In Chile, the European Investment Bank (EIB) will fund climate action projects with over €300 million. This allocation includes the bank's first green mortgage loan outside Europe, and projects involving hydrogen are included in the plan.
Chile witnessed a significant milestone in its journey towards sustainable housing on July 17, 2023, with the European Investment Bank (EIB) announcing its first-ever residential mortgage-based loan outside the EU. The loan, worth €200 million, will finance mortgages for approximately 2,600 new housing units with improved energy efficiency standards [1].
This innovative initiative marks a pioneering step by the EIB in promoting sustainable housing beyond Europe. The transaction represents the first EIB residential mortgage-based loan targeted at energy-efficient housing outside the EU, demonstrating the EIB's commitment to climate and sustainable finance in Latin America, particularly Chile [2].
The loan, intermediated through the Banco del Estado de Chile, aligns with the EIB's broader strategy to support green investments globally and assist local financial institutions in expanding affordable, energy-efficient housing finance [2]. The Banco del Estado de Chile, with a history associated with inclusion and financing for social housing, is poised to collaborate with energy efficiency and become a pillar of sustainable development in Chile [3].
The new buildings will reduce energy consumption, increase thermal comfort, and minimize low- and middle-income household energy consumption and costs. This financing innovation is expected to expand access to affordable financing for energy-efficient homes, improving energy performance standards within the Chilean residential housing sector [2].
The operation also signals to other Latin American markets that green mortgages are viable and scalable, potentially catalyzing similar products in the region and attracting additional investors focused on sustainability [2]. It strengthens partnership efforts between the EIB and regional development banks such as the Inter-American Development Bank (IDB), helping to mobilize larger resources for sustainable development finance in Latin America [2][4].
The EIB's commitment to Chile extends beyond this green mortgage loan. The bank also announced the approval of a €100 million loan under the Team Europe Renewable Hydrogen Funding Platform for Chile to support the decarbonisation of Chile's economy [5]. This loan is part of the European Union's Global Gateway initiative, which supports projects in the digital, climate, transport, health, energy, and education sectors [6].
Chile's ambition to make its main sources of energy generation renewable and clean, with 100% clean energy before 2050, finds a strong ally in the EIB. The EIB Global is designed to foster strong, focused partnership within Team Europe and bring the Group closer to local people, companies, and institutions through offices across the world [7].
The collaborative work between the EIB and Chile was appreciated by both parties. Daniel Hojman, President of the Banco del Estado de Chile, expressed happiness about receiving the loan from the European Investment Bank, while Diego Pardow, Minister of Energy of the Republic of Chile, expressed Chile's ambition to establish a stable plan for long-term investments in the renewable hydrogen industry [8].
Energy savings from the project will contribute to the reduction of local air pollution due to decreased biomass usage and lower greenhouse gas emissions linked to the use of fossil fuels. The EIB's initiatives in Chile are part of a growing trend where the bank extends its expertise and funding into emerging markets, supporting climate-friendly infrastructure and housing with innovative financial products [1][2][4].
Between 2021 and 2027, the European Union expects to mobilize up to €300 billion of investments for sustainable and high-quality projects. The EIB and 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 renewable energies.
References:
- Banco del Estado de Chile
- European Investment Bank
- Banco del Estado de Chile
- Inter-American Development Bank
- European Investment Bank
- European Commission
- European Investment Bank
- Ministerio de Energía de Chile
- This residential mortgage loan by the European Investment Bank (EIB) marks a significant step towards promoting the hydrogen economy, with the focus on green hydrogen as a clean energy source, in Chile.
- The EIB's commitment to climate and sustainable finance extends to Chile's energy transition, as evidenced by the €100 million loan for decarbonizing Chile's economy through renewable hydrogen.
- The Banco del Estado de Chile, with a history in financing for social housing and inclusion, will collaborate with energy efficiency to become a pillar of sustainable development, contributing to improving energy efficiency standards in the residential housing sector.
- The operation signals a potential growth in the use of green mortgages in Latin America, contributing to the region's energy transition and the reduction of greenhouse gas emissions.
- The EIB's initiatives in Chile are part of a larger global trend, aiming to mobilize resources for sustainable development finance, supporting climate-friendly infrastructure and housing through innovative financial products.
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