EIB Funds Chilean Climate Projects

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by KnowESG
KnowESG_EIB's climate action projects in Chile
Image courtesy of EIB

During the EU-CELAC Summit of Heads of State and Government, the European Investment Bank (EIB) made a significant announcement regarding its first-ever residential mortgage-based loan for financing energy-efficient housing units outside the EU.

In collaboration with Banco del Estado de Chile and guaranteed by the EU, the EIB has granted a €200 million loan to support the development of approximately 2,600 new housing units with improved energy efficiency standards.

The introduction of these energy-efficient buildings aims to reduce energy consumption and enhance thermal comfort for low- and middle-income households. By achieving significant energy savings, this initiative will also contribute to reducing local air pollution resulting from decreased biomass usage and lower greenhouse gas emissions associated with fossil fuel consumption.

This landmark project is classified as a 100% Climate Action endeavour and represents the EIB's first residential mortgage-based lending venture for promoting access to energy-efficient housing units outside the EU.

In addition to this milestone, the EIB reaffirmed its commitment to supporting Chile's renewable hydrogen industry during the EU-CELAC Summit. It announced the approval of a €100 million loan through the Team Europe Renewable Hydrogen Funding Platform for Chile.

This platform aims to facilitate the decarbonisation of Chile's economy by creating green jobs, fostering business opportunities for both Chilean and European companies, and helping Europe meet its renewable hydrogen import demands.

The Team Europe Renewable Hydrogen Funding Platform for Chile is part of the European Union - Latin America and the Caribbean Global Gateway Investment Agenda, which prioritises investment projects to address infrastructure needs in the region while promoting local value creation, growth, decent jobs, and social cohesion.

Under this platform, the EIB can provide financing to the Republic of Chile, with the Corporación de Fomento de la Producción (CORFO) acting as the implementing agency to channel funds into renewable hydrogen initiatives.

By supporting Chile's goal of achieving 100% clean energy generation before 2050, the Team Europe Renewable Hydrogen Funding Platform for Chile contributes to the country's efforts to transition to renewable and clean energy sources.

As part of the EU-CELAC Summit, EIB President Werner Hoyer and Chile's Minister of Energy, Diego Pardow, signed a declaration of intent to further enhance cooperation and financing actions for the development and sustainable deployment of green hydrogen, renewable energies such as geothermal, solar, and wind, energy storage technologies, energy efficiency, and electromobility. This partnership aims to accelerate Chile's energy transition and decarbonisation process.

Werner Hoyer, EIB President, expressed pride in the growing cooperation between the European Union and Chile through investments in climate action and new green technologies. He emphasised the EIB's dedication to achieving global climate goals while creating opportunities for growth and employment.

Ursula von der Leyen, President of the European Commission, hailed the EIB's contribution to the Team Europe Renewable Hydrogen Fund for Chile, highlighting its support for the strategic development of the hydrogen industry in Chile. She emphasised the positive impact this initiative would have on job creation, local value added, and Chile's export capacity, particularly towards its partners like the EU.

Gabriel Boric, President of the Republic of Chile, expressed satisfaction with the long-standing cooperation between Chile and the European Union in the energy sector. He emphasised the shared vision and commitment to urgent climate action, aiming to achieve carbon neutrality by 2050. He praised these initiatives for fostering a cleaner, more sustainable, and just society.

Daniel Hojman, President of the Banco del Estado de Chile, expressed gratitude for the loan granted by the European Investment Bank, highlighting BancoEstado's dedication to financing and promoting access to social housing and energy efficiency. He stated that BancoEstado aims to become a pillar of sustainable development in Chile.

Diego Pardow, Minister of Energy of the Republic of Chile, appreciated the collaborative efforts with the EIB, particularly highlighted by the signing of the Joint Declaration of Intent.

He considered the recent signals from multilateral banks as a testament to Chile's credibility in its endeavours. Pardow expressed Chile's commitment to establishing a stable plan that encourages long-term contracts and investments to foster the development of the renewable hydrogen industry.

These three projects are part of the European Union's Global Gateway initiative, which aims to enhance global and regional connectivity in sectors such as digital technology, climate action, transportation, healthcare, energy, and education.

The Global Gateway serves as the European Union's contribution to narrowing the global investment gap, with a mobilisation target of up to €300 billion between 2021 and 2027 for sustainable and high-quality projects. The initiative takes into account the needs of partner countries and ensures lasting benefits for local communities.

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Source: EIB

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