How KfW works to promote green hydrogen all over the world

Green hydrogen is an environmentally friendly energy source. It is produced from renewable energies such as wind or solar energy. Countries in the Global South in particular offer ideal conditions for its production. KfW supports projects worldwide. German and European companies are also involved and benefit from innovations related to this CO₂-saving alternative.

Green hydrogen is used in various sectors, for example in industry, transport and energy storage. It can be used and transported in various forms, making it a flexible precursor for basic materials and fuels. In the future, green hydrogen produced abroad could contribute to a sustainable supply for Germany.

Optimal conditions for market development

Significant additional electricity generation capacity for renewable energies is required to produce the necessary quantities of electricity-based basic and fuel materials. Given the limited land available for the expansion of renewables in Germany and even Europe, as well as more favourable location conditions in other countries, it is to be expected that a high proportion of the required green basic and fuel materials will have to come from abroad in the long term.

Developing and emerging countries have very good conditions for a thriving, globally competitive green hydrogen industry – large areas of available land and numerous renewable energy sources, for example.

Nevertheless, high price differences compared to conventionally produced hydrogen from fossil fuels pose major challenges for green hydrogen and its downstream products. That is why KfW supports projects that improve economic efficiency on the one hand and reduce uncertainties on the other, thereby increasing the interest of private investors.

Power-to-X technologies

“Power to X” technologies, which use wind or solar power to produce hydrogen-based materials and energy sources, are gaining in importance for green hydrogen production. This involves converting electricity from renewable energies into gaseous or liquid derivatives so that it can be transported over long distances.

KfW…

...finances projects of German and European industry that are leaders in the field of green technologies. These include electrolysers manufactured in Germany – which are the heart of hydrogen production – as well as infrastructure for transport and facilities for storing hydrogen. In addition, capital is provided for goods and facilities across various industries that use green hydrogen, such as hydrogen-powered trains or plants for producing green steel.
...advises and finances companies and projects worldwide in the field of green hydrogen production and use. Feasibility studies for projects in the area of green hydrogen are also prepared.
...concludes contracts with state actors in other countries on behalf of the Federal Ministry for Economic Cooperation and Development in order to initiate the development of a sustainable hydrogen economy. These programmes promote the production and use of green hydrogen and its secondary products, such as sustainable fertilisers.

KfW’s PtX Platform

Illustration of a landscape with a hydrogen-pipeline, a power plant and wind turbines

KfW has launched the PtX Platform to bundle KfW’s diverse promotional and financing instruments. This one-stop shop coordinates and implements tailor-made financing for projects along the entire value chain. It aims to promote capital-intensive PtX projects, which would not yet pass banking requirements, especially in developing countries and emerging economies, as easily as possible in order to close existing financial gaps.

More about the PtX Platform

The PtX Development Fund in developing countries and emerging economies

In addition to good framework conditions, targeted government support is required to establish PtX technology on an industrial scale and worldwide. This is because the green hydrogen economy is characterised by global value chains and trade corridors, with substantial involvement from developing countries and emerging economies. Further financing from KfW Group complements the promotion of the development fund. This provides optimal support for countries in the Global South to pilot this crucial future technology and accelerates its global market adoption.

Further information on the Power-to-X Development Fund

Examples of projects

Hydrogen tanks with a photovoltaic system in the foreground

World’s largest hydrogen project

The world’s largest plant for producing green hydrogen is currently under construction in Saudi Arabia. KfW is contributing USD 325 million to the financing through its subsidiary KfW IPEX-Bank. The electrolysers from the renowned German manufacturer ThyssenKrupp Nucera are a key component of the project. The plant will produce green ammonia on an industrial scale after its planned completion in 2026 with its own wind and solar farms and covers the entire value chain from renewable energy generation right through to exportation to Europe and Asia.

Further information

landscape with a hydrogen terminal harbour and wind turbines in the foreground

Building a green hydrogen economy in South Africa

KfW has launched a programme to develop a sustainable hydrogen economy with the South African state-owned promotional bank. This includes reference projects for the production and use of green hydrogen and its secondary products, such as hydrogen-powered buses, sustainable aviation fuel and green ammonia. KfW’s support will contribute to the economic development of South Africa and create jobs.

Further information

A hydrogen pipeline with wind turbines in the background

Uzbekistan: facilitating the decarbonisation of the economy

Through its subsidiary DEG, KfW is supporting the development of the first green hydrogen plant in Uzbekistan and providing a loan of USD 25 million. The plant is expected to produce 3,000 tonnes of green hydrogen per year and is powered by green energy from an expanded wind farm facility. Uzbekistan’s green hydrogen strategy aims to decarbonise heavy industry and supports commitments to reduce greenhouse gas emissions and increase the share of renewable energies in the energy mix to 40%.

Further information

two project managers in front of an electricity pole

KfW Development Bank

On behalf of the German government, we improve people's living conditions in developing and emerging countries in a sustainable way and promote climate and environmental protection.

Website of KfW Development Bank