Africa’s H2 project development lags behind: report

  • Market: Hydrogen
  • 27/03/24

The development of renewable hydrogen projects in Africa is lagging behind the global pace with only 1pc of African project volume having already reached final investment decision (FID) compared with a global average of 7pc, Brussels-based industry body Hydrogen Council said in a report.

The projects that have moved to FID in Africa are small-scale ventures, located mainly in the southern part of the continent and focused on mobility or industrial applications, according to the Council's investment tracker.

Even projects at an earlier stage in Africa are trailing behind development in other parts of the world. While 20pc of project investment volume are at front-end engineering design (FEED) stage or further globally, only 5pc of projects have progressed beyond FEED in Africa.

The lag in project development is driven by perceived risks in African jurisdictions such as political and monetary instability, the Hydrogen Council said. Underdeveloped infrastructure also contributes to delays and uncertainty.

Given the "right enabling conditions," Africa could supply 15pc of expected globally traded hydrogen volume which would translate into 1mn t/yr in exports by 2030, 5mn t/yr by 2040 and 11mn t/yr by 2050, according to the study. But realising these targets would require $400bn in investment.

African countries offer promising cost-competitive renewable energy resources, but unlocking this potential will "require coordinated efforts across public and private sectors" and the creation of a "legal framework that helps mitigate risks," industrial gas firm Linde's chief executive and Hydrogen Council co-chair Sanjiv Lamba said.

Most of the projects announced in Africa so far focus on exports to Europe and Asia, but demand within the continent could also drive adoption in the long-run, the authors point out. Applications in chemicals, refining and transportation in African countries could generate demand of 6.5mn t/yr by 2050.

Industry participants in developing countries have long called for more financing mechanisms such as blended finance to help projects gather momentum in locations considered more risky and uncertain for investment.

The largest projects in the pipeline are planned in North African countries such as Morocco, Egypt and Mauritania.


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EU to publish H2 bank pilot results on 30 April

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09/04/24

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09/04/24

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