Chile’s hydrogen project finance-brokering platform open for business

Hydrogen and derivatives projects have started entering an online platform established in Chile to link developers with potential financial backers, BNamericas was told.

In parallel, the Chilean office of German sustainable development cooperation agency GIZ, which is spearheading the initiative, has hired a consultancy to provide free-of-charge financial and technical planning support to project owners.

Branded Financial Service Assistance (FSA) and launched last half, the scheme is open to local and international players with projects that have a minimum ticket size of US$10 million. This includes projects in the wider hydrogen value chain.

Through an encrypted FSA dashboard, developers can apply for the bespoke and independent consulting services. 

An associated objective is providing a project shop window for potential backers interested in providing financing. 

“Projects submitted so far vary in status, and we’re receiving more,” Álvaro Castro, GIZ Chile renewable hydrogen financial advisor, said.

“Some are in the devex [development expenditure] phase, others in the project financing phase, but the trend is early devex.”

As of September 24, 11 projects had been submitted, together seeking investment of US$3.8 billion. 

Five are geared to meeting domestic demand – including a green copper project and a transport initiative – and six to the export market, with associated output of 3.4Mt/y ammonia and 75,000t/y of hydrogen.

Five are earmarked for northern region Antofagasta, two central region Biobío and one southern region Magallanes. Three projects target multiple jurisdictions. 

Demand for financing exists particularly among owners of medium-sized hydrogen projects, to support early-stage development work in the areas of engineering and permitting as well as to help get projects built.

“Through FSA, GIZ is working directly with projects,” Castro said. “This is a real state-of-the-art catalyst, to help address the needs they have.”

Part of the project Team Europe for the Development of Renewable Hydrogen in Chile, which is co-financed by the EU and the German Ministry of Economics and Climate Protection (BMWK), FSA is among several GIZ financing initiatives. These include a project underway to introduce contracts for difference in Chile to help bridge the initial price gap expected between green hydrogen and its derivatives and conventional fossil fuels. 

Given the large price tags of many projects planned and the longer-than-usual terms of financing required, innovation is deemed necessary, such as combining multiple sources of capital.

Chile has around 70 publicly announced green hydrogen and derivative projects, some targeting the export market, some the domestic market, others both.

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Pilot projects are operating, and commercial-scale initiatives have entered the environmental review phase. 

The FSA dashboard is accessible via the website of 4e Chile, a cluster of renewable energy and energy efficiency projects financed by the German State and implemented by GIZ in cooperation with the Chilean energy ministry.

Projects can be submitted via the FSA dashboard until October 2025.

General metrics, such as number of projects and associated outlay, can be viewed by the public.