Ardian eyes US$2.4 bil green hydrogen fund

French private-equity firm Ardian SAS is considering raising as much as EUR2 billion ($3.2 billion) for a fund dedicated to green hydrogen, one of the hottest fuels in the energy transition. Hydrogen’s popularity is surging. European nations have pledged tens of billions of dollars of subsidies to promote production of the gas with renewable energy — called green hydrogen — rather than fossil fuels, as part of a plan to eliminate emissions by the middle of the century.

While a formal decision hasn’t yet been made, Ardian is considering launching the fund with EUR1–2 billion euros before the end of the year, Mathias Burghardt, head of infrastructure at the Paris-based firm, said in an interview. It would invest in green hydrogen production, its transport and distribution infrastructure such as service stations, and the fuel’s use for mobility.

Hydrogen could be critical to decarbonise industrial processes such as oil refining and steelmaking. It can also be turned into electricity via fuel cells to power heavy trucks, trains and ships. Still, it is currently far more expensive to produce the green variety, the cleanest form, than the kind extracted from natural gas.

“Hydrogen appears to be a pillar of the energy transition, and as a green investment,” Burghardt said, adding the firm’s “investors are asking for it.”

A surge in European carbon prices also makes hydrogen more important for companies, especially in fossil fuel-reliant countries such as Germany, he said.

Ardian, which has more than US$112 billion ($152 billion) of assets under management including US$18 billion in infrastructure, has deployed more than half a dozen of its people to support hydrogen projects in companies it owns stakes in, Burghardt said.

It boosted the team last year by hiring Fabio Ferrari, founder and former head of Symbio, a fuel cell-maker that’s been bought by tire company Michelin and car parts-maker Faurecia SE.

A wave of interest in hydrogen has spread across the world. Abu Dhabi is seeking investors to help build hydrogen-export facilities, while Royal Dutch Shell Plc recently started output of the green variety in Germany, the first time that a European oil refinery has been used to make the gas on a large scale. Italy’s Eni SpA will study commercial feasibility for hydrogen production in Egypt.

Efforts to raise funds for green hydrogen infrastructure have also gathered pace. The FiveT Hydrogen Fund is seeking EUR1 billion, while German start-up Hy2gen AG wants to raise at least EUR200 million. Hydrogene de France raised EUR115 million on the Paris stock exchange last month.

“It will be one of the most important investment themes of the coming decade,” Ardian’s Burghardt said. —