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Estonian hydrogen innovator Elcogen gets a €45M strategic investment from HD Hyundai

South Korean HD Hyundai Group invests €45M in Estonian green hydrogen startup Elcogen, considering its fuel cells the most advanced in the world.

Korea Shipbuilding & Offshore Engineering (KSOE), a member of HD Hyundai Group, invests €45m in Estonian startup Elcogen and its Solid Oxide technology to further deepen the collaboration on emission-free power generation systems as well as green hydrogen production. The signing ceremony was attended by the President of Republic of Estonia, Alar Karis, as well as Kisun Chung, President and CEO at HD Hyundai, H.E. Sten Schwede, Ambassador of Estonia to South Korea and Enn Õunpuu, CEO of Elcogen.

The deal was advised by Arrowpoint Advisory (part of Rothschild & Co), and shareholder approval is needed before the new shares can be issued to KSOE.

A perfect pairing

HD Hyundai’s investment follows an extensive period of testing the full range of technology available in the market, following which an R&D collaboration agreement was signed with Elcogen in January 2023.

Chris Nash, Chairman of Elcogen, said: “We are delighted to welcome HD Hyundai as a close working partner and now as a shareholder. I believe this is a vote of confidence in our technology from a world leader in industrial innovation and shipbuilding. We look forward to building on this relationship as we continue working together.”

From left to right: Kisun Chung, President and CEO at HD Hyundai. H.E. Alar Karis, President of Republic of Estonia, H.E. Sten Schwede, Ambassador of Estonia to South Korea, Enn Õunpuu, CEO of Elcogen.

Founded in 2001 by Enn Õunpuu, Elcogen is an Estonian manufacturer of clean energy technology that delivers affordable green hydrogen and emission-free electricity. Elcogen has its registered office in the UK, and manufacturing facilities in Estonia and Finland that have served 160 customers in 30 countries. Elcogen provides advanced technology to transition away from fossil fuels and ensure energy security, focusing on solid oxide fuel cell (SOFC) and solid oxide electrolyser cell (SOEC) technology offers.

“There is a huge amount of pressure for heavy industries to decarbonise and meet net zero targets, not least maritime transport. We are delighted that HD Hyundai has built upon our strategic partnership to invest directly into Elcogen, recognising the key role our proprietary Solid Oxide technology will have in leading the world to net zero, providing a clear and external validation of Elcogen”, said Enn Õunpuu.

With the new deal, HD Hyundai and Elcogen are deepening their collaboration, focusing on marine propulsion systems and stationary power generation. Investment proceeds will fund Elcogen’s manufacturing capacity expansion via a new 360MW factory facility in Tallinn, Estonia, to satisfy rising demand. This will involve Elcogen’s proprietary SOFC and SOEC tech.

The power of hydrogen technology

HD Hyundai now has taken a major step in achieving its “Ocean Transformation” vision of eco-friendly, next-gen digital ships. KSOE signs a memorandum of understanding with Elcogen to design and prototype test large-capacity SOFC systems for ships and power generation. KSOE and Elcogen will manufacture the systems in South Korea and collaborate on technology advancements.

Mr Kisun Chung, CEO of HD Hyundai and Mr Enn Õunpuu, CEO of Elcogen

But why has Estonian-made tech won the global competition? HD Hyundai lists three major reasons for Elcogen’s SOFC and SOEC technology:

  • its flexibility to produce electrical energy from a variety of fuels such as hydrogen, natural gas, ammonia, methanol, and biofuel;
  • its suitability for ship engines and cogeneration as it is highly energy efficient and can use waste heat generated from high-temperature operation (600~1000℃);
  • it is considered the most advanced among all fuel cells developed to date.

“We expect this investment, and the strategic collaboration HD Hyundai and Elcogen will build together, will lay the cornerstone for realising the sustainable future energy ecosystem HD Hyundai envisions, which includes developing next generation clean energy technologies and expanding the value chain capabilities of future core energy sources, including hydrogen,” commented Kisun Chung, CEO of HD Hyundai/KSOE.

This deal is not the first time Elcogen has netted a major international win. In May 2022, Elcogen picked up €24M investment from HydrogenOne Capital, an LSE-listed investment fund dedicated to clean hydrogen. Yet the new success once again highlights the efforts of Estonia to lead in clean hydrogen production and research, now joined by the South Korean industry giant.

The Estonian Hydrogen Valley, established, is the world’s first nationwide Hydrogen Valley — a consortium of Estonian public and private capital-based organisations, including research institutions, aimed at making the local energy system more sustainable. The plan is to develop the first country-wide hydrogen ecosystem, with the first production units, distribution solutions and uses to be created within the next six years.

Do you want to participate in a future $2.5 trillion hydrogen global market? Start in Estonia! Book a time via e-Consulting to speak to your personal investment advisor.

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