Santiago, Chile – In a significant boost to Chile's ambitious clean energy goals, the European Union (EU), the European Investment Bank (EIB), and KfW Development Bank have pledged up to €216.5 million to finance renewable hydrogen projects in the country. Agreements formalizing the "Team Europe Renewable Hydrogen Funding Platform for Chile" were signed today in Santiago, marking a crucial step towards Chile's target of achieving 100% clean energy by 2050 and positioning it as a leader in green hydrogen production.
The landmark agreement was witnessed by key figures including European Commissioner for International Partnership Jozef Síkela, Chilean Minister of Energy Diego Pardow, Executive Vice-President of Chile's development agency CORFO José Miguel Benavente, EIB Director of the International Partners Department Thouraya Triki, and German Chargé d’Affaires a.i. Thomas Schmitt, representing KfW.
This collaborative initiative, operating under the umbrella of the EU-Latin America and the Caribbean Global Gateway Investment Agenda (GGIA), aims to decarbonize Chile's economy, generate green jobs, and create valuable business opportunities for both Chilean and European companies. Furthermore, it will contribute to meeting Europe's growing demand for imported renewable hydrogen, fostering stronger economic ties between the two regions.
Under the newly established platform, the EIB and KfW will each provide financing of up to €100 million to the Republic of Chile. CORFO will act as the implementing agency, responsible for channeling these funds towards promising renewable hydrogen initiatives across the country. Complementing this substantial financial commitment, the EU Latin America and Caribbean Investment Facility (LACIF) will provide an additional grant of €16.5 million, further accelerating project development.
The funding is specifically earmarked to support Chile's aspiration to transition its primary energy sources to renewable and clean alternatives. It is estimated that this financial injection will contribute to the development of at least 150 MW of new renewable energy generation capacity and an equivalent 150 MW of new electrolyser capacity within Chile. Electrolysers are crucial components in the production of green hydrogen, using electricity to split water into hydrogen and oxygen.
European Commissioner Jozef Síkela emphasized the EU's commitment to renewable hydrogen as a cornerstone of the future energy landscape, stating, "With this agreement, the European Union reaffirms its vision of renewable hydrogen as a pillar of the energy of the future, and together with Chile, a leader in the region in this field, we are advancing the development of this key industry. This initiative is a clear example of Team Europe's commitment to sustainability, the creation of green jobs, and the strengthening of our economic ties."
Chilean Minister of Energy Diego Pardow highlighted the broader benefits of this collaboration, noting, "The creation of the green hydrogen industry is not only an opportunity to continue the decarbonization process but can also contribute to providing quality jobs and opportunities for the regions where future projects will be located. Therefore, this initiative led by the European Union, which is another step in our long and close collaboration, is great news for the energy industry but also for the citizens of our country."
Executive Vice-President of CORFO José Miguel Benavente underscored the significance of the funding platform in overcoming the challenges of establishing a green hydrogen industry. "The creation of CORFO's Green Hydrogen Facility, with contributions from multilateral institutions, including KfW and the European Investment Bank, constitutes a very relevant and necessary step forward to have financial instruments that can provide a relevant signal from the State in order to support the development of the industry and large-scale projects. We take on this challenge with great energy and enthusiasm."
Thouraya Triki, EIB Director of the International Partners Department, speaking on behalf of EIB Vice-President Ioannis Tsakiris, affirmed the EIB's dedication to Chile's green hydrogen ambitions. "The Team Europe Renewable Hydrogen Funding Platform for Chile will play a key role in supporting the Chilean government’s efforts to develop a sustainable and competitive renewable hydrogen sector. By aligning with Chile’s ambitious climate action goals, we are fostering green energy solutions that create jobs, drive innovation and strengthen EU-Latin America cooperation. This partnership reflects our shared vision for a cleaner, more sustainable future."
Thomas Schmitt, the Chargé d'Affaires of the German Embassy in Chile, representing KfW, highlighted Chile's exceptional potential in renewable energy. "Chile has exceptional renewable energy potential for the development of green hydrogen production. To leverage this potential, it is essential to catalyze private investment. In a first stage, financing from KfW on behalf of BMWK will support the mobilization of private capital for Chilean hydrogen projects. In a later stage, this should also enable the export of green hydrogen to European customers within the framework of hydrogen partnerships."
Background: Chile's Green Hydrogen Strategy and the Global Gateway Initiative
Chile has emerged as a frontrunner in the race to develop green hydrogen, leveraging its abundant solar and wind resources, particularly in the Atacama Desert and Patagonia. The country has set ambitious targets for green hydrogen production and export, recognizing its potential to contribute to global decarbonization efforts.
The Team Europe Renewable Hydrogen Funding Platform for Chile aligns with the European Union's broader Global Gateway Investment Agenda. This initiative aims to mobilize up to €300 billion in investments between 2021 and 2027 for sustainable and high-quality projects worldwide, focusing on key sectors such as digital, climate, transport, health, energy, and education. By supporting projects like Chile's renewable hydrogen development, the Global Gateway seeks to address infrastructure needs in partner countries while fostering local added value, economic growth, and social cohesion.
About the Involved Institutions:
European Investment Bank (EIB): The EU's long-term lending institution, owned by its member states, financing investments that support EU policy objectives. EIB Global is its specialized arm for international partnerships and development finance.
KfW Development Bank: A German state-owned development bank that provides financial cooperation to developing countries and emerging economies.
European Union (EU): A political and economic union of 27 member states located primarily in Europe.
Corporación de Fomento de la Producción (CORFO): The Chilean government agency responsible for promoting economic growth and industrial development in Chile.
EU Latin America and Caribbean Investment Facility (LACIF): An EU initiative that provides grants and technical assistance to leverage investments in Latin America and the Caribbean.
This significant financial commitment from Team Europe underscores the growing international recognition of green hydrogen's potential and Chile's pivotal role in its development. The collaboration is expected to accelerate the deployment of renewable hydrogen technologies, contributing to a cleaner energy future for both Chile and Europe.
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