A recent study by Chile’s Capital Gains Corporation (CBC) estimates that more than US$21.26 billion could be invested throughout Chile in ‘mega projects’ over the next 10 years. Real estate, electricity, and mining projects account for the majority of the proposed investments, yet the most lucrative opportunities also seem to be the most controversial projects on the horizon.
Electric Power and Distribution Company (ENDESA) plans to spend US$4.67 billion on four new hydroelectric dams in Chile’s water rich south. The projects have sparked a lot of debate between environmentalists and government economists in Chile over the extent that Chile should sacrifice natural areas for additional energy capacity.
Barrick Gold has proposed to spend US$1.4 billion on the Pascua Lama gold mine, however the current plans are still being negotiated with government officials after the company released an environmental impact report strongly differing from an international assessment concerning three glaciers located on top of the proposed site (ST, Nov. 10).
Real estate ventures represent the largest investment sector in the CBC’s ten year investment report. Housing projects, business centers, and casinos are expected to contribute over US$5.95 billion in the 13 years.
Including Pascua Lama, mining investments could add US$5.3 billion to Chile’s economy in the next three years, All proposed energy projects represent US$5.7 billion, and forest products such as cellulose would create an additional US$1.79 billion in the next two years.
The remaining projects listed in the report include public works projects, agricultural industry investments, as well as a US$600 million astronomical observatory in the north of Chile.
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Chile finally graduated to a developed country status in December of 2009, that’s why these mega projects were well on their way for implementation. Investors have an eye for economies that could turn out as great investment opportunities, and Chile proved to be one of them. With its new economic status, foreigners can now freely buy properties in Chile.
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