Enel Green Power Chile and Highly Innovative Fuels (HIF), a unit of regional power producer AME, have won a $16.9m award in Chile’s ‘First Call for Green Hydrogen Project Funding in Chile’ – the world’s first national green H2 tender.

The funding will be used towards about 240MW of electrolysers in the first commercial phase of the Faro del Sur project in the Magallanes region at the southern tip of the South American nation. The project is expected to produce 25,000 tons of green hydrogen per year from local wind power.

“This marks a new step forward for a project that will produce green hydrogen through the wind-powered electrolysis process,” said Fernando Meza, business development manager for EGP Chile.

“It is a project that demonstrates our commitment to promoting innovative solutions that contribute to the sustainable development of the country.”

Magallanes is Chile’s southernmost region, facing Antarctica, and characterised by icy temperatures and strong winds.

The funding is promoted by Chile’s Production Development Corporation (Corfo), which awarded a maximum of $50m to green hydrogen projects. Corfo had received applications from 12 national and foreign companies.

One of the requirements to participate in the process was that the projects consider an electrolyser capacity of at least over 10MW. Additionally, the commissioning of the projects must not take place later than December 31st, 2025.

Other bidders in the world’s first green hydrogen tender include French utility Engie; industrial gas giants Linde and Air Liquide, from Ireland and France; Danish offshore wind developer and investor Copenhagen Infrastructure Partners (CIP); local steel producer and iron-one miner CAP, and Chilean LNG terminal GNL Quintero.

Chile has long been considered an ideal location for green hydrogen production because the price of power is the biggest contributor to the cost of splitting water molecules into hydrogen and oxygen — and the country has among the cheapest wind and solar power in the world, due to the strength and consistency of its sunshine and winds.

The country mulls using green hydrogen or its derivatives, such as green ammonia, both in its mining industry and for export.