IDB Approves $400 Million Loan to Develop Chile's Green Hydrogen Industry

(Reuters) — The Inter-American Development Bank (IDB) approved a $400 million loan to develop Chile's green hydrogen industry, the bank said Wednesday.

The funds will go to financing projects in the industry, developing domestic demand, training and research, among other things, the IDB said.

Green hydrogen is made using renewable energy to split water by electrolysis, without producing greenhouse gases. So-called grey hydrogen, the current standard, is extracted from coal or natural gas.

The green hydrogen industry is an opportunity for Chile, the development bank said, due to Chile's ability to produce renewable energy at low cost. It would also reduce Chile's current rate of carbon dioxide emissions, which is the highest per capita among countries in Latin America and the Caribbean, the bank added.

However, investment in Chile's green hydrogen industry "is still incipient," the development bank said in a statement.

"The IDB loan... allows the country to advance in the development of a high-potential sector that, in addition to boosting the economy, will contribute to promote environmental sustainability," said the bank's Chile representative, Maria Florencia Attademo-Hirt.

The loan is the second credit operation under a previously approved $1 billion credit line, the IDB added. In December 2022, the bank approved $400 million to support the country's micro, small and medium-sized enterprises.

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