FiveT Hydrogen, thought to be the world’s first pureplay clean hydrogen investment fund, has been launched by a team of energy and industry executives headed up by former Air Liquide vice-president Pierre-Etienne Franc.
The fund, which aims to raise €1bn ($1.2bn) from a mix of financial and industrial backers, already has some €300m in publicly announced investment “intentions” to underwrite its set-up, with its longer-term “broader ambition to establish an investment platform focused on accelerating the hydrogen economy”.
“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,” said Franc.
“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.”
Franc called the “value-creation opportunity [presented by hydrogen] huge”, adding that FiveT Hydrogen, as a first mover in the market, would have the “agility and flexibility to identify the right projects and invest in the most compelling infrastructure assets of the future” that would “unlock superior, risk-adjusted returns for [its] investors”.
FiveT Hydrogen points to the “growing focus” from global policy makers on decarbonisation, with more than 30 governments around the world now having enshrined national hydrogen strategies as part of their climate action plans.
“Some $70bn of public funding [according to recent McKinsey study] 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,” said Franc.
“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 environment, society and businesses, contributing to the ESG [environmental, social and governance] imperatives of their respective investment portfolios.”
The euro-denominated fund is being targeted at “largely minority co-investments into greenfield projects with key industrial players”, with expectations it will work 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”.
FiveT Hydrogen counts financial commitments totalling €260m from Plug Power, Chart Industries and Baker Hughes among its lead-off investments, along with a personal buy-in of €30m from Francisco Fernandez, founder and former CEO of Avaloq.
The fund’s first closing is expected in the fourth quarter of 2021, with first cash contributed by investors early next year.