Up to 41 green hydrogen projects are expected to enter development in Africa over the next five years, although not one initiative on the continent has yet reached final investment decision (FID).
In its Africa OPEX Report, the Energy Industries Council (EIC) highlights that, despite Africa’s vast renewable energy potential and promising outlook, the continent continues to grapple with securing reliable offtake agreements, developing a comprehensive regulatory framework, and constructing resilient infrastructure.
Africa is poised to become a key supplier of hydrogen to Europe as efforts intensify to reduce reliance on Russian gas. According to the report, 61.1 GW of renewable energy capacity is already operational across the continent, and under the REPowerEU Plan, Europe aims to import 10 million tonnes of green hydrogen annually from Africa.
In Sub-Saharan Africa, countries like Namibia are leading with large-scale projects, including Hyphen Hydrogen Energy’s 3GW initiative, and in the north Mauritania’s Aman and Nour projects are set to produce 40GW of power for hydrogen production.
Furthermore, countries strategically located for exports into Europe, such as Tunisia and Algeria, are set to be part of the 3,300km Southern Hydrogen Corridor – which will import four million tonnes of green hydrogen yearly into the continent.
Read more:Southern Hydrogen Corridor gains momentum with joint declaration signed in Rome
However, has a lack of international government support and the development of export, import and storage infrastructure held African projects back from reaching FID?
“While the longer-term outlook looks positive for the hydrogen sector, no commercial-scale project has yet reached FID,” highlighted Neil Golding, EIC’s Director of Market Intelligence.
“Offtake agreements need to be signed, and demand creation for the projects to be commercially viable. At the same time, we see the need for the regulatory framework to be established and the development of robust infrastructure.
“What is clear is that North Africa is well placed to support Europe’s hydrogen ambitions and could become a potentially significant supplier of the molecule in the future. Financial support is also coming in the form of EU grants for some African countries, notably Namibia and South Africa, across the hydrogen value chain, which points to a positive outlook for the sector.”
The EU announced last September it would invest over €80m to support the development of the Namibian and South African green hydrogen industries to advance production, transportation and storage in the countries.
Read more:EU to invest over €50m in Namibia’s green hydrogen industry
Countries including South Africa, Kenya, Namibia, and Egypt have all introduced hydrogen roadmaps, with the latter aiming to reach 5-8% of the global hydrogen market.
Additionally, Elemental Energy revealed it would distribute Hexagon Purus’ Type 4 storage cylinders throughout Southern and East Africa to address storage challenges.
Read more:Hexagon Purus brings hydrogen storage and distribution systems to Africa
H2 View understands that Angola’s state-owned oil and gas company Sonangol also plans to take FID on a 400,000 tonne per year green ammonia project this year, along with two more “commercial-scale” projects in Namibia and Algeria.
Read more:2025 FID planned for 600MW Angolan green hydrogen project
These developments demonstrate the growing momentum in Africa’s hydrogen sector, but as Rebecca Groundwater, EIC’s Head of External Affairs, pointed out, unlocking the continent’s full potential will require the establishment of robust regulatory and financing conditions.
“For businesses in Europe and elsewhere to move to Africa, there needs to be the right regulatory and financing conditions that help propel Africa’s hydrogen and, indeed, cleantech potential,” she stated.
“But capital isn’t ample in Africa, and hence the need for international collaboration to open new financing channels in the continent,” Groundwater concluded.
Unlocking Africa’s hydrogen potential requires risk mitigation, report advises
Africa could capture 15% of globally traded hydrogen volumes, but higher project financing costs risks its production build out, a new Hydrogen Council report has found.
Released today (March 26), The Africa Hydrogen Opportunity report said African countries could meet 15% of globally traded hydrogen demand, by leveraging its abundant renewable energy potential.
The report estimated renewable hydrogen production on the continent could grow from one million tonnes per annum (mtpa) in 2030 to 11 mtpa in 2050, mobilising a cumulative investment of $400bn and increasing African export value by $15bn.
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