A recent study conducted by the Indian Institute of Management-Bangalore (IIM-B) has shed light on the financial hurdles faced by green hydrogen projects, particularly one spearheaded by TheGreenBillions Ltd. (TGBL) in Pune. The study, titled “Funding Green Hydrogen from Waste: Can Social Projects Make Financial Sense?”, was published in August by Harvard Publishing Business Education, reported The Hindu.
The project, estimated to cost ₹4.2 billion, aims to produce green hydrogen from waste, but the study warns of significant funding risks. According to the authors — Ranjani K.S., Chirag Rawat, and U. Dinesh Kumar, a professor at IIM-B — the challenge lies in securing funds for a futuristic technology that comes with untested adoption rates and unexplored risk factors.
“For such projects to succeed, the benefits must outweigh the risks,” the study emphasized.
TGBL, founded in 2016, is recognized as a pioneer in the green hydrogen sector. In early 2022, the company began working on a waste-to-hydrogen technology in Pune. The initiative, developed in collaboration with research partners, government bodies, and other stakeholders, was eventually pitched to the Urban Local Body (ULB) for implementation under a Private-Public Partnership (PPP) model.
Following a feasibility study, the ULB agreed to move forward with the project, pending financial closure. The estimated ₹4.2 billion investment would cover the design, construction, fabrication, erection, and commissioning of the hydrogen generation facility, along with logistics support.
According to the study, the project presented multiple revenue opportunities, including income from the sale of hydrogen, waste management services, recyclables, organic fertilizers, and carbon credits earned from reduced emissions.
However, it was not an easy task to secure funds for such a large and innovative project. Although financial institutions are interested in clean energy projects, they have been quite cautious about green hydrogen due to the limited track record and uncertainty of its technological and financial feasibility.
The study observes that, although mandates and agencies exist to encourage investment in clean energy, the end users and financial institutions remain more reluctant to adopt green hydrogen technology at scale.
With this, the authors concluded that even with technological progressions, financing green hydrogen projects remains a complex affair because of the risks associated with emergent technologies and untested markets.
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