The Chilean government has taken a significant step towards the development of the green hydrogen industry by announcing a US$1 billion fund.
The fund aims to attract a total of US$12.5 billion in investments across various stages of the emerging sector. The joint statement from Chile’s Ministry of Energy, Ministry of Finance, and Ministry of Economy outlines the program’s objective to stimulate private investments in green hydrogen production and demand projects by reducing risks and costs. With support from international entities such as the Inter-American Development Bank, the World Bank, the German Development Bank, and the European Union, this financing program seeks to create a robust domestic consumption market and position Chile as a global exporter of green hydrogen.
Chile’s natural resources and favorable production conditions make it a prime location for green hydrogen production. The government references studies indicating that the country could potentially meet 5% of the global green hydrogen demand, surpassing its domestic requirements.
The program is slated to begin in the second half of 2024, with an initial injection of US$1 billion from loans and contributions provided by international entities and the European Union. The funding includes a US$400 million loan from the Inter-American Development Bank, a US$150 million loan from the World Bank, a US$100 million contribution from the German Development Bank, a US$109.67 million loan from the European Investment Bank, US$250 million from the Chilean Production Development Corporation (Corfo), US$16.45 million from the EU’s Latin America investment fund, and US$830,000 in technical assistance from the EU.
Corfo, as the implementing body, will utilize these funds to support international green hydrogen production projects in Chile and facilitate the transformation of energy suppliers in traditional sectors such as mining and agribusiness. This strategic initiative aims to accelerate the country’s energy transition and drive sustainable economic growth while capitalizing on its renewable energy potential.
The impact of Chile’s ambitious green hydrogen fund extends beyond its borders. By positioning itself as a global player in the green hydrogen market, Chile has the opportunity to become a major exporter, contributing to the worldwide decarbonization efforts and reinforcing its position as a leader in renewable energy.