Hygenco's first take-or-pay green-hydrogen contract is exactly the deal the sector needed

Hygenco's execution of a long-tenure take-or-pay offtake agreement with an industrial buyer in 2025 is the most commercially significant development in India's early-stage green hydrogen sector since the government announced the National Green Hydrogen Mission in 2022. The deal - the kind of bankable, revenue-certain contract that project finance lenders require before committing to infrastructure capital - puts Hygenco in a small group of global green hydrogen companies that have moved from pilot plant to commercial-scale contracted revenue. Most Indian green hydrogen ventures have remained at the project development, feasibility and fundraising stage, with offtake agreements consistently cited as the missing piece needed to unlock capital at scale. Hygenco, founded by Siddharth Malik and Amit Bansal, has been building electrolyser-based green hydrogen production facilities powered by renewable energy. The company's model involves co-locating electrolysers with solar or wind generation assets, taking the renewable energy directly and producing hydrogen on-site that is then piped or transported to the industrial customer. This co-location approach eliminates the transmission losses and infrastructure costs of taking grid electricity for electrolysis - a meaningful cost advantage in the Indian context where grid electricity still carries coal-heavy baseload blending that affects the carbon footprint calculation. The industrial customer that signed the take-or-pay agreement is believed to be in the fertiliser or ammonia sector - the largest near-term addressable market for green hydrogen in India - where the displacement of grey hydrogen currently produced from natural gas through steam methane reforming represents a direct substitution opportunity rather than a market development challenge. Fertiliser plants that already use hydrogen as a feedstock are logical first customers because they understand the product, have existing hydrogen-handling infrastructure, and face regulatory pressure to decarbonise their production processes under India's Climate Action Plan commitments. The policy tailwind behind this deal is substantial. The National Green Hydrogen Mission provides production-linked incentive support for green hydrogen and green ammonia production, with a target of five million metric tonnes of annual production by 2030. Hygenco's contracted project can access this support, improving its economics and reducing the price required from the offtake customer to make the project bankable. What to watch: whether Hygenco can secure project finance from banks and infrastructure funds based on the take-or-pay contract, how quickly additional offtake agreements follow as the first project demonstrates commercial operation, and whether the production cost trajectory aligns with the government's stated target of making Indian green hydrogen competitive with grey hydrogen within the decade.

Original source: Mint