Alternative asset and private equity investor KKR, and Spanish renewable developer IGNIS today announced that they will launch a new Power-to-X (P2X) platform to develop primarily green hydrogen and ammonia projects, for industrial applications in hard-to-abate sectors.

According to KKR and IGNIS, the new platform will develop traditional renewables, largely wind and solar, associated with hydrogen and ammonia projects. It will also produce green hydrogen, ammonia, e-methanol, e-fuels and SAF production plants to serve blue chip corporates in refining, steel, chemicals, fertilizer, and other sectors that are seeking to decarbonize. P2X refers to technologies that convert energy, particularly renewable energy, into carbon-neutral synthetic fuels.

The new partnership follows the identification by KKR in December 2023 of decarbonization, and the large scale “brown-to-green” transition of asset-heavy sectors in particular, as a key “mega-theme” driving investment opportunities. The firm made a series of climate-focused and sector decarbonization moves, including the launch in August 2023 of a global climate strategy team in its infrastructure unit, which the firm said marked an expansion on its focus on climate investing, and has recently announced several large-scale energy transition infrastructure-related investments.

Under the new agreement, KKR will provide up to €400 million (USD$429 million) from its global climate strategy to develop and build future projects and the companies will each own 50% of the platform when launched.

Ryan Miller, Managing Director in KKR’s European Infrastructure Team, said:

“IGNIS is a leader in renewables in Spain, with an industrial mentality, differentiated P2X pipeline, and experienced management team. We believe this platform will play a critical role in the decarbonisation of heavy industry in Spain and internationally, driven by favourable regulatory tailwinds and its strong industrial integration with blue chip corporates.”

The platform includes a pipeline of around 20 GW of P2X projects across Spain and other selected countries, as well as more than 10 GW of advanced and early-stage renewables in Spain and additional renewable projects globally, to be developed by a dedicated P2X team. Projects will be located near large off-takers, providing a critical enabling technology for the decarbonization of hard-to-abate sectors.

Antonio Sieira, IGNIS CEO, said:

“This agreement is an important milestone for IGNIS. KKR is providing a strong endorsement of the development work we have been doing at IGNIS around P2X. We’re very pleased to have such a globally recognised partner alongside us. Their financial acumen, high performing team, as well as their leadership in energy transition, are an extraordinary asset for the development of such a strategic business as P2X.”