The project, which requires total early-stage investments of 35 million euros, entails building and operating a wind power plant, Haru Oni, in southern Chile.

Power from the plant will be used to produce green hydrogen via electrolysis, which will in turn be used to generate synthetic methanol/gasoline, a low-carbon alternative fuel for transport, the ministry said in a statement.

The plant will produce 130,000 litres in a 2022 pilot phase, rising to 55 million litres by 2024 and 550 million by 2026.

Several international partners are involved, including carmaker Porsche, which plans to buy methanol.

Germany approved in June a 9 billion euro strategy to promote hydrogen initiatives at home and globally.

As future German demand will not be met by domestic production alone, it aims to build up partnerships overseas to secure imports.

"The project contributes to building up reliable import capacities and the strategic positioning of German companies in this marketplace of the future," the ministry said.

(Reporting by Vera Eckert; Editing by Jan Harvey)