Chile green hydrogen fund mulling first projects

A Chilean green hydrogen fund may start investing in its first projects by the middle of the year, BNamericas was told.

Projects could enter the construction phase by year-end.

The US$300mn Green H2 Fund is managed by venture capital player Genesis Ventures, which is currently analyzing a portfolio of around 12 pilot projects at various stages of development.

Projects with electrolyzer capacity of 20-100MW – and that are well-positioned to enter offtake agreements with local industry – are deemed particularly attractive.

Fund officials, as part of a launch plan, aim to pump money into an initial 2-3 projects. The overall target number of investments is 5-7.

The first phase of the fund has closed and it could inject money around mid-year, said José Luis Barrientos, one of three partners at Genesis Ventures, the others being Rodrigo Castro and Andrés Meirovich. “Hopefully by the end of December 2023 construction will also start; that’s our objective.”

Genesis Ventures recently signed an associated agreement, during a Chile Day investor event in London, with Chilean state development agency Corfo (pictured). As part of a push to help spur the country’s fledgling green hydrogen sector, Corfo has agreed to invest up to US$46mn in the fund. The balance would come from limited equity partners. 

Projects being considered include standalone green hydrogen and green hydrogen derivative plants with proposed power-purchase agreements, as well as production facilities with associated renewable energy plants to power them directly. Projects with energy storage elements are also being mulled.

“There are different configurations; the important thing for us is that they produce hydrogen or a derivative,” Barrientos said.

The focus is on scalable pilot projects geared to meeting local demand and with equity requirements of US$30mn-US$60mn each. Sectors or areas on the use-case radar include mining, cellulose, electromobility, navigation and salmon farming.

The green hydrogen wheels and cogs are starting to turn in Chile, which has a green hydrogen strategy and committed to achieving carbon neutrality by 2050. An e-gasoline pilot plant was launched in December and more than 30 projects, aimed at both the local and export markets, have been announced. A key attraction of Chile is the country’s investment environment and abundant renewable energy resources, needed to generate the cheap and plentiful electricity companies will require to produce low-cost hydrogen.

Smaller projects – or rather those geared to supplying only local offtakers in the first phase – should be faster to develop and bring online than large, export-focused initiatives.