Water Scarcity in Chile and Public Desalination Infrastructure: A Solution that Raises Questions

Like many countries, Chile has also suffered heavily from the consequences of climate change. Water scarcity is a critical issue in current Chilean public policies, as more than 100 communes in Chile are under water scarcity decrees (almost a third of the total number of communes in the country).

As a measure to combat this serious situation, the President of the Republic announced in October that by the end of 2023, a bill would be presented to allow the Chilean Ministry of Public Works (“MOP” the body in charge of planning and building public infrastructure in Chile), either directly or through concessions, to build desalination plants for the production of multi-purpose water (human consumption, agriculture, mining and industry). Prior to the project, the MOP was only empowered by law to develop infrastructure whose main purpose was irrigation.

As an enabling step for this objective, it was indicated that, in order to boost investment in projects, it is essential to unblock the granting of permits based on four criteria: proportionality, purpose, irreversibility and recognition of the vocation of the institutions that have experience in the subject.

As a result of the above, the authority outlined a series of structural measures needed to streamline the infrastructure industry, enabling the desalination water solution projects to move forward:

• Reform of the Environmental Law to allow for shorter environmental assessment process;
• Streamline the granting of maritime concessions;
• Changes to the National Monuments Council (Consejo de Monumentos Nacionales) to reduce the number of projects detained due to archaeological findings and speed up the authorization process. In the development of infrastructure projects in Chile, a very relevant issue that is discussed at length in the negotiation of infrastructure contracts is archaeological findings and their impact on construction schedules and the entry into operation of critical projects such as power transmission infrastructure and renewable energy;
• And finally, progress on a National Infrastructure Plan and an Advisory Council.

In early November, the government presented the bill, which was passed into law at the end of the same month and is expected to be enacted in the coming days. Therefore, the MOP will be empowered by "law" and will have special attributions for the development of desalination infrastructure projects.

Although this law is not a solution to the problem of water scarcity, it is an important step. However, there are still many other barriers to the advancement of the principles sought by this law, both in terms of the "structural measures" mentioned above, as well as in the very definition and development of the idea of the State developing this infrastructure.

In this regard, there is still a key question that will define the progress or halt of these policies: who will pay for the development of infrastructure and how will it be paid for? We believe that this issue will mark the main stakeholder discussions that could hinder the development of public desalination infrastructure.