- Africa has strong renewable energy fundamentals but most green hydrogen projects remain far from final investment decision.
- New industry report warns lack of off-take agreements and infrastructure is stalling progress.
- Egypt Morocco and South Africa dominate planned investment but only limited capacity is operational
Africa’s push to become a major exporter of green hydrogen is losing momentum as large scale projects struggle to secure buyers financing and supporting infrastructure according to a new report by the Energy Industries Council.
The continent has long been seen as a natural home for green hydrogen development due to its abundant solar and wind resources and proximity to European markets seeking to decarbonise industry and energy systems. North African countries such as Egypt and Morocco in particular have positioned themselves as future suppliers to Europe supporting the European Union’s REPowerEU target of importing 10 million tonnes of green hydrogen per year by 2030.
However the EIC Insight Africa Hydrogen report finds that while ambition is high delivery remains limited. The report identifies 78 proposed green hydrogen projects across Africa yet only two small scale projects are currently operational both located in Namibia with a combined capacity of just 17 megawatts.
Planned capacity is significant. Proposed electrolyser capacity across Africa totals around 38 gigawatts supported by an estimated 194 billion dollars in planned investment. This figure exceeds Europe’s projected capital spend reflecting the additional cost of building renewable generation pipelines ports desalination plants and other enabling infrastructure needed to support hydrogen production.
Project development is heavily concentrated. Egypt Morocco and South Africa account for around 80 percent of total planned hydrogen investment with Egypt alone representing nearly 88.5 billion dollars underpinned by its national low carbon hydrogen strategy. North African projects are largely focused on supplying European markets with Germany identified as a key destination while projects in sub Saharan Africa are more oriented toward ammonia exports to Asia including Japan and South Korea.
A major barrier to progress remains the absence of binding offtake agreements. The report stresses that without revenue certainty even well located projects struggle to advance from early development to construction. The EIC warns that Africa’s hydrogen strategy has leaned too heavily toward multi gigawatt megaprojects that lack secured buyers and mature infrastructure.
Instead the council calls for smaller phased developments that can reach execution more quickly while helping to build local supply chains and investor confidence. Supply chain constraints remain a challenge with no electrolyser manufacturers currently operating on the continent leaving early projects dependent on imported equipment. Egypt stands out as a partial exception after introducing local content requirements linked to investment incentives.
Rebecca Groundwater global head of external affairs at the EIC said governments need to focus on providing stable policy frameworks and basic enablers. She said investors require clear rules faster permitting reliable access to grid and water infrastructure and financing tools that share risk while costs remain high.
Despite these headwinds the report concludes that Africa’s long term green hydrogen potential remains strong. Abundant renewable resources and proximity to major demand centres continue to underpin the opportunity but execution risk has become the defining challenge as the sector moves from ambition to delivery.
Author: Bryan Groenendaal
