The European Investment Bank (EIB) and Germany will boost the global hydrogen economy by expanding the Green Hydrogen Fund, which was established in 2021. Today, the EIB confirmed an additional German contribution into the fund, which is implemented by the Bank. This enables the fund to broaden its scope - it will now provide investment grants in addition to strategic advice and technical assistance to developing countries for initiatives or projects using green hydrogen.
"Green hydrogen can help industries reduce their carbon footprint," said EIB President Werner Hoyer. "The countries of the Global South have enormous potential to produce the renewable energy needed for green hydrogen. With the Green Hydrogen Fund, we are building a bridge between the innovative projects required to limit global warming to an acceptable level and the economic development of countries and regions most affected by the consequences of climate change. Together with the German Ministry for Economic Affairs and Climate Protection, we will offer technical assistance and investment grants through the fund. This will enable our partners to integrate green hydrogen into their climate action plans and develop infrastructure projects that can make green hydrogen a reality on a large scale."
The additional funding for the Green Hydrogen Fund will help reduce the financing gap for large-scale green hydrogen projects. The fund subsidises investments and advisory services along the entire value chain: from the production of green hydrogen, through processing, to storage and the transport infrastructure for hydrogen and hydrogen downstream products. This supports the international ramp-up of the hydrogen economy.
Dealing with emerging hydrogen technologies and unestablished markets increases the complexity, costs and risks associated with project development and financing. Currently, international hydrogen projects face challenges such as unfavourable market conditions, regulatory risks, a lack of societal acceptance and lengthy approval processes. Public support provides an important market signal to attract further investments and mitigate risks. The Fund serves as a platform for collaboration with other development banks and private financial institutions.
With this replenishment, EIB Global, the development arm of the EIB, and the German Ministry for Economic Affairs strengthen their long-standing collaboration in the green hydrogen sector. The possibility to offer investment grants will make the Green Hydrogen Fund even more impactful. These grants are crucial in advancing projects often perceived as too risky by traditional investors. Supported projects are expected to attract approximately three to 100 times the amount of grant money in follow-on investments, depending on whether they are pilot projects or ready for large-scale green hydrogen production.
Overall, the fund contributes to the global energy transition, sustainable and emission-free economic development, and the achievement of climate goals. It also has the potential to enhance EU energy security.
Background information
The development of renewable hydrogen requires significant investment. In the EU context, the EIB is a key funding partner. Over the past decade, the EU bank has provided over €1 billion in direct financial support related to hydrogen technologies, which has helped mobilise over €2 billion in overall investment. Currently, the Bank supports technologies such as electrolysers, catalysts and fuel cells. It also finances large-scale hydrogen production, including electrolysis, carbon capture and storage, and hydrogen stations.