By Akani Nkuna
Electricity and Energy Minister Kgosientsho Ramokgopa has called on pension funds, banks and development finance institutions to invest in South Africa’s emerging green hydrogen industry, saying it cannot be built on foreign capital alone.
Speaking at the Africa Green Hydrogen Summit in Cape Town on Tuesday, Ramokgopa said the country should ensure that investment in the sector also strengthens domestic manufacturing, skills and technological capability rather than relying largely on imported equipment.
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“A South African green hydrogen industry cannot be built on external capital alone,” he said.
The Africa Green Hydrogen Summit, which runs from 15 to 16 September, brings together African governments, investors, civil society, academics and technology experts as countries seek to turn ambitious hydrogen plans into commercially viable projects.
The summit is intended to mobilise foreign and domestic investment, unlock export opportunities for low-carbon energy and advance green industrialisation, job creation and regional infrastructure development.
South Africa’s green hydrogen plans are underpinned by the Hydrogen Society Roadmap, the Green Hydrogen Commercialisation Strategy and the country’s Just Energy Transition framework.
Ramokgopa said governments had an important role to play in helping the industry develop by providing regulatory certainty, certification, market access and investment facilitation.
Green hydrogen and its derivatives could help decarbonise hard-to-abate industries including iron and steel manufacturing, mining, chemicals and selected heavy transport applications, he said.
Ramokgopa also called for greater regional cooperation and localisation, saying African countries could use the Africa Green Hydrogen Alliance to coordinate areas where working together could lower costs and build larger markets.
“These include standards, certification, project preparation, infrastructure corridors, skills and the development of regional demand. Certification helps demonstrate project integrity. Offtake provides the demand without which production cannot be financed,” Ramokgopa said.
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He said, however, that the international hydrogen market had become more demanding.
“The global hydrogen sector is entering a more exciting phase. Capital and customers are distinguishing between announcements and executable projects. South Africa should not retreat from that discipline, we should apply it more rigorously to our own programmes.”
The call for domestic capital comes as institutional investors have already begun putting money into the country’s hydrogen industry.
The SA-H2 Fund, a blended-finance investment platform focused on the country’s green hydrogen value chain, announced a R3 billion first close in August.
Its investors include the Public Investment Corporation on behalf of the Government Employees Pension Fund, Sanlam Life, the Industrial Development Corporation, Invest International and the European Commission, with support from the Development Bank of Southern Africa.
The fund has already signed a development funding agreement with Hive Hydrogen. Hive is developing a multibillion-dollar project at the Coega Special Economic Zone near the Port of Ngqura, with plans to produce more than one million tonnes of green ammonia annually using renewable electricity.
Trade, Industry and Competition Minister Parks Tau told the summit that government viewed the hydrogen economy as part of an industrialisation strategy and as a potential catalyst for South Africa’s re-industrialisation and future competitiveness.
He said the DTIC was supporting the development of green hydrogen projects, including through industrial incentives and infrastructure support.
Tau said cooperation between African countries would also be crucial if the continent wanted to develop green hydrogen at sufficient scale.
“Through platforms such as the Africa Green Hydrogen Alliance, we are strengthening cooperation across the continent, because no single African country will build this economy alone, but together we can build a scale that makes Africa’s offer to the world impossible to ignore” he said.
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