Hydrogen financing advice

Client

Deutsche Gesellschaft für internationale Zusammenarbeit GmbH on behalf of the Federal Ministry for Economic Cooperation and Development (BMZ)

Background

The German government's national hydrogen strategy is gaining in importance due to the energy supply crisis.

Compared to other countries, Germany has limited resources of renewable sources and relatively little space. Experts assume that 70 % of the hydrogen required will have to be imported.

Accordingly, the National Hydrogen Strategy aims to promote the market ramp-up for green hydrogen, advance technological development and enter into partnerships with countries that have locational advantages. For this reason, the German government would like to promote large-scale hydrogen projects in emerging and developing countries more strongly. To this end, private-sector projects must be promoted using suitable instruments. This refers both to a reduction in capital costs and to risk reduction (derisking), e.g. through suitable hedging instruments.

Objective

The aim of the DFIC's advisory activities is to develop proposals for improving the financial viability of projects based on the needs of the companies and the view of the financiers.

Results

As a first step, intensive discussions were held with industry representatives such as electrolysers manufacturers, EPCs and storage technology developers on the one hand, and with investors, including investment /private equity funds and international financial institutions on the other.

The results are being evaluated and ideas for increrased public support for investments in large-scale hydrogen projects are being developed. In a next step, ideas from the discussions will be taken up and further developed in roundtable meetings.

Finally, instruments will be developed that efficiently support the investment in international hydrogen projects.