Green hydrogen to be produced at Baltic states' largest onshore wind farm after EU backs €100m loan deal

Achema aims to replace the use of natural gas with renewable hydrogen (H2) in the production of ammonia. The proposed solution involves harnessing the entire output of a forthcoming 264MW onshore wind farm in Lithuania to generate green hydrogen for Achema, the country's leading fertilizer manufacturer. This endeavor, facilitated by securing €326m ($352m) in loans from European banks, is set to materialize with the construction of the Pagėgiai wind farm, projected to be operational by the third quarter of 2026. Anticipated to cost €460m, this wind farm will mark the largest greenfield onshore project in the Baltic states upon completion.

Although Achema, which controls the wind project's developer Renerga, has pledged to utilize all of the anticipated 602GWh of renewable electricity annually for green hydrogen production, specifics regarding the volume of hydrogen to be produced and the type of electrolyzer to be employed remain undisclosed. Achema estimates that a significant portion, approximately 80%, of its emissions stem from the operation of its two ammonia production units.

Notably, Achema is a major consumer of natural gas in Lithuania, a country reliant on gas imports due to the absence of domestic production. Prior to the establishment of Lithuania's first LNG terminal in 2014, the nation relied solely on a Russian gas pipeline. A spike in gas prices in 2022, resulting from Russia's invasion of Ukraine, compelled Achema to temporarily halt production. Thus, the transition toward green hydrogen could serve as a dual-purpose strategy: decarbonizing Achema's products while bolstering energy security.

The loans for this ambitious initiative were provided by German export bank KfW IPEX, German commercial bank Nord/LB, and the Nordic Investment Bank, the latter being an international investment institution serving the Nordic region and Baltic states. The Nordic Investment Bank's €100m loan was supported by a €43.5m guarantee from the European Union's InvestEU program. André Küüsvek, President and CEO of the Nordic Investment Bank, affirms that this loan aligns with the institution's commitment to enhancing member countries' productivity and environmental stewardship. He emphasizes the loan's contribution to Lithuania's renewable energy expansion, reduced dependence on natural gas imports, advancement of green technologies, and its broader positive impact on the region's development.