New opportunity for Moroccan developersgreen hydrogen. The «PtX Development Fund», a pioneering program financed by the German Federal Ministry for Economic Cooperation and Development (BMZ), launched its second call for expressions of interest on January 8, 2025. With an initial envelope of 270 million euros, this Fund aims to stimulate the development of large-scale industrial projects along the value chain of green hydrogen and its derivatives, known as “Power-to-X” (PtX). Morocco is one of the 7 eligible countries, alongside Brazil, Colombia, Egypt, India, Kenya and South Africa. The deadline for receipt of applications for the “ PtX Development Fund” is March 5, 2025. Projects must be of industrial size with a total investment cost exceeding 100 million euros. An industrial project can receive up to 30 million euros, provided it meets the technical, environmental and social criteria of the program.
The selection process takes place in two stages. The first consists of an eligibility check and pre-selection, during which applicants must provide a pre-selection questionnaire containing detailed information about their projects. Those who meet the criteria will be invited to the second stage, which consists of an in-depth assessment and grant allocation. Shortlisted applicants will be required to submit comprehensive documentation, including an environmental and social impact assessment, feasibility studies and financial models.
The amount of subsidies must be decisive to enable the project to reach the “Financial Close» (financial closure). Grants may cover capital expenditures for key components of projects and, in some cases, include technical assistance to address gaps identified in proposals. In addition to direct grants, projects may be eligible for parallel funding via the KfW “PtX” platform. This platform brings together financing and support instruments to fill gaps in the financial viability of projects. The Fund works closely with KfW’s “PtX” platform, which aims to attract more investment from private investors and promotional loans, thereby mobilizing project finance worth total of several billion euros.Several webinars are planned with the “PtX Development Fund” team in the coming weeks to provide additional information on the application process and answer general questions from applicants.
By providing non-repayable grants to these industrial projects, the Fund aims to contribute to the economic development and socio-ecological transformation of developing and emerging countries, as well as to the achievement of their climate objectives.
-Program Background
According to those responsible for this Fund, the decarbonization of societies and economies is one of the greatest challenges of this century. The energy sector can be largely decarbonized by further developing renewable electricity production. However, electrification reaches its limits when it comes to long-term storage and transport of energy over long distances. In addition, several applications – particularly in the industrial and transport sectors – cannot be directly electrified at a reasonable cost. This is where green or renewable hydrogen plays a key role. Green hydrogen is produced by electrolysis using renewable electricity and can then be transformed into secondary products. These derivatives, such as green ammonia, green methanol or synthetic fuels, offer ecological solutions for various industrial and energy uses. The levelized costs of electricity from renewable energies – and therefore green hydrogen – strongly depend on the local geographic and weather conditions. It therefore makes sense to establish significant green hydrogen production capacities not only in regions of high energy consumption, such as the European Union, but also in countries where production conditions are particularly favorable, and where decarbonization can thus be carried out more efficiently. Some of these countries with favorable conditions are developing and emerging economies, whose energy demand is also expected to increase.
It is therefore essential to intensify and support the energy transition in these countries, not only to achieve net-zero emissions on a global scale, but also to guarantee sustainable economic and social development. In addition, the development of a global market for green hydrogen contributes to a diversification of energy supply. Germany is among the leading nations in the fight against climate change, with the commitment to achieve neutrality carbon by 2045 and support other countries in their climate goals. To this end, the BMZ has established the “PtX” Development Fund to provide non-repayable grants to large-scale industrial projects within the green hydrogen value chain. These projects, of geostrategic importance, must be located in developing and emerging countries and be close to financial closure. In July 2023, KGAL Investment Management was commissioned by KfW as manager of the Fund. The KGAL team of experts, together with experts, will evaluate the expressions of interest submitted by interested parties from technical, economic, environmental and social perspectives. Based on the results of this assessment, the “PtX” Development Fund will allocate grants to selected interested parties. The “PtX Development Fund” offers a unique opportunity to develop high-impact ecological projects in developing economies. With its substantial financial support and rigorous criteria, this program aims to be an essential lever for accelerating the global energy transition and achieving climate objectives.
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