23 April 2026
Chilean Senate advances legislation to promote desalination industry
The Chilean Senate has approved the final text of a bill titled "On the Use of Seawater for Desalination” (Law), which aims to modernize regulations for desalination plants by establishing a specific concession regime, a National Desalination Strategy (Strategy), and standardized easements.
Below, we discuss the state of the desalination industry in Chile, key provisions of the Law, and its potential impact on investment and industry.
Background
The desalination industry is growing worldwide. The global desalination systems market was valued at approximately USD28.54 billion in 2025 and is projected to reach USD60.08 billion by 2033, growing at a compound annual rate of 9.75 percent. Key drivers of growth include increasing water scarcity, rising demand for potable water, and the expansion of municipal and industrial water supply infrastructure.
Chile is emerging as a key desalination market in Latin America. The country currently hosts 32 industrial-scale seawater desalination plants with a combined installed capacity of 14,227 liters per second. According to a joint survey by the Chilean Desalination and Reuse Association and the Capital Goods Corporation, 51 new large-scale desalination projects are currently in development, representing an estimated investment of USD24,455 million and an additional capacity of over 39,000 liters per second. The Antofagasta region leads with 17 projects valued at over USD10,870 million, followed by Magallanes with 11 projects totaling USD4,990 million. Of the 51 projects, ten are under construction, 16 have obtained a favorable Environmental Qualification Resolution, and 23 have not yet entered the Environmental Impact Assessment System.
Despite the development of this pipeline, the industry has faced structural obstacles. These have included legal uncertainty in the absence of a comprehensive regulatory framework, with projects governed by multiple bodies; slow and fragmented permitting; and the simultaneous proliferation of projects without national planning, creating the risk of plant concentration, cumulative environmental impacts, and conflicts with coastal communities.
The Law, approved by the Chilean Senate on March 16, 2026, aims to address these issues.
The Law: An integral legal framework for desalination
The Law contains the following provisions, which aim to reduce legal uncertainty and accelerate investment in Chile's desalination industry.
Special maritime concession for desalination
The Law creates a specific, technical, and binding procedure for granting coastal zone permits for desalination projects. The concession is granted by the Ministry of National Defense through a Supreme Decree, following a mandatory favorable technical report from the Chilean General Water Directorate (DGA), for a maximum term of 30 years, renewable once for the same term. The concession covers the use of national public assets in the coastal zone for the extraction, treatment, conveyance, and final disposal of desalinated water. The DGA's technical report is binding and, therefore, the Ministry cannot grant a concession if the DGA issues an unfavorable report. Where two or more applications overlap, the Law establishes a competitive process based on criteria such as the degree of compliance with the Strategic Hydrological Resources Plan, the volume earmarked for human consumption, and alignment with the Strategy.
Notably, the Law also allows simultaneous submission of the concession application and the environmental impact assessment, eliminating the need to obtain one before the other. A simplified regime may be established for smaller-scale projects that do not involve industrial-scale seawater extraction.
National Desalination Strategy
The Strategy is a binding instrument approved by Supreme Decree of the Ministry of Public Works and co-signed by the Ministries of the Interior, National Defense, Finance, Economy, Mining, National Assets, and the Environment. It is based on a proposal by the DGA.
According to the approved version of the Law, the Strategy must be reviewed and updated every six years (rather than every four years as contemplated in earlier drafts), and its preparation must include a public participation stage of at least 60 days.
The Strategy's content must also include a diagnosis of water security opportunities and challenges; criteria for identifying zones most suitable for desalination projects; guidelines for bays or areas where brine discharge should be avoided due to special bathymetric, current, or biota characteristics; mechanisms to promote the re-use or reduction of waste from the desalination process; estimates of present and future water requirements by productive sector, region, and watershed; and targets and monitoring indicators.
Legal easement for desalination
The Law establishes a specific legal easement for desalination that allows concession holders to construct and operate desalination plants, as well as to convey desalinated or saline water across third-party properties. The easement is constituted either by public deed (by agreement with the landowner) or by judicial resolution under a summary procedure. Indemnification of affected landowners is mandatory, determined either by agreement in a public deed or by court ruling. The Law also introduces provisions for shared use of easement strips, which enables multiple concession holders to utilize the same corridor and therefore reduces land-use conflicts and infrastructure duplication.
Legal nature of desalinated water and safeguard of public interest
The Law establishes that the territorial sea and internal waters – including the seabed and subsoil – are national assets for public use, and that the desalination concession does not grant dominion over such assets. It further establishes that the prioritization of desalinated water for human consumption and/or sanitation constitutes a matter of public interest. In line with this, the DGA may require projects whose primary purpose is not human consumption to contribute up to five percent of their desalinated water production capacity for human consumption and/or sanitation, depending on the water availability of nearby communities. The cost of this water must not be lower than the marginal cost, as determined by the Superintendency of Sanitary Services.
Supervision, sanctions, and closure obligations
The Law empowers the DGA to supervise and sanction concession holders, classifying infractions into three categories according to the seriousness.
Penalties for very serious infractions can reach up to 10,000 annual tax units, and two sanctions for very serious infractions trigger mandatory concession forfeiture. The Law also requires concession holders to submit a closure and removal plan within 180 days of the concession grant and to post a fiscal insurance policy guaranteeing compliance with closure obligations.
Other noteworthy provisions
The Law introduces amendments to the General Environmental Framework Law (Law 19,300) by incorporating industrial-scale desalination plants and intensive seawater extraction projects into the list of activities that must undergo environmental impact assessment. It also modifies the General Urban Planning and Construction Law to provide that desalination buildings and installations are always permitted in rural areas, and their networks, pipelines, and ducts are always admitted in both urban and rural areas.
Additionally, the Law authorizes the state-owned Empresa Concesionaria de Servicios Sanitarios S.A. to design, build, and operate desalination plants and similar works (including wastewater re-use systems) for multi-purpose use, with nationwide reach.
Finally, the Law will enter into force 18 months after its publication, except for the provisions on the National Desalination Strategy, which will take effect upon promulgation of the corresponding regulation.
Expected impact on investment and key industries
The National Desalination Strategy will act as a roadmap for preventing project overlap and setting uniform environmental standards. In particular, the binding nature of the DGA's technical report and the possibility of simultaneous environmental and concession processing could reduce the average permitting timeline that the industry currently endures, while the standardized easement regime will provide clear rules for pipeline corridors and shared use that could reduce both costs and execution risks.
The strengthened regulatory framework could generate benefits beyond the water sector by supporting key industries critically dependent on desalinated water, such as mining, which has 15 planned projects exceeding USD9.3 million; industry and energy, including USD2.67 million in planned industrial projects and 20 hydrogen-related initiatives estimated at over USD7.2 million; the sanitary sector, which has eight planned projects totaling USD5.23 million that will secure water for urban areas under growing strain; and agriculture and irrigation, where multi-purpose projects can help free continental water sources for ecological and productive uses.
Nonetheless, the Law's success will likely depend on effective implementation. The government must now draft the National Desalination Strategy and the implementing regulations that will govern the evaluation and granting of the new concessions. The quality and timeliness of these instruments could determine whether the Law delivers on its aim to transform and improve Chile's desalination.
For more information, please contact the authors.
