According to the IEA’s 2023 Global Hydrogen Review, to meet climate ambitions, there is a need to switch hydrogen used in existing applications, such as fertilizers, steel, chemicals and refining industries, to low-emission hydrogen and to expand the use to new applications in heavy industry or long-distance transport. Green hydrogen is one of the most promising tools to decarbonize such hard-to-abate sectors and reach net zero targets.
Despite the great promise of green hydrogen, as well as the announcement of more than 1,000 large-scale green hydrogen projects (with expected investments of over $320 billion through 2030), only a few projects have reached final investment decision. High costs and challenges related to market and the regulatory environment are the primary barriers to financing. Governments, donors, and multilateral organizations are working to ensure appropriate incentives and regulatory frameworks are in place to support this nascent industry and accelerate the development of green hydrogen projects.
IFC’s Role
Recognizing the decarbonization potential of green hydrogen, IFC is working closely with the World Bank and MIGA to support its deployment.
IFC is committed to supporting the development of green hydrogen as part of its effort to combat climate change, create jobs and capture new opportunities for growth in emerging markets. IFC is helping fund feasibility studies and co-develop pilot projects, advising companies on bankability issues, raising concessional financing, and providing equity and debt financing for green hydrogen projects in Latin America, Africa, Europe, the Middle East, and Asia. We also offer industry-leading expertise to develop infrastructure projects that provide essential services in partnership with the private sector.
IFC’s Green Hydrogen Hub, consisting of experts from Global Manufacturing, Energy, and Climate teams, leads IFC’s efforts. As of December 2023, IFC is involved in developing nearly a dozen green hydrogen projects worldwide, with potential investments exceeding $10 billion.
