Investment strategies by BBVA in Latin America branching from traditional commodities to green hydrogen technology.
BBVA Drives Green Hydrogen Investments in Latin America
BBVA, a leading Spanish bank, is steering significant investments towards green hydrogen projects in Latin America, leveraging the region's renewable energy advantages and fostering enabling financial ecosystems to support the broader energy transition goals.
According to BBVA's chief economist Juan Ruiz, Latin America, particularly countries like Chile, benefits from a very clean energy matrix—largely hydroelectric—which positions it well for green hydrogen production aimed at export markets such as Europe. In fact, green hydrogen projects in Chile attracted over US$25.6 billion in investments last year, driving foreign direct investment into the region.
BBVA's investment strategies for clean energy also include sustainable financing in emerging markets. In 2024, the bank channeled €27 billion into sustainable business and development projects in emerging markets, including Latin America. This funding covers climate change-related initiatives, reflecting a strategic push towards financing the energy transition and social infrastructure simultaneously.
Moreover, BBVA emphasizes creating stable regulatory frameworks and blending public and private capital to scale up private investment in climate solutions. The bank has engaged in deals such as the first project finance loan on the Iberian Peninsula for a renewable electrolytic hydrogen plant, reflecting a broader investment model that could be replicated or adapted in Latin America to support energy transition technologies like green hydrogen and cleantech.
BBVA's focus on green hydrogen projects and clean energy aligns with the strategic areas for investment identified by BBVA Research: domestic demand, commodities, and clean energy. However, the bank's involvement in cleantech financing and energy transition projects does not explicitly mention direct investments in strategic metals, which are critical for batteries, hydrogen infrastructure, and other clean energy technologies.
Foreign direct investment (FDI) in Latin America and the Caribbean totaled US$188.962 billion last year, a 7.1% increase over the previous year. 24% of the total number of projects were for critical minerals, and 84% of the total value was concentrated in Chile, Peru, Brazil, and Argentina.
However, the attractiveness of these assets depends on the type of investor. European investors are less likely to see the appreciation of Latin American currencies fully offset due to the strength of the euro against the dollar. On the other hand, an American investor may see some value in local currency assets in the region.
ECLAC concludes that Latin America needs to improve FDI attraction policies and align them with productive development policies to increase FDI and its impact on host economies. In an uncertain economic climate, it is difficult for companies to be encouraged to make significant investments, according to Juan Ruiz.
Despite these challenges, BBVA remains optimistic about the growth potential in investments aimed at serving the local population, especially the growing middle class. The bank believes there is room for growth in investments that address middle-class needs and opportunities in strategic metals for energy transition and green hydrogen.
In summary, BBVA's strategy in Latin America for clean energy is focused on mobilizing significant capital for green hydrogen projects, leveraging the region's renewable energy advantages, and fostering enabling financial ecosystems through partnerships and strategic financing to support the broader energy transition goals. The bank also advocates for regulatory stability to attract private investments in climate-related projects.
- BBVA is investing in green hydrogen projects in Latin America, aiming to export clean energy to markets like Europe, as the region's clean energy matrix offers a beneficial position for such production.
- The investments made by BBVA in Latin America towards green hydrogen and clean energy align with their focus on strategic areas identified by BBVA Research, including domestic demand and clean energy.
- BBVA aims to blend public and private capital to scale up private investment in climate solutions, and has engaged in deals like the first project finance loan for a renewable electrolytic hydrogen plant on the Iberian Peninsula.
- BBVA's strategy in Latin America for clean energy includes sustainable financing in the region, and the bank sees potential for growth in investments that address middle-class needs, particularly in strategic metals for energy transition and green hydrogen.
