Hydrogen investors demand security of offtake deals

Long-term contracts will be needed to mitigate risk as investors assess bankability of multiple clean hydrogen production projects

Financiers are queuing up to look at clean hydrogen production proposals but will be reluctant to commit capital unless projects are underpinned by long-term offtake deals and certifiable sources of renewable power, senior financial players said this week. Offtake agreements of 20 years or longer are likely to be the norm for projects in the early stages of the sector’s development, as providers of debt and equity investment will demand secure revenue streams from hydrogen production. “At this stage of the hydrogen life cycle, absent any real [hydrogen] market or reference, projects must be underpinned by one very large, creditworthy offtaker to stand behind some of the risk,” Andrew Doyle,