World Bank unveils initiative to help finance clean hydrogen projects in developing countries

The Hydrogen for Development Partnership will also offer technical assistance and help with creating regulations and business models

World Bank president David Malpass, pictured yesterday at the G20 Summit in Bali, Indonesia.
World Bank president David Malpass, pictured yesterday at the G20 Summit in Bali, Indonesia.Photo: AFP/Getty

The World Bank Group announced a new global initiative to help finance the deployment of low-carbon hydrogen in developing countries at COP27 in Egypt yesterday.

Hydrogen: hype, hope and the hard truths around its role in the energy transition

Will hydrogen be the skeleton key to unlock a carbon-neutral world? Subscribe to the weekly Hydrogen Insight newsletter and get the evidence-based market insight you need for this rapidly evolving global market
Sign up now

The Hydrogen for Development Partnership (H4D) will “help catalyze financing for hydrogen investments” from both public and private sources over the coming years, said the banking group, which provides loans and grants to low- and middle-income countries.

“The partnership will foster capacity building and regulatory solutions, business models, and technologies toward the roll out of low-carbon hydrogen in developing countries,” said the group in a statement. “Through H4D, developing countries will gain further access to concessional financing and technical assistance to scale up hydrogen projects.”

World Bank president David Malpass, who was chief economist at US investment bank Bear Stearns in the six years running up to its 2008 collapse, added: “Low-carbon hydrogen can have a significant role in countries seeking to accelerate their clean energy transition.

“Our new hydrogen partnership will enable developing countries to prepare low-carbon hydrogen projects and boost energy security and resilience for their people while lowering emissions.”

The statement explained: “For low- and middle-income countries, low-carbon hydrogen has the potential to generate export revenues, creating a value-added export sector that generates jobs for skilled labor and helps promote food security, since hydrogen can be used to produce ammonia, a key component of fertilizers.

“It can also generate energy capacity to meet local needs, including decarbonizing in-country manufacturing and smelting sectors, and provide energy access to remote populations.”

The main activities of H4D will include “convening international cooperation to increase the knowledge base in low-carbon hydrogen technologies for developing countries” and fostering collaboration with the private sector on clean hydrogen projects, the group said.

The World Bank also made some contentious remarks in its statement: “Low-carbon hydrogen offers a solution to decarbonize heavy industries that produce more than 25% of global CO2 emissions, for which there is presently no viable alternative to fossil fuels.”

“Low-cost, low-carbon hydrogen fuel can become a viable replacement for diesel in transportation.

“Hydrogen also has the potential to provide long-term energy storage options and bolster the reliability of renewable energies with variable outputs, like solar photovoltaics and wind.”

Much of the world’s heavy industries could be decarbonised through electric technologies at a lower cost than hydrogen, while battery electric options are also available as a cheaper diesel replacement, and long-duration energy-storage systems such as new types of batteries, liquid-air and thermal storage may also be able to bolster the reliability of variable renewables faster and more cheaply than H2.
A spokesperson for the World Bank Group told Hydrogen Insight that direct electrification and biomass would complement the use of hydrogen in decarbonising hard-to-abate industrial sectors, but she was unable to explain which industries contributed to the “more than 25% of global CO2 emissions” mentioned in the press release.

The World Bank Group consists of five organisations:

(Copyright)
Published 16 November 2022, 09:33Updated 21 November 2022, 10:47