How can hydrogen become commercially viable while meeting the needs of both developed and emerging markets? This was the central question addressed during the Singapore-US Forum session on "Financing Hydrogen Deployment". The discussion was moderated by Ambassador Brian D McFeeters (ret.), Senior Vice President and Regional Managing Director, US-ASEAN Business Council.
Challenges and opportunities in hydrogen projects
Hydrogen projects face numerous hurdles, including commercial viability, policy uncertainty, and the need for harmonised standards and regulations.
Xueyong Chin, Senior Vice President, Project Finance, Institutional Banking Group, DBS Bank, noted that "the key issue right now from a hydrogen perspective is really around commercial viability". Despite these challenges, hydrogen's versatility across sectors like manufacturing, transportation, and power generation presents significant opportunities.
The panel stressed the importance of understanding the economics of different hydrogen production pathways, such as turquoise hydrogen. They also highlighted the need to monetise byproducts to enhance the overall viability of these projects. Priyantha Wijayatunga, Senior Director, Energy Sector Office, Asian Development Bank (ADB), noted that the overall integrated cost of hydrogen projects needs careful consideration.
Roles of development banks and the private sector
Development banks such as the ADB and Development Finance Corporation (DFC) play a crucial role in financing and offering technical support, particularly in emerging markets. They adopt a technology-agnostic approach, focusing on the overall feasibility and integration of hydrogen solutions within the broader energy system.
Douglas Midland, Managing Director, Jakarta, DFC, noted the importance of blending different forms of capital to support early-stage project development. Meanwhile, Jianrong Liu, Investment Director, Decarbonisation Partners, stressed the need for blending grant funding with project financing to de-risk and scale hydrogen projects. Both public and private sectors must align to create the right enabling environment that attracts private capital, with a focus on commercial viability.
Innovation and collaboration in hydrogen projects
The discussions showcased examples of grassroots innovation in hydrogen applications across Southeast Asia. Countries in Singapore and India are exploring specialised roles—with Singapore focusing on end-user applications and distribution, and India emphasising hydrogen production.
The panelists emphasised the potential for regional cooperation. Mr Liu noted that "it takes a village to raise a child", stressing the need for collaboration across the hydrogen value chain, from technology providers to end-users.
The panel also highlighted the role of government support, such as the US hydrogen hubs initiative. The speakers called for similar sandbox environments in Southeast Asia to test and scale hydrogen solutions suited to local contexts.
The session highlighted hydrogen's immense potential in the energy transition, alongside the complexities involved in overcoming the associated challenges. From innovative financing models to regional collaboration, the discussions made it clear that hydrogen will be a cornerstone in shaping a sustainable energy future.
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