In addition to large-scale green hydrogen projects under development in southern Africa, North Africa has emerged as a frontier hub for green hydrogen production. Algeria’s national oil company Sonatrach recently signed a Memorandum of Understanding (MOU) with construction firm Tosyali to jointly explore green hydrogen production from renewable energy sources. The agreement aligns with Algeria’s aims to boost renewable power generation to 15,000 MW and achieve 30% of its total energy mix from renewables by 2035, as Sonatrach moves forward with the development of a 50 MW green hydrogen pilot plant in Arzew.
Meanwhile, energy major bp and a consortium comprising renewable energy and utility companies Masdar, Hassan Allam Utilities and Infinity Power signed a Joint Development Agreement in July 2024 for a green hydrogen project in Egypt. One month earlier, renewable energy company ACWA Power signed an MOU with the Tunisian Government to advance green hydrogen production, with the goal of producing 600,000 tons of green hydrogen annually through a three-phase approach for export to Europe. This followed shortly after TE H2 – a joint venture led by French major TotalEnergies – and Australian electricity company VERBUND also signed an MOU with the government of Tunisia to study the implementation of a large-scale green hydrogen project.
In South Africa, the Northern Cape Economic Development Trade and Investment Promotion Agency revealed its South Africa Green Hydrogen Vision in May 2024. According to the plan, the Northern Cape province is poised to become a leader in the global green hydrogen economy, raising South Africa’s national production capacity by up to 10 million tons per year by 2050. In the same month, an MOU was signed for the Namibia-South Africa Green Hydrogen Corridor. The agreement aims to assess the feasibility of developing a green hydrogen corridor connecting the Western Cape and Northern Cape provinces of South Africa with Lüderitz in Namibia.
Expected to play a prominent role in South Africa’s energy transition, green hydrogen is poised to serve a vital role in the country’s future energy market. A rapid increase in demand, particularly from the EU, is expected to stimulate long-term private sector capital in the sector in the coming years. According to Mike Peo, Head of Infrastructure, Energy and Telecommunications at South African financial institution Nedbank – who spoke at a sustainable energy finance event in Johannesburg on July 24 – the green hydrogen sector represents a dynamic ecosystem of opportunities for South African businesses and investors. Currently, 90% of lending into renewables comes from the banking sector, which reflects a strong commitment to invest in long-term projects. According to Peo, green hydrogen has been identified as a major opportunity for economic growth in South Africa, able to foster job creation and revitalize sectors like agriculture, mining and tourism.
Peo also noted that the government should prioritize liberalizing the market and developing internal mechanisms for green hydrogen export, particularly for large industrial markets such as South Korea, Japan and Germany. According to Peo, the biggest opportunity for the country comes in the form of green aviation, green ammonia and green steel. Also speaking at the event, James Brice, Partner at management consulting firm EY-Parthenon, highlighted the potential for green hydrogen to decarbonize South Africa’s supply chain and export industry. He called on the country to develop special economic zones to improve electrolyzer production and the manufacturing of transmission components to ensure job preservation – particularly in areas where the economy is dependent on coal – and trigger economic growth, while facilitating favorable pricing mechanisms for green hydrogen.
During the event, Social Infrastructure Specialist at financial corporation Public Investment Corporation (PIC) Lucky Pane emphasized the importance of commercializing early-stage green hydrogen projects. The PIC is involved in initiatives like the APV Ventures Fund, which has raised significant capital to support Africa’s green hydrogen value chain. Pane noted the need to actively seek opportunities and collaborate from a discovery perspective, particularly in hydrogen’s applications in energy, transport, manufacturing and agriculture.
As the future of energy increasingly shifts towards green hydrogen, the fuel source offers a promising pathway for Africa to decarbonize its energy sector. The $9.4-billion Hyphen Hydrogen Energy Project in Namibia is one of the leading examples of the continent’s drive to commercialize its renewable resources for green hydrogen deployment. Project developer Hyphen Hydrogen Energy signed a project preparation facility agreement with the Development Bank of Southern Africa last December, set to support the engineering, environmental and socioeconomic components of the project.
