Scaling Hydrogen Financing for Development (English)

This report's analysis provides detailed information on the global hydrogen market and the cost of producing hydrogen. It quantifies the gap between the costs of financing clean hydrogen projects and the benefits such a project can be expected to yield in the short term. The study explores measures to minimize the need for government financing by making hydrogen investments attractive to the private sector. Chiefly, those measures involve managing and mitigating risk. Major risk categories such as those related to offtake have been identified through an extensive survey. This study reviews best practices for accelerated clean hydrogen deployment in emerging markets and developing countries with an eye to key risks in all project stages. Different types of risk are analyzed and split into project-enabling factors and factors that must be managed to reduce the cost of capital. The potential of each type to reduce the cost of hydrogen is quantified. The report lays out how multilateral development banks and development finance institutions can help to accelerate and de-risk clean hydrogen projects. However, at this stage of the clean hydrogen industry's development, financial de-risking is insufficient. Policies are necessary to de-risk investments and increase the volume and scale of projects coming on stream