After multiple efforts, Chile has approved a comprehensive Desalination Act (Bulletin No. 11,608-09) that, for the first time, sets out a dedicated legal regime for seawater desalination projects. The new law introduces, among other features, a National Desalination Strategy, a concession regime, statutory easements, environmental obligations and an enforcement system led by the General Water Directorate (DGA).
Water security has become one of the main challenges for Chile's mining, energy and agricultural industries, particularly in the country's arid northern and central regions. In this context, seawater desalination has rapidly evolved from a niche technical solution into a strategic component of Chile's long-term water policy.
Until now, desalination projects had been developed under a fragmented legal framework. This dispersion generated significant uncertainty for investors, project developers and public authorities, particularly regarding the legal nature of the rights involved and the stability of projects.
After years of legislative debate, Chile has now approved its first dedicated Desalination Act, which establishes a comprehensive regulatory framework for the abstraction of seawater, the operation of desalination plants and the disposal of brine. The Act will enter into force 18 months after its publication and contemplates the issuance of regulations within 12 months.
A key element of the new framework is the National Desalination Strategy, which remains to be issued. The Strategy will provide a long-term assessment of Chile’s water security and desalination needs, identify areas most suitable for project development, and set guidelines for innovation and mitigation of environmental impacts. It will be subject to public consultation and updated every six years, providing stability horizon for both public and private actors.
The Act introduces three legal mechanisms for project development. Private entities may apply for a desalination concession for up to 30 years (renewable once for an equal term) in exchange for a fee or tariff payable to the State. Public entities without independent legal personality may obtain an exclusive right of use of the same scope, free of charge. A separate strategic dedication regime applies to projects developed by the Armed Forces that qualify as military installations. Importantly, none of these rights transfer ownership over public maritime assets, and the State may revoke them on grounds of public interest, national security, or serious risk to the population.
One of the most relevant innovations of the Act is the introduction of the human consumption contribution. Where a project's main purpose is not human consumption or sanitation, the DGA may require the concessionaire to allocate up to 5% of its production capacity to local sanitation operators.
The Act also creates a relevant statutory easement of desalination, allowing concession holders to constitute and impose easements for the works of abstraction, conveyance and final disposal of salt or saline waters across third-party properties.
From an environmental perspective, the Act amends Law No. 19,300 to expressly incorporate industrial-scale desalination plants and intensive seawater abstraction projects among the categories mandatorily subject to the Environmental Impact Assessment System (SEIA).
Enforcement is centralised in the DGA, which is empowered to investigate and sanction breaches of the conditions of the concession and of the technical instructions applicable to desalination. Fines may reach up to 10,000 Annual Tax Units (approximately USD 8.8 million) for the most severe cases, including the unauthorised change of use of desalinated water and breaches of the human consumption contribution.
The Act also provides for the automatic lapse of the concession where works do not commence within two years of the delivery act, with limited grounds for suspension of that term.
For project developers, lenders and offtakers, the new framework provides significantly greater legal certainty and a clearer allocation of risks. While much of its success will depend on the regulations and on effective coordination between the different authorities involved, the Act marks a decisive step towards consolidating Chile's leadership in sustainable water infrastructure.
Nicolás Yuraszeck, Partner, Projects and Infrastructure, Prieto Abogados, nyuraszeck@prieto.cl
Emilia Valenzuela, Associate, Projects and Infrastructure, Prieto Abogados evalenzuela@prieto.cl