The development of green hydrogen in Africa is progressing at a slower pace than official announcements suggest. According to a recent report from the Energy Industries Council (EIC), which represents the global energy supply chain, projects on the continent remain largely hindered by structural obstacles, the most significant being the lack of secure offtake contracts, inadequate infrastructure, and the fragility of local industrial chains.
Data from the EICDataStream platform shows that no fewer than 78 green hydrogen projects are currently announced in Africa. Their geographical distribution highlights a marked concentration around three hubs: Egypt, Morocco, and South Africa, which capitalize on their solar and wind potential to position themselves as future exporters of hydrogen and its derivatives, especially ammonia, to Europe and Asia.
### Many Announcements, Limited Achievements
Despite this declarative momentum, the industrial reality remains mixed. The report emphasizes that only two small-scale projects are currently operational, both located in Namibia, with a combined capacity of 17 megawatts. “The African hydrogen market remains in its infancy, despite the scale of the announcements,” observes the EIC, highlighting the persistent gap between strategic intentions and final investment decisions.
The stated ambitions are nevertheless considerable. The projected electrolyzer capacity at the continental level is estimated at 38 gigawatts, with investment volumes approaching $194 billion. This amount exceeds that anticipated in Europe, even as the Old Continent projects larger capacities but at a lower overall cost estimated at $170 billion.
### The Burden of Infrastructure on Project Costs
This difference is mainly explained by the nature of African investments, which involve heavy infrastructure that is still non-existent. Transport pipelines, power plants, desalination units, and water networks are essential prerequisites for large-scale green hydrogen production.
“The investment expenses in Africa include essential supporting equipment, which must be built from scratch,” the report specifies, noting that Egypt, Morocco, and South Africa together account for nearly 80% of the announced amounts. Egypt stands out particularly with nearly $88.5 billion committed, supported by a national strategy dedicated to low-carbon hydrogen.
### Target Markets and Regional Logics
Commercial orientations vary across regions. North Africa, led by Morocco, favors an export-oriented approach towards Europe, with Germany identified as the main potential market. Conversely, several sub-Saharan African countries are more focused on ammonia production for Asian markets, particularly Japan and South Korea.
However, this export strategy faces a central obstacle: the absence of firm purchase contracts. For the report’s authors, Jack Boggis and Chris Shirley, “offtake agreements are a key lever to move projects from the conceptual stage to construction.” Without long-term revenue guarantees, even projects benefiting from favorable natural conditions experience significant delays.
### A Sector Still Dependent on External Factors
The study thus recommends postponing large-scale projects that lack secure outlets and operational infrastructure. It also highlights the continent’s dependence on equipment imports, with no electrolyzer manufacturers currently based in Africa. Egypt stands as an exception, imposing a local content requirement of 20%, along with financial incentives and restrictions on the use of foreign labor.
For Rebecca Groundwater, EIC’s global head of external affairs, the challenge now lies in the clarity of public policies. “Governments need to provide investors with what they prioritize: stable regulations, fast permitting processes, and basic infrastructure in terms of electricity and water,” she asserts, also advocating for risk-sharing mechanisms supported by development institutions as long as costs remain high.
### Morocco: A Strategic Hub Under Constraints
In this contrasting landscape, Morocco establishes itself as one of the pillars of Africa’s green hydrogen strategy, driven by its renewable potential, relative regulatory stability, and proximity to European markets. However, like other countries on the continent, the Kingdom faces major challenges: securing commercial outlets, funding infrastructure, and structuring a local industrial value chain capable of supporting the projected growth.
Balancing climate ambitions, industrial imperatives, and economic realities, African green hydrogen thus advances on a tightrope, where success will depend as much on political decisions as on the ability to transform announcements into concrete, actionable projects.