A hydrogen investment fund aiming to raise up to £1bn ($1.37bn) has been launched by the heir to the JCB construction empire, who claims it can help the UK take a leading role in the sector globally.
Jo Bamford and family wealth investment specialist Vedra Partners have raised an initial £200m for their HyCap fund, which they hope will eventually swell to five times that sum.
Bamford – whose grandfather founded JCB, one of the world’s largest construction equipment suppliers – said HyCap will be mainly focused on renewable-produced green hydrogen and the UK, which he claimed has a chance to be an early mover in H2 production and technology.
“The UK has missed the boat on batteries, a sector dominated by China and the Far East, but we can be global leaders in the production and supply of hydrogen,” he said, adding that the HyCap team had already identified more than 40 firms as possible investment targets.
Bamford said the majority of HyCap’s investments will be directed to green hydrogen from renewable sources along the sector’s value chain from production to consumption but told the FT he did not rule out the possibility of directing some of it to blue hydrogen.
The UK earlier in 2021 unveiled a ‘twin-track’ national hydrogen strategy with roles for both renewable hydrogen and the blue variety produced using fossil fuels allied to carbon capture and storage. The role of blue hydrogen has proved hugely controversial in the energy transition, with the head of the UK Hydrogen & Fuel Cell Association resigning over the issue.
The British government has outlined plans for a contract-for-difference (CfD) support mechanism to underpin confidence in hydrogen investments, similar to the one that has spurred large-scale offshore wind deployment over the last decade.
The UK is also consulting on the design of the £240m Net Zero Hydrogen Fund, which aims to support the commercial deployment of new 'low carbon' hydrogen production plants across the UK.
Financial analysts said the launch of HyCap reflects growing investment appetite for opportunities in hydrogen, although challenges remain for the sector in attracting the huge levels of capital required to meet massive H2 ambitions globally.
Recharge reported earlier this year how a HydrogenOne Capital Growth, billed as the world’s first clean hydrogen investment fund, raised less than half a planned £250m during an initial public offering.
Bamford is also chairman of Wrightbus, a UK-based automotive manufacturer seeking to commercialise hydrogen-powered bus transport.