The Department of Business, Economic Development and Tourism has selected H2 Energy LLC to manage an $8.7 million investment fund aimed at jump-starting Hawai'i hydrogen-based technologies.

State officials will now work to finalize a contract with H2 Energy so seed capital investments and matching grant money can be disbursed as soon as this fall, said Maurice Kaya, chief technology officer for DBEDT. H2 Energy is a partnership involving HiBEAM and merchant bank Sennet Capital. HiBEAM is an organization of venture capitalists and others who have raised millions for client companies.

HiBeam officers include Barry Weinman, managing director of Allegis Capital and a co-founder of HiBEAM. Sennet's officers include Richard Lim and Kenton Eldridge.

Five consortia bid to run the program. H2 Energy was selected based in part on criteria such as management team and experience even though it was not the lowest bidder, Kaya said.

While details of H2 Energy's contract have not been settled, the company likely will receive up to $385,000 in consulting fees along with 2 percent to 3 percent of fund awards.

Lawmakers authorized the creation of a hydrogen investment capital special fund in 2006 in hopes of fueling interest and development of clean-burning hydrogen fuel from renewable resources such as wind and water. Hydrogen is a renewable fuel that can be used in fuel cells, internal combustion engines and in future power plants. Hydrogen is plentiful, but researchers have yet to find cost-effective ways to manufacture and use the fuel.

Lawmakers actually set aside $10 million for the fund; however, $800,000 of that money already has been given to the University of Hawai'i to help fund a Big Island hydrogen power park. Another $500,000 has been set aside to cover administrative costs.

Reach Sean Hao at shao@honoluluadvertiser.com.