The giants are the lead investors on the H2 production project in the port of Lubmin
CIBC and BNP have signed to invest in the HH2E AG startup in Germany, bringing the project closer to its final investment goals for the 100-megawatts green hydrogen production plant.
The project is slated to be financially ready by October
The green hydrogen production plant will be located in the German port of Lubmin on the Baltic Sea.
“We have engaged BNP Paribas as a debt adviser to create a debt syndicate for financing our initial projects,” said an HH2E spokesperson as quoted by Bloomberg. “In parallel, we are also running an equity raise process managed by CIBC. Both processes are expected to conclude in the fourth quarter of this year.”
Upon the initial announcement of the investment, no specific details were announced. That said loans of more than €200 million (US$222 million) were requested by the HH2E, according to people familiar with the financial negotiations who spoke on the condition of remaining anonymous.
Green hydrogen will be critical to the European climate strategy
Green hydrogen can be used in fuel cells as a way to produce electricity without carbon emissions. Moreover, this specific form of H2 is made using electrolyzers powered by renewable electricity such as solar and wind power. It is a central part of the overall decarbonization strategy Europe has developed in order to meet its climate targets.
That said, in order to meet that goal, much more clean H2 production will be needed, as current levels are nowhere near what would be needed to meet demand.
The market remains in its early days at the moment. By 2030, only 5 percent of expected total capacity for meeting its goals will have come online, according to Bloomberg.
One of the largest in Germany
The HH2E project is slated to become one of the largest in Germany and will be included among the largest in Europe. This new investment wave from CIBC and BNP was what brought the project to financial viability, when combined with initial government financial commitments. Germany has been pouring billions into establishing one of the first and largest green hydrogen production and distribution infrastructures in the world in order to reach its 2045 net zero goals.