Chile: EIB to finance climate action projects in Chile with more than €300 million including its first green mortgage loan outside Europe

July 18, 2023 by European Union Leave a Comment

This article is brought to you in association with the European Commission.

€200 million loan to Banco del Estado de Chile to finance mortgages for new housing units with improved energy efficiency standards under Ecovivienda Program.

Team Europe Renewable Hydrogen Funding Platform for Chile to support Chile’s renewable hydrogen industry with more than €100 million and help meet the country’s target of 100% clean energy by 2050.

EIB and Ministry of Energy of Chile to further develop cooperation and financing actions that accelerates the energy transition in Chile.

During the EU-CELAC Summit of Heads of State and Government, the European Investment Bank (EIB) today announced the signature of its first ever residential mortgage-based loan to finance access to energy efficient housing units outside the EU. The €200 million loan to Banco del Estado de Chile, guaranteed by the EU, finances mortgages for approximately 2,600 new housing units with improved energy efficiency standards.

The energy performance level of the new buildings will reduce energy consumption, increase thermal comfort in the dwellings while minimising low- and middle-income household energy consumption and costs. Energy savings will contribute as well to the reduction of local air pollution due to decreased biomass usage and lower greenhouse gases emissions linked to the use of fossil fuels.

The operation qualifies as a 100% Climate Action project, and it is the first EIB residential mortgage-based lending to finance access to energy efficient housing units outside the EU.

In addition, at the EU-CELAC Summit, the EIB confirmed support for Chile’s growing renewable hydrogen industry and announced the approval of a € 100m loan under the Team Europe Renewable Hydrogen Funding Platform for Chile. The platform will support the decarbonisation of Chile’s economy, creating green jobs and generating business opportunities for Chilean and European companies while also helping Europe meet its import demand for renewable hydrogen. The Team Europe Renewable HydrogenFunding Platform for Chile is part of the European Union – Latin America and the Caribbean Global Gateway Investment Agenda that highlights priority investment projects to help address infrastructure needs in Latin America and the Caribbean, while creating local added value and promoting growth, decent jobs and social cohesion.

Under the platform, the EIB can provide financing to the Republic of Chile, with Corporación de Fomento de la Producción (CORFO) as the implementing agency to channel the funds to renewable hydrogen initiatives. The Team Europe Renewable Hydrogen Funding Platform for Chile supports Chile’s ambition to make its main sources of energy generation renewable and clean, with 100% clean energy before 2050.

In the context of the EU-CELAC Summit, Werner Hoyer, President of the EIB, and Diego Pardow, Minister of Energy of the Republic of Chile, signed a declaration of intent to further develop cooperation and financing actions for the development and sustainable deployment of green hydrogen and derivatives, renewable energies such as geothermal, solar and wind, among others, storage technologies, energy efficiency and electromobility, supporting a decarbonisation process that accelerates the energy transition in Chile.

“I am proud to see the cooperation between the European Union and Chile growing through investments in climate and new green technology. These initiatives demonstrate how Team Europe and Global Gateway can bring value to partners like Chile in their ambitious climate action agenda. At the EIB, we are determined to achieve global climate goals while creating new growth and employment opportunities,” said Werner Hoyer, EIB President.

Ursula von der Leyen, President of the European Commission, said: “Just a month after we launched it, the Team Europe Renewable Hydrogen Fund for Chile is coming to life, with this important EIB contribution backed by Global Gateway. It will support the development of this strategic industry in Chile, creating good jobs and local value added. And it will boost Chile’s export capacity towards its partners, like the EU. So this is really a win-win”.

Gabriel Boric, President of the of the Republic of Chile, said: “Chile and the European Union have a solid and long-standing relationship of cooperation in the energy sector. We share the same vision on the urgency of climate action and are committed to meet the Paris agreement by achieving carbon neutrality by 2050. These initiatives will contribute to rise the ambition for a cleaner, more sustainable and just society.”

“At BancoEstado we are very happy to receive this loan granted by the European Investment Bank. The history of BancoEstado is associated with inclusion, and in particular with financing and access to social housing. Today, a strategic objective of BancoEstado is to collaborate with energy efficiency and become a pillar of sustainable development in Chile,” said Daniel Hojman, President of the Banco del Estado de Chile.

Diego Pardow, Minister of Energy of the Republic of Chile, said: “We appreciate the collaborative work we are doing with the EIB, which is reflected today in the signing of this Joint Declaration of Intent. The signals given by multilateral banks in recent days are a sign of credibility towards the work that Chile is doing. What we want is to establish a stable plan that promotes long-term contracts for long-term investments. Chile is already preparing for the development of this new industry.”

The three projects are part of the European Union’s Global Gateway initiative supporting projects that improve global and regional connectivity in the digital, climate, transport, health, energy and education sectors. The Global Gateway is the European Union’s contribution to narrowing the global investment gap worldwide. Between 2021 and 2027, the European Union expects to mobilise up to €300 billion of investments for sustainable and high-quality projects, taking into account the needs of partner countries and ensuring lasting benefits for local communities.

Background information

About EIB Global

EIB Global is the EIB Group’s specialised arm dedicated to increasing the impact of international partnerships and development finance. EIB Global is designed to foster strong, focused partnership within Team Europe, alongside fellow development finance institutions, and civil society. EIB Global brings the Group closer to local people, companies and institutions through our offices across the world.

Tweets by EIBGlobal

https://www.linkedin.com/company/eib-global/

About EIB Global in Chile

The EIB is the largest multilateral public bank in the world. In 2022 it financed around €10.8 billion in investments outside of the European Union via EIB Global, the arm of the EIB created that same year for activities beyond Europe. Since the EIB started working in Chile in 1994, it has provided over €776 million to finance investments on favourable conditions — in terms of both maturity and interest rates — with the aim of improving Chileans’ quality of life.

About EIB Global in Latin America

EIB Global has been providing economic support for projects in Latin America since 2022, facilitating longterm investment with favourable conditions and offering the technical support needed to ensure that these projects deliver positive social, economic and environmental results. Since the EIB began operating in Latin America in 1993, it has provided total financing of around €13 billion to support more than 150 projects in 15 countries in the region.

About the Global Gateway initiative

EIB Global is a key partner in the implementation of the European Union’s Global Gateway initiative, supporting sound projects that improve global and regional connectivity in the digital, climate, transport, health, energy and education sectors. Investing in connectivity is at the very heart of what EIB Global does, building on the Bank’s 65 years of experience in this domain. Alongside our partners, fellow EU institutions and Member States, we aim to support investment of €100 billion (around one-third of the overall envelope of the initiative) by the end of 2027, including in Brazil and Latin America.

About the EU – Latin America and the Caribbean Global Gateway Investment Agenda:

The EU-LAC Global Gateway Investment Agenda is a political commitment to work together, identifying fair green and digital investment opportunities in Latin America and the Caribbean, which will benefit from the open environment generated by trade and investment agreements and will help achieve the Sustainable Development Goals. It will be delivered through Team Europe initiatives: the EU, its Member States, development financing institutions including the European Investment Bank (EIB), export credit agencies and all other public sources of funding will be working together in public-private partnerships with the private sector.

Quote(s)

Just a month after we launched it, the Team Europe Renewable Hydrogen Fund for Chile is coming to life, with this important EIB contribution backed by Global Gateway. It will support the development of this strategic industry in Chile, creating good jobs and local value added. And it will boost Chile’s export capacity towards its partners, like the EU. So this is really a win-win.Ursula von der Leyen, President of the European Commission

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