Chile has seen a steady growth in local pic production thanks to hefty political support and an uptick in private backing.

“Even building contractors, real estate and supermarket businesses have been investing in Chilean cinema as of late,” says Carola Leiva, exec secretary of Chile’s Arts Council.

Gonzalo Justiniano, whose “B Happy” will be sold by L.A.-based CMG in Cannes, is in talks with businesses as disparate as construction and fruit exporting for his next pic, $2 million dramatic comedy “Lupita.” “Interest rates are so abysmally low here that they’d rather risk investing their capital in cinema,” notes Justiniano.

Last year’s biggest local hit, Andres Wood’s “Machuca,” lured 654,000 admissions, trouncing “Spider-Man 2,” “Troy” and “Harry Potter and the Prisoner of Azkaban.” Chile’s No. 1 pic, “Shrek 2,” attracted 1.1 million filmgoers. Wood’s reflection on the socio-economic divide in Chile as seen through the eyes of two schoolboys resonated among local auds.

Like neighbor Argentina, this tiny country of some 15 million inhabitants and barely 300 screens shares a Euro sensibility and a tortured political history that provides a wealth of stories with strong global appeal.

Genres range from comedies and horror to intimate dramas like Miguel Littin’s “La ultima luna,” which explores the relationship between an Israeli and his Palestinian neighbor.

Alicia Scherson, whose debut feature, “Play,” earned her an honor at the Tribeca fest in April, leads a new breed of filmmakers whose work is close in style to new Argentinean titles or American indie pics.

“Within this new generation of filmmakers are university-educated producers who are finding new, intelligent ways to raise private money,” says Wood.