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Highlights:
- Fortescue has collaborated with Tree Energy Solutions to expand its green energy hub in Europe
- The investment of €130 million (AU$ 199.2 million) will be funded by FFI (an FMG subsidiary).
- As per the deal, FFI will acquire 30% of TES, and the project will take place in Wilhelmshaven, Germany.
Materials giant Fortescue Metals Group Ltd (ASX:FMG) announced on ASX today (5 October 2022) that Fortescue Future Industries (FFI), a green energy subsidiary of FMG, has signed a partnership contract with Tree Energy Solutions.
Tree Energy Solutions, also known as TES, is an energy infrastructure developer currently building a green energy hub in Germany. The goal of this strategic alliance between the two companies is to hasten the development of a green energy import plant in Germany.
The partnership will combine TES' sustainable business model and access to the European green hydrogen market with FFI's industry-leading expertise in creating large-scale renewable energy production.
About the deal
- Under the partnership, FFI will invest €130 million (AU$199.2 million) using its unutilised capital commitment. This investment will help FFI to draw a clearer roadmap in order to execute the plan of Europe transitioning into green energy and clean fuels.
- The company will also invest €100 million (US$98 million) to build the TES terminal in Wilhelmshaven, Germany. After this investment spree, FFI will hold a 30% stake in Deutsche Grüngas und Energieversorgung GmbH, a subsidiary of TES and the project company that will build a green hydrogen hub in Wilhelmshaven, Germany.
- Both companies have decided to begin this partnership’s first phase by jointly developing and investing in the supply of 300,000 tonnes of green hydrogen.
- The final locations will be agreed upon soon, and a financial investment decision is anticipated for 2023.
- Apart from this, TES estimates receiving its first shipment of green hydrogen at its terminal in Wilhelmshaven, Germany, in 2026, wherein Australia, Europe, the Middle East, and Africa will be the primary projects to be focused on during the initial stages of this alliance.
TES is determined to develop a portfolio of terminals to enable global transportation of green energy. By speeding the import and manufacture of green molecules as a more affordable alternative to fossil fuels, the new strategic partnership underscores FFI and TES' commitment to lowering global emissions. FFI joins a group of investors in TES that includes multinational energy businesses and international financial institutions, including E.ON, HSBC, UniCredit, and Zodiac Maritime.
About Fortescue Metal Group (ASX:FMG)
Fortescue, a West Australian corporation founded in 2003, is renowned for its culture, values, innovation, and development of infrastructure and mining assets that set the standard for the industry. With more than 1.7 billion tonnes of iron ore shipped to our clients since 2008, Fortescue, one of the lowest-cost iron ore producers in the world, is currently shipping at a rate of over 180 million tonnes annually.
