Promotion of foreign trade and investment
Type of instrument | Investment cover against political risks, not a funding instrument or subsidy |
Eligible applicants | German citizens, companies and banks |
Scope of application | Cross-sectoral approach, both industry and services Limited to developing, emerging and transition countries |
Requirements, e.g.
| Long-term investments abroad (e.g. foreign subsidiaries and branches for plant locations) via equity investments, equity-like loans and similar project structures Positive (economic) effects on host country and Germany Compliance with environmental and social standards based on World Bank criteria Fully mature projects with complete business plan No restriction in size |
Scope of cover
| Guarantee portfolio of 28.3 billion euros in total (30.6.2021) Designed to protect direct investments of German companies in developing, emerging and transition countries Duration of up to 20 years Refund of 95% of the covered investment amount in the event of war, expropriation, expropriation-like acts (e.g. non-fulfilment of purchase agreements by public sector entities or breach of public payment commitments) or other political risks |
Evaluation, e.g.
| Investment guarantees can help realise hydrogen projects in developing, emerging and transition countries by increasing creditworthiness, improving financing conditions and offering diplomatic support, but also add insurance costs (usually 0.5% p.a. of covered amount) It is intended to improve conditions for sustainable investments. Complementary use to Hermes cover generally possible |
Implementing organisation | PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft (PwC) on behalf of the German Government |
Link |
Type of instrument | Self-supporting cover, not a funding instrument or subsidy |
Eligible applicants | Exporting companies, banks |
Scope of application | Cross-sectoral approach, both industry and services No limited country selection |
Requirements, e.g.
| Export of a German product Risk-adequate premium to be paid by guarantee holder Positive influence on hosting country and Germany Compliance with environmental and social standards based on World Bank criteria Economic efficiency comprehensively demonstrated Expectation of damage-free project progress proven |
Scope of cover
| Total volume determined by federal budget law Up to 95% of the transaction volume, compensation equivalent to the covered claim |
Evaluation, e.g.
| Open to different sectors including hydrogen 95% risk cover allows banks to grant longer lending periods Challenge: evaluation of project bankability for shorter-term contracts |
Implementing organisation | Euler Hermes AG |
Link |
Type of instrument | Self-supporting cover to support the external financing of raw materials projects abroad; not a funding instrument or subsidy |
Eligible applicants | Primarily banks, but also private German companies |
Scope of application | Cross-sectoral approachNo limited country selection |
Requirements, e.g.
| I. Supply shortages of the raw material: Supply to Germany is highly dependent on imports Price and supplier risks are prevailing and/or may arise in future Existing market structures impede the raw material supply to German offtakers Political interference and/or political measures impede the conclusion of offtake agreements (export restrictions, prohibitive export duties etc.) II. Use of raw materials in German industries: High importance regarding the labour market of the Federal Republic of Germany Contribute to a sustainable macroeconomic and/or regional development Strategic importance for the macroeconomic development (e.g. future technologies) |
Scope of cover
| List of products supported in the past: Metals and metalloids: graphite, copper, lithium, magnesium, (ferro-)niobium, platinum group metals, rare earths, tungsten Energy commodities: natural gas + liquefied natural gas (LNG) |
Evaluation, e.g.
| Can help realise imports of hydrogen and derivatives such as ammonia (Green) Hydrogen should be explicitly designated as eligible for cover |
Link | Euler Hermes AG |
Hydrogen funding instruments
Type of instrument | Auction-based mechanism for the procurement of green hydrogen or its derivatives for a fixed procurement volume. The product quantity is determined in the competitive process. Contracts for Difference (CfD) approach: difference between supply prices abroad and demand prices in Germany and the EU will be compensated by grants from the German government |
Eligible applicants | Supply side: project bidding consortia of green hydrogen and its derivatives Demand side: industry, transport and energy sector in Germany |
Scope of application | Renewable green hydrogen and its derivatives (PtX products), such as ammonia, methanol and power-based sustainable aviation fuels |
Requirements, e.g.
| Priority given to PtX products as logistics for transport (ship, rail and road haulage) are more mature, long-distance hydrogen pipelines still to be built Compliance with environmental and social standards and proof of sustainability of the product including renewable electricity sources Risk management for projects still to be determined |
Scope of cover
| German government to provide 900 million euros in funding to enable at least three larger hydrogen production facilities during a ten-year period = 90 million euros annual volume on average; for future bidding rounds the funding will be raised according to the 2023 German draft budget. Hydrogen Intermediary Company GmbH (HINT.CO) concludes long-term purchase contracts (HPA of 10 years) on the supply side and short-term sales contracts (e.g. 1 year), Hydrogen Service Agreements (HSA), on the demand side |
Evaluation, e.g.
| Competition-based double auction mechanism instead of fixed feed-in tariffs allows for sufficient degree of flexibility. Could benefit from expected increases in market prices for substitute goods thanks to short-term sales contracts Public funds required to compensate the price difference may decrease over the funding period due to expected increases in market prices for substitute goods Functioning of H2Global limited by expansion of transport infrastructure Transparent criteria needed for procurement procedure, to ensure non-discriminatory selection of bidding countries and compliance with sustainability standards As with hydrogen production in general, important to ensure additional RES use to prevent lack of RES needed for green electricity market |
Implementing organisation | H2 Global Foundation & HINT.CO |
Link |
Development and investment banks
Field of activity | Project and corporate finance |
Eligible applicants | Private companies |
Core sectors | Export industry, infrastructure and transport, climate and environmental protection, securing the supply of raw materials |
Requirements | Bankable projects with a completed feasibility study, profitability ana-lysis, off-take agreements and complete project planning documents Project uses market-ready technology and is no longer in the development stage Requested foreign trade promotion instrument in high-risk countries mostly a prerequisite |
Scope of grant/loan per project | Full as well as partial financing possible, financing conditions dependent on de-risking measures |
Link | www.kfw-ipex-bank.de |
Field of activity | Project and corporate finance in developing countries |
Eligible applicants | Private companies |
Requirements | Bankable projects with a completed feasibility study, profitability analysis, off-take agreements and complete project planning documents |
Scope of grant/loan per project | Full as well as partial financing possible, financing conditions dependent on de-risking measures Project uses market-ready technology and is no longer in the development stage Financing of the non-covered project shares that cannot be financed by KfW IPEX possible |
Link | www.kfw-ipex-bank.de |
Field of activity | Financing in developing countries |
Eligible applicants | Governments, public enterprises and commercial banks engaged in microfinance and SME |
Requirements | Bankable projects with a completed feasibility study, profitability ana-lysis, off-take agreements and complete project planning documents |
Scope of grant/loan per project | Full as well as partial financing possible, financing conditions dependent on de-risking measures |
Link | www.kfw-entwicklungsbank.de |
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Download the BMWK factsheet on "Support Mechanisms for International Hydrogen Projects by the German Government" here
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