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Africa Set to Lead in Global Green Hydrogen Development, Says EIC Report

Africa is set to become a key player in the global green hydrogen market, with 41 projects expected to enter development over the next five years, according to a new report published by the Energy Industries Council (EIC), the world-leading trade association and purveyor of data, insights, and events.

But the EIC warns that despite its promise, the hydrogen sector in Africa faces serious challenges, including securing offtake agreements, establishing regulatory frameworks, and building robust infrastructure.

The Africa OPEX Report 2025 reveals that North African countries, including Egypt, Algeria, and Morocco, are leading the efforts, with their abundance of year-round sunshine providing ample opportunities for investments in green hydrogen production and export infrastructure.

The countries are strategically located across the Mediterranean from Europe, where Germany, Austria, and Italy are proposing to repurpose 3,300 km of existing midstream gas infrastructure in North Africa to import 4 million tonnes yearly of green hydrogen to the continent. For one, Egypt’s National Green Hydrogen Strategy aims to hold 8% of the global hydrogen market and produce 10 million tons of green hydrogen annually by 2050, with a significant portion destined for export.

Neil Golding, EIC’s Director of Market Intelligence, cautioned that optimism should be viewed with care. “While the longer-term outlook looks positive for the hydrogen sector, no commercial-scale project has yet reached a final investment decision,” he said. “Offtake agreements need to be signed, and demand created for the projects to be commercially viable. At the same time, we see the need for regulatory frameworks to be established and the development of robust infrastructure.”

He added, “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 report – written by Aqilah Shahruddin, an EIC analyst for operational assets and decommissioning – provides a comprehensive analysis of Africa’s energy sector, covering renewable energy projects, carbon capture, energy storage, and traditional energy sectors such as oil, gas, and thermal power.

Africa offers fertile ground for scaling the production of green hydrogen, produced using renewable energy sources like solar and wind, as it continues to leverage its abundant resources and low production costs. The Africa Green Hydrogen Alliance, launched in 2022 and led by Egypt, Kenya, Mauritania, Morocco, Namibia, and South Africa, aims to position Africa as a global leader in this sector.

According to the report, 41 hydrogen projects are expected to enter development between now and 2030. Sub-Saharan Africa is also developing green hydrogen capabilities, with countries like Namibia leading with large-scale projects. Namibia’s $10 billion hydrogen project will create 15,000 construction jobs and 3,000 permanent positions. Further north, Mauritania’s Aman and Nour projects are set to produce 40 GW of power to produce hydrogen.

Despite the massive potential, the report identifies several challenges that need to be addressed to fully realise Africa’s green hydrogen ambitions, including the need for major infrastructure investments — such as pipelines, ports, and export facilities — and the development of clear policy frameworks and regulatory support to attract investments.

The upfront costs of green hydrogen projects call for international cooperation and financing initiatives, the report said. Europe’s REPowerEU Plan, designed to reduce the continent’s dependence on Russian gas and which aims to import 10 million tonnes of green hydrogen every year from Africa, is a sign that efforts are already in place. However, the report notes that more targeted funding and collaboration will be key to scaling up hydrogen production in Africa.

EIC’s Head of External Affairs, Rebecca Groundwater, said, “If anything, this report, like many others the EIC produces, is a clear case for supply chain companies to look around the globe for opportunities rather than limiting themselves to markets they’re traditionally active in. This requires, of course, getting out of the comfort zone and for governments to help businesses understand different international markets, and Africa is no exception to that.”

“But of course, 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. But capital isn’t ample in Africa, and hence the need for international collaboration to open new financing channels in the continent.”

The green hydrogen sector is closely tied to Africa’s broader renewable energy growth. The report notes that 61.1 GW of renewable energy capacity is currently operational across the continent, with significant investments in solar and wind projects. South Africa leads in solar capacity, with 59 operational solar farms, while North African countries like Egypt and Morocco are driving wind energy development, with 9 GW of wind capacity added to the grid as of 2024.

But the report says that Africa will need to invest in power storage in tandem with production. Africa’s energy storage capacity has grown from 180 MW in 1979 to 4.2 GW in 2023, with South Africa contributing 3.6 GW. The sector, however, faces significant challenges due to a lack of clear regulations.

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