Analysis of the Week: $20bn Investment Opportunity - 10 Low-Carbon H2 Projects, Representing 2mmtpa+ Production, are Targeting an FID by End-2026

published on 20 July 2024
Enerdatics_$20bn-Low-Carbon-H2-Investment-Opportunity_Jul'24-886kr

Heavyweights Including ExxonMobil, INPEX, ENEOS are Progressing Initiatives Primarily in TX and LA, for Industrial, Mobility, Refining and Power Generation Applications

Despite market research suggesting a 60:40 debt-to-equity split, Enerdatics anticipates a 50:50 structure due to uncertainties around off-take agreements, tax credits, and market dynamics. Major financing considerations include off-take contract bankability, feedstock volatilities, tax credits, technology risks, demand evolution, partners’ creditworthiness, and EPC contract bankability. The refining and heavy-duty transport sectors are seen as the most bankable, bolstered by advancements in fuel-cell technologies and government support. Major financial commitments include ExxonMobil targeting a 15% return, Fortescue planning to invest $1bn annually, and Monarch Energy securing $400mn. Leading financial institutions like JP Morgan, MUFG, and Deutsche Bank are expected to support these projects.

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