Project Finance and the Hydrogen Wave

By Alistair Wishart, Louise Fischel-Bock and Lauren Davies at Vinson & Elkins RLLP; Peter Gorman at Wafaa Ermilate; and Sanne Rosendaal at ING Bank

Hydrogen technology is experiencing a renewed wave of interest due to the decreasing costs of producing low- or zero-carbon hydrogen and expanded applications for hydrogen in the energy sector. Although project finance has traditionally been seen as more appropriate for large-scale, long-term projects with proven technology and a clear offtake strategy, project finance lenders are engaging in hydrogen projects in both advisory and lender capacities at an earlier stage of market development than might be expected given market appetite for sustainable projects and the drive on the macro level for clean energy projects.