9 Feb 2023
The European Investment Bank (EIB), the bank of the European Union, has signed a memorandum of understanding (MoU) with the India Hydrogen Alliance (IH2A) to provide €1 billion (~$1.1 billion) to develop large-scale green hydrogen hubs and projects in India.
The funding is subject to approvals from the EIB and the Indian government.
EIB has also formally agreed to join the IH2A, a move that is expected to bring the industry, investors, and government agencies together to work on the green hydrogen hubs and projects. Earlier this year, the Indian government approved the National Green Hydrogen Mission to facilitate demand, creation, production, utilization, and export of the fuel with an initial outlay of ₹197.4 billion ($2.3 billion).
The mission was followed by the Green Hydrogen Policy to help the country achieve a production target of 5 million tons of clean fuel by 2030. The EIB is exploring a credit facility with the Indian government to provide investments to critical public sectors that support the development of the green hydrogen industry. This facility would support the Indian government's efforts to commercialize upcoming green hydrogen technologies and accelerate cost reduction by investing in innovation, R&D, green hydrogen hubs, and pilot projects.
The EIB is financing green hydrogen investment in Europe and working with partners across Africa, Latin America, and Asia to accelerate large-scale green hydrogen investment. The bank recognizes the huge potential of developing and reducing the cost of green hydrogen in India. The strengthened cooperation through the IH2A will contribute to implementing a national green hydrogen roadmap that delivers India's energy transition and net-zero carbon plans while also strengthening energy security in the years ahead.
The IH2A is an industry coalition of global and Indian companies working to establish a hydrogen value chain and economy in India. It collaborates with private sector partners, the government, and the public to ensure that the costs of hydrogen production are brought down, a local supply chain for hydrogen and related applications grows, and India can achieve its net-zero carbon ambitions.
Funding for large-scale green hydrogen projects is nascent, and EIB's participation will help solve a key ecosystem problem. This is an essential part of getting the first few steps of the hydrogen transition right before looking at 2030 scenarios.
The European Investment Bank joining the IH2A further highlights a Team Europe approach for a green and resilient future, underpinning the EU Global Gateway strategy. The green hydrogen sector is poised for substantial growth in the coming years. Green hydrogen is produced from renewable energy sources, such as wind and solar power, and does not emit any harmful greenhouse gases during production.
The fuel is seen as an important component in the transition to a low-carbon future, as it has the potential to replace traditional fossil fuels in various applications, including transportation and heating. In India, the government has recognized the potential of green hydrogen and has launched the National Green Hydrogen Mission to promote the development of the industry. The mission aims to facilitate demand, creation, production, utilization, and export of the fuel and has an initial outlay of ₹197.4 billion ($2.3 billion).
The government has also launched the Green Hydrogen Policy to help the country achieve a production target of 5 million tons of clean fuel by 2030. The partnership between the EIB and the IH2A is an important step in the development of the green hydrogen sector in India. The EIB is providing €1 billion to develop large-scale green hydrogen hubs and projects, and the IH2A is working to establish a hydrogen value chain and economy in India. The partnership will bring the industry, investors, and government agencies together.