Abu Dhabi-July 29.2024: In an exclusive interview with Nicolás Grau, Chile’s Minister of Economy, Development, and Tourism, we explore the burgeoning relationship between Chile and the UAE. With both nations at the forefront of renewable energy, green technologies, and sustainable development, their collaboration promises significant advancements in these critical areas. Minister Grau shares insights on Chile’s strategic initiatives, including the national lithium strategy, the role of green hydrogen, and the nation’s ambitious plans for digital infrastructure.
He also highlights the growing Emirati investments in Chile, particularly in mining, infrastructure, and the food industry, and the potential for further collaboration through public-private partnerships. Join us as we uncover how Chile and the UAE are poised to lead the charge in global decarbonization and sustainable economic growth.
Chile has positioned itself as a technological hub and leader in green energy in Latin America. How do you see the collaboration between Chile and the UAE in areas such as renewable energy, battery storage, and clean technologies?
The collaboration between Chile and the UAE presents a significant opportunity for both countries. We share many challenges and ambitions in these areas. For instance, Chile is building the first submarine cable from the Southern Cone to Australia, demonstrating our strategy for developing digital infrastructure, a key enabler for becoming a technological hub.
In terms of green energy, Chile has significantly accelerated investments in renewable energies, especially solar and wind. Currently, around two-thirds of our energy is renewable, with a substantial portion being solar. The UAE has also made remarkable strides in transitioning to a greener economy, particularly in green mining and desalination plants. Despite the geographical distance, our shared challenges and goals put us in a strong position to deepen our economic relations.
Given the growing global demand for critical minerals, especially lithium, how is Chile advancing its economic development strategy in this area? What opportunities do you see for collaboration with the UAE in the lithium value chain?
Chile is a major producer of lithium and copper and has ideal conditions for producing green hydrogen. Combining these strengths allows us to make the fight against the climate crisis a central driver of our development. Our national lithium strategy aims to double production in the next decade through public-private partnerships, a concept well understood in the UAE.
This approach will not only increase production but also reduce environmental impact by improving production technology and adding value to our lithium exports. An alliance with the UAE could be instrumental in this strategy, enhancing technological development and expanding production capabilities in Chile. Our President, Gabriel Boric, is committed to this approach, emphasizing the importance of international cooperation in achieving our goals.
The Lithium and Green Hydrogen strategies are crucial for climate change mitigation. How do you believe these strategies will contribute to global decarbonization, and what role will Chile play in this context?
Both strategies are vital for different reasons. Green hydrogen can replace fossil fuels, and lithium is essential for batteries, which are key to the energy transition towards greater electrification. Chile’s favorable conditions for producing these resources position us to make significant contributions to global decarbonization.
Chile is the world’s largest copper producer and the second-largest lithium producer with the most extensive reserves. We are also on track to produce the cheapest hydrogen globally. Our strategy emphasizes international openness, multilateralism, and strong institutional frameworks, enabling us to play a crucial role in achieving carbon neutrality by 2050 and supporting the global energy transition.
Chile has been proactive in attracting foreign investment. What is your perspective on the importance of Emirati investment in Chile’s economic development? Are there specific sectors you find particularly attractive for UAE investors?
Emirati investment in Chile currently stands at around two billion dollars, which is relatively modest compared to other countries like the United States or Canada. However, foreign direct investment (FDI) flows into Chile have been robust, reaching almost 23 billion dollars in 2023, the highest since 2014.
Several sectors hold promise for Emirati investors, including mining, particularly in exploration and green mining projects such as desalination plants. Additionally, infrastructure projects, where Chile has a long tradition of public-private partnerships, and the food industry, which has already seen significant Emirati investments, offer considerable opportunities. The Comprehensive Economic Partnership Agreement (CEPA) will further enhance these opportunities by reducing tariffs and strengthening trade and investment ties.
What projects or areas of investment in infrastructure could benefit from collaboration between Chile and the UAE? Are there opportunities in transportation, energy, or telecommunications?
There are two primary areas for collaboration in infrastructure. One involves specific projects, such as desalination plants for mining, where UAE companies can play a crucial role. The other is general infrastructure investment. During our visit, the Minister of Public Works presented a portfolio of nearly 20 billion dollars in concession projects, waiting to be realized.
Emirati investments have already made significant inroads in Chile, such as DP World’s investments in the ports of Lirquén and San Antonio and the agricultural sector through ADQ, making it the largest exporter of food from Chile. We see substantial potential for expanding these investments.
How can Chilean and Emirati companies collaborate in the food supply chain, from production to distribution?
The new trade agreement signed will significantly benefit food exports from Chile to the UAE. Given the UAE’s limited food production capacity, this presents a tremendous opportunity for Chile and other Latin American countries. Emirati investments in Chile’s food industry have already laid a strong foundation for further growth.
As we deepen our bilateral investments, the initial phase may be slow due to the distance and the need for mutual understanding and trust. However, once established, these investments tend to accelerate. Our ongoing visits and business delegations are designed to enhance mutual knowledge and accelerate investment flows, bolstering our food supply chain collaboration.
Renewable energy and desalination are crucial given the UAE’s arid climate. How can Chile and the UAE share experiences and technologies in these fields?
Both countries are making significant efforts in desalination and renewable energy. In Chile, a significant portion of the mining industry already uses seawater, with plans for nearly 100% of large-scale mining to transition to desalinated water by 2030. Successful UAE experiences in this field can be highly beneficial for Chile.
In renewable energy, Chile has transformed its energy matrix rapidly, aiming to phase out coal-fired power plants and reduce carbon emissions. Our success in solar energy investment has led to new challenges, such as the need for more transmission lines and large-scale storage projects, areas where UAE expertise can contribute significantly. Additionally, companies like CODELCO, which is Chile’s largest state-owned copper mining company, are leading the way in adopting these technologies and can collaborate with UAE counterparts to share best practices and innovations.
Startups are thriving in both countries. What opportunities exist for collaboration between the startup ecosystems of Chile and the UAE?
Chile has a robust startup ecosystem led by Startup Chile, which has been successful in the early stages of development. However, scaling these startups requires access to venture capital, often leading Chilean startups to seek funding abroad. We are currently working on creating a deeper venture capital market in Chile, including a proposed law to establish a fund of funds.
Collaboration with the UAE, which has a well-developed financing ecosystem, can help bridge this gap. The Startup Campus project in Santiago aims to centralize and support startups, facilitating access to Emirati financing sources and fostering deeper collaboration.
What common challenges do Chile and the UAE face in their pursuit of sustainable development? Are there innovative solutions they can share?
Both countries aim to achieve carbon neutrality by 2050 while maintaining quality jobs, reducing inequalities, and increasing productivity. These are significant challenges individually and even more so when pursued simultaneously. International cooperation, technological exchange, and sharing best practices are crucial.
Our countries share challenges like water scarcity, making cooperation in desalination and renewable energy particularly beneficial. This visit underscores our commitment to these shared goals, with significant potential for investment and collaboration in economic, cultural, and academic fields. This is Chile’s first presidential visit to the UAE, highlighting the importance we place on this relationship and the opportunities it presents.
