A Chilean wind farm operator backed by Latin American Power has filed for bankruptcy in the U.S. with a restructuring deal that would provide financial relief from a debt default due to increased competition and severe drought, WSJ Pro Bankruptcy reported. Santiago-based Inversiones Latin America Power filed for chapter 11 Thursday in the U.S. Bankruptcy Court in Manhattan, with more than $400 million of debt. Chief Executive Esteban Moraga said a 2019 move by the Chilean government to phase out coal plants and make the country carbon-neutral by 2050 resulted in a proliferation of new renewable projects, in turn creating a shortage of transmission capacity. Other factors pressuring the company’s finances include volatility in the Chilean energy market due to severe drought conditions, he said in a sworn declaration filed in bankruptcy court. Those conditions have resulted in lower energy-generation at the company’s two wind farms, forcing it to buy energy at significantly higher prices in the spot market to honor customer contracts. That move has hurt cash flow, making the company unable to meet its debt obligations. Earlier this year, Inversiones defaulted on its debt and its credit ratings were lowered, partly due to spot price volatility.
