A pioneering clean hydrogen investment fund has paid out around £50 million since starting up.
Launched in July, HydrogenOne Capital Growth (HGEN) bills itself as the first London-listed fund dedicated to the clean hydrogen revolution.
It aims to be the “sector specialist” in the clean fuel, investing primarily in private opportunities not readily accessible elsewhere.
The first tranche of investment
HGEN (LSE: HGEN) raised £107m as part of its launch last year, £25m of which came from petrochemicals giant Ineos.
Of that initial pot, 46% (£50.29m) has subsequently been deployed into hydrogen sector companies – the fund excludes fossil fuel producers.
“This comprises 19 listed positions for an aggregate of 9% of the net proceeds, and 3 private companies accounting for a total of 37% of the net proceeds,” HGEN said.
The investments span the full value chain, including critical components for green and turquoise, that made through a process called methane pyrolysis, hydrogen supply.
Over 90%, of the deployed capital is in the UK and Europe.
Based on current estimates HGEN expects to fully deploy the proceeds from its 2021 initial public offering (IPO) by the second quarter of this year.
A wealth of opportunity
Since its launch the fund has observed “strong momentum” in the hydrogen sector.
Numerous pledges were made as part of COP26 and a further nine countries have published hydrogen roadmaps, taking the total to 39.
At the end of 2021, there were at least 500 hydrogen projects announced world-wide, an increase of over 100% in the year, HGEN said.
And full value chain spending in announced clean hydrogen could reach $700 billion by 2030.
HGEN alone says it has identified an investible universe of over £17bn in private hydrogen assets, in operational companies and hydrogen projects.
In order to assist in the financing of these investment opportunities, options are currently being considered for raising further capital.
Simon Hogan, chairman of HGEN, said: “We are very encouraged by the progress HGEN has made since its IPO last summer as the first listed fund dedicated to clean hydrogen for the energy transition to net zero.
“HGEN has completed a number of transactions, building on the strong momentum in the sector.
“With deployment from our latest fundraise now well underway, and with a robust and exciting pipeline of potential deals we are seeing HGEN’s growth potential.
“The business is considering options for raising further capital so we can continue to deploy substantial growth capital into energy transition and unlock value for shareholders in this sector.”
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