Government of Chile rejects royalty tax for hydro generators

Chile’s minister of energy said the government does not plan to impose royalty taxes on hydroelectric generators operating throughout the country, wire services reported.

The government of former president Michelle Bachelet had proposed levying a capacity-based tax on generators that would be directed toward municipalities where hydro projects are located, wire reports indicate. Power firms typically pay taxes to the municipality in which their corporate headquarters are based.

Government officials said that the government of President Sebastian Pinera would define its position on the proposal within the next 60 days, Business News Americas reported.

In other news, Chilean utility Compania General de Electricidad S.A. (CGE) plans to begin construction this year on its 136-MW Nuble run-of-river hydro project, which could put the hydropower project on schedule for completion in 2013.

Environmental regulators approved the hydropower project in October 2008, and construction had been slated to begin in 2009.

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