Green hydrogen assets carry similar credit risk to thermal power – Fitch

Green hydrogen assets carry similar credit risk to thermal power – Fitch

Credit risks of project-financed green hydrogen assets are currently similar to those of thermal power for standalone assets, or potentially greater, according to a Fitch update.

The ratings agency said the green hydrogen market is in its infancy, and technology and process developments will be evaluated and incorporated in ratings as the industry matures.

Fitch said green hydrogen is likely to play an important role in the net zero transition, particularly in sectors where decarbonisation would otherwise prove challenging.

UAE-based Masdar is among those harnessing the technology, announcing on Thursday that it had plans to double its clean energy capacity in two years, and plans to produce one million tonnes of green hydrogen by 2030.

The Egyptian government’s Cabinet approved a draft law to promote green hydrogen and related projects in the kingdom this week, including tax incentives and a streamlined approval process.

“While precedents for project-financed transactions are very limited, we expect to rate an increasing number of transactions in this sector over the next few years,” Fitch said.

Fitch added that the International Renewable Energy Agency (IRENA), headquartered in Abu Dhabi, projected in its 2022 report that, in its 1.5C climate change scenario by 2050, up to 12% of final energy will be supplied