BBVA believes green hydrogen will become a mainstream market for debt financing, but the Managing Director for Low Carbon Advisory at BBVA warned that technology immaturity continues to limit bankability.

“The challenge lies in the difficulty of understanding the degree of maturity of each project,” explained Dorian de Kermadec.

“[Challenges include] the high price of green hydrogen limiting offtaker appetite, a slowly evolving European regulatory framework, complex contractual arrangements, and projects that often combine multiple technologies requiring sophisticated financing structures.”

For now, the Spanish multinational bank sees its role less as a straightforward lender and more as a partner in structuring, advisory and early-stage risk mitigation to help clients combine subsidies, equity and eventually debt and bring projects to financial close.

“Green hydrogen is, in the short term, more than a financing opportunity; it is a chance to offer 360º financial advice tailored to each project,” de Kermadec added. “Our role is to accompany clients to make their projects bankable.”

BBVA has been involved in previous transactions, including the Basque hydrogen project in Bilbao, where it acted as advisor and debt coordinator. The initiative was described as the first project-financed green hydrogen plant in southern Europe.

The financer also invested €10m ($11.6m) into Hy24, the world’s largest clean hydrogen infrastructure fund, enabling exposure to projects across the full value chain.

Through Hy24 and other climate action funds, BBVA aims to mobilise more than €20bn ($23bn) in investment for hydrogen projects. To date, the bank has invested more than €300m ($347m) in decarbonisation funds.

“Our approach is clear: we prioritise collaborations with projects that, with our support, will be able to reach commercial operation,” de Kermadec said.

“We believe that green hydrogen is poised to become a real opportunity for banks to channel significant volumes of debt.”