Finance, Insurance Industry and Trading Meeting of Indo-German Green Hydrogen Task Force

The Indo-German Energy Forum (IGEF) organised a subworking group meeting on Finance, Insurance Industry and Trading of Green Hydrogen Production under the Indo-German Green Hydrogen Task Force on 12 December 2022. On request of the German Federal Ministry for Economic Affairs and Climate Action (BMWK) and the Indian Ministry of New and Renewable Energy (MNRE), all participants were briefed on the purpose of the Task Force and its subworking groups.

Mr. Tapas Kapadia, CEO at RWE Supply & Trading, expressed his interest to head the group and was confirmed so upon no objections from the members. Mr. Tobias Winter, Director, Indo-German Energy Forum Support Office, kickstarted the group discussion along with Mr. Kapadia by diving into the topic of financing schemes for Indian green hydrogen projects.

Dr. Martin Lux, Head of Energy, KfW Development Bank, informed that the organisation has instruments such as concessional loans and grants available for financing green projects. Currently, they are developing a promotional platform where more than EUR 550 million would be made available under PtX Development Funds and PtX Growth Funds. This piqued the interest of several industry members and a presentation on available funding instruments in the next subworking group meeting was proposed.

An interactive poll with the participants revealed that there is a keen interest to dig into funding tools and additional revenue streams. Earlier, the subworking group meeting on Plant Engineering and Production had requested to investigate carbon as an additional revenue stream. Based on this, Mr. Philipp Veh, Consultant in Hydrogen Projects, Perspectives Climate Group, briefed the members on the functioning of carbon markets, how they can be applied on low carbon hydrogen projects and its benefits. Mr. Kapadia along with the participants agreed that a dedicated discussion was required on the topic to also factor in Indian regulations and export of credits.

Furthermore, Mr. Simon Byrtus, Senior Consultant, ConEnergy, asked how offtake agreements could be developed with German companies. To this, Mr. Kapadia said that it is still early days to see what the tech requirements are, however, work is needed on the import and export side while also considering government support or tenders. The Government of India has decided to support contracts of difference where international tenders for green ammonia, green methanol, green hydrogen, and E-fuels are being published. There is a call of interest for green ammonia to be imported in Europe and can be provided by any country outside of the European Union.

Mr. Kapadia suggested and accepted that exploring the available funding schemes such as H2Uppp programme, or credit lines as mentioned by Dr. Lux of KfW Development Bank, is the next step to be taken by the group. Since many participants were interested in learning about offtake funds, it was agreed that if any member or an expert could provide knowledge on the same and its viability, this would be an action point for the group too.

At the end of the meeting, following decisions were taken:

• Dedicated session on German funding schemes and credit lines for Green Hydrogen Projects in India to be organized.
• Subworking group 1 decision to organize a session on CO2 certificates as additional revenue stream for green hydrogen sales welcomed.
• More information on reliable national and international offtake required to make projects in India bankable.
• Idea on the establishment of a Govt. backed PtX offtake guarantee fund to be further discussed.