JCB scion seeks to drive UK hydrogen economy with £1bn investment

Entrepreneur Jo Bamford, one of the heirs to the JCB fortune, has joined forces with a green investment fund to create new hydrogen investment fund HYCAP.

Its capital already stands at £200m after the first round of investment, which will be largely injected into UK businesses working on the supply and production of hydrogen. Run in association with Vedra Partners, it aims to obtain a total of £1bn through further rounds.

“With the government’s relentless pursuit of net zero targets and the publication of the damning IPCC report, it is our belief that hydrogen holds the key to reducing emissions - and there is a growing sense of urgency to act now,” said Bamford, the son of billionaire JCB chairman Lord Anthony Bamford.

Under his chairmanship and ownership since 2019, Northern Ireland-based bus manufacturer Wrightbus has introduced a number of hydrogen and battery-powered models, including the world’s first double-decker fuel cell model this year.

READ MORE: UK Hydrogen Strategy: Government says hydrogen could provide a third of the UK’s energy by 2050

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“The UK has missed the boat on batteries, a sector dominated by China and the Far East, but we can be global leaders in the production and supply of hydrogen - an economy said to be worth $2.5 trillion in revenues by 2050,” he Bamford added. His team has already identified more than 40 firms operating in the hydrogen sector that may be ripe for investment.

“We have also discovered that investors around the world match the ambitions of global governments in wanting green-focused funds which have a positive impact on climate change,” he said.

His comment is an acknowledgment of an increasingly crowded marketplace for hydrogen investment. Investor interest has grown rapidly, due both to the potential of hydrogen to meet decarbonisation efforts and the vast amount of money needed to build the infrastructure to produce, distribute and use it. Furthermore, countries representing 70% of global GDP now have hydrogen roadmaps, membership of the UK’s Hydrogen Council has increased almost five-fold since 2017 and last month’s Hydrogen Strategy outlines an ambition to reach five gigawatts of low-carbon hydrogen production within the decade.

Cash is pouring into the sector. There are now at least two hydrogen share indexes – the VanEck Vectors Hydrogen Economy index and the Solactive Hydrogen Economy Index, the latter having tripled in value since its launch at the end of 2018. It is tracked by L&G’s $495.0m Hydrogen Economy fund, launched in February.

The European-focused ‘FiveT Hydrogen’ fund followed in April, seeking to raise €1bn by the end of the year. Another fund, Hydrogen One, raised £107m through an initial public offering in July. It is already valued at over £122m following a leap in its share price last month.

Vedra Partners' founder Max Gottschalk, who took $3million of seed capital in 1999 to $16 billion eight years later, said there had already been a great deal of interest in HYCAP.

“The fund will be investing across the entire value chain, focusing on production, manufacture and supply, in order to put the UK firmly on the map when it comes to hydrogen,” Gottschalk said.

He added that the fund will be aiming to invest in hydrogen for public transport – potentially financially beneficial for Wrightbus.

However, according to Board of Trade member and technology consultant Michael Liebreich, metropolitan buses are one of the most inappropriate and fundamentally inefficient uses of hydrogen. “Local trains and buses simply don't cover enough miles for hydrogen to have any advantages. All you get is a vehicle with higher maintenance costs and a safety problem in your depot,” he wrote in a blog last month, backing electrification instead.

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