Letter on hydrogen: HSBC takes the plunge

Bank’s UK arm signs first deal to finance a green hydrogen developer, but cost and offtake pressures mean the sector remains too risky for many lenders

The UK arm of multinational bank HSBC has finalised its first deal to fund a green hydrogen project developer. It has agreed a “multi-million pound funding deal” to support Oxford-based project developer Hygen in the expansion of capacity at its Birmingham production site and other projects across the UK. For a lender, Hygen looks like a decent bet. It aims to scale up to 500MW of low-carbon hydrogen production capacity in the UK. Crucially, it is part of HydraB, a holding company comprising transport-focused firms including Ryze, a hydrogen distributor, and Wrightbus, the UK’s leading manufacturer of hydrogen and battery-electric buses. This gives Hygen a route to market. The company says i