Africa’s green hydrogen sector gains momentum amid a global energy shift

With at least 58 projects in development, spanning all parts of Africa, the continent is attracting major investments from global energy players. Countries like Namibia, South Africa, Morocco and Egypt are leveraging their abundant renewable energy resources to produce hydrogen, with growing interest from the European Union (EU), China, and private-sector giants like TotalEnergies and BP. As the sector takes shape, Africa finds itself at the forefront of a potential energy revolution.

Major projects

Various countries across Africa are either in the testing phase or have already initiated hydrogen production. Namibia’s Daures Green Hydrogen Village, the continent’s first 100% net-zero community, is nearing completion, positioning the country as a pioneer. Similarly, South Africa’s 220 MW Prieska Power Reserve is preparing to produce hydrogen for local and export markets, and Egypt is developing Africa’s first integrated green hydrogen plant.

Egypt, an emerging hydrogen hub, has signed seven memoranda of understanding (MOUs) worth up to $40 billion to establish projects in the Suez Canal Economic Zone (SCZONE). Morocco, another key player, is developing the $25 billion Dahamco Green Hydrogen Project, backed by the UAE. Elsewhere, Algeria’s Arzew Green Hydrogen Pilot Plant, funded by Germany, and Tunisia’s $6 billion  Amarenco Green Hydrogen and Ammonia Hub highlight the continent’s accelerating efforts.

Africa’s projects vary widely in scale, from Kenya’s $5 million, 5 MW demonstration plant which could scale to a 100 MW electrolyser, to Mauritania’s Aman Hydrogen Project, a $40 billion venture expected to produce 1.7 million tons per annum (mtpa) of green hydrogen. Other mega-projects include South Africa’s 0.9 mtpa Green Ammonia Plant and Egypt’s 5 GW electrolyser plant in SCZONE, both designed to serve growing domestic and international demand.

Global investments

A diverse group of international players is funding Africa’s hydrogen industry, signaling strong global interest. The EU has recently committed €32 million in grants to support South Africa’s hydrogen value chains, while Germany’s €40 million support aims to enhance Namibia’s hydrogen capabilities. Egypt’s hydrogen sector has secured a €30 million grant from Germany, reflecting growing European backing.

China’s state-owned CPECC is eyeing opportunities in Algeria, and the African Development Bank (AfDB) is financing feasibility studies and infrastructure across multiple countries. The European Investment Bank (EIB) is also stepping in, committing to accelerating green hydrogen investments in Kenya. Meanwhile, TotalEnergies and Chariot Energy are partnering on a 10 GW project in Mauritania, further cementing Africa’s role in global energy markets.

Export vs domestic

While Africa’s hydrogen ambitions are largely driven by export demand, domestic applications are also on the rise. Egypt, Algeria, and Morocco, positioned strategically with year-round solar potential, are being primed as key suppliers to Europe. Germany, Austria, and Italy are repurposing 3,300 km of North African gas infrastructure to facilitate the import of 4 million tonnes of hydrogen annually through the Southern Hydrogen Corridor project (SoutH2 Corridor).

Egypt has taken an aggressive stance, aiming to capture up to 8% of the global hydrogen market and produce 10 million tons annually by 2050. Mauritania is targeting 10 million tonnes in exports by 2030, underscoring Africa’s growing stake in the green hydrogen trade.

Renewables catalyst

Africa's hydrogen potential is underpinned by its vast renewable energy resources. While Europe currently has around 285 GW of wind power capacity, Africa is swiftly expanding its renewable infrastructure. South Africa is developing a 3.2 GW wind power program, while Morocco leads with ambitious solar projects like the 800 MW hybrid solar park and the Noor-Ouarzazate Solar Complex, the world's largest concentrated solar power plant, with a 580 MW capacity.

Africa installed 2.5 GWp of new solar capacity in 2024, reaching 19.2 GWp, with South Africa and Egypt accounting for 80% of the new additions. European nations like Denmark and Germany still lead in wind energy share, but Africa’s untapped wind and solar resources, particularly in North Africa, present enormous potential.

Government policies

African governments are implementing policies to attract investment and develop a sustainable hydrogen industry. South Africa’s Hydrogen Society Roadmap is serving as a model for industry collaboration, with recent additions like the Environmental Impact Assessment (EIA) guideline to support environmental assessment experts and the South African Green Hydrogen Potential Atlas, an online tool mapping potential hydrogen hotspots. Meanwhile, Kenya’s Green Hydrogen Strategy and Roadmap (launched in 2023) aims to integrate hydrogen into its domestic energy system by 2030.

Morocco’s National Hydrogen Strategy focuses on developing hydrogen for local green ammonia production and exports, while the ECOWAS Green Hydrogen Policy and Strategy Framework seeks to boost energy security across West Africa. Egypt, meanwhile, is partnering with Siemens to advance hydrogen production and technology transfer.

Governments are also offering incentives to attract investors, creating a more favourable landscape for green hydrogen development. In 2024, Morocco dedicated 1 million hectares to green hydrogen projects, with 300,000 hectares allocated for the first phase — a significant land commitment signaling long-term support for renewable energy infrastructure. Meanwhile, Mauritania introduced Africa’s first Green Hydrogen Code, establishing a legal framework with substantial tax benefits. These include VAT and corporate tax exemptions, along with a progressive corporate tax scheme starting at 15%, which only increases after investors have recovered their initial costs. Such measures reduce early-stage financial risks and enhance project viability, making Africa an increasingly attractive destination for green hydrogen investments.

Economic prospects

Hydrogen’s economic potential extends beyond exports. South Africa expects hydrogen to contribute 3.6% to its GDP by 2050, creating over 370,000 jobs. The broader industry is projected to generate 13 million job-years by mid-century through manufacturing, installation, and maintenance roles. With an anticipated $400 billion in cumulative investments, Africa could gain an additional $15 billion in exports by 2050.

The challenges

Despite its promise, green hydrogen production faces significant cost hurdles. Producing green hydrogen in Africa currently costs between $4 and $6 per kilogram. , which is significantly more than the cost of non-green hydrogen globally. However, the local industry hopes for cost reductions similar to those seen in solar PV technology over the past decade.

Infrastructure constraints also pose challenges. While Morocco, Egypt, and South Africa are leveraging existing energy grids and industrial zones, many African countries still lack the necessary pipeline and storage networks to support large-scale production.

Lack of technical expertise is a further concern. The green hydrogen sector in Africa is at the moment dependent on foreign expertise.

The future

Africa’s green hydrogen sector is at a turning point. With abundant renewable energy, strategic geographic advantages, and increasing global interest, the continent is poised to play a pivotal role in the global hydrogen economy. If Africa secures even 15% of the world’s hydrogen trade, it could unlock $400 billion in investments and drive $15 billion in export revenues by 2050.

However, for the industry to truly take off, challenges such as high production costs, infrastructure gaps, and policy coordination must be addressed. As African nations push forward with large-scale hydrogen projects and attract international funding, the continent is hoping to position itself as industrial powerhouse.