Europe and Chile discuss infrastructure support

To develop the nation’s budding green hydrogen sector, Europe may give the Chilean government an injection of 217 million euros (about US$210 million).

The proposed sovereign package focuses on infrastructure and, possibly, related areas like hydrogen certification and local skill development. These are measures aimed at encouraging private sector participation and ensuring that benefits are felt by all members of society.

The main goals of cooperation are to decarbonize Chile’s energy system and to take advantage of potential export opportunities. The package, which includes financing of 100 million euros from the European Investment Bank (EIB), 100 million euros from the German Development Bank KfW, and a grant of 17 million euros from the European Commission, is currently the subject of negotiations with Chile.

“It can be pipelines, it can be transmission lines, it can be port infrastructure, it can be desalination wherever it is needed, the water pipes. But it can also be investments that are softer, in terms of supporting skill-building, training for the local population so they can participate,” said María Shaw-Barragán (in photo), director of lending for Latin America, Africa and Asia at EIB.

“Our finance can also be used to make sure that there is a certification system that’s clear about what hydrogen is green. It has to be compatible with the region and, ideally, with the European Union if you’re thinking of exporting to the European Union.”

Claudio Huepe, the country’s former energy minister, stated in June that the government’s plans might involve constructing midstream infrastructure through the national oil company Enap that could be utilised by numerous projects.

The public and private sectors will both be able to benefit from this finance from the EIB. The bank is in discussions with both producers and potential off-takers on private-sector finance in the area, where Chile, Colombia, and Brazil are thought to be the leading producers of green hydrogen. Enel Chile’s electric utility and the EIB recently agreed to a $300 million loan for wind and solar projects, adding to the renewable energy resources that can be used to power electrolyzers.

Thought to be the most developed nation in Latin America along the green hydrogen highway, the nation already has a green hydrogen strategy that was released in 2020, and officials are currently putting the finishing touches on a companion roadmap. Small-scale testing units are functioning, a pilot production plant is being built, and developers are moving forward with a portfolio of early-stage initiatives, some of which have received funding from the development organisation Corfo to assist spur private investment. Purchases of electrolyzers are the focus of the subsidies.

Chile’s policy aims to produce the most affordable green hydrogen by 2030 and to have 5GW of electrolysis capacity under construction by 2025. With European port operators, Chile has already started to coordinate its activities.

To facilitate the progress of projects, community outreach and engagement as well as detailed yet expedited permitting are considered essential. Green hydrogen adoption is seen as a key element in Chile’s effort to achieve net zero carbon emissions by the year 2050, especially in areas like heavy transportation.