Singapore’s GIC is pumping more capital into technologies and industries dedicated to the transition to net zero with a further US$115 million investment in Hong Kong-based green hydrogen projects developer InterContinental Energy (ICE) that follows the sovereign fund's involvement in a EUR1.5 billion private placement in H2 Green Steel earlier this month.
ICE is developing green hydrogen projects in Australia and the Middle East, with a target of nearly 100GW of total installed renewables capacity, 10GW of which is set to be delivered by the end of 2030. The portfolio is projected to produce more than 5 million tonnes of green hydrogen per year, including involvement in Western Australia’s massive Asian Renewable Energy Hub (AREH) project.
GIC became a strategic investor in ICE in January 2022, by which time the green hydrogen producer had been in operation for nearly eight years and had an advanced portfolio of projects in Western Australia, Oman and Saudi Arabia. Its developments utilize wind and solar energy to electrolyze water and produce green fuels, such as hydrogen and ammonia. Key end markets include marine fuels, co-firing in power generation, industrial processes, and heavy transport. The ICE portfolio is expected to offset over 200 million tonnes per annum of CO2.
H2 Green Steel, GIC’s other major investment target this month, is also set to utilize green hydrogen. GIC teamed up with Altor, Hy24 and Just Climate to buy equity that will finance the world’s first large-scale green steel plant and Europe’s first giga-scale electrolyzer based in Sweden. Operations are due to start by end-2025. The transaction also included new investors Sweden’s AP2 public pension fund and GIC’s stablemate, Singapore’s state-owned investor Temasek. The pioneering plant will reduce carbon dioxide emissions by up to 95% compared to steel produced in blast furnaces. It replaces coal in the production process with hydrogen made from water, created from a process that uses renewable energy sources.
Australian renewables were also a target for the Singaporean investor in June when it joined Copenhagen Infrastructure Partners (CIP) in backing a green bond issue by TagEnergy of up to EUR570 million. The funds are supporting the growth of its renewable energy portfolio of onshore wind, battery energy storage systems (BESS) and solar PV assets across the UK, Europe and Australia. The financial backing is pivotal part of TagEnergy´s strategy to bring over 4GW of onshore wind and other renewable energy projects to commercial operation in developed markets.
Aiming for exposure in Europe's burgeoning renewables sector, in March it bought a 5% stake in Spain-based EDP Renovaveis (EDPR) for US$1 billion, supporting the producer’s plans for pan-European growth in renewables and energy transition. EDPR is planning EUR20 billion in investments to double its capacity of wind and other renewable projects by 2026. Projects would see the roll out of more than 4GW of new wind and solar projects every year between 2023 and 2026, totalling 17GW of new installed capacity. By 2030, it aims for 50GW of additions.
GIC’s low carbon portfolio includes stakes in Storegga, ecoATM, Greenko, Duke Energy Indiana, Arctic Green Energy, and Eneus Energy. It is also a backer of greentech leader Envision Group, joining Sequoia Capital and Primavera Capital in November 2021 in an investment worth US$1 billion to accelerate the pace of energy transition and explore net zero opportunities through strategic partnerships. Envision’s businesses span renewables, hydrogen, battery and digital solutions.
GIC was the leading sovereign investor in renewables in 2022, deploying more than US$3 billion in the sector. Its Infrastructure group sees hydrogen as a crucial and necessary component in achieving the world’s decarbonization targets due to its versatility in applications across a range of sectors, from transportation, energy storage, heating and power to feedstock in industrial and agricultural sectors. As a global investor in energy and transport infrastructure, GIC is positioning itself to invest in emerging opportunities in the hydrogen economy.