With hydrogen subsidies and strategies being announced globally, a panel delved into some of the investment and policy levers that could be pulled to accelerate the up-scaling of hydrogen production and end-uses.

The panel turned to the role that private financing, in particular venture capital could play in the development of the still nascent industry, with Sherif Elkholy, Partner, Head of Middle East & Africa for Infrastructure at Actis telling the summit that once some significant projects are realised, far more investment could follow.

“It wasn’t very long ago that we started investing in the wind and solar markets, which has now become a very core part of sustainable infrastructure investment all over the world,” said Elkholy. “I think we are witnessing the same thing happen on the hydrogen front.”

He added, “Once we start to see some significant hydrogen projects reaching financial flows and starting to ship products, I think there will be a lot of capital that will be chasing to invest into hydrogen.”

Tengku Muhammad Taufik, President and Group CEO of PETRONAS, said that although venture capital investment does have a role to play however, some ground ruled need to be set out.

He explained, “The reality here is I think we need to understand what a venture capitalist would want to put in, because there’s a very narrow fairway of definitions of what qualifies as a green hydrogen project.

“I think we need to make sure that if we get this into an ecosystem that has a lot of funds moving in a very fluid way, we need to get some ground rules straight, at least within the finance community.”

Moving onto what public support mechanisms could be used, Taufik reflected on parallels that could be drawn from the liquified natural gas (LNG) industry which he said faced the same problems as hydrogen, which long-term partnerships could help to resolve.

“We have seen LNG evolve into a key part of the energy mix in countries like Japan, given the focus on imports, we built long-term partnerships and I think, in hydrogen the context is the same,” he said.

Taufik explained, “Both the producing and off-taking country need to build long-term partnerships to help de-risk the commercial structures in place.”

Summarising the route for investment needed for the hydrogen industry, Ahmed Mortada, Associate Director, Head of Energy Egypt at EBRD said that both public and private support will play a key role.

“On the public side, hydrogen does require some help, support and subsidies, whether in the form of fiscal benefits, grants, or concessional loans,” Mortada said. “On our [the private] side, we need to sharpen our pencils and think outside of the box when we are creating financing structures that will work for everyone.”