The German federal government has given the starting signal for financing the nationwide hydrogen core network. On March 24, KfW Bank paid out the first 172 million euros to the amortization account. The following day, the funds were transferred to the hydrogen core network operators.
The Federal Network Agency approved the construction of the nationwide hydrogen core network on October 22, 2024. The costs of the 9,040-kilometer hydrogen pipelines are estimated at approximately 18.9 billion euros. The financing is to be achieved through a mix of network fees from users, government subsidies, and the network operators' own funds.
On March 24, KfW, as the loan provider, paid the first payment of 172 million euros into the amortization account for the hydrogen core network. On March 25, the account-managing H2 Amortization Account GmbH (AMKG) then transferred this payment to the 18 hydrogen core network operators.
The payment marks the beginning of the gradual network expansion. This was also confirmed by the Federal Minister of Finance, Dr. Jörg Kukies: "We are convinced that the ramp-up will succeed and that the core network will be economically viable in the long term. Through the subsidiary financial security provided by the federal government, we are expressing this conviction."
KfW Provides 24 Billion Euros
KfW is providing a loan of 24 billion euros through the amortization account for financing. The funds are intended to finance the initial compensation payments to the hydrogen core network operators. The next payout from the amortization account is planned for March 2026.
Robert Habeck stated that the Federal Ministry of Economic Affairs and Climate Protection has developed an innovative financing concept with the amortization account that incentivizes private investments and enables long-term complete financing of the hydrogen core network through network fees. The payment to the hydrogen core network operators should allow the first core network lines to be completed this year.
The payment to the hydrogen core network operators serves as an initial interim financing for the construction of the hydrogen core network. Repayment will occur through privately generated network fees after market ramp-up. Since there will be relatively few consumers in the first years of the hydrogen ramp-up, the initially high investment costs cannot be fully passed on to users. Network fees will therefore be capped to prevent initially high fees from hindering the hydrogen ramp-up. The ministry intends to interim finance the difference between investment costs and capped network fees through the amortization account. Later, when more hydrogen consumers are connected to the network, this difference is to be balanced out by additional revenues. The concept includes a subsidiary financial security by the federal government against unforeseeable developments. Additionally, the Federal Network Agency will conduct a review of the ramp-up fee every three years.
