German fund earmarks €270M to enhance hydrogen production in several countries, including Morocco
Germany’s Power-to-X Development Fund has unveiled a significant €270 million grant opportunity aimed at enhancing hydrogen production in select countries, including Morocco, South Africa, Kenya, Egypt, Brazil, Georgia, and India.
This initiative, launched in 2023 and supported by the German Ministry of Economic Cooperation and Development, represents a crucial step toward advancing green hydrogen industries globally.
The grant, provided as non-repayable funds, seeks to bolster project profitability and facilitate additional financing options for industrial ventures focused on hydrogen. With an application deadline set for March 1, interested parties are invited to submit proposals outlining projects that meet specific criteria under the program, with the potential to secure grants of up to €30 million.
Thomas Engelmann, head of PtX, emphasizes the fund’s commitment to supporting projects exceeding €100 million, particularly those driving innovation in industries heavily reliant on hydrogen, such as ammonia, methanol, synthetic fuels, and various chemical processes powered by renewable electricity.
The funding scope spans various stages of the PtX value chain, including renewable energy production, electrolysis, compression, storage, and hydrogen transport. Engelmann highlights plans to distribute funds across eight to ten projects over multiple submission rounds, with investments slated from 2024 to 2027.
Janne Rajpar, director of the KfW office in Rabat, expressed confidence in Morocco’s readiness to leverage these grants, citing the maturity of local projects, while Florian Ziegler, also from KfW, highlighted Germany’s commitment not only to advancing green hydrogen industries in Morocco but also to facilitating skill transfers and job creation.
Export opportunities to Europe are encouraged but not obligatory for funding eligibility, Ziegler clarified.
In recent years, Morocco, along with other designated beneficiary countries, has been actively welcoming investments in green hydrogen, recognizing its potential for cost-effective green fuel production. Actually, converging reports show that sourcing green hydrogen from Morocco has several benefits, making it a good option for producing environmentally friendly fuel at a lower cost.
Green hydrogen is currently regarded as an eco-friendly alternative to oil. As the global shift towards more sustainable practices accelerates, there is a projected exponential increase in the demand for green hydrogen.
Reports also revealed that Europe is already planning substantial investments in green hydrogen and solar panel projects, primarily involving Morocco, Egypt, and southern Africa, and highlighted the continent’s potential to become a key player in the global hydrogen market.
As the world transitions toward more sustainable energy practices, the demand for green hydrogen is expected to rise exponentially. The European Investment Bank estimates Africa’s capacity for green hydrogen production to represent a 1 trillion-euro investment opportunity, with projections suggesting the continent could achieve an annual production capacity of 50 million tons by 2035 at a highly competitive price of $2 per kilogram or less.
