49969 - Engie Chile UCL2

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Environmental & Social Review Summary

Project Number

49969

Company Name

ENGIE ENERGIA CHILE S.A.

Date ESRS Disclosed

Aug 27, 2026

Country

Chile

Region

Latin America and the Caribbean

Last Updated Date

Aug 28, 2026

Environmental Category

B - Limited

Status

Pending Approval

Sector

Integrated Utilities

Industry

Infrastructure

Department

Regional Industry INF LAC & EUR

Project Description

IFC proposes to arrange a US$400 million 10-year unsecured corporate loan to Engie Energia Chile S.A. (“EECL” or the “Borrower”) (https://www.engie.cl). EECL is a leading integrated utility company in Chile and a subsidiary of Engie S.A. (“Engie” or the “Sponsor”), an existing client of IFC. The financing will include a US$50 million A Loan with the balance provided through B Loans. The proceeds will be used to finance energy transition infrastructure including: (i) the battery energy storage system (“BESS”) Tocopilla project (116 MW/660 MWh); (ii) the BESS Lile project (140 MW/802 MWh); and (iii) the development of Chile’s first synchronous condenser, developed at the Tocopilla Complex, through the conversion of the former coal-fired generation unit 15 (closed in 2022) (the “Project”).

The project is being implemented entirely within EECL-owned brownfield industrial sites, largely leveraging existing infrastructure. The Tocopilla BESS is located within the Tocopilla Energy Complex in Chile’s Antofagasta Region, on the site of a decommissioned coal-fired power plant. It occupies approximately 3.3 hectares and includes 240 lithium-ion battery containers and 30 power conversion systems. The facility connects to the National Electricity System (SEN) using existing infrastructure within the complex. Commercial operations commenced in February 2026. The Tocopilla synchronous condenser is intended to provide grid stabilization services in the Antofagasta Region; it will supply power of 145 megavolt-amperes reactive and reach commercial operations in July 2027.

The Lile BESS is being developed within the Mejillones Thermal Complex, also in the Antofagasta Region, using existing electrical infrastructure and transmission lines originally designed for a potential expansion of the legacy thermal complex. The project will cover approximately 2 hectares and comprise 160 battery containers and 40 medium voltage transformers. It is expected to enter commercial operation during the second half of 2026.

Overview of IFC's Scope of Review

EECL is an existing IFC client through project #46952 ( HYPERLINK "https://disclosures.ifc.org/project-detail/ESRS/46952/engie-chile-ucl" \t "_blank" https://disclosures.ifc.org/project-detail/ESRS/46952/engie-chile-ucl). As of this disclosure, EECL’s E&S performance under that investment is rated satisfactory. In addition, the sponsor is an existing IFC client through project #48736 ( HYPERLINK "https://disclosures.ifc.org/project-detail/ESRS/48736/engie-sll" \t "_blank" https://disclosures.ifc.org/project-detail/ESRS/48736/engie-sll), and the sponsor’s E&S performance is also satisfactory.

IFC’s E&S appraisal reviewed EECL’s and the sponsor’s performance across existing IFC-supervised investments, including progress on implementing the Environmental and Social Action Plan (ESAP) agreed under IFC’s prior investments. The appraisal also included: (i) a review of project-level environmental, health, safety, and social documentation; and (ii) an in-person site visit in June 2026 to the Tocopilla BESS project (including the Synchronous Condenser) and the Lile BESS project, during which IFC met with EECL’s corporate and project teams.

E & S Project Categorization and Applicable Standard

While all Performance Standards are applicable to this investment, IFC’s environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards

PS 1 - Assessment and Management of Environmental and Social Risks and Impacts
PS 2 - Labor and Working Conditions
PS 3 - Resource Efficiency and Pollution Prevention

This is a Category B project, as per IFC's Policy on Environmental and Social Sustainability, because potential adverse environmental or social risks and/or impacts are limited, few in number, site-specific, largely reversible, and readily addressed through mitigation measures.

Key E&S aspects associated with the project are: (i) EECL’s project-level E&S management systems and organizational capacity to assess and manage risks and impacts from construction and operation; (ii) stakeholder engagement & community grievance mechanism; (iii) labor & working conditions including occupational health and safety (OHS), contractor management, emergency planning and workers grievance mechanism (WGM); (iv) life and fire/explosion safety standards; (v) waste and hazardous materials management including recycling and disposal of used batteries.

Environmental and Social Mitigation Measures

IFC’s appraisal considered the environmental and social management planning process and documentation for the Project and gaps, if any, between these and IFC’s requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) in an agreed Environmental and Social Action Plan (ESAP). Through implementation of these measures, the Project is expected to be designed and operated in accordance with Performance Standards objectives.
PS1: Assessment and Management of Environmental and Social Risks and Impacts:

EECL applies the sponsor’s corporate policies alongside its own E&S policies across all operations in Chile, including the projects proposed under this financing. These policies are broadly consistent with the IFC PSs and are cascaded to EECL’s contractors and subcontractors. EECL also operates an integrated management system (IMS) aligned with ISO 9001, ISO 14001, ISO 45001, and ISO 55001, which covers all of its activities in Chile. IFC’s E&S appraisal and ongoing supervision under IFC’s existing investment confirmed that the IMS is mature, fully implemented, and aligned with the IFC PSs.

EECL submitted environmental and social (E&S) project summary documents for the Tocopilla BESS, Tocopilla Synchronous Condenser, and Lile BESS projects to the Antofagasta Regional Environmental Assessment Service, seeking confirmation on whether an Environmental Impact Assessment (EIA) was required under national regulations. Based on the information provided and the responses from the regional authorities, the projects were determined not to trigger the mandatory EIA requirement. All supporting information submitted by EECL is available through the regulator’s approval platform at HYPERLINK "http://www.sea.gob.cl/" \t "_blank" www.sea.gob.cl.

In the early development phase of the BESS and synchronous condenser projects, EECL undertook an initial screening of potential risks and impacts, including climate-related risks, using its Corporate Social Responsibility (CSR) Checklist and Matrix tool, which is aligned with the EU taxonomy. EECL also developed a site-specific Matrix for the Identification and Assessment of Environmental Aspects to evaluate potential construction-phase E&S risks and impacts and is currently updating it to cover operational risks. In addition, EECL completed a series of technical studies addressing fire and explosion hazards, thermal runaway, and related risks.

As the BESS and synchronous condenser projects are fully located within existing industrial facility boundaries, construction and operational E&S risks and impacts are expected to be low, localized, and temporary, with the main issues relating to fire risk, hazardous materials management, and waste generation. Through its IMS, EECL has developed and is implementing site-specific Environmental Management Plans (EMPs) that describe how E&S impacts will be identified, avoided, minimized, and managed across the project lifecycle. The EMPs set out roles and responsibilities, mitigation measures, legal compliance obligations, and monitoring arrangements. EECL has also prepared a site-specific Matrix of E&S Legal Requirements that consolidates applicable legal obligations. Contractors are contractually required to comply with the EMP requirements.

EECL has prepared site-specific Emergency, Catastrophe, and Disaster Risk Reduction Management Plans to manage risks to workers, the environment, and local communities arising from emergency events, including battery unit fires, explosions, and climatic hazards such as climate-related extreme weather. These plans are tailored to each site and cover all phases of the projects.

EECL has corporate-level environmental and social (E&S) resources that provide project oversight and support to site teams. In addition, EECL has engaged adequate project-level E&S personnel, including environmental, community liaison, and health and safety specialists, to oversee construction and operational activities. EECL’s contractors have also appointed Health & Safety Officers to provide effective oversight of their workforce and project activities.

PS2: Labor and Working Condition:

During the construction of BESS Tocopilla and Lile BESS, the workforce peaked at approximately 186 and 233 personnel, respectively. For the Tocopilla Synchronous Condenser, peak construction staffing is expected to be around 140 workers. The workforce is predominantly composed of Chilean nationals, largely recruited from the local region. During operations, the average workforce is expected to be approximately 1 per shift at BESS Tocopilla, 1 per shift at Lile BESS, and 3 per shift at the Tocopilla Synchronous Condenser.

EECL’s Human Resources Policy and Code of Ethics are aligned with applicable local regulations and are consistent with IFC PS2 requirements and relevant ILO conventions. They address labor and working conditions, nondiscrimination, equal opportunity, equal pay for men and women, respect for freedom of association, inclusion of workers with disabilities, and the prohibition of child and forced labor.
Employees receive written contracts outlining their terms and conditions of employment and, through the induction program, are informed of the corporate policies and Code of Ethics, which are also available on the Company’s website. E&S provisions in contractor agreements require all contractors to comply with the Company’s Human Resources policies and Code of Ethics.

EECL has a workers' grievance mechanism that complies with national law and aligns with IFC PSs. It is communicated through the induction program and enables complaints to be submitted online or by phone, via unions, and through EECL’s intranet. The mechanism allows for confidential and anonymous reporting and is accessible to project contractors and subcontractors. EECL also maintains a Sexual Harassment Procedure and provides training to all managers, including those responsible for contractor audits. Allegations of sexual harassment or assault are investigated and addressed either internally, with support from external counsel where appropriate, or through the government Labor Department for investigation and resolution.
EECL has a corporate occupational health and safety (OHS) management system that is ISO 45001-certified and has developed site-specific OHS Plans and procedures, aligned with Chilean OHS and technical regulatory standards, which define project OHS obligations that are applicable to all project workers.

EECL applies a procurement policy across all projects, including the BESS and synchronous condenser projects, supported by a Supplier Code of Conduct that addresses and prohibits labor abuses such as child and forced labor. EECL also includes contractual provisions in agreements with primary suppliers requiring them, and their sub-suppliers, to comply with the Supplier Code of Conduct, which prohibits child and forced labor and sets occupational health and safety expectations for suppliers’ own operations. Where non-compliance is identified, EECL reserves the right to terminate the supplier contract. EECL also engages specialists, including external firms with supply chain audit expertise, to verify implementation and compliance with these requirements.

PS3: Resource Efficiency and Pollution Prevention:

The project is expected to deliver a net reduction of ~77,500 (BESS Tocopilla) and ~91,500 (BESS Lile) tons of carbon dioxide equivalent (CO2e) annually. During operations, minor indirect emissions are generated through the charging and discharging processes. In line with the sponsor’s corporate policies, EECL is committed to monitoring and reporting GHG emissions. Water usage during construction and operations is expected to be negligible.

Given the project’s nature and its siting within existing industrial complexes, impacts on surrounding communities are not anticipated. During construction, the project is expected to generate minor air, water, and soil pollution and produce waste volumes that can be effectively managed through standard pollution prevention and control measures set out in the project EMP(s). Routine operations are not expected to generate significant waste or emissions. The main pollution risks relate to construction and decommissioning activities, battery waste from maintenance and endoflife management, and potential accidental or emergency events. These risks will be managed through a combination of design controls, operating procedures, monitoring, and emergency response measures, as defined in the EMPs, hazardous materials handling procedures, and sitespecific Emergency, Catastrophe, and Disaster Risk Reduction Management Plans. Project waste will be managed using the existing waste management systems established for the industrial complexes.

As per ESAP#1, EECL will prepare a BESS Battery EndofLife Management and Disposal Plan that addresses decommissioning, reuse/second-life evaluation, and the identification of recycling and disposal pathways for battery modules/cells and associated hazardous waste. Given that Chile’s BESS industry is still emerging, the Plan will be reviewed and updated periodically to reflect evolving industry practices and options.

Stakeholder Engagement

EECL has a corporate Stakeholder Relations Policy that sets out core principles for stakeholder identification, mapping, and engagement. In line with this policy, EECL’s social team is implementing a stakeholder engagement program with local communities, municipal authorities, neighborhood associations, and other stakeholders to understand local needs and concerns related to the project. Engagement is primarily conducted through local consultation forums (“Mesas de Consultas Comunitarias”), where municipalities, community leaders, neighborhood associations, and company representatives jointly agree on priorities and select local development initiatives.

EECL operates an external grievance mechanism and whistleblowing system that is designed for all stakeholders, including employees, contractors, suppliers, unions, NGOs, and local communities. The mechanism is generally aligned with IFC PSs and includes multiple entry points for raising and addressing grievances, with options to report anonymously if preferred. The mechanism can be accessed online via HYPERLINK "https://denuncias.engie.cl/" https://denuncias.engie.cl/. As per ESAP#2, EECL will strengthen communication and accessibility of the existing community grievance mechanism, including clearly informing stakeholders of the option to submit grievances anonymously.

Broad Community Support

Environmental & Social Action Plan

S.no	Description	Anticipated Completion Date
1	EECL will prepare a BESS Battery End of Life Management and Disposal Plan that addresses decommissioning, reuse/second-life evaluation, and the identification of recycling and disposal pathways for battery modules/cells and associated hazardous waste.	03/24/2027
2	EECL will strengthen communication and accessibility of the existing community grievance mechanism, including clearly informing stakeholders of the option to submit grievances anonymously.	12/24/2026

Client Documentation

File Name	Actions
CP BESS Tocopilla.pdf
CTT _ CP Nuevo Proyecto Reconversion Condensadores Sincronos vf.pdf
CP Nuevo Proyecto de Almacenamiento de Energia con Baterias BESS Lile.pdf

**Information on IFC's Policy and Performance Standards on Environmental and Social Sustainability can be found at www.ifc.org/sustainability

IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.

Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

IFC complaint response is separate from and complementary to IFC’s clients’ project level grievance mechanisms and IFC’s Independent Accountability Mechanism (CAO). Lodging a complaint directly with IFC does not, at any time, restrict access to CAO.

Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.

Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.

Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

Complaints can be submitted by any of the following methods:

Online form: available at https://www.cao-ombudsman.org/
Mail/Hand Delivery to: 2121 Pennsylvania Avenue, NW, Washington, DC 20433, USA
Voice mail: +1 202 458 1973
Email: cao@worldbankgroup.org
SMS, WhatsApp, Telegram, and Signal: +1 202 650 2627

CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

This Environmental and Social Review Summary (ESRS) is prepared by IFC to disclose its findings and recommendations related to environmental and social considerations regarding potential investments. Its purpose is to enhance the transparency of IFC's activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this ESRS is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein.
It is distributed in advance of IFC Board of Directors' consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following ESRS is disclosed in accordance with IFC's Access to Information Policy (AIP).

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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