Cop 27: Chile inks deals for green hydrogen finance

Chile has signed financial agreements with the InterAmerican Development Bank (IDB) and the World Bank to boost green hydrogen development.

The two loan deals were signed this week at the Cop 27 UN climate conference in Sharm el-Sheikh, the country's economic development agency Corfo said.

The first agreement between Corfo and the IDB will provide a "results-based" investment loan of up to $400mn, aimed at broadly supporting the development of Chile's green hydrogen industry, including developing local workforce capabilities and supporting the development of the regions where green hydrogen projects are established.

The World Bank deal will allow access to a $150 million loan in a first stage in 2023 and a further $200mn in a second stage, with the same broad purpose of supporting Chile's development of green hydrogen.

"Chile has unique renewable resources and I believe we can have Chile fully [energy] independent by 2040," the World Bank's global director for energy and extractive industries Demetrios Papathanasiou said. "The [Chilean] government is serious and committed with this strategy to incentivize investors [to invest in green hydrogen]."

Chile launched a national green hydrogen strategy in 2020 which set out plans to become one of the world's top three exporters by 2040. Corfo is responsible for implementing that strategy, and is working with different ministries to create regulations to support three phases of development, Corfo vice-president Miguel Benavente said. The first phase will focus on attracting investments that promote green hydrogen; the second on promoting green hydrogen use in other sectors such as mining; and the third on supporting green hydrogen exports.

Chile has a pipeline of more than 80 green hydrogen projects, 15 of which now have confirmed start-up dates, the country's energy ministry has said. Energy minister Diego Pardow is expected to attend Cop 27 in the coming week for the 15 November launch of the World Bank's new Hydrogen for Development Partnership, an initiative aimed at boosting low-carbon hydrogen deployment in developing countries.

By Jacqueline Echevarria