H2Pro to sell hydrogen to Japanese giant Sumitomo in deal estimated at $250 million
H2Pro to sell hydrogen to Japanese giant Sumitomo in deal estimated at $250 million
Talmon Marco's company will build hydrogen production facilities for the Japanese corporation with a capacity of up to 500 megawatts. The value of the agreement is estimated at $250 million until the end of the decade. Marco: "It’s not a one-time deal, it's a relationship"
Israeli company H2Pro, founded by entrepreneur Talmon Marco, has signed a strategic agreement with the Japanese giant Sumitomo, Calcalist has learned. The value of the agreement is estimated at about $250 million until the end of the current decade.
In a conversation with Calcalist, Marco and Eyal Rosner, a partner at IN Venture that invested in the company and is Sumitomo's representative in Israel, explained that this is not only a financial agreement, but also and above all a strategic agreement for the Israeli company.
H2Pro develops innovative technology for green hydrogen production (hydrogen production that does not involve CO2 emissions). The technology called E-TAC upgrades the normal electrolysis process and enables the separation of water into hydrogen and oxygen in an innovative process where the hydrogen and oxygen are produced separately in different stages. As a result, the process developed by H2Pro enables the production of hydrogen without the emission of greenhouse gasses at a substantially lower price than the production cost of clean hydrogen using existing technologies.
The agreement with the Japanese giant is to provide it with facilities for the production of hydrogen with a capacity of up to 500 megawatts by the end of the decade. The company is set to start to supply the facilities in 2025, when H2Pro is expected to finish the development.
"Our belief is that the product will work in 2025. In terms of progress, by the end of the year a pilot system will be in place in Bazan. This is a 400 kilowatt system which is substantial in terms of the market. It is ten million times larger than the laboratory stage but we want to go much further. We want a demo system of 12 megawatts by the end of next year and 25 megawatts in 2025. If we meet these goals, then we can move to serial production in 2025 and begin to supply it," said Marco.
A similar but significantly smaller agreement was signed by the Israeli company with the renewable energy company Doral last year. The agreement with Doral is valued at approximately $70 million.
The Israeli company's investors include Microsoft founder Bill Gates, who invested in the company as early as 2019 through the Breakthrough Energy Ventures fund. Another leading investor is the Singapore government's Temasek fund. To date, the company has raised about $100 million.
Marco is one of the most prominent entrepreneurs in Israel who was previously behind the Viber chat application that was sold to Japan's Rakuten for approximately $800 million and the Juno travel application that was purchased by Gett for an estimated $200 million.
"We produce green hydrogen, hydrogen whose production and emission do not pollute the world," added Marco.
"We studied the company's needs and adapted to Sumitomo. After a long process we reached a framework agreement that should help the company significantly," said Eyal Rosner, a partner in the investment fund IN Venture, in which Sumitomo is the main investor.
"We are unique in the Israeli landscape because Sumitomo is a very industrial company that produces large things. Sumitomo brings knowledge that we do not have in the supply of raw materials and components. We will purchase a lot of nickel. The agreement does not speak of Sumitomo purchasing from us but of a sharing of an extensive collaboration," noted Marco. "We are building a long-term relationship there that starts today at the production planning stage. Hydrogen is a huge industry and Sumitomo is a leading player in the field.
"Assuming that all the company's systems will work, this is not a one-time deal. Hydrogen is a huge industry and Sumitomo is a huge player in these areas," added Marco.
