Government of Chile signs agreements with the IDB and the World Bank to promote green hydrogen projects

PRESS RELEASE from Corfo
November 11, 2022

This is an automated translation of the original press release issued in Spanish

Sharm-el Sheikh, Egypt, Friday, November 11, 2022.- Within the framework of Chile's presence at the twenty-seventh Conference of the Parties United Nations Framework Convention on Climate Change (UNFCCC) COP 27, the vice president of Corfo , José Miguel Benavente and Demetrios Papathanasiou, Global Director of Energy and Extractive Industries of the World Bank, signed an agreement to promote green hydrogen initiatives in Chile called "Green Hydrogen Facility Project to support Green, Resilient and Inclusive Economic Development".

“This alliance, which has been in preparation for several months, will allow us to have support to develop the Green Hydrogen strategy. These international organizations are going to contribute knowledge, resources and also their experience in the link with the areas that cover the private sector in these institutions, in such a way that, in the future, the participation of private companies in the industry can also count on the support of these international organizations through their windows”, highlighted from Chile the Minister of Finance, Mario Marcel.

Since 2020, Chile has had a National Green Hydrogen Strategy, with long-term national and global implications. “We understand the H2v industry as a key piece to face the challenges of decarbonization of the country, to advance in terms of diversification and productive sophistication and as a source of impetus for science and technology, linking its deployment with local research and development. For this reason, we are generating various financial support mechanisms for both R&D&i and investment in productive projects in the field of H2v," said CORFO's vice president, José Miguel Benavente.

In the case of the agreement with the Inter-American Development Bank (IDB), the priority given to the Program to support the green hydrogen industry in Chile is ratified, which constitutes the second individual operation under the Conditional Credit Line for Investment Projects (CCLIP) for Productivity and Sustainable Development in Chile. This will be financed through a results-based investment loan for an IDB financing amount of up to US$400 million.

The general objective of the Program aims to contribute to the development of the green hydrogen industry in Chile, increase investments in this type of project, improve the enabling conditions for the development of the sector in labor, institutional and innovation capacities; and promote the development of the regions where green hydrogen production projects are installed.

In this regard, Graham Watkins, head of the IDB's climate change and sustainability division, stated that “Latin America has the energy matrix with the highest percentage of clean and renewable energies. Chile has latent comparative advantages to compete in the global green hydrogen market. This agreement will help the country accelerate its commitment to decarbonization.”

In a first stage, the initiative with the World Bank will allow access to a loan for a total of US$150 million in 2023, and for US$200 million in a second stage, with the purpose of contributing to the development of the green hydrogen industry (H2V) in Chile.

Meanwhile, Marianne Fay, director of the World Bank for Bolivia, Chile, Ecuador and Peru stated that "social and environmental aspects, such as sustainable water supply and proper management of natural resources, will be essential to guarantee the implementation of projects of green hydrogen in the territories. Likewise, the association with local communities and the promotion of local productive value chains are fundamental requirements to guarantee shared prosperity and a just transition derived from the green hydrogen industry”.

Recognizing Chile's efforts to advance the green hydrogen agenda, the World Bank has invited Corfo to be part of the new Hydrogen Partnership for Development (H4D) which will be launched with the presence of the Minister of Energy, Diego Pardow , in the World Bank pavilion at COP27. This new association will be made up of more than 15 institutions from countries such as Brazil, Japan and the United Kingdom, with the purpose of accelerating the development of knowledge, policies and investments that allow the deployment of green hydrogen.

For her part, María Paz de la Cruz, general manager of H2 Chile, pointed out that "although Chile makes minor contributions in terms of emissions, it is one of the most vulnerable countries to the impacts of climate change and that is why a such a determined commitment to carbon neutrality and the adoption of new low-emission technologies such as green hydrogen”.