Surge in Foreign Private Investment in Chile
According to an analysis conducted by InvestChile based on the survey by the Capital Goods Corporation (CBC) for the second quarter of this year, the $37.478 billion in foreign private investment in Chile represents a 24% increase compared to the previous quarter.
Foreign Projects Lead Private Investment
Foreign projects lead the private investment in Chile during the 2024-2028 period, as revealed by an analysis by InvestChile’s Strategy and Investment Climate division of the latest Capital Goods Corporation (CBC) report.
The review showed that foreign private investment accounted for 77% ($37.478 billion) of the CBC’s survey, while national private investment in Chile made up the remaining 23% ($11.193 billion). The situation was entirely different six years ago, as in 2018, only 45% of the projects included in the report came from foreign capital, compared to 55% from local capital.
Significant Growth in Energy and Mining Sectors
The amount associated with projects owned or involving foreign capital represents a 24% increase compared to the first quarter of this year ($30.118 billion). The most significant growth in private investment in Chile was seen in the energy and mining sectors, which account for more than 70% of the total difference between the two surveys.
Government and Industry Leaders React
Economy Minister Nicolás Grau stated, “This is good news because it shows that we can convert the international interest we see in presidential tours into investments, which translates into more jobs and economic growth.”
Meanwhile, Karla Flores, Director of InvestChile, noted that the figures align with the significant contribution foreign investment makes to Chile’s GDP, which is considerably higher than in other regional economies. We have recorded high flows of FDI in recent years.
Chile’s Institutional Strengths Attract Foreign Investment
“We are talking about companies setting up projects with a development horizon of many years or even decades and whose analysis incorporates elements where Chile has clear strengths: institutional solidity, robust fiscal responsibility and macroeconomic management, legal certainty, and opportunities in high-potential sectors. Although we have faced challenges like other economies worldwide, we are a country that can resolve them in an institutional and orderly manner, which is highly valued. The day-to-day and local debates often distract from the significant opportunities Chile offers for private investment in Chile, which foreign companies do see. Foreign investment is a powerful development tool for our country, and all indications are that it will continue to be so,” said Flores.
Number of Projects and Progress Status
In addition to the amount, another aspect worth highlighting is the number of projects related to foreign investment. In the second quarter of 2024, 221 such projects were recorded, explained by the inclusion of 22 new projects and 16 that moved from a ‘no schedule’ classification to a ‘with schedule’ status, where the existence of a precise disbursement timeline is determined. These 38 projects account for more than a $7.3 billion difference between the two reports.
Project Stages and Environmental Approvals
It is also essential to consider the stage of the projects involved, as their progress implies greater certainty of their materialization. 70% of the amounts considered are in the Construction and Detailed Engineering stages, providing greater certainty regarding their completion. These stages account for $27 billion in private investment in Chile.
In addition to the degree of progress, it is crucial to highlight the status of the projects mentioned: 56% corresponds to projects that already have environmental approval, totaling more than $20 billion. Meanwhile, projects under ecological review, meaning they are already under analysis, involve an amount close to $8 billion, representing 21% of the total. In summary, 76% of the projects are already in the environmental assessment system, either approved or under review.
Chile’s Continued Attractiveness as a Global Investment Destination
The growing dominance of foreign private investment in Chile underscores the country’s attractiveness as a global investment destination. With significant capital directed toward critical sectors such as energy and mining, Chile can benefit from sustained economic growth and job creation in the coming years. The robust institutional framework, fiscal responsibility, and legal certainty that characterize Chile’s economic environment continue to draw international interest. As the country moves forward, this influx of foreign capital will play a crucial role in shaping its future development, ensuring that Chile remains a competitive and dynamic player on the global stage.