hydrogen-fuel-dispenser
Hydrogen fuel dispenser at a transport refueling station in Aachen, Germany in January 2020 (image credit: Alexander Kirch / Shutterstock.com).

A unique private infrastructure fund dedicated to delivering clean hydrogen infrastructure projects at scale has been launched. The group behind the FiveT Hydrogen Fund suggest it will play a major role in the decarbonisation of the global economy.

Pierre-Etienne Franc, Co-founder and CEO of FiveT Hydrogen, said: “We firmly believe that clean hydrogen, an energy carrier created from low-carbon sources, will help transform and decarbonise the world’s economy, addressing the global climate emergency and making a positive change to our planet for future generations. The Fund will serve as a catalyst for both the financing and building of global hydrogen infrastructure projects. We believe it creates the right investment platform to support existing and future hydrogen initiatives.”

“The value-creation opportunity is huge. We want to deliver hydrogen energy infrastructure at scale and at pace. We will partner with the primary financial and strategic hydrogen players to do that. Being a first mover in the market means that our fund will have the agility and flexibility to identify the right projects and invest in the most compelling infrastructure assets of the future. This is expected to unlock superior, risk-adjusted returns for our investors.”

There is a growing focus from global policy makers on the urgent need to decarbonise. More than 30 governments around the world have already adopted national hydrogen strategies as part of their climate plans so the opportunity is huge. $70 billion[1] of public funding has been pledged to accelerate hydrogen scale-up. Accelerating the build-out of hydrogen infrastructure will radically improve national and corporate abilities to meet net zero and decarbonisation targets. These ambitions are also driving demand from institutional investors for exposure to cleaner energy sources in line with the Paris Agreement, which will have a lasting impact on environment, society and businesses, contributing to the ESG imperatives of their respective investment portfolios.

This fund is said to be the first stage of FiveT Hydrogen’s broader ambition to establish an investment platform focused on accelerating the hydrogen economy. By serving as a catalyst to scale the hydrogen market, the fund’s initial priority is to develop infrastructure and then extend its investment strategy into hydrogen-related technologies and companies.

FiveT Hydrogen describes itself as combining deep investment expertise with unparalleled knowledge of, and access to, the hydrogen market and its ecosystem. It will finance large projects in the production, storage and distribution of clean hydrogen primarily in OECD countries and those with supportive policies, regulations and financial schemes in place enabling projects to be scaled profitably.

The Euro-denominated Fund, offered only to qualifying and verified investors, intends to raise a total of €1 billion from a combination of financial and industrial investors. It will make largely minority co-investments into greenfield projects with key industrial players. The Fund expects to act as a catalyst by investing in upstream and downstream opportunities across the value chain, including green hydrogen production and use and downstream distribution assets to the transport segment and associated fleet development schemes.

Backed by established alternative asset manager, FiveT Capital Holding, the Fund will enable investors to access the emerging hydrogen economy whilst mitigating the risk to their returns through co-investment with strategic players with deep technical skill and project execution capabilities.

The Fund has already received combined commitments intentions of €260 million from Plug Power (NASDAQ: PLUG), Chart Industries, Inc. (NYSE: GTLS) and Baker Hughes (NYSE: BKR). In addition, Francisco Fernandez, an accomplished serial entrepreneur, founder and former CEO of Avaloq, and a shareholder and member of the Board of Directors of FiveT Capital, is committing €30 million. This commitment is part of a global FiveT Capital contribution to the Fund expected to reach up to 5% of the final Fund size.

FiveT Hydrogen’s management team has deep hydrogen exposure, expertise and networks established over 30 years of building and operating in the industry. It expects to add further financial and industry expertise in due course.

The Fund’s first closing is expected in the fourth quarter of 2021, with first cash contributed by investors by early 2022 and drawn as required for investment over several years.

Notes
[1] According to ‘Hydrogen Insights 2021: A Perspective on Hydrogen Investment, Deployment and Cost Competitiveness’ a collaboration between the Hydrogen Council and McKinsey & Company https://hydrogencouncil.com/en/hydrogen-insights-2021/.