Publication date: 5 March 2024
Bilbao, 19 December 2024. Basque Hydrogen has managed to secure substantial funding through a project finance scheme, a key step in the financing of this type of initiative which is vital for the energy transition of our society.
The aim of Basque Hydrogen, a ground-breaking initiative in the energy sector promoted by Petronor, the Basque Energy Agency and Enagás Renovable, is to boost the production of renewable hydrogen through a 10 MW electrolysis project already under construction in the Port of Bilbao.
A clean energy renewable hydrogen production plant will be built, featuring an electrolyser powered by solar and wind energy. The plant is planned to be able to produce 1,600 tonnes of renewable hydrogen per year, which will be used in both the industrial sector and in sustainable mobility, thus contributing to the decarbonisation of these sectors.
The financing has been structured using a project finance model, an approach used for large-scale projects in which the future income from the project is used to secure the debt and finance the initial investment. This scheme has made it possible for the project risk to be shared among the financiers and the developers, and has been structured in collaboration with two banks; BBVA, as the lead bank, and Kutxabank.
The project finance model has been key in ensuring the viability of this ambitious renewable hydrogen project, providing a solid financial structure that minimises the risks associated with investments in new energy technologies.
This type of financial formula is driving innovation and growth in the energy sector, as in this case for renewable hydrogen, which is positioning itself as a key component in Europe’s energy strategy for the coming years.
Basque Hydrogen has received funding from both the Basque Government (through the INDARTU initiative) and the PERTE ERHA programme managed by IDAE. It is also expected to benefit from tax incentives as part of the fiscal policy envisaged in the province of Bizkaia, within the framework of the promotion of clean technologies and decarbonisation objectives.
The plant is scheduled to begin producing renewable hydrogen in mid-2026, which would speed up the adoption of this clean energy source considered crucial for reducing dependence on fossil fuels and meeting global climate targets.