The Inter-American Development Bank (IDB) has approved a significant loan of $400 million to support the development of the green hydrogen industry in Chile.
This loan is part of a larger credit operation aimed at promoting productivity and sustainable development in the country, with a total value of $1 billion. The funding will contribute to the decarbonization of Chile’s economy and create new opportunities for productive development.
The IDB loan will play a crucial role in advancing Chile’s efforts to reduce carbon dioxide emissions and achieve its sustainability goals. Chile has the highest per capita CO2 emissions in Latin America and the Caribbean, surpassing countries like Brazil, Uruguay, and Peru. By strengthening the green hydrogen industry, Chile aims to make significant progress in reducing emissions by 50% by 2030 and achieving net-zero emissions before 2050.
According to the International Energy Agency (IEA), the demand for hydrogen is expected to increase significantly in the coming decades, with around 300 million tons of hydrogen produced annually by 2050. A substantial portion of this demand is projected to be in the form of green hydrogen, which is produced using renewable energy sources.
Chile possesses natural advantages for green hydrogen production due to its ability to generate renewable energy at low costs. Expanding the green hydrogen industry not only presents an opportunity for increased productivity but also contributes to the country’s sustainability objectives. By leveraging its renewable energy potential, Chile can become a major player in the global green hydrogen market.
The funds from the IDB loan will be allocated to various aspects of the green hydrogen value chain. These include financing new green hydrogen projects, developing local demand, investing in human capital, creating intermediate goods and services to support the industry, funding applied research and technological innovation, and promoting entrepreneurship within the sector.
Maria Florencia Attademo-Hirt, the IDB representative in Chile, emphasized the loan’s significance in increasing investments in the green hydrogen sector. She highlighted the economic and environmental benefits that the industry can bring to Chile, including environmental sustainability, addressing climate change, and fostering inclusive growth.
With this substantial financial support, Chile is poised to accelerate its transition to a greener and more sustainable future by harnessing the potential of green hydrogen. The loan from the IDB marks a significant milestone in Chile’s renewable energy journey and sets the stage for the country to become a leader in the global green hydrogen market.
