IDB Invest prepares green hydrogen agreements in Latin America

Bloomberg — The private sector arm of the Inter-American Development Bank is in talks to provide financing for five Latin American projects involving green hydrogen with the aim of helping the region meet its climate change goals.

They have turned to IDB Invest to obtain financing to help expand plants and adapt products to use hydrogen produced from renewable energy, Bank CEO James Scriven said in a phone interview, declining to give details because the five mandates have not yet been approved by the bank’s board.

Green hydrogen is extracted from water using renewable energy and does not emit greenhouse gases during its production or use. It is increasingly considered as a possible alternative to diesel in industrial operations and transportation.. Companies are looking at how to use this fuel and governments hope to encourage its evolution by reducing costs, which would speed up the substitution of fossil fuels.

Chile, a major commodity exporter with fast-growing wind and solar power sectors, wants to foster a local hydrogen industry to help meet the country’s carbon targets. and encouraging companies to make the transition at a time of increasing investor scrutiny around environmental issues.

Potential green fuel deals would join IDB Invest’s work on renewable energy and the use of electric vehicles in Latin America after granting a record US$9.3 billion in loans last year. Much of the current work is focused on helping to mitigate early technology risk.

“It’s a great space for us,” Scriven said.

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