A newly launched private infrastructure investment fund FiveT Hydrogen is dedicated to delivering clean hydrogen infrastructure projects at scale.
The fund aims to raise €1-billion from a combination of financial and industrial investors and act as a catalyst in the scaling of the global hydrogen economy. It has received publicly announced investment intentions of about €300-million.
“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,” says FiveT Hydrogen co-founder and CEO Pierre-Etienne Franc.
"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. Public funding of $70-billion 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," he adds.
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 the environment, society and businesses, contributing to the environmental, social and governance imperatives of their respective investment portfolios, he notes.
“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 fund will finance large projects in the production, storage and distribution of clean hydrogen primarily in Organisation for Economic Cooperation and Development countries and those with supportive policies, regulations and financial schemes in place enabling projects to be scaled profitably. 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. It is the first stage of FiveT Hydrogen’s 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, says Franc.
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. It is backed by established alternative asset manager FiveT Capital Holding.
The fund’s first closing is expected in the fourth quarter of this year, with first cash to be contributed by investors by early 2022 and drawn as required for investment over several years.