African countries are beginning to explore regional cooperation to turn their green hydrogen ambitions into export opportunities. New investment platforms in Southern Africa and a proposed hydrogen corridor linking North Africa to Europe are providing early examples of how countries can share the costs and opportunities of developing the emerging energy market. The African Development Bank has identified four green hydrogen and derivatives projects in Egypt, Morocco, Namibia, and South Africa, representing an estimated $23 billion in prospective investment.
The African Development Bank has announced over $20 million in reimbursable grants to help prepare these projects for investment. The selected projects include Egypt's Project Ra, Morocco's Guelmim Green Hydrogen Valley, Namibia's Hyphen development, and the Saldanha Hydrogen Direct Reduced Iron project in South Africa. These projects envisage 20 GW of solar and wind generation capacity, 7 GW of electrolyser capacity, and 2,950 MWh of battery storage. The bank's program attracted 81 applications from 18 African countries, indicating a broad interest in developing hydrogen-related industries across the continent.
In addition to the African Development Bank's funding, the Green Climate Fund has approved $140 million for Climate Investor Three, a blended-finance platform supporting industrial decarbonization, including green hydrogen infrastructure in Namibia and South Africa. The facility, overseen by the Development Bank of Southern Africa, will allocate $84 million to South Africa's SA-H2 Fund and $56 million to Namibia's SDG Namibia One Fund. This financing aims to reduce project risks and attract additional private investment towards a $1.2 billion fundraising target.
The SA-H2 Fund in South Africa has reached an initial close of R3 billion, approximately $182 million, with investments from the Public Investment Corporation, Sanlam Life, the Industrial Development Corporation, and the Development Bank of Southern Africa. In Namibia, SDG Namibia One has secured approximately N$2.15 billion, or $129 million, in combined commitments and approvals, equivalent to about 37% of its $350 million fundraising target. These funds will support integrated industrial value chains, including green ammonia and methanol production.
One of the notable projects is Namibia's Hyphen, a proposed development estimated to cost over $10 billion. The project envisages 3 GW of electrolyser capacity and 8 GW of renewable energy generation across two phases, with the potential to produce up to two million tonnes of green ammonia annually. The developer is targeting a final investment decision by the end of 2027. Cooperation is also taking shape around the infrastructure needed to transport hydrogen between countries.
In North Africa, Algeria and Tunisia have joined Italy, Austria, and Germany in advancing the SoutH2 Corridor, a proposed 3,300-kilometer pipeline network connecting renewable hydrogen production in North Africa with European industrial markets. The five countries have reinforced their political commitment through a ministerial declaration signed in Algiers on October 1. The corridor's developers envisage using over 65% repurposed gas pipelines and transporting approximately four million tonnes of renewable hydrogen annually when fully operational in the early 2030s.
Further south, Namibia and South Africa are exploring shared hydrogen infrastructure connecting production and export hubs at Lüderitz, Boegoebaai, and Saldanha Bay. A study commissioned by Germany's environment ministry examined how pipelines, railways, and other transport options could connect hydrogen production centers with industrial users and export facilities. However, the emerging cooperation comes as Africa's hydrogen industry faces a substantial gap between announced ambitions and actual production, with the International Energy Agency estimating that the continent currently produces just 6,000 tonnes of low-emissions hydrogen annually.
Key points
- The African Development Bank has identified four green hydrogen and derivatives projects in Egypt, Morocco, Namibia, and South Africa, representing an estimated $23 billion in prospective investment.
- The Green Climate Fund has approved $140 million for Climate Investor Three, a blended-finance platform supporting industrial decarbonization, including green hydrogen infrastructure in Namibia and South Africa.
- Namibia's Hyphen project is a proposed development estimated to cost over $10 billion, with the potential to produce up to two million tonnes of green ammonia annually.
