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Air Liquide, TotalEnergies, Lotte launch $1.7-billion clean hydrogen fund to accelerate large-scale projects, infrastructure

October 3, 2021
Chemical Value Chain

Air Liquide, TotalEnergies, and Vinci say they will participate as anchor investors, along with Lotte Chemical, to create the world’s largest fund dedicated exclusively to clean hydrogen infrastructure solutions.

The fund is planned to raise €1.5 billion ($1.7 billion) and has already secured initial commitments of €800 million, they say. Air Liquide, TotalEnergies, and Vinci have each pledged investment of €100 million. Lotte Chemical has also confirmed its intention to participate as an anchor investor, they add.

The infrastructure fund will have capacity to “unlock large scale projects under development and accelerate the scaling up of hydrogen markets. With the announced support of public policies and some use of debt financing, the fund should be able to contribute to the development of hydrogen projects with a total value of about €15 billion,” they say.

The fund’s objective will be to “accelerate the growth of the clean hydrogen ecosystem by investing in large strategic projects and leveraging the alliance of industrial and financial players,” according to the companies. It will invest in the entire renewable and low-carbon hydrogen value chain in the most promising regions in the Americas, Asia, and Europe. The fund will “invest as a partner, alongside other key project developers and/or industry players, in large upstream and downstream clean hydrogen projects,” they say.

The fund will be managed by Hy24, a new 50/50 joint venture between private equity firm Ardian and FiveT Hydrogen, a clean hydrogen-enabling investment platform. “The choice of this fund manager allows to merge with their similar initiative and to add Plug Power as an anchor partner, as well as Chart Industries and Baker Hughes joining together,” they say.

Further investments are also expected from large financial players, including Axa as another anchor investor, with other non-anchor partners expected to include Groupe ADP, Ballard, EDF, and Schaeffler.

“Hydrogen has become a central element of the energy transition,” says Air Liquide’s chairman and CEO Benoît Potier. “The time to act is now, not only as companies on a stand-alone basis, but by joining forces with states, other industrial groups, and the financial community,” he says. Air Liquide has already committed to invest approximately €8 billion in the low-carbon hydrogen supply chain by 2035, he adds.

“We believe that clean, renewable hydrogen will play a key role in the energy transition, and TotalEnergies wants to be a pioneer in its mass production,” says TotalEnergies chairman and CEO Patrick Pouyanné. “We are currently working on several projects, notably to decarbonize the grey hydrogen used in our European refineries by 2030. We are convinced that a collective effort is needed to kickstart the hydrogen sector and take it to scale.”

The fund is planned to be operational by late 2021, with first closing expected before the end of the year, the companies say.

by Mark Thomas


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