Hidroaysén Case: Building Dams in Chile’s Patagonia Region

This teaching case intends to be a tool for academic purposes as a way to show the different assessments an investor should make and the many problems he/she may face, when evaluating a megaproject. It reviews the experience of two large corporations in Chile, intending to build a major hydroelectric generation project in Chile while facing major opposition from environmental NGOs and other stakeholders. Although in the view of many industry experts and consultants Hidroaysén was a good and necessary project, the environmental implications and some of the project’s stakeholders created a deadlock.

This teaching case was written with the idea of being used as a tool for classes in order to discuss the implications of environmental issues in big projects. The research was based on particular information of the project, financial data of the companies involved, and other public sources (news, interviews, etc.).

The conclusion of this case is that private initiatives, without the right alignment of political actors and civil society, could face the risk of being blocked and not being executed.

COP21 guidelines for responsive investment could be a guideline to follow, aligning private interest with development for countries in the third world.

We offer a way to analyze external impacts on a project of this kind, that using a common framework (COP21 guidelines) could avoid risks taking all considerations into the project.