HydrogenOne Capital Growth (HGEN) has provided an update on German green hydrogen project developer, HH2E.
HH2E has been undertaking a fundraising exercise in order to go ahead with its first development project, at Lubmin. However, in the challenging current global funding environment, the process has not led to a financing partner being secured within the required timeframe and at the required scale, and there is now material uncertainty over whether adequate funding will be achieved. The company now expects these developments to result in HH2E entering administration.
HH2E’s administration process will focus on an outcome in the interests of all creditors. HydrogenOne is a creditor and has provided c. £1m shareholder loans to HH2E. Under German insolvency law, shareholder loans are subordinated to other creditors. The outcome of the administration process is not yet known, but the company will update the market further at the appropriate time.
At 30 September 2024, the company’s unaudited NAV for HH2E was £11 million representing 8% of the HGEN’s NAV.
[Stubborn, and in our view, irrational discounts across the renewable energy sector have meant many of these companies have been starved of the capital needed to optimise their growth. This is particularly disappointing given the valuable role that companies like HH2E play in the effort to decarbonise our energy systems. It’s hoped that with interest rates heading down, and the regulatory backdrop providing further support, these situations will become much less frequent and companies will be able to capitalise on the wealth of opportunities which exist across the sector.]
