Around 38GW of green hydrogen projects have been proposed in Africa, but only a few megawatts have started operations, according to a new report by trade association the Energy Industries Council.

The report says that only two projects, both in Namibia, with a combined capacity of 17MW, have started up.

Meanwhile, although the continent has racked up multiple gigawatt-scale projects aimed at supplying huge volumes of hydrogen derivatives such as ammonia to Europe and Asia, none have yet taken a final investment decision (FID) and no firm offtake agreements have been signed.

“Offtake agreements are a critical factor in transitioning projects from pre-FID to construction,” according to the report’s authors, Jack Boggis, energy analyst at the EIC, and Chris Shirley, the association’s supply-chain market intelligence manager.

“Without revenue certainty, even well-located projects face delays to say the least.”

Part of the problem is cost.

The EIC raises that although a greater electrolyser capacity has been proposed in Europe compared to Africa, the former is only expected to cost $166bn compared to the latter’s $194bn of combined investments.

This is because large-scale projects require huge investment into surrounding infrastructure, from power generation to pipelines and desalination plants, according to the report — never mind the cost of building out port infrastructure for export.
Projects are also concentrated in specific countries that have pushed for hydrogen in public policy, with nearly half of the development pipeline located in Egypt alone.

However, the EIC warns that projects will also depend on imported equipment, such as electrolysers — as no factories are currently set up on the continent.

This could cause a problem for Egyptian green hydrogen developers, which face a 20% local-content requirement tied to incentives and are limited in the share of foreign labour that can work on the project.