On paper, Africa appears to be one of the future global pillars of green hydrogen. The continent possesses vast solar and wind resources, ample land for large-scale projects, and a strategic geographic positioning as industries and maritime transport commit to decarbonization. However, between the articulated ambition and industrial realization, a critical barrier remains: the final investment decision, or Final Investment Decision (FID).
In its “Africa Hydrogen” report, published in January 2026, the Energy Industries Council (EIC) presents a clear assessment. The continent faces “more challenges than most other regions,” citing limited infrastructure, high local electricity demand, water scarcity, and a proliferation of projects deemed too ambitious to be realistically executable. As long as these obstacles remain, the majority of initiatives stay at the portfolio stage, lacking the capacity to secure funding or convincingly attract buyers.
The FID is indeed the necessary transition between intention and industrial asset. Without this step, projects cannot lock in debt, contract the supply chain, or guarantee delivery timelines. In other words, African green hydrogen does not suffer from a lack of vision, but rather from a lack of financial and contractual architecture capable of transforming announcements into actual investments.
The report emphasizes that the challenge is more financial than technological. According to the EIC, financing mechanisms similar to those established in Europe—such as public guarantees, long-term contracts, and risk-sharing arrangements—are required to support upstream projects and bring them to the crucial FID milestone. Without committed long-term buyers and instruments that can absorb part of the initial risk, projects remain too costly to self-finance and too uncertain to attract private capital.
Adding to these financial difficulties are structural constraints. The issue of infrastructure is central. Producing green hydrogen is not limited to installing electrolyzers powered by renewable energy. It requires the establishment of complex transport, storage, and sometimes transformation networks, particularly into ammonia. The EIC notes that North African projects aimed at export rely on transcontinental pipelines set to connect multiple European networks over thousands of kilometers. The cost, coordination, and timing of these infrastructures directly condition the economic viability of the model.
The availability of electricity presents another significant dilemma. A portion of the renewable electricity intended for green hydrogen competes with domestic needs in countries where local demand remains high. This tension is not only political or social, but also financial. If the electrical system is strained, the opportunity cost of energy increases, competition for capacity intensifies, and political risk infiltrates financial models, further undermining the bankability of projects.
The issue of water, often relegated to the background, also emerges as a critical factor. In many areas with high solar potential, water stress is already significant. The use of desalination, when necessary, adds an extra layer of investment, energy consumption, and infrastructure, increasing the total production cost and raising concerns about environmental and social acceptability.
The report is particularly harsh regarding the proliferation of megaprojects. It mentions “ambitious initiatives that are unlikely to materialize,” warning against the trap of gigantism. While large-scale projects promise economies of scale, they require flawless synchronization between funding, infrastructure, permits, supply chains, and sales contracts. The slightest misalignment can lead to cost overruns and delayed revenues, jeopardizing economic balance.
In this contrasting landscape, the EIC identifies a clear geographical concentration. North Africa, particularly Egypt and Morocco, represents over half of the actively developing projects, with a clear orientation towards the European market. This geographical and industrial proximity gives these countries the potential role of key exporters, as well as strategic links in the structuring of infrastructure corridors and technical and contractual standards aimed at Europe.
However, this promise of a European outlet is not enough to guarantee project success. Without robust financing mechanisms and the ability to navigate the FID stage, the connection to the market remains theoretical. In the short term, the report also highlights the dependence of African projects on international suppliers for key equipment, with local capabilities mainly focused on infrastructure, integration, operation, and maintenance. This situation limits immediate industrial added value and exposes projects to risks from global supply chains.
In light of these findings, the EIC stresses the importance of hydrogen corridors and national clusters designed to pool infrastructure, reduce coordination costs, and accelerate industrial learning. Yet again, the message is clear: these frameworks make sense only if they can quickly generate bankability. Otherwise, they risk remaining political showcases, rich in announcements but poor in actual investments.
Ultimately, the development of green hydrogen in Africa hinges less on the abundance of resources than on the ability to transform projects into financeable assets. As long as the bankability barrier remains unbreached, the promise will remain suspended between immense potential and deferred industrial reality.
With Le360