(Bloomberg) -- Project developer HH2E AG is set to file for self-administration after it failed to secure financing for one of Germany’s largest hydrogen projects.
HH2E has been fundraising for its first development project, a hydrogen production plant in the Baltic port of Lubmin. While it said negotiations resulted in final agreements, majority shareholder Foresight Group Holdings Ltd. ultimately decided against providing the necessary financing, HH2E said in a statement.
Foresight didn’t comment on its role in the breakdown of financing discussions in a separate statement. The firm said its fund level investment in HH2E is not material and that it maintains its conviction in the significant investment opportunity presented by green hydrogen.
The fuel made from renewable energy is considered crucial to helping Europe reach its climate targets and steering power-hungry industries like steel away from fossil fuels. Germany has outlined ambitious plans for building out hydrogen infrastructure, but uncertainty about costs and logistics have so far made investors hesitate.
Read: Germany’s Hydrogen Goal in Danger as Supply Options Dwindle
Equinor ASA earlier this year was said to be in advanced talks to become a key investor in the German hydrogen startup. The Norwegian company declined to comment.
HH2E said it wants to pursue a structured corporate restructuring process and focus on securing a new investor.
“We remain committed to maintaining continuity and stability in our operations as we work toward a long-term solution,” said Chief Executive Officer Alexander Voigt. “I am convinced we will soon find a strategic partner who shares our passion for green energy and can support HH2E AG’s vision.”
Finding new investors in Germany’s current political environment could be challenging in the short-term. A government crisis has thrown a wrench into the country’s energy goals, including important measures related to the expansion of hydrogen.
(Updates with comments by HH2E and Foresight from first paragraph.)
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