German development bank KfW has launched the “world’s first” promotional platform for financing green hydrogen at COP27.
KfW’s PtX Platform will house the PtX Development Fund and the PtX Growth Fund on behalf of the Germany’s 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.
Member of the executive board of KfW Group Christiane Laibach said: “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.”
The German Federal Government’s involvement and KfW’s financing have considerable potential of more than €2.5bn to leverage private investments, which are essential for expanding hydrogen production.