hydrogen tanks with a photovoltaic plant in front

Green Hydrogen

How KfW works to promote green hydrogen all over the world

Technologies for sustainably transforming sectors that cannot be electrified also include the use of hydrogen produced with renewable electricity – commonly referred to as "green hydrogen". “Power to X” technologies, which convert wind or solar power into hydrogen-based raw materials and energy sources that can be used, for example in the chemical and steel industries, are gaining in prominence.

Significant additional renewable power generation capacity is needed to produce the required amounts of electricity-based raw-materials and fuels. Given the limited areas potentially available for renewable expansion in Germany and even Europe, along with more favourable conditions in other countries, a significant share of the green gases and fuels needed will need to be sourced from abroad in the long term.

KfW…

  • concludes contracts with state actors in other countries on behalf of the Federal Ministry for Economic Cooperation and Development in order to initiate the development of a sustainable hydrogen economy. These programmes promote the production and use of green hydrogen and its secondary products, such as hydrogen-powered vehicles and sustainable fuels. As a result, they improve profitability and increase the interest of other private investors.
  • finances projects of German and European industry that are leaders in the field of green technologies. These include electrolysers manufactured in Germany – which are the heart of hydrogen production – as well as infrastructure for transport and facilities for storing hydrogen. In addition, capital is provided for goods and facilities across various industries that use green hydrogen, such as hydrogen-powered trains or plants for producing green steel.
  • advises and finances companies and projects worldwide in the field of green hydrogen production and use. Feasibility studies for projects in the area of green hydrogen are also prepared.

KfW’s PtX Platform

Illustration of a landscape with a hydrogen-pipeline, a power plant and wind turbines

KfW has launched the PtX Platform to bundle KfW’s diverse promotional and financing instruments. This one-stop shop coordinates and implements tailor-made financing for projects along the entire value chain. It aims to promote capital-intensive PtX projects, which would not yet pass banking requirements, especially in developing countries and emerging economies, as easily as possible in order to close existing financial gaps.

More about the PtX Platform

PtX Development Fund in developing countries and emerging economies

In addition to good framework conditions, targeted government support is required to establish PtX technology on an industrial scale and worldwide. This is because the green hydrogen economy is characterised by global value creation and trade networks, with substantial involvement from developing countries and emerging economies. Further financing from KfW Group complements the promotion of the Development Fund. This provides optimal support for countries in the Global South to pilot this crucial future technology and accelerates its global market adoption.

Further information on the Power-to-X Development Fund

Examples of projects

World’s largest hydrogen project

The world’s largest plant for producing green hydrogen is currently under construction in Saudi Arabia. KfW is contributing USD 325 million to the financing through its subsidiary KfW IPEX-Bank. The electrolysers from the renowned German manufacturer ThyssenKrupp Nucera are a key component of the project. The plant will produce green ammonia on an industrial scale after its planned completion in 2026 with its own wind and solar farms and covers the entire value chain from renewable energy generation right through to exportation to Europe and Asia.

Further information
Building a green hydrogen economy in South Africa

KfW has launched a programme to develop a sustainable hydrogen economy with the South African state-owned promotional bank. This includes reference projects for the production and use of green hydrogen and its secondary products, such as hydrogen-powered buses, sustainable aviation fuel and green ammonia. KfW’s support will contribute to the economic development of South Africa and create jobs.

Further information
Uzbekistan: facilitating the decarbonisation of the economy

Through its subsidiary DEG, KfW is supporting the development of the first green hydrogen plant in Uzbekistan and providing a loan of USD 25 million. The plant is expected to produce 3,000 tonnes of green hydrogen per year and is powered by green energy from an expanded wind farm facility. Uzbekistan’s green hydrogen strategy aims to decarbonise heavy industry and supports commitments to reduce greenhouse gas emissions and increase the share of renewable energies in the energy mix to 40%.

Further information

Further information

KfW Development Bank

On behalf of the German government, we improve people's living conditions in developing and emerging countries in a sustainable way and promote climate and environmental protection.

Website of KfW Development Bank

DEG

We finance and support private companies that are active in developing countries and emerging economies.

Website of DEG - Deutsche Investitions- und Entwicklungsgesellschaft

KfW IPEX-Bank

KfW IPEX-Bank supports the German and European economies with project and export finance.

Website of KfW IPEX-Bank

Status: 15 November 2024