Chile announces US$1B fund for green hydrogen industry development

The Chilean government has unveiled a US$1 billion fund to foster the green hydrogen industry, aiming to secure US$12.5 billion in investments throughout various stages of this emerging sector, according to a joint statement by the country’s Ministry of Energy, Ministry of Finance, and Ministry of Economy.

This financing program, backed by the Inter-American Development Bank (IDB), the World Bank, the German Development Bank, and the European Union, aims to stimulate private investments in green hydrogen production and demand projects by reducing risks and costs.

The initiative seeks to create a domestic consumption market and expand national production capacities, leveraging Chile’s competitive advantages to transform the nation into a green hydrogen exporter.

Government-referenced studies suggest Chile could generate 5% of the global green hydrogen demand, outpacing domestic requirements given the country’s conducive production conditions.

The program, set to commence in the second half of 2024, will initially feature US$1 billion funded through loans and contributions from international entities and the European Union, supplemented by resources from the Chilean Production Development Corporation (Corfo).

The first phase includes US$400 million from an IDB-approved loan, US$150 million from a World Bank loan, US$100 million from the German Development Bank, US$109.67 million from the European Investment Bank, US$250 million from Corfo, Us$16.45 million from the EU’s Latin America investment fund, and US$830,000 in technical assistance from the EU.

Corfo will allocate these funds towards international green hydrogen production projects in Chile and support energy transformation suppliers in traditional sectors such as mining or agribusiness.