An investment company advised by former senior executives from Shell, BP and ExxonMobil is lining up an IPO at the end of July which aims to raise £250mn ($347mn) and gain the first London Stock Exchange listing of a fund dedicated to the clean hydrogen sector.

HydrogenOne Capital (HGEN) already has backing from chemicals group Ineos, which has committed to an investment of £25mn through the IPO, which is expected to close by the end of July.

$90bn – Investible hydrogen assets

“Clean hydrogen is a fast-moving and complex sector that commands a specialist approach with access to private equity to unlock value for shareholders. We have established HGEN to fill that gap,” says Richard Hulf, managing partner of HGEN.

Ineos, Europe’s largest hydrogen producer, says its investment in HGEN will help to accelerate and diversify its existing clean hydrogen strategy.

“It marks the beginning of another substantial and long-term partnership, opening new windows into the clean hydrogen world for Ineos,” says Brian Gilvary, executive chairman of Ineos Energy.

Private assets

HGEN says it will invest predominantly in private hydrogen assets but also look at hydrogen-focused listed assets from global markets. It is targeting a net asset value total return of 10-15pc. The HGEN team has identified 36 potential investments to form an illustrative portfolio.

It estimates the total “investible universe” of hydrogen assets to be worth more than $90bn, but believes that figure represents less than a quarter of total worldwide hydrogen opportunities.

“Listed hydrogen clean-tech revenues will see substantial growth, with up to four times growth potential from 2021 to 2025, underpinned by electrolyser and fuel-cell sales volumes increasing rapidly,” HGEN says, noting the positive outlook applies to both green and blue hydrogen.

“In the short term, the clean hydrogen industry will remain dominated by bespoke sources of supply, financed by specialised offtakers, typically at 20-100MW scale,” it adds. 

In the period 2025-2030 it expects these facilities to be scaled up to as large as 5GW.

“Energy storage and carbon capture and storage projects will also increase in scale in this timeframe, with the development of compressed air energy storage followed by hydrogen storage and long-distance transport through pipelines and as liquid hydrogen or ammonia on ships,” it says.

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Author: Stuart Penson