BNP, CIBC to lead financing of major German hydrogen project #NewsGerman

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BNP Paribas SA and Canadian Imperial Bank of Commerce are among banks that have committed to backing one of Germany’s largest hydrogen projects.

The decision is a sign that startup HH2E AG is seen as bankable and takes it closer to its aim of a final investment decision on its 100-megawatts green hydrogen production plant in the Baltic port of Lubmin by October.

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“We have engaged BNP Paribas as a debt adviser to create a debt syndicate for financing our initial projects,” a spokesperson for HH2E told Bloomberg. “In parallel, we are also running an equity raise process managed by CIBC. Both processes are expected to conclude in the fourth quarter of this year.”

The firm gave no additional details. HH2E has requested loans of over €200 million (US$222 million), according to people familiar with the discussions who asked not to be named discussing a private matter.

Green hydrogen made from renewable energies is considered crucial to Europe’s climate targets and to wean power-hungry industries like steel away from fossil fuels. However uncertainties about the future price of the gas and gaps in figuring how to safely and cheaply transport it have so far made investors hesitate.

The market for hydrogen is still in its early stages and only five per cent of capacity announced to come online by 2030 has reached a final investment decision, according to data from BloombergNEF.

BNP and CIBC didn’t immediately respond to requests seeking comment.

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The HH2E electrolyser project — set to become one of Germany’s biggest — has become financially viable because of government commitments to kick-start the hydrogen market, one of the people said. The country is pouring billions into one of the world’s first and biggest hydrogen networks as it races to reach net zero by 2045.

HH2E is seeking larger investors to scale up its project to around one gigawatt by the end of the decade, with Norway’s Equinor ASA already in advanced talks.

The startup’s current investors include U.K. private equity firm Foresight Group Holdings Ltd., which owns 55 per cent, and HydrogenOne Capital Growth Plc, which holds a minority stake.

Bloomberg.com

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