The executive board of the World Bank (WB) has given the green signal to a substantial $150 million loan to spur investment in green hydrogen projects in Chile.
This pivotal step is poised to expedite Chile’s green growth trajectory, drive its energy transition, and provide crucial support for its ambitious target of achieving carbon neutrality by 2050. Notably, this marks the first-ever global loan by the World Bank aimed at propelling green hydrogen initiatives and bolstering climate change mitigation endeavors.
The heart of this initiative, the Green Hydrogen Facility project, is set to catalyze a resilient, inclusive, and eco-conscious economic development agenda. The beneficiaries are expected to primarily be local communities where the production and utilization of clean hydrogen will unfold. Beyond environmental benefits, the project’s ripple effects are anticipated to encompass generating green jobs, invigorating the economy, and effectively decarbonizing local industries.
The implementation reins of this groundbreaking endeavor fall in the hands of the Chilean Production Development Corporation (Corfo). The loan will be channeled towards creating a fund that seamlessly blends public and private financing for a spectrum of green hydrogen projects. This fund’s establishment aligns with a broader goal of developing risk mitigation instruments that inherently enhance the financial conditions for these ventures. Moreover, the project will provide much-needed technical assistance, playing a pivotal role in nurturing the growth of this nascent industry.
The World Bank’s strategic involvement serves as a linchpin in mobilizing private sector resources and engaging multilateral partners to rally behind this burgeoning sector. This financial infusion is expected to act as a springboard, potentially unlocking investments of at least $280 million from the private sector. The project’s overarching objective is to kickstart early investments in green hydrogen production, thereby fast-tracking projects from pilot stages to full-fledged commercial operations.
Chile has set its sights on a lofty target – to be a global frontrunner in green hydrogen production. By 2030, the nation aims to achieve the remarkable feat of producing the world’s most cost-efficient hydrogen. Looking ahead, Chile is charting a course to secure a place among the top three hydrogen exporters globally by 2040. According to projections outlined in Chile’s National Green Hydrogen Strategy, this sector possesses the potential to attract a staggering $330 billion in private investment and pave the way for annual exports totaling around $30 billion by 2050.
This ambitious green hydrogen journey is further bolstered by the collaborative efforts of the Chilean Production Development Corporation (Corfo) and their partnership with the Hydrogen Association for Development (H4D), an initiative orchestrated by the World Bank and administered by the Energy Sector Management Assistance Program (Esmap). This synergy seeks to accelerate hydrogen’s progress in emerging markets and developing nations, harnessing its potential as a game-changer in the global energy landscape.
