Houston-based Baker Hughes Co. (NYSE: BKR), one of the region's largest public companies, plans to invest in a fund focused on clean hydrogen infrastructure projects.
Baker Hughes, New York-based Plug Power (Nasdaq: PLUG) and Georgia-based Chart Industries Inc. (NYSE: GTLS) announced their intention to be lead investors for the FiveT Hydrogen Fund on April 5. The Euro-denominated fund will be offered to only qualifying and verified investors and aims to raise a total of €1 billion, or about $1.18 billion at the current exchange rate.
Plug Power plans to commit €160 million, or roughly $200 million, to the fund, while Baker Hughes and Chart Industries each plan to commit €50 million, or roughly $60 million, the firms announced. The FiveT Hyrdogen Fund will exclusively focus on projects "in the production, storage and distribution of clean hydrogen."
"To drive the energy transition forward requires innovative models for collaboration and investment, and new energy frontiers like hydrogen will progress faster when key players come together," said Lorenzo Simonelli, chairman and CEO at Baker Hughes. "The FiveT Hydrogen Fund will combine the financial strength as well as the strategic and technical expertise of our companies to help advance hydrogen in new ways. As an energy technology company with almost 60 years’ experience in the hydrogen space, Baker Hughes is pleased to continue our commitment to a net-zero future with our intended investment in FiveT."
Many energy industry experts agree that hydrogen will play an important role in the transition to clean energy and net-zero carbon dioxide emissions. Speaking at the CERAWeek by IHS Markit 2021 conference in March, David Eyton, executive vice president of innovation and engineering for BP PLC (NYSE: BP), said that better energy storage, advancements in carbon capture technology and hydrogen as an energy vector could make a huge difference in reaching net-zero goals.
The FiveT Hydrogen Fund will be led by CEO Pierre Etienne Franc, according to the announcement. Until March 31, Etienne served as vice president of hydrogen energy for French gas firm Air Liquide, as well as co-secretary of the Hydrogen Council.
"We all know that this moment in the hydrogen journey requires a very innovative approach to infrastructure investment," Franc said. "FiveT ambition is indeed to put forward a distinctive fund value proposition for financial and industrial LPs wishing to be the hydrogen infrastructure key players. We expect to welcome future commitments from EU and Asian strategic partners who are actively working on infrastructure projects and initiatives."
Baker Hughes' 2020 revenue was about $20.7 billion, down 13% year over year. The firm recorded a net loss of $15.98 billion for the year, largely due to $14.77 billion in impairment costs, according to its annual report. Baker Hughes cut its headcount by about 13,000 employees in 2020.
Based on the firm's 2019 revenue of $23.84 billion, Baker Hughes is the Houston area's eighth-largest publicly traded company.
