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How to de-risk green hydrogen development in LatAm

Bnamericas Published: Monday, December 26, 2022
How to de-risk green hydrogen development in LatAm

National infrastructure platforms (NIPs) would help Latin America and the Caribbean to maximize public investment, particularly in new technologies such as green hydrogen.

That is according to a study published by IDB that pitches the platform model as a new public policy instrument to help with fiscal restrictions.

“Since the infrastructure challenges of the region will not be met with public funding, NIPs will permit countries to optimize the role of public investment as a financial enabler for private investment,” the research highlights.

The instrument has three main functions: project preparation, de-risking, and financial structuring.

In the case of green hydrogen, the study’s authors point to the alternative fuel’s limited operating history and high costs which may curb large-scale private investment.

“To mitigate the main risks identified in green hydrogen projects, the NIP's de-risking function would offer tailor-made financial solutions.” Concessional financing and credit risk mitigation instruments are two options.

The IDB research paper is available here.

Also Read

Brazil studying tax benefit for hydrogen projects

Bolivia’s green hydrogen plans pique foreign interest

IFC upbeat on Chile's potential, urges green hydrogen embrace

Ecuador designs a roadmap for the production and use of green hydrogen with the aim of advancing towards the energy transition

Colombia includes hydrogen in clean energy tax breaks

Launch of The Roadmap for a Green Hydrogen Economy in Trinidad and Tobago

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