The German Government has made its first loan payment for the construction of the nation’s 9,040km hydrogen core network (HCN).
State-owned bank KfW, which is supporting the development with a €24bn ($25.9bn) loan, transferred €172m ($186m) to the H2 Amortisationskonto GmbH (AMKG) special purpose vehicle to make the payment.
The pipeline network to be built and operated by the private sector, and financed by user fees, transmission system operators (TSOs) can secure loans from AMKG to cover initial losses.
© FNB Gas | Map of the HCN
Repayments will be made once TSOs start logging revenues from the network.
“With the amortisation account, we have developed an innovative financing concept that encourages private-sector investment and enables the long-term full financing of the hydrogen core network through network fees,” said Climate Minister Robert Habeck.
Sections of the HCN will begin going into operation this year, with 60% planned to be converted from existing natural gas lines.
While the first payment may come as a major milestone, German Finance Minister, Dr. Jörg Kukies, has urged for a “pragmatic” approach to sourcing the hydrogen that will fill the network – suggesting unabated fossil-based volumes could first fill the pipelines.
“Now it is important to procure the required quantities of hydrogen through production in Germany and imports and to put them into use,” he said. “More pragmatism is needed at the European level and in Germany, for example, regarding the criteria for the production and use of all hydrogen [colours].”
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