HydrogenOne Capital Growth plc Portfolio and Strategy Update

Source: www.gulfoilandgas.com 1/13/2022, Location: Europe

• HydrogenOne Capital Growth plc has deployed 46% of available capital in the first 5 months following launch
• HydrogenOne Capital Growth plc expects to fully deploy the proceeds from its 2021 IPO by Q2 2022
• The hydrogen sector continues to build strong momentum; the Company is maturing a Pipeline exceeding £500m for further potential private investment

HydrogenOne Capital Growth plc (“HGEN”) is the first London-listed fund dedicated to the clean hydrogen revolution, following its launch in July 2021 when it raised £107m. HGEN’s distinctive strategy is to be the sector specialist in hydrogen, investing primarily in private opportunities not readily accessible elsewhere, strongly-orientated to ESG mandates, and targeting 10-15% per annum NAV growth over time1.

Fundamental shifts are underway in energy systems world-wide. Governments, industries and consumers are shaping a net zero economy, with clean hydrogen – as a feedstock, an energy carrier and a fuel – set to play a vital role.

Since its IPO, HGEN has continued to see strong momentum in the hydrogen sector. Numerous declarations and commitments around COP26 supported the acceleration of investment and demand. A further 9 countries have published hydrogen roadmaps, making a total of 39. The phase out of diesel in UK heavy goods vehicles by 2035-40 is one of many similar policy shifts that further support the hydrogen sector. At the end of 2021, there were at least 500 hydrogen projects announced world-wide, an increase of over 100% in the year. Full value chain spending in announced clean hydrogen could reach $700bn by 2030.

The potential from clean hydrogen to mitigate rising global temperatures cannot be understated.

HGEN has now deployed 46% of the net proceeds it raised on its launch, into hydrogen sector companies. This comprises 19 listed positions for an aggregate of 9% of the net proceeds, and 3 private companies accounting for a total of 37% of the net proceeds. These investments span the full hydrogen value chain, including critical components for green and turquoise hydrogen supply, distribution and refuelling equipment, fuel cells innovators, systems integrators and developers. Over 90%, of the deployed capital is in the UK and EU, reflecting HGEN’s OECD focussed strategy.

HGEN has identified an investible universe of over £17 billion in Private Hydrogen Assets, in operational companies and hydrogen projects. This large and distinctive opportunity set has only continued to grow, with over 200 Private Hydrogen Asset opportunities now identified, compared to 120 at the time of HGEN’s IPO, and the sizes of potential investments has also increased.

HGEN today has an active Pipeline of over £500 million of private opportunities for potential investment including a near term pipeline in excess of £200m of potential transactions under NDA. This is a strong and distinctive opportunity set for investors and underscores the Company’s strong growth potential.

HGEN believes that the proceeds from its 2021 IPO should be fully deployed by Q2 2022. The investment potential in this Pipeline is approximately 10 times in excess of the remaining net proceeds from launch available for deployment.

In order to assist in the financing of these investment opportunities, the Company is therefore currently considering its options for raising further capital, in the near term.

Simon Hogan, Chairman of HGEN, commented “we are very encouraged by the progress HGEN has made since its IPO last summer as the first listed fund dedicated to clean hydrogen for the energy transition to net zero. HGEN has completed a number of transactions, building on the strong momentum in the sector. With deployment from our latest fundraise now well underway, and with a robust and exciting pipeline of potential deals we are seeing HGEN’s growth potential. The business is considering options for raising further capital so we can continue to deploy substantial growth capital into energy transition and unlock value for shareholders in this sector.”

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