KfW develops world’s first green hydrogen funding platform

Together with the Federal Ministries for Economic Cooperation and Development (BMZ) and for Economic Affairs and Climate Protection (BMWK), KfW presented the first financing platform in the world for specialized financing of green hydrogen infrastructure at the UN climate conference in Sharm el-Sheikh and introduced its derivatives.

For the benefit of the BMZ and the BMWK, the PtX development fund and the PtX growth fund will be housed on the KfW PtX platform. In particular in poor and emerging nations, this is meant to encourage industrial projects for the production, transportation, storage, consumption, and further processing of green hydrogen.

The PtX platform provides tailored and connected financing products to investors from a single source, including equity investments, loans, and grants from KfW Development Bank and DEG. The PtX development fund enables state-owned enterprises from developing and emerging nations, as well as private financiers, to access structured project finance for the construction of green hydrogen production facilities. It is possible to combine grants and traditional promotional loans with market capital. The PtX growth fund is designed to provide financing for large-scale facilities for the production, transportation, storage, and consumption of hydrogen as well as the necessary renewable energies for European businesses and business consortiums having their registered office or company premises in Germany.

There is a sizable potential of more than EUR 2.5 billion to leverage private investments that are crucial for the growth of hydrogen production with the involvement of the federal government and financing by KfW.

The countries of the Global South have the highest potential for producing green hydrogen. However, there is a chance that developing nations will experience a strategic “gap” early in the market’s development that cannot be filled. Therefore, aiding these nations is a task for development policy. Additionally, the emergence of a hydrogen market in each nation presents chances for local value creation, training, and competent employment for the populace. Furthermore, there are excellent chances for German businesses to gain a competitive edge in the significant green hydrogen market of the future.

In the Middle East, North Africa, Southern Africa, Latin America, and the nations of Eastern and Southeastern Europe, there are particularly favorable beginning conditions for plants for the generation of green hydrogen. The PtX development fund can be used to sponsor initiatives in developing and emerging nations. The PtX growth fund can be used to finance projects outside of Europe.