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HydrogenPro sets up joint venture as basis for global fabrication plan

17th November 2021. HydrogenPro AS (OSE: HYPRO) has reached an agreement with Tianjin HQY Hydrogen Machinery Co., Ltd. (“THM”) to create a joint venture, which will allow HydrogenPro to utilize THM’s electrolyser technology globally.

The first step of the joint venture is to set up a 300MW annual electrolyser production capacity in Tianjin, China, thereby completing the first major step of HydrogenPro’s global technology and fabrication plan.

THM will transfer employees, fixed assets and intellectual property to the joint venture, which will be 75 percent owned by HydrogenPro and 25 percent by the current owners of THM.

“This transaction gives HydrogenPro full control over IP and core electrolyser technology that is key to our global fabrication plan. The joint venture will be very cost-effective and serve clients all over the world until our global fabrication set-up is completed, complying with all regulatory standards in the relevant locations. The next steps will be to establish footprints outside of China, based on technology and experience from the joint venture, to maintain cost leadership and to ensure high local activity in our end-markets,” says Elling Nygaard, CEO of HydrogenPro.

THM has a long-standing history of producing electrolyser components, parts and systems as a supplier to the electrolyser industry in China and has over the past years expanded into assembly and sales of complete electrolysers.

HydrogenPro’s total investment cost is approximately NOK 48 million, whereof approximately NOK 8 million has been pre-paid and the remaining capital injection is approximately NOK 40 million (1 RMB = 1.35 NOK).

The board of the joint venture will consist of five representatives, with a majority appointed by HydrogenPro. HydrogenPro board member Jarle Dragvik will be chair of the joint venture board.

The production facility will be located in Tianjin and will be equipped with new machines, which have already been purchased. It is expected to be ready for pilot production by the end of 2021. When fully operational, the facility will have an annual electrolyser production capacity of 300MW, with substantial room for further expansion.

“We are very happy that THM’s technology and the hard work we have put into developing it will now be utilized in the new joint venture. We look forward to working with HydrogenPro to reach a global market and further develop the most efficient and competitive electrolyser technology,” says Wang Zhou, CEO of THM.

HydrogenPro will leverage its new, improved and cost-leading electrolyser technology for large industrial hydrogen installations, reducing power consumption by 14 percent, thus giving a significant cost advantage compared to other technologies.

“THM’s unique intellectual property and experience in the manufacturing of cost-competitive high-pressure alkaline electrolysers, makes them an ideal partner for HydrogenPro. When combined with our next-generation electrode technology from Denmark, we are able to significantly improve electrolyser efficiency, enabling hydrogen to be produced at the absolute lowest cost in the market for the time being. We regard this moderate investment in state-of-the-art production capacity to be in line with our asset light approach to developing a global supply chain,” Nygaard concludes.

For more information, please contact:
Elling Nygaard, CEO, +47 90 84 41 94, elling@hydrogen-pro.com
Martin T. Holtet, CFO, +47 92 24 49 02, martin@hydrogen-pro.com

HydrogenPro in brief:
HydrogenPro designs and supplies customized hydrogen plants in cooperation with global partners and suppliers, all ISO 9001 certified.

The Company was founded in 2013 by individuals with background from the electrolysis industry which was established in Telemark, Norway by Norsk Hydro in 1927. We are an experienced engineering team of leading industry experts, drawing upon unparalleled experience and expertise in the hydrogen and renewable energy industry.

Our core product is the alkaline high-pressure electrolyser. With the new electrode technology, we are able to increase the efficiency of each unit by 14% to reach 93% of the theoretical maximum. This is a significant step forward as the cost of electric power, depending on market prices, amounts to 70-90% of the cost of producing hydrogen, the value of such increased efficiency equals approximately the investment cost for the entire plant in a Total Cost of Operation perspective. The Company is targeting a production cost for green hydrogen of USD 1.2 per kg in 2022.

This information is subject to the disclosure requirements pursuant to the Market Abuse Regulation (MAR) Article 17 no. 1 and section 5-12 of the Norwegian Securities Trading Act.

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