Hanwha Energy to raise $130 mn for Australia hydrogen project

Hanwha Energy Corp. of South Korea's Hanwha Group will raise about 150 billion won ($130 million) from Woori Private Equity to fund its solar energy-based green hydrogen project in Australia.

Hanwha Energy's subsidiary in Australia is in the final stages of talks with Woori PE for the new funding, according to investment banking sources on Nov. 8.

The funding, which is expected to close early next year, will give the PE firm about a 20% stake in the Australian subsidiary of Hanwha Energy. The company plans to list the Australian unit in the US via a special purpose acquisition company (SPAC) in 2023.

The proceeds will be used to build solar power plants in two locations in Australia and expand its electricity retail business in the country. Established in 2018, the Australian unit has entered the electricity retailing market under the Nectr brand. Its solar power plants under construction will have a combined capacity of 202 megawatts and are expected to come online in 2023.

Australia is seen as an optimal country to produce green hydrogen from water, which uses renewable energy in the process. The country's dry weather, abundant sunshine and water resources make it an ideal place to produce renewable energy. It is one of the few countries in a rapid transition to renewable sources as well. 

Australia's electricity market is expected to grow 3-4% per annum, alongside population growth and a rise in electric vehicles. In particular, its renewable energy market is forecast to expand by 10% per annum, in line with its policy efforts to shut down coal power plants to reduce carbon emissions.

Hanwha Energy runs various energy businesses ranging from solar energy to large-scale energy storage systems (ESS), liquefied natural gas and hydrogen in the US., Japan and Australia, as well as in South Korea.

It is now stepping up hydrogen and renewable businesses by expanding solar energy-related ESS business in the US and Australia. Its eventual goal is to build a group-wide green hydrogen value chain from production to storage to charging.

Earlier this year, Hanwha Energy had agreed with French refiner Total SE to set up a joint venture to build solar power plants and storage centers in 12 US locations, in projects worth around 2 trillion won.

Write to Chae-yeon Kim at why29@hankyung.com
Yeonhee Kim edited this article