LEI: 213800PMTT98U879SF45

18 April 2024

HydrogenOne Capital Growth plc 

("HydrogenOne" or the "Company")

Update on HH2E

HydrogenOne Capital Growth plc, the first London-listed fund investing in clean hydrogen for a positive environmental impact, reports an update from the Company's portfolio holding HH2E AG ("HH2E"), a green hydrogen project developer in Germany.

HH2E is backed by HydrogenOne and Foresight Group ("Foresight"), comprising an investment in HH2E itself, and separately into project-specific Special Purpose Vehicles ("SPVs") managed by HH2E. The Company has invested alongside Foresight in the Thierbach SPV ("Thierbach"), and Foresight has also invested in the Lubmin SPV ("Lubmin"). In addition, HydrogenOne and Foresight together have development rights on a further four green hydrogen project SPVs, through their investment in HH2E.

The Company has now signed agreements, subject to customary completion, alongside Foresight and other investors in HH2E, to streamline the HH2E business, ahead of upcoming external funding rounds to bring green hydrogen projects into production.

Accordingly, the investment rights in all six green hydrogen project SPVs will be exchanged for HH2E equity, in a non-cash transaction for the Company. In addition, the Company's previously announced development loan to Thierbach, of which £1.9 million has been drawn, will be reduced to £0.7 million, through a swap for equity in HH2E (together the "HH2E Transaction").  The Company's resulting equity share of HH2E is unchanged, at around 11%, on an enlarged asset base with a simpler corporate structure.

The HH2E Transaction also provides the Company with exposure to an additional green hydrogen project, Lubmin, which is progressing towards its Final Investment Decision. The project is currently expected to be for 100MW input power, producing 7,000 tonnes per annum of REDII-compliant green hydrogen from 2026.

At 31 December 2023, the Company's investment in HH2E and Thierbach represented 6% of the Company's NAV. The Investment Adviser expects that the HH2E Transaction will be accretive to the Company's valuation of HH2E as projects move into development.

Dr JJ Traynor, Managing Partner of HydrogenOne Capital LLP, the Company's investment adviser, commented: "With these changes, HH2E has the platform to attract material new capital and scale the business, to become one of Europe's largest producers of green hydrogen and support the energy transition away from traditional fossil fuels. The restructuring also offers HydrogenOne exposure to the promising Lubmin project, which is an exciting development for our shareholders."

Alexander Voigt, co-founder and CEO of HH2E, commented: "In anticipation of our upcoming external investment round, we encountered an exceptionally high number of expressions of interest from both financial and industrial investors. The prevailing sentiment favoured a simpler corporate structure and a larger business size, necessitating the now-completed consolidation. Our forthcoming objective is to declare FID for our HH2E-Werk Lubmin and to initiate the Series B investment round for HH2E AG. We extend our deepest appreciation to Foresight Group and HydrogenOne for their steadfast support since our Series A investment round and their continued belief in our vision."

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Notes

For further information, please visit www.hydrogenonecapitalgrowthplc.com or contact:

About HydrogenOne:

HydrogenOne is the first London-listed hydrogen fund investing in clean hydrogen for a positive environmental impact. The Company was launched in 2021 with an investment objective to deliver an attractive level of capital growth by investing in a diversified portfolio of hydrogen and complementary hydrogen focused assets. INEOS Energy is a strategic investor in HydrogenOne. The Company is listed on the London Stock Exchange's main market (ticker code: HGEN). The Company is an Article 9 climate impact fund with an ESG policy integrated in investment decisions and asset monitoring.

The Company's Investment Adviser, HydrogenOne Capital LLP (FRN: 954060), is an appointed representative of Thornbridge Investment Management LLP (FRN: 713859) which is authorised and regulated by the Financial Conduct Authority.

IMPORTANT NOTICE

This announcement contains (or may contain) certain forward-looking statements with respect to certain of the Company's plans and/or the plans of one or more of its investee companies and their respective current goals and expectations relating to their respective future financial condition and performance and which involve a number of risks and uncertainties. The Company cautions readers that no forward- looking statement is a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statements.