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The operation consists in a framework loan (FL) with the sovereign loan under the Team Europe Green Hydrogen Fund for Chile, which is a platform to finance the incipient green hydrogen market, foster local supply chains and strengthen the potential for green hydrogen exports to Europe.
The project is part of the Team Europe Initiative (TEI) on green Hydrogen Development in Chile, aiming to support the decarbonisation of the Chilean economy, create green jobs and generate business opportunities for Chilean and European companies, whilst contributing to meet Europe's own demand for import of green hydrogen. The TEI is promoted by the EU Delegation in Chile.
The proposed operation consists of an up to EUR 100m (or its equivalent in USD) framework loan to the Republic of Chile, to promote the country's green hydrogen economy. The EIB financing, to be structured as a framework loan (FL), will be integrated in the Team Europe Green Hydrogen Fund for Chile.
The Team Europe Green Hydrogen Fund for Chile is a joint initiative by the EIB, KfW and the Delegation of the European Union in Chile to promote the incipient green hydrogen market in Chile, foster local supply chains and strengthen the potential for green hydrogen exports to Europe, while considering the importance of a just energy transition. The presented initiative also has the potential to become a role model in the region.
The operation is expected to address in particular the market failure of negative climate and environmental externalities, as well as positive knowledge/learning externalities.
The EIB will provide long-term financing for the economic life of the assets and EIB's contribution is an important element of the overall financing plan in terms of additionality, diversification as well as duration and pricing. EIB's involvement will complement the financing provided by other International Financial Institutions, therefore facilitating the financing of the full programme.
The EIB will require the promoter to ensure that the implementation of the project will be done in accordance with the EIB's Environmental and Social Standards.
The EIB will require the promoter to ensure that the implementation of the project is carried out in accordance with the EIB's Guide to Procurement.