(Bloomberg) --
Spanish oil producer Repsol SA will enter the renewable market in Chile through a joint venture to develop solar and wind projects in the South American nation.
Repsol will form a joint venture with Spain's Grupo Ibereolica Renovables, with each company owning 50% stakes, according to a statement from the Madrid-based oil producer Thursday. Repsol will invest 168 million euros ($195 million) through a capital increase while Ibereolica will add assets under development for a total capacity of 1.6 gigawatt. The companies could develop an additional 1 gigawatt.
The agreement marks Repsol's first significant renewable energy project outside Spain and moves it closer to achieving its target of having 7.5 gigawatts in renewable energy generation capacity by 2025. The company is building seven solar and wind projects in the Iberian peninsula.
The Chilean joint venture's portfolio includes 52% of wind projects and 48% in solar located mainly in Chile's northern Antofagasta and Atacama regions.
Repsol in December became the first oil major to pledge net-zero emissions by 2050.
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