A helping hand to the hydrogen value chain
Having trouble financing your hydrogen-related project? A bank founded by the five Nordic countries can be a part of the solution.
Nefco is different from other banks. It is willing to take on a higher financial risk and has the criteria of green financing only.
Since 1990 the bank has been financing green projects. Now they are scaling up their visibility in Norway and are on the look for new investment opportunities throughout the country. But how can companies in the hydrogen value chain use Nefco? We reached out to Oslo-based Investment Adviser Anne Mette Guerrero for a chat.
How can companies in the hydrogen value chain use Nefco?
Anne Mette Guerrero, Investment Adviser, Nefco – The Nordic Green Bank
“Nefco – the Nordic Green Bank is an international financial institution founded by the five Nordic countries; Denmark, Finland, Iceland, Norway and Sweden”, Guerrero explains. “Our mandate is to accelerate the green transition. We do so by providing growth financing when there is a scale-up potential. We focus on Nordic SMEs with projects that have a higher financial risk profile than is acceptable for traditional commercial bank financing. Nefco only provides financing for activities that generate direct or indirect environmental or climate-related benefits”.
Guerrero highlights Nefco’s focus on green hydrogen:
“Nefco can finance companies in different stages in the hydrogen value chain. For example, we can finance companies that work with production of technology, production of green hydrogen or energy storage applications. When we evaluate each project, we consider the whole value chain: where is the product originated from, who is the end user, how is the energy generated. Considering our environment and sustainability criteria, we are only interested in green hydrogen”.
“We see that green hydrogen can contribute to the reduction of CO2 emissions in various sectors, including the maritime sector. Regardless of where the projects are in the hydrogen value chain, we assess the projects and the value chain as a whole and evaluate how the projects contribute to the positive environmental impact”, says Guerrero.
What differentiates Nefco from commercial banks?
“To put it shortly: higher financial risk and green financing only. Nefco is ready to take higher financial risk than most commercial banks as long as there is a green upside. Our financing options are suitable for a company that needs growth financing for the scale-up phase. While commercial banks may perceive the financial risk to be too high for such companies, for us they are just right if they have economically viable projects with positive environmental impact. Secondly, Nefco only offers financing for activities that generate direct or indirect environmental benefits. In addition to a proven technology and economic viability, the project must generate substantial positive environmental impact”.
Have companies in the hydrogen value chain applied for Nefco financing?
Convion Oy, a Finnish company specialising in SOFC systems, got financiation from Nefco to scale up and commercialise their technology. Photo: Convion Oy.
“Yes! Nefco has financed Convion Oy, a Finnish company specialising in solid oxide fuel cell (SOFC) systems for distributed power generation and green hydrogen production. The company’s scalable technology plat-form enables on-site generation of clean power or green hydrogen with premium efficiency. In this project, Nefco contributed with financing to scale-up and commercialise Convion’s technology and the manufacture of electrolysers for the green hydrogen economy, which can lead to significant emission reductions”.
“Another example is a Norwegian supplier of customised hydrogen plants. The company received a Nopef grant for a feasibility study to explore expansion outside Europe. Nopef, the Nordic Project Fund, is a fund managed by Nefco that provides financial support for demonstration, scale-up and growth of Nordic green and sustainable solutions on global markets. Nopef is a great starting point for many companies who are planning to take the next step and expand their business outside Europe. Many companies who receive a Nopef grant continue their growth with further financing from Nefco”.
“Overall, at Nefco we see that the green hydrogen has the potential to play a vital role in the future energy systems and it can accelerate the transition from fossil fuels to renewable energy. Increased use of green hydrogen can contribute emission reductions for example in the transport sector. We would be happy to see more success stories, like those mentioned above, stemming from collaboration with Nefco”, says Guerrero enthusiastically.
What are Nefco’s criteria for green projects?
“We evaluate project proposals to verify that they will have direct or indirect positive green impacts and cooperate with clients to improve their sustainability practices and capacities. When assessing the projects, we use the EU Taxonomy, the UN Sustainable Development Goals and Nefco’s own environmental and sustainability criteria. As for hydrogen projects, Nefco will not finance projects involving fossil-based hydrogen since fossil fuels are excluded in our Environmental & Sustainability Policy”.
A Technology Readiness Level of 8 or higher is preferred:
“Nefco generally finances technologies that are technically proven and commercialised. In this assessment, Nefco employs the widely used method called the Technology Readiness Level. Most commonly levels 8 or above (system complete, qualified and small-scale commercial trials completed) are accepted for Nefco financing”.
How can companies apply for financing at Nefco?
“Our Norwegian SME page www.nefco.int/norge is a good starting point when you are interested in Nefco financing. The easiest way to start is to contact our investment managers and discuss the potential project. You can also send us a project proposal form (download here) to tell us more about your project”.
“I’m always happy to talk with companies so let’s stay in touch”, Guerrero ends.
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