Interview with Louise De Sousa, HM Ambassador to Chile

LatAm INVESTOR: Chile’s economy looks like it is set to outperform in 2025; has the British Embassy been busier helping UK firms recently?

Ambassador De Sousa: The economic outlook in Chile this year is promising and we have seen an increase in the demand for our support from UK businesses. That reflects the fact lots of countries have been going through tough times, while Chile has strong economic fundamentals. We've also got a good framework of trade agreements and there is lots potential in sectors where the UK is strong, for example renewable energy, mining, sustainable mobility and financial services. It also helps that both Chile and the UK have two governments that are prioritising economic growth.

Here in Chile, we have a really active team from the Department of Business and Trade (DBT) that is energetically working to identify the opportunities and engage with British businesses. At the moment we're working with more than 100 companies who are either doing business here or exploring how to do so. Things are ticking up this year.

LatAm INVESTOR: How can the Embassy and its team help British businesses explore investment opportunities in Chile?

Ambassador De Sousa: I would really encourage UK firms to look for opportunities in Chile. Our in-country DBT team offers a range of services to support businesses exploring the market. We can make introductions, support meetings, help scope projects and potential clients and we can advise on the business landscape here.

We can also deliver joint activities, and I host quite a lot of events in my residence to promote individual businesses and their aims here. We also host sector-wide events, in partnership with business, and we can create campaigns to help raise awareness.

We also help UK firms adapt to the regulatory landscape of Chile and try to resolve significant trade barriers when companies bring them to our attention. Finally, there are the traditional trade promotion activities, such as trade missions and expos.

So, starting from the beginning, with market research, insight and sector analysis on trends and expectations, to networking and partnerships - we can connect UK businesses to key players in Chilean industry and government.

LatAm INVESTOR: The bilateral relationship between the UK and Chile is one of the strongest in the region; how is that an asset for British businesses operating in the country?

Ambassador De Sousa: We've got a really solid and historic relationship with Chile and the two countries are likeminded in many ways, ranging from values and standards to a commitment to free trade.

There is enormous potential here that I don't think British businesses are yet making the most of. Chile was the first country to sign a continuity trade agreement with the UK after we left the EU. That agreement is being used by UK companies as we speak but feel that we can remove more market access barriers to help both countries make the most out of that free trade agreement.

In December 2024, the UK’s accession to the Comprehensive and Progressive Trans Pacific Partnership (CPTPP) came into force. It’s a gamechanger because it doesn't just give enhanced access to the Chilean market, but also to all the other CPTPP markets.

The bilateral UK-Chile deal, which is quite focussed on the exchange of goods, whereas CPTPP goes much more into services and digital economy. It has emphasis on e-commerce and ESG, which are areas where UK businesses have an excellent offer.

The biggest barrier we face to British business doing more here is a lack of a lack of understanding of the opportunity. UK plc has an offer that is highly appreciated in Chile, but my challenge is raising awareness. My simple message to British firms is: it’s great in Chile so come here and do more business. In the four quarters to the end of 2024, UK-Chile trade reached £1.7billion but it could be much higher.

LatAm INVESTOR: Where are the most exciting investment and business opportunities in the Chilean economy for UK plc?

Ambassador De Sousa: One of the most important is renewable energy. Chile faces vulnerability from climate change with water stress, but also has massive opportunity with the quantity of solar power in the north and potential for wind in the south. In 2024, Chile generated 68% of its electricity from renewable sources. We have two government agreements in this area. One is particularly focused on green hydrogen between the Chile's development agency, CORFO and UK Export Finance (UKEF). We are very much looking for good projects to finance there. The other is a is a much broader agreement with the Ministry of Energy focused on renewables and offshore wind in particular, which is a very new sector here. So, we think there's tonnes of potential in the energy sector and UK export finance has an appetite to finance £5billion worth of projects.

It’s a gamechanger because it doesn't just give enhanced access to the Chilean market, but also to all the other CPTPP markets

Around 50% of Chile’s GDP is linked to mining. It’s the world’s largest producer of copper and second-largest of lithium. There are a lot of innovative UK companies, with sustainable solutions that would be readily welcomed in this market and obviously we've got a significant presence with Anglo American, Antofagasta Minerals and Rio Tinto being major players in Chile and either being British or listed on the London Stock Exchange. Then there are opportunities in areas that support mining, such as project finance for infrastructure and water management.

With infrastructure, Chile’s government is really focussed on attracting international investment and there are major projects, including airports, ports, data centres, desalination plants, railways and sustainable mobility.

On trade our accession to CPTPP reduces tariffs on a number of goods, meaning together with our bilateral agreement a significant proportion of trade now benefits from 0% rates. It also improves market access generally and raises standards, which means that the UK offer is particularly attractive because we have high standard companies and products.

LatAm INVESTOR: The UK is a global financial centre; have you received interest from Chilean companies looking to access UK investment or finance?

Ambassador De Sousa: Chile updated its fintech law in 2022, so there's a whole new range of opportunities in open banking and digital payments. The two governments work closely together on financial services and fintech. We've signed an MOU between the UK Treasury and the Chilean Ministry of Finance that includes green finance, which is an area where Chile is really innovative. In fact, Chile issued green bonds on the London Stock Exchange before the UK.

Every year, Chile Day in London sees a delegation of up to 300 Chilean businesspeople looking for opportunities in the financial services sector. You also have Chilean institutions coming to raise capital and investment from the UK.

LatAm INVESTOR: Chile’s stable reputation was upset by the 2019 protests and subsequent years of political turmoil; has uncertainty made Chile a more difficult place to do business?

Ambassador De Sousa: No, it hasn't. It's understandable that the political turmoil around 2019 raised concerns, but I think it was because unrest so unexpected for Chile, which has been so solid and predictable. If you look at the level of political risk in in other countries in the region, then you need to put Chile in perspective.

Chile’s economic fundamentals remain solid. There was some disruption to the pensions system of AFPs.  But now a pension reform has been passed in Congress that should draw a line on that debate and bring some certainty to the sector. It's a testament to the strength of Chile's democracy that Congress, which is pretty fractured, was able to come to a consensus on reforming that sector.

The way the 2019 protests were resolved also says much of Chile’s democracy and inherent stability. Protests were incorporated into the political process, to the point of considering a rewrite of the Constitution. That didn’t happen but everything was channelled into democratic processes, which speaks highly of the culture in this country. Even the most stable countries go through difficult moments.