government is keen to expand the renewables industry, and to diversify away from costly thermal imports and unreliable hydropower, the latter of which has prompted widespread electricity shortages and power rationing in the past.

Chile has four transmission grids:

  • Sistema Interconectado Central (SIC) serves the central part of the country and 93 per cent of the population
  • Sistema Interconectado del Norte Grande (SING) serves the desert mining regions in the north
  • Aysen and Magallanes systems, which serve small areas of the extreme southern part of the country.

The grids are not linked, owing to difficulties created by distances and geography. However the government is working in a connection plan to have better grid infrastructure, in order to combat some of the deep-rooted issues in Chile's power sector. Therefore the government announced investment plans to unify the SIC and SING grids to benefit the country's power sector.


  • Chile needs to keep competitiveness in the region, therefore improvements in infrastructure are key.
  • Chile is focused on improving connectivity and quality of life.
  • The country is investing in infrastructure for national and international integration.
  • Due to the larger ships that will be arriving in Chilean ports as a result of the Panama Canal expansion, the country will need improvements in its ports. In line with this diagnosis, the government announced an investment of $US1.8 billion in ports infrastructure which includes the concession of eight out of 10 of the country's public ports.

Energy improvements in the grids are needed to avoid blackouts, and to secure total energy access to population and industry in the country.


Loans needed by the Chilean Government to finance large infrastructure projects are a real opportunity for financial banks, pension funds or private equity firms, companies that are generally adverse to other riskier Latin American markets.

Build-Operate-Transfer (BOT) concessions programs have been very successful in Chile, highlighting the key driver for growth and modernisation of road infrastructure (Source: Euromoniter).

European companies that have expertise in operating road projects are keen to compete in the sector as their peers have made sizeable returns on investments. But there is room for Australian companies to invest if they are not keen to operate them. Public Works Ministry in Chile is expecting new concessions to draw considerable interest when they open for bidding.

Chile's ports sector requires substantial investment to maintain competitiveness. According to the Public Works Ministry, Chile's ports need between US$600 million – US$1 billion in infrastructure upgrades before 2020.

In railway, Australia has proven to be a very innovative developer of solutions. Australia is recognised as a world leader in rail infrastructure and operations, and that experience can help Chile to succeed in its transition process of railway improvement. Australian companies can deliver state-of-the-art solutions at each stage of current heavy haul and freight rail projects in Chile. The Australian expertise in design and delivery of mine site loading, port unloading, materials handling facilities, and in transport of minerals and commodities is a great advantage to enter in Chilean market.

Chile's long coastline provides excellent conditions for wind power generation and wave power, and the Atacama Desert has some of the highest insolation rates in the world.

Tariffs, regulations and customs

Chile has 24 free trade agreements in place with 62 countries, including 10 APEC member nations such as Australia, Japan, Singapore, India, New Zealand and Korea.

The Australia-Chile free trade agreement (ACI-FTA) came into force in 2009 and covers goods, services and investment and by 2015 all tariffs will be eliminated except on sugar.

In 2013, the Double taxation agreement (DTA) came into effect. The agreement provides certainty for Australian and Chilean businesses, through a framework for the taxation of cross-border transactions. It reduces barriers to the cross-border movement of people, capital and technology, primarily through reducing withholding taxes on dividend, interest and royalty payments.

Chile is also a member of Mercosur (Customs Union involving Argentina, Brazil, Paraguay and Uruguay), the Andean Community (Colombia, Ecuador, Peru and Bolivia) and the Pacific Alliance Agreement (Colombia, Mexico and Peru).

Chile’s FTA and DTA with Australia combined with its extensive network of agreements with other Latin American countries, reinforces its position as the hub for Australian companies’ expansion plans into Latin America.

Chile is a civil law country, as opposed to a common law country which has implications in the way that business is done in the country and how contracts are enforced and it is highly advisable to consult with a lawyer before entering the market.

Austrade can help you with referrals to law firms which other Australian companies have used before.

Marketing your products and services

Pacific Hydro and Origin Energy are the only Australian companies operating in the Chilean infrastructure sector. However there is room for entrants in other infrastructure areas, such as energy, transport, public works and projects of public-private partnerships.

The best approach depends on factors including the type of business, the appetite for risk, funds available to the company and issues around protection of intellectual property. Relationships are very important in Chile and a local partner can provide valuable connections and networks to decision makers.

There are also suppliers that prefer not to have a presence in Chile, instead selecting to sell into the market through distributors or agents. This approach is certainly less capital intensive, but requires patience and a good local partner.

If your goal is to do business with the Chilean Government it is very important to have a subsidiary or representative in the market. All purchases done by public offices are published in ChileCompra / Mercado Publico website to be transparent and give equal opportunities to sellers.

Large infrastructure projects, tenders and important investment opportunities in different industries in Chile are usually published once a year, and this is done by InvestChile, which is the government body responsible for promoting Chile in the global market as a destination for foreign direct investment.

It is also useful to follow the Foreign Investor Guide of InvestChile to understand how to set up a company in Chile, what is required by labour laws and environmental regulation, among other important issues.

Some tips to keep in mind:

  • Exhibition shows and technical seminars are good way to expand networking and prospect business opportunities to get better exposure of your company prior to entering the market. The main Events and Convention Centres are Espacio Riesco and FISA. Visit their websites for a calendar of events.
  • Setting up in Chile sends a strong message to customers signalling commitment to the market and will often convert interest into a solid commercial relationship.
  • Given the focus on productivity in the mining industry, prepare a concrete value proposition which demonstrates clearly how your solution has saved customers money in previous projects.

Links and industry contacts

Association of Public Infrastructure Works
Chamber of Port-Maritime Chile
Chile Compra
Chilean Chamber of Construction
Chilean Economic Development Agency - CORFO
Chile Proovedores
Council of Infrastructure Policies
Dispatch Center of Central Interconnected System (CDECSIC)
Dispatch Center of Norte Grande Interconnected System (CDEC-SING)
EFE -State Railway Company
Espacio Riesco – Events and Convention Center
FISA – Events and Convention Center
Mercado Publico
Ministry of Energy
Ministry of Public Works
Ministry of Transport and Telecommunications
National Productivity Commission
Origin Energy
Pacific Hydro Chile

Please note: This list of websites and resources is not definitive. Inclusion in this list does not imply endorsement by Austrade. The information provided is a guide only. The content is for information and carries no warranty; as such, the addressee must exercise their own discretion in its use. Australia’s anti-bribery laws apply overseas and Austrade will not provide business related services to any party who breaches the law and will report credible evidence of any breach. For further information, please see foreign bribery information and awareness pack.

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