Press Release from 2022-11-15 / Group, KfW Development Bank
Mobilising private capital: KfW launches the world’s first promotional platform for financing green hydrogen
- Up to EUR 550 million for the PtX Development Fund and PtX Growth Fund
- Energy security, decarbonisation and achievement of climate targets in partner countries
- Basis for future hydrogen partnerships with Germany
Together with the Federal Ministry for Economic Cooperation and Development (BMZ) and the Federal Ministry for Economic Affairs and Climate Action (BMWK), KfW today launched the world’s first financing platform for tailored financing of infrastructure for green hydrogen and its derivatives at the UN Climate Change Conference in Sharm el-Sheikh. KfW’s PtX Platform will house the PtX Development Fund and the PtX Growth Fund on behalf of the Federal Ministry for Economic Cooperation and Development (BMZ) and the Federal Ministry for Economic Affairs and Climate Action (BMWK). This is intended to support industrial projects for the production, transport, storage, use and further processing of green hydrogen, particularly in developing countries and emerging economies. Green hydrogen is generated from renewable energy sources and can be processed into carbon-neutral derivative products such as ammonia (Power-to-X or PtX).
The PtX Platform offers investors targeted and interlinked financing products from a single source, such as equity investments, loans and grants from KfW Development Bank and DEG. The PtX Development Fund enables developing countries and emerging economies or their state-owned enterprises, together with private financiers, to organise structured project financing to finance plants for the production of green hydrogen. Grants and conventional promotional loans containing market funds can be combined. The PtX Growth Fund is aimed at European companies and consortia of companies based in or with permanent establishments in Germany for financing large-volume plants for the production, transport, storage and use of hydrogen as well as the renewable energy sources necessary for this. KfW IPEX-Bank, among others, follows on from this with its offer of commercial export and project financing as well as import financing for hydrogen and relevant derivatives.
“Green hydrogen and its derivative products hold enormous potential to support the world’s energy transition, social-ecological economic transformation and sustainable development, particularly in developing countries. To increase energy security, decarbonisation and achieve climate targets, KfW is therefore offering financing from KfW Development Bank and DEG from a single source. In addition, the early development of a local hydrogen market in the respective countries is of utmost importance as a basis for future hydrogen partnerships with Germany,” said Christiane Laibach, Member of the Executive Board of KfW Group.
The German Federal Government’s involvement and KfW’s financing have considerable potential of more than EUR 2.5 billion to leverage private investments, which are essential for expanding hydrogen production.
The potential for the production of green hydrogen is greatest in the countries of the Global South. Nevertheless, there is a risk that an insurmountable strategic “gap” for developing countries is forming at an early stage of market development. It is therefore a development policy task to support these countries. In addition, the development of a hydrogen market in the respective countries offers opportunities for local value creation, training and qualified jobs for the local population. There are also great opportunities to position German companies in the important future market of green hydrogen.
There are particularly good starting conditions for green hydrogen production plants in the Middle East, North Africa, Southern Africa, Latin America and the countries of Eastern and Southeastern Europe. Projects in developing countries and emerging economies can be funded by the PtX Development Fund. Projects outside of Europe can be financed via the PtX Growth Fund.
Interested companies may get further information on KfW’s PtX Platform here:
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