South Africa Announces First Six Priority Green Hydrogen Projects
Cape Town, The Gulf Observer: South African President Cyril Ramaphosa has announced the first six priority projects under the country’s national green hydrogen programme, marking a shift from project planning toward implementation and investment.
Addressing the African Green Hydrogen Summit in Cape Town on Tuesday, President Ramaphosa said the projects were selected through a rigorous assessment process designed to strengthen project bankability, establish clear milestones and boost investor confidence. His address was delivered on his behalf by Electricity and Energy Minister Dr Kgosientsho Ramokgopa.
The Phelan Green Group electro-Sustainable Aviation Fuel project in Saldanha Bay is leading the first wave after reaching a final investment decision, securing an offtake agreement and obtaining a US$100 million equity commitment. Construction is expected to begin in the first quarter of 2027, with the first exports targeted for the first quarter of 2029.
President Ramaphosa described the project as an important milestone, emphasizing that long-term offtake agreements are essential to scaling the clean hydrogen industry and converting investment plans into operational projects.
The remaining five projects cover several segments of the green hydrogen value chain.
The Coega Green Ammonia Project in the Eastern Cape has completed initial preparatory work but requires additional commercial, technical and financial development before reaching a final investment decision.
The Saldanha Hydrogen Direct Reduced Iron Project on the West Coast is at the pre-feasibility stage and aims to use green hydrogen to support lower-emission iron and steel production.
The Prieska Power Reserve in the Northern Cape is a green ammonia project targeting the domestic market and is currently at the development stage.
Meanwhile, the Green e-Fuels Producers Green Methanol Corridor is at the pre-feasibility stage and is targeting European markets, while the Green Hydrogen Solutions Project, focused primarily on domestic South African demand, has completed front-end engineering design.
Ramaphosa said designating the six projects as priorities would enable government and its partners to concentrate efforts on advancing the remaining projects toward final investment decisions, construction and production. He added that a second wave of projects would subsequently be incorporated into the national portfolio.
The President also highlighted Africa’s potential to emerge as a major global green hydrogen hub, supported by the continent’s abundant renewable energy and water resources as well as its critical mineral reserves.
However, he stressed that Africa should move beyond being merely a supplier of renewable energy, minerals or hydrogen and instead participate across the entire value chain as an owner, manufacturer, technology partner, producer and market.
He said the green hydrogen economy should contribute directly to Africa’s industrialisation by supporting sectors including fertilizer production, green iron and steel, sustainable fuels, equipment manufacturing, engineering and related services.
Ramaphosa further emphasized the role of the African Continental Free Trade Area in creating larger markets and facilitating regional value chains that can support the development of the green hydrogen sector.
He called for greater investment in African talent, innovation, local procurement, manufacturing, employment and skills development, while stressing that local communities should be treated as stakeholders in green hydrogen projects.
The President also urged international technology partners to establish manufacturing, training and research capabilities in Africa rather than treating the continent solely as a market for imported equipment.
He called for stronger cooperation among African countries on standards, certification, infrastructure corridors and project preparation, including through the Africa Green Hydrogen Alliance.
Ramaphosa also urged African development finance institutions to play a leading role in financing the sector by increasing project-preparation funding and developing financial instruments suited to the risks associated with first-of-a-kind projects.
He called on prospective buyers to transform non-binding expressions of interest into credible, long-term offtake agreements capable of supporting project financing.
The President said South Africa’s transition from an undifferentiated project pipeline to a managed priority portfolio demonstrated that, with appropriate planning, public and private financing and international partnerships, African countries could move green hydrogen initiatives from concepts to projects under development.
