Japan’s brand-new hydrogen fund makes a smashing debut with $400M already in hand

September 16, 2024, by Naida Hakirevic Prevljak

The Japan Hydrogen Fund — the first Japanese fund dedicated to the development of low-carbon hydrogen — has been officially launched, with more than $400 million raised from multiple investors.

Illustration. Suiso Frontier, the world’s first liquefied hydrogen carrier built by Kawasaki Heavy Industries in Japan in 2019. Courtesy of KHI

The fund — expected to raise about $1 billion in the future — will be managed by Advantage Partners (AP), one of Japan’s leading private equity firms, and was launched by the Japan Hydrogen Association (JH2A), the largest private hydrogen value chain promotion council in the country.

At its launch, the fund was initially endowed with over $400 million, thanks to contributions from Toyota Motor Corporation, Iwatani Corporation, Sumitomo Mitsui Banking Corporation, MUFG Bank, Tokyo Century Corporation, Japan Green Investment Corp. for Carbon Neutrality, the Bank of Fukuoka and Total Energies.

In order to address the global issue of climate change, JH2A and AP agreed to cooperate in establishing this fund in September 2023 with the aim of solving issues such as:

Creating demand for hydrogen;
Reducing costs through scale-up and technological innovation; and
Providing funds to businesses in order to build a hydrogen supply chain not only in Japan but also around the world.

On June 6, 2024, the Ministry of Economy, Trade and Industry (METI) announced that it would establish an IPEF Window within the fund and obtain official support from METI in order to build a hydrogen supply chain within the Indo-Pacific Economic Framework for Prosperity (IPEF) region.

Specific activities to fulfill the aim could include, but are not limited to, the establishment of production facilities of hydrogen and hydrogen derivatives, including for electrolyzation, ammonia conversion and renewable energy generation, establishment of storage facilities, development of technologies such as liquefied hydrogen and metal hydride, establishment of transportation facilities such as pipelines and ships, and exploration of expanded use of hydrogen for facilitating the energy transition, including in industry, transportation, energy storage and power generation.

Through collaboration with METI and the public and private sectors around the world, the fund will work to expedite the implementation and scale-up of hydrogen supply chains in society.

“JH2A was established in 2020 to solve three issues for the social implementation of hydrogen: 1) creating demand for hydrogen, 2) reducing costs through scale-up and technological innovation, and 3) supplying funds to businesses,” Hiroshi Fukushima, Secretary General of JH2A, explained.

“The establishment of this fund has been a long-cherished wish of JH2A since its establishment. In addition to the promotion of hydrogen projects by private companies and regions and policy support such as government subsidies, we hope to support the social implementation of hydrogen through the supply of financing by this fund and contribute to the realization of a hydrogen society.”

“We are delighted to be able to start this fund in cooperation with JH2A and Sumitomo Mitsui DS, with the great expectations and support of METI. We are also very pleased and proud to have received strong trust and support from the major board members of JH2A, including Toyota Motor Corporation and Iwatani Corporation, Japan’s leading hydrogen companies, in closing this deal. The AP Group would like to pour all of the knowledge and experience it has accumulated in the fund business over the past 30 years into this fund. We look forward to collaborating with people from all over the world in the hydrogen-related field in the future,” Richard Folsom, AP Group co-chair, noted.

“TotalEnergies is pleased to support an ambitious fund dedicated to developing the hydrogen value chain in Japan and globally, as the only non-Japanese investor at this stage. We are convinced that only a collective effort will enable low-carbon hydrogen solutions to emerge on an industrial scale,” Helle Kristoffersen, President of Asia and member of the Executive Committee of TotalEnergies, said.