Saudi Arabian renewable energy developer, investor, and operator ACWA Power has signed a Memorandum of Understanding (MoU) with South Africa’s government-owned finance institution, the Industrial Development Corporation (IDC), for the development of green hydrogen and its derivatives.
The MoU, signed by Paddy Padmanathan, Vice Chairman and CEO of ACWA Power; Clive Turton, Chief Investment Officer of ACWA Power; Rian Coetzee, Head of Industrial Planning and Project Development at the IDC; and Russel Wallace, Manager of Legal Services at the IDC, will explore a partnership for the development of green hydrogen, demonstrating South Africa’s commitment to achieving net-zero by 2050 and becoming a regional and global green hydrogen hub.
“With tangible renewable energy development commitments in South Africa already contributing to the country’s clean energy goals, the signing of the MoU with the IDC for the development of green hydrogen is a significant step towards further investing in diversifying the country’s energy mix and accelerating its green economy,” stated Padmanathan.
The value of the MoU is estimated at $10 billion, with ACWA Power poised to serve as the developer for green hydrogen while the IDC will act as co-developer and equity partner in the proposed projects.
Coinciding with a state visit to the Kingdom of Saudi Arabia by South Africa’s President, H.E. Cyril Ramaphosa, the project is in line with a mandate by the South Africa’s government for the IDC to lead the development and commercialization of a green hydrogen economy, with the institution currently in the process of finalizing the South African Green Hydrogen Commercialization Strategy in partnership with the Green Hydrogen Panel.
“The IDC recognizes the substantial value and benefits that the green hydrogen economy will bring to South Africa. The green hydrogen economy presents new economic, skills, employment, and community opportunities for the country. We are pleased to explore potential partnership opportunities with ACWA Power, given its pedigree and expertise in this industry,” stated Joanne Bate, Chief Operating Officer for the IDC.
With two solar energy plants in South Africa, the Bokpoort and Redstone Concentrated Solar Power Plants, ACWA Power has been operating in the southern African country since 2016, with the MoU demonstrating the developer’s commitment towards supporting the implementation of the GHCS and South Africa’s green hydrogen production targets. Both the IDC and ACWA Power will cooperate, jointly develop, and co-invest in projects in the green hydrogen value chain in South Africa.
“As a company that is driving energy transition, ACWA Power is proud to work closely with the IDC with whom we share a robust working history, and today we are delighted to take our collaboration further. I am confident that our expertise in developing mega-scale green hydrogen projects in other geographies will enable us to successfully create a new avenue of sustainable energy generation, one that will pave the plan to further progress,” Padmanathan said.
With the potential to cover approximately 12% of global energy demand, thereby cutting 10% of carbon emissions by 2050, the green hydrogen economy is projects to be worth up to $183 billion by 2023 while presenting a viable potential to transform Africa’s energy landscape.