Watson Farley & Williams (“WFW”) advised KGAL Investment Management (“KGAL”)‘s KGAL ESPF 6 Energy Transition Fund on its investment in a major project to produce green hydrogen in the Baltic Sea port of Lubmin in eastern Germany. KGAL’s partners on the project are PtX Development GmbH (“PtX Development”) as initiator and German green energy specialist GP JOULE as developer.
The “Lubmin Project” is being built on the site of a former nuclear power plant and will produce around 100,000t of green hydrogen per year with a total capacity of up to 1,050 MW. Up to 2.8 GW of offshore wind energy will be available for electrolysis. A direct connection to Germany’s hydrogen core network is planned to transport the hydrogen from Lubmin via Bitterfeld and the Frankfurt-Höchst chemical triangle to economic hubs in the south of the country going forward.
The Lubmin Project is embedded in the hydrogen hub planned for the site, which will have a total electrolysis capacity of approximately 4 GW through four other planned projects and, combined with hydrogen imports via the industrial port, will be of strategic importance across Europe.
Lubmin is KGAL ESPF 6 Energy Transition Fund’s second ground-breaking project in the renewables space, following its investment in the large-scale eSAF project by developer Arcadia in Vordingborg, Denmark, on which WFW also advised them.
Munich-based KGAL is one of Germany’s leading independent investment and asset managers with €16bn AUM. It focusses on long-term real capital investments for institutional and private investors in the real estate, sustainable infrastructure and aviation sectors.
Founded in Berlin in 2020, PtX Development plans and develops sites for hydrogen production, combining extensive expertise in the hydrogen market and plant construction with many years of experience realising complex construction and infrastructure projects.
GP JOULE is an integrated energy supplier in all areas of the energy value chain, producing and marketing wind and solar power, green hydrogen and heat for both electric and hydrogen mobility and household and industrial use.
The multidisciplinary WFW German team that advised KGAL was led by Munich Corporate and M&A Partner Dirk Janssen, working closely with Projects Partner Christian Bauer, Hamburg Partners F. Maximilian Boemke, Christine Bader (both Regulatory), Verena Scheibe (Tax) and Sebastian Baum (Real Estate). They were supported by Munich Corporate Associates Christian Schulten-Baumer and Julian Kasper, Hamburg Regulatory Associates Ruwen Fritsche and Philipp Kleiner, Hamburg Real Estate Senior Associate Julia von der Blumensaat and Associate Josephina Knauf and Hamburg Finance Senior Associate Marlene Kowerk.
Dirk commented: “Following our successful collaboration on the large-scale Arcadia ESAF project in Denmark, we are delighted that we were once again able to support KGAL on a project that will make a significant contribution to the decarbonisation of the German economy. The trust and well-coordinated collaboration between the KGAL and WFW teams played a key role in successfully bringing this complex project across the finish line”.
