Chile to launch US$1bn green hydrogen fund this year

Chile’s development agency Corfo will start supporting green hydrogen projects through a US$1 billion fund to be created later this year.

“The idea is that there will be two ways to access these funds. One will be through a loan with better terms than those found in the market, and the other via a guarantee to access other loans,” Ángel Caviedes, head of the energy ministry’s new energies unit, told BNamericas at the Latam Mobility Cono Sur summit in Santiago.

The new mechanism will finance projects involving green hydrogen demand, generation and components manufacturing. 

Funding for the initiative will come from the IDB, the World Bank, the European Investment Bank (EIB), German development bank KfW, and Latin American development bank CAF.

Caviedes told the summit that the lack of specific regulations for the new industry remains one of the biggest bottlenecks for Chile’s green hydrogen plans, but the ministry has a protocol in place to avoid projects getting stalled due to this issue.

Currently, project owners can request sector permits under existing norms, and there are several large-scale green hydrogen projects undergoing environmental evaluation.

The government has issued security guidelines for green hydrogen installations and will publish a new schedule in September to draft additional industry regulations, said Caviedes. 

Chile’s green hydrogen strategy, which is focused on both domestic consumption and exports, also includes infrastructure plans.

A key part of those plans is turning the Laredo port in far-south region Magallanes into a hub for green hydrogen production and sale.

The project, which is developed through an alliance between state oil firm Enap, HIF Chile, HNH Energy and Total Eren, is in the process of entering the permitting stage.