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Hy24’s €2bn fund targets global clean-hydrogen value chain

© Shutterstock / Juergen PrieweHydrogen market.

Hy24 has global ambitions for its Clean H2 Infra Fund to build hydrogen infrastructure on a large scale. It may also benefit from the EU’s own hydrogen ambitions and increasingly relaxed state-aid rules.  

  • Hy24 has closed funding in its Clean H2 Infra Fund at €2 billion.
  • The fund will invest in large-scale infrastructure projects to manufacture, store and distribute clean hydrogen globally.
  • Hy24 will rely on the financial and subject matter expertise of its partners to benefit from the EU’s 2030 goal of building and importing 20 million tons of hydrogen annually.

As a joint venture formed by investors experienced in infrastructure investment and the hydrogen value chain, Hy24’s Clean H2 Infra Fund has lofty ambitions to build large-scale projects globally. It also says it has access to an additional €20 billion in the near term to further its aims.

A relaxation of EU state aid rules and the need to deploy capital to meet the bloc’s lofty hydrogen goals at a rapid pace may also work to Hy24’s advantage. 

Diverse fund backing points to growing global popularity of hydrogen

The diversity of investors backing Hy24’s fund indicates the popularity of hydrogen as an enabler of the transition to clean energy globally. Contributors to the fund included 50 investors from 13 countries in the Americas, Europe and Asia, comprising industrial companies, banks, pension funds and insurance companies.

Notable among these were US-based fuel cell company Ballard (NGM:BLDP), German auto supplier Schaeffler (GER:SHA), and a host of French companies, including EDF (PAR:EDF), Vinci (PAR:DG), TotalEnergies (PAR:TTE), and Air Liquide (PAR:AI).

Hy24 itself is a joint venture between Switzerland based investment holding company FiveT Group and French private investment firm Ardian. FiveT Hydrogen, which represents one of four focal sectors for FiveT, has the ambition “to become the 360° financial partner and a catalyst to the hydrogen ecosystem”, reflecting the subject matter expertise of its own senior management. 

Hy24’s prospects buoyed by founders’ financing and domain expertise

The managing partner of FiveT Hydrogen, Pierre-Etienne Franc, is also the CEO of Hy24. As a former vice president at Air Liquide, he managed the hydrogen energy business unit, and was also a founding member and secretary of the hydrogen council. 

Ardian has $141 billion in AUM, across 50 countries in Europe, the Americas, Asia and the Middle East. It contributes an expertise in infrastructure investments to the joint venture, having made more than 55 investments  in the field since 2005, with $21 billion in assets under management. The president of Hy24, Laurent Fayollas is also the deputy head of Ardian’s infrastructure investment business.

In addition to Hy24, Ardian has invested in Geosel, a French crude oil and refined products  storage and transportation company. It operates the largest fossil fuel storage facility in France, and will partner with hydrogen producers to transport green hydrogen. A solar farm is planned on its site, which is expected to provide renewable energy needed for clean hydrogen.

Hy24 claims it can mobilise an additional €20 billion in funding over the next six years, and believes being able to roll out this capital quickly and efficiently, while influencing government policy are its main value-adds.

Hydrogen investment wave may be unleashed

The EU’s process of approving state aid for hydrogen projects has received criticism recently. In June 2022, Hy24’s CEO Pierre- Etienne Franc complained that dozens of projects were stalled because they were waiting for clearance from the EC to receive funds.

The reason this delay occurred was because these projects were meant to receive state aid under a derogation of the EU’s Important Projects of Common European Interest (IPCEI) scheme. Simply put, derogation refers to an exemption or relaxation of a rule or law, which in this case had to deal with conditions for granting state aid to hydrogen projects.  

The use of IPCEI schemes is freeing up EU funding for hydrogen-related projects. The launch of IPCEI Hy2Tech (July 2022) and IPCEI Hy2Use (September 2022) will help to clear the existing logjam.

This in turn will support the EU in meeting its clean hydrogen targets of producing 10 million tons per year, and importing and distributing a further 10 million tons per year.

EU’s hydrogen ambitions play to Hy24’s strengths

Franc has described the EC’s ambition as being ahead of the industry, however, saying that the industry was not capable of delivering on the EU’s ambitions. The 10 million ton production target was a big ask for the industry, he said, even though it would only replace 10% of Europe’s dependence on Russian gas.

This will do little to curb Hy24’s ambitions of building hydrogen infrastructure on a large scale, which seems to be aligned with that of the EU. Its ability to assemble additional capital to fund clean hydrogen projects across the value chain and across countries will also satisfy IPCEI rules, qualifying it for additional funding through state aid.

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