Securing a grant is only the first step for a hydrogen project: turning it into a working plant also means convincing banks and investors. This was the thread running through the sixth and seventh sessions of the CyLH2 Valley Learning Capsules series, organised by our partner Lhyfe.
A broad funding toolbox
Europe now offers support across the entire innovation cycle, as Marco Molica-Colella of Hydrogen Europe explained. The toolbox ranges from Horizon Europe and the Clean Hydrogen Partnership to the Innovation Fund, the European Hydrogen Bank and the Connecting Europe Facility. Looking ahead, he expects future schemes to rely less on direct grants and more on de-risking investment and mobilising private capital.
Spain shows what this support can achieve at national level. Jesús Martín Pérez of IDAE described how the country has raised its 2030 electrolyser target from 4 GW to 12 GW, with demand for its hydrogen programmes consistently exceeding available budgets. Flagship initiatives such as Cartagena, Bilbao, the Andalusia Green Hydrogen Valley and the León Green Hydrogen Valley illustrate the scale of this ambition.
Yet no single programme can finance a Hydrogen Valley from start to finish. Alice Ruczinski of Lhyfe therefore stressed the importance of combining funding sources, while keeping costs clearly separated and complying with State aid rules to avoid double funding.
Bankability: what lenders look for
Funding, however, is not the same as financing. Opening the second session, Christoph Flink of DEKRA pointed out that grants reduce risk but do not replace loans, and that lenders ultimately need confidence that a project’s cash flows will be stable enough to repay its debt. He urged developers to think like lenders from the earliest stages of a project, and called on the sector to develop shared bankability standards.
The investor perspective
Investors look at projects in much the same way. For Meriem Benhassine-Fuertes and Raphaël Bordenave of Hy24, reliable long-term revenues, strong off-take agreements and experienced teams are the decisive criteria. Drawing on Hy24’s Spanish portfolio, they identified refinery decarbonisation as today’s most investable application, since refineries already consume large volumes of hydrogen. For now, most projects are still financed largely through equity, with debt becoming a realistic option only once plants are up and running.
From funding to financing
Taken together, the two sessions sent a clear message: public funding is essential but cannot create a hydrogen market on its own. Stable regulation, predictable demand and bankable business models matter just as much. By bringing production, infrastructure and demand together, Hydrogen Valleys are well placed to reduce investment risk and attract the private capital the sector needs.
Keep updated
This seventh session brought the CyLH2 Valley Learning Capsules series to a close. Over the year, the series covered topics ranging from certification and mobility to digitalisation, industrial deployment, funding and financing. The knowledge exchanged will continue to inform the project’s work on synergies with other Hydrogen Valleys across Europe.
