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Green hydrogen, a clean burning fuel produced through electrolysis using electricity generated from renewable sources, is making a lot of noise and has become a centerpiece of strategic conversations about fighting climate change, decarbonizing industries and transforming economies. It was also the sole focus of the recently held, Hydrogen Congress for Latin America and the Caribbean (H2LAC), co-organized by New Energy Events and the Inter-American Development Bank for the first time this year.  During this two-day virtual event, an outstanding representation of regional stakeholders, including policy makers and global industry leaders, held key discussions around the development of a hydrogen industry in Latin America and the Caribbean, as well as the opportunities for the region to become a hydrogen world-leader.  It’s clear that green  hydrogen will play an important role in the clean energy transformation, though there is still a long road ahead.

How are countries positioning themselves

With such great representation, the discussion revolved around the importance of designing a road map for each country and the region as a whole. 

“The entire region must bet on making green hydrogen the fuel of the future together. This is a new industry and we must collaborate.” emphasized Francisco Javier López Díaz, from the Ministry of Energy of  Chile. 

Chile launched its green hydrogen strategy in November 2020, becoming the first country in the region to do so.  With 40 hydrogen projects already under development, it will be used mainly in the transportation and mining industries, and is expected to reduce 27% of GHGs.  The country is positioning itself to be an exporter of clean energy, and hopes to generate $33 Billion in revenue from this industry by 2050.  Chile is aiming  to produce the cheapest hydrogen by 2030, at a target price of $1.30/kg, a significant reduction from the current market price of over $4.00/kg. Chileans see hydrogen as an important vector for economic growth and job creation. 

Other countries such as Mexico, Costa Rica, Colombia, Brazil, Argentina, Peru, Uruguay and Paraguay are in the process of developing their hydrogen strategy.   They have included hydrogen as a component of their national energy planning, decarbonization and transportation strategies. These countries are working on the regulatory framework and designing incentives for the hydrogen market to take off.

Each country must design a road map that includes:

  •  Identify their potential and competitive advantage, create awareness, identify barriers and determine the necessary inputs.  
  • Be comprehensive and incorporate a close collaboration between the public and private sectors.  
  • Most importantly, implement a proper regulatory framework with policies and compelling incentives that will attract private investors (national and international). 

It’s worth noting that bilateral and multilateral institutions are  keen on providing support to governments and private companies, and are expected to play a key role as the hydrogen industry develops in Latin America and the Caribbean.   

“Policy changes need to come into play, and also financial support, such as what the Inter-American Development Bank and the World Bank could provide, to finance the cost of initial incentives to speed up the transition.”  Fernando Alvarado, CEO of Deetken Impact Sustainable Energy

At Deetken Impact, we understand that private capital will also be essential to fund these emerging opportunities. Projects will vary in  scale and size, which will attract different types of investors.  For example, in highly industrialized countries in South America, green hydrogen is expected to have a lower cost due to economies of scale and will be mostly used for industries, such as mining, and export.  Alternatively, Central American countries, with no significant mining industry nor economies of scale will focus on green hydrogen as the means to transform the transportation sector.

Bilateral and Multilateral institutions will play a key role

The Vision for a Green Hydrogen Economy

Experts envision an economy in which hydrogen is used as the main source of energy, including long distance transportation, vehicles, heating and other industrial uses.  The transformation is expected to generate hundreds of thousands of jobs and billions in revenues.  This will require significant investments in infrastructure and development of the international markets, including an international trade framework for the exports and imports of hydrogen. A study by McKinsey estimates that the U.S. hydrogen economy could create over 700,000 jobs and generate revenues of $140 billion by 2030, increasing to over 3.4 million jobs and $750 billion in revenues by 2050.

In the end, it all comes down to cost. The biggest challenge for green hydrogen to take off is to reduce the price of renewable energy, electrolyzers, transportation and storage of hydrogen, which may only happen as it begins to go mainstream and manufacturing scales up.  A 50% reduction in the cost will be required  to achieve the price reduction goal. 

Ten years ago, Latin America and the Caribbean began their successful  transition to renewable energy. Visionary leaders in the region believe that this can be replicated to successfully become world leaders in the production and export of green hydrogen.  In a panel moderated by the Inter-American Development Bank and integrated by policy makers representing Brazil, Chile, Colombia, Costa Rica and Uruguay, all panelists agreed that hydrogen will have a  crucial role in the road to decarbonization and that it will represent a fantastic opportunity for the region to build a stronger economy. The time to get started is now. 

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Magali Lamyin, Director of Communications and Development for Deetken Impact

MAGALI LAMYIN

Director of Communications and Development

 

Magali brings extensive market intelligence, business development and marketing experience from her work at the Central Bank of Mexico, the Canadian Institute for Market Intelligence, and the IESE-PWC e-Business Centre in Barcelona. She also co-led national marketing campaigns for businesses in the hospitality and early childhood education sectors for almost a decade before joining Deetken. In her current role, she is responsible for leading Deetken Impact’s communications, marketing and branding strategy. She is also involved in the due diligence process for project selection with an emphasis in Mexico.

Magali holds a BA in Economics from Mexico's ITAM and a Master's degree in Economics from the University of British Columbia.

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Jose Lamyin, Managing Partner Deetken Impact

JOSE LAMYIN

Managing Partner

 

José has extensive experience as a business advisor for clients throughout Canada, Europe and Latin America in mining, telecommunications, and finance. Prior to co-founding The Deetken Group, José worked for Teck Cominco in Peru and Canada and Deutsche Bank in London (UK). José has spearheaded much of the strategic growth of Deetken Asset Management since inception and is currently focused on investment selection.

José received his BS in Engineering from the University of British Columbia and MBA from IESE School of Business (Barcelona). Born in Peru, José is fluent in English and Spanish.

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Alexa Blain, Managing Partner Deetken Impact

ALEXA BLAIN

Managing Partner

 

Alexa is responsible for finance, operations and investor relations at Deetken Impact. She brings over 10 years of experience in financial consulting and asset management, with specific expertise in company and investment analysis, business valuation and securities/corporate finance. Prior to joining Deetken, she spent three years with African Alliance, a pan-African financial services group, where she focused on expanding the firm’s retail financial services operations as well as on the origination and negotiation of new capital. In addition, Alexa has six years of asset management experience with the Canada Pension Plan Investment Board, the Macquarie Group and the Ontario Teachers’ Pension Plan.

Alexa is a CFA Charterholder. She has also completed an MA in Financial Economics and an Honours BA in Economics, both at the University of Toronto.

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Fernando Alvarado, Head of Deetken Impact Sustainable Energy

FERNANDO ALVARADO

CEO

Honduras Renewable Energy Managers (HREM) and Caribbean Renewable Energy Managers (CAREM)

 

Fernando Alvarado leads the General Partner and Investment Advisor of two clean energy and energy efficiency project finance and venture capital funds: Honduras Renewable Energy Financing Facility (H-REFF) and Caribbean Basin Sustainable Energy Fund (CABEF), which he structured and runs with a combined target capitalization of $100m.

Development Investment Banker with 28 years of international credit and investment experience and 18 years of direct experience assessing diversified renewable energy portfolios in Latin America & the Caribbean. He has participated in more than 50 syndicated credit and investment transactions for renewable energy projects in excess of $250 MM. He led the creation, structuring, fundraising, legal closing and portfolio construction of several specialized renewable energy funds.

Costa Rican, based in San Jose, Mr. Alvarado has an MBA in Banking and Finance cum laude from Universidad de Costa Rica.

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Carl Black, Portfolio Manager Deetken Impact

CARL BLACK

Portfolio Manager

 

Carl is a Portfolio Manager with Deetken Impact focused on analyzing and working with MSMEs, social enterprises, and renewable energy developers in Latin America and the Caribbean. His main responsibilities include supporting business development, managing technical assistance projects, leading investment due diligence, and monitoring portfolio performance. Prior to joining Deetken Impact, Carl worked for five years as a consultant, advising public sector clients an non profits in Canada and financial services companies in Latin America. He started his career at the Bank of Canada, where he researched issues related to household and business credit. 

Carl completed an Honours BA in Economics at the University of British Columbia. He also holds an MSc in Economics & Development from the University of Oxford, where he earned distinctions in quantitative and development economics.

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Cristobal Aguirre, Investment Analyst at Deetken Impact

CRISTOBAL AGUIRRE

Investment Analyst

 

Cristobal has over 6 years of experience in the asset management industry, where his responsibilities have ranged from asset allocation and portfolio management to risk analysis and software development. Before relocating to Canada, Cristobal worked as a senior investment analyst in AFP Habitat—Chile’s largest pension fund—where he led the tactical asset allocation and macroeconomic research for emerging markets.

Cristobal is a CFA Charterholder, and completed a BA in Economics at Universidad de Chile.

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Chad Parsons, Senior Investment Analyst at Deetken Impact

CHAD PARSONS

SeniorInvestmentAnalyst

 

Chad has worked as a consultant in business and technology for 20 years – often helping clients with their business transformation initiatives.    He has worked with start-ups, government, and established businesses to further their product and service offerings with a balanced approach.   After pursuing a research degree on leveraging technology for social and economic development; Chad has found a valuable alignment of his background with Deetken’s innovative impact investments. 

Chad completed a BS in Engineering from the University of British Columbia and has a MSc with distinction from the University of Manchester (UK).

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