From our investment in 2013, Aela Energía became Chile’s largest operational independent renewable energy platform with 332MW of wind capacity. By investing in local communities and developing initiatives such as female entrepreneurship programmes, Aela also blazed the sustainability trail in Chile to create lasting positive social and economic as well as environmental impact.
When we invested in Aela Energía in 2013, we saw strong potential to tap into Chile’s strong wind resources to create a leading renewable energy platform in the country. Yet, with nearly a third of Chile’s indigenous population living in poverty, we also recognised that the company had an important role to play in promoting diversity and inclusion economically within and beyond the business to create lasting positive impact.
As with all our investments, sustainability was at the heart of our value creation plan for Aela. As one of the 17 renewable energy platforms Actis has built or is in the process of building, we were able to bring our expertise and contacts within the global supply chain to support Aela’s growth and development while implementing strong ESG standards across the business. Using the Actis Impact Score methodology, which measures and quantifies the positive environmental and social impacts of our investments, Aela had a baseline score of 24 when we invested, with a forecast score of 97. By the time we sold the business to Innergex Renewables in 2022, Aela’s score had climbed to 110, exceeding our original ambitious target and translating into an impact multiple of 4.7x.
Aela achieved this result in part because of the positive environmental and climate impact of its focus on renewable energy provision and the oversight of a Board of Directors with significant experience in building sustainable infrastructure. Yet that is far from the whole story. Supported by Actis, Aela also invested heavily and purposefully in a wide range of community development and engagement programmes. Our investment in Aela therefore aligns closely with five of the United Nations’ Sustainable Development Goals (SDGs) – SDG 7 (affordable and clean energy), SDG 8 (decent work and economic growth), SDG 13 (climate action) SDG 5 (gender equality) and SDG 1 (no poverty).
Producing over 900GWh of clean energy from its three operational wind farms, Sarco, Cuel and Aurora, Aela has helped deliver energy access to Chile’s population, supporting both the country’s economic development and the government’s target of sourcing 70% of power from renewables by 2040. Further, the energy Aela had produced by the time we exited had avoided nearly 1.2 million tonnes of carbon dioxide emissions.
Using the Actis Impact Score methodology, which measures and quantifies the positive environmental and social impacts of our investments, Aela had a baseline score of 24 when we invested, with a forecast score of 97. By the time we sold the business to Innergex Renewables in 2022, Aela’s score had climbed to 110, exceeding our original ambitious target and translating into an impact multiple of 4.7x.
In addition, Aela employed over 1,100 people during peak construction, with local workers hired and trained where possible – the business launched the Chilean energy sector’s first ever female apprenticeship programme for engineers, for example. It has also created 50 permanent posts during its operational phase.
Producing renewable energy from onshore wind farms has clear environmental benefits that can help address the climate crisis. Yet we also recognise that turbines can cause issues for neighbours to the sites. Supported by Actis, Aela undertook extensive environmental studies and consultations with local communities, to understand their concerns, manage noise impacts, and provide compensation where appropriate.
Community engagement did not stop there, however. With a focus on inclusion and diversity, Aela launched a range of programmes aimed at female economic empowerment and developing livelihoods for local indigenous communities.
After supporting the extended Carrillanca community’s bid to constitute itself as part of the Mapuche community (which resulted in formal recognition by the Chilean state), Aela provided technical advice, materials and financial assistance to create an “ethno-tourism” business. Offering food, accommodation and tours to visitors, the business generates income for the community while also helping to preserve traditional skills, culture, crafts and rituals for future generations. In another project, with the Lefnahuel indigenous community, Aela supported the restoration of an abandoned health centre to create a multi-purpose space that includes a workshop. This is now used by community members, following training support from Aela, to make and sell traditional furniture and ironwork. Importantly, the training provided skills to female members of the community in what was traditionally seen as a male occupation – 80% of trainees were female.
Training has also featured heavily in Aela’s work with communities close to the Cuel windfarm in Central Chile. Together with the local municipality, Aela offered technical and practical workshops for women in areas including agroprocessing, baking and fruit and vegetable farming alongside training in women’s rights and their role in society to help build confidence and an understanding that they have an equal part to play in their communities.
With these and other projects, Aela has sought to build capacity by partnering with foundations and municipalities to help communities build enduring links and networks as well as viable businesses. At the time of exit, Aela had invested over US$1.02 million in community initiatives, reaching over 14,000 participants. Of these, nearly half were women and nearly a quarter were from indigenous groups.
These achievements would be notable at any time, but are particularly so, given the backdrop of the pandemic, which delayed a number of initiatives, as well as the civil unrest in Chile that broke out in 2019 sparked by concerns around the cost of living and inequality.
Aela also faced a number of challenges to the business, including the insolvency of one of its key suppliers and an energy price cap introduced by the government in response to the unrest. However, drawing on its networks, Actis was able to secure a new, global supplier for Aela. To mitigate the price caps, we were also able to secure new funding for the business and to negotiate short-term power purchase agreements with commercial and industrial off-takers.
In 2022, Actis sold its stake in Aela, which had by that time transformed three assets under construction into Chile’s largest independent operational renewable energy platform, with 332MW of capacity, backed by strong management and solid governance standards. It had also created enduring community and training programmes that both Aela and Actis saw as vital to the success of the business, its licence to operate and to foster the conditions for a Just Transition in Chile.