Leveraging extraordinary potential for green hydrogen: KfW supports Chile in mobilising private investment

• EUR 100 million for a promotional loan to build a green hydrogen economy
• Contributing to the sustainable transformation of the Chilean economy
• Basis for future hydrogen partnerships with European customers

On behalf of the Federal Ministry for Economic Affairs and Climate Action (BMWK), KfW has today signed a contract with the Republic of Chile, represented by the Chilean Ministry of Finance, and the Chilean economic development agency Cooperación de Formento de la Producción (CORFO) for a promotional loan of EUR 100 million to build a green hydrogen economy in Chile that takes social and environmental concerns into account. The loan is part of the European Global Gateway Renewable Hydrogen Funding platform, which offers tailored financing for private and public investments. It will comprise a total of up to EUR 1 billion, with which CORFO will refinance banks or issue guarantees to them. In turn, the banks will provide loans to private and public hydrogen projects. Projects for the production and use of green hydrogen along the entire value chain will be financed. These could be, for example, plants for the production of green hydrogen (e.g. renewable energy projects and electrolysers) and its further processing (e.g. to form ammonia). In addition, storage and transport infrastructure as well as projects for the industrial use of green hydrogen (e.g. for steel production) and factories for the manufacture of electrolysers can also be financed.

“Chile has extraordinary potential when it comes to renewable sources of energy for the successful development of hydrogen production. In order to take advantage of this, leveraging private investments for market development is essential. KfW's financing will have a structure-building effect at an early stage in order to mobilise private capital to finance Chilean green hydrogen projects on an industrial scale. At a later date, this will also enable the sale of green hydrogen to European customers within the framework of hydrogen partnerships,”

says Christiane Laibach, Member of the Executive Board of KfW Group.

With its large areas of available land, sunny deserts and strong winds in the south, Chile offers excellent conditions for building a globally competitive hydrogen economy. This will drive the sustainable transformation of the Chilean economy, open up business opportunities for Chilean and European companies and underline the importance of a fair energy transition.

The promotional loan will support the internationally agreed Team Europe Initiative (TEI) promotional programme by the EU and its Member States. KfW’s financing is also in line with the German Federal Government’s hydrogen initiative and the EU’s development goals. The financing platform will be able to provide funding of almost EUR 1 billion. Of this amount, EUR 100 million will come from KfW, EUR 100 million from the European Investment Bank (EIB), EUR 16.5 million from the EU, USD 150 million from the World Bank and EUR 400 million from the Inter-American Development Bank (IDB). Around EUR 230 million will be provided by CORFO and other financiers.

Further information on KfW Development Bank is available at: www.kfw-entwicklungsbank.de