Keypoints:
- Africa has tens of gigawatts of green hydrogen projects planned
- Weak offtake and high capital costs are delaying delivery
- Industry urges smaller, phased projects over megaprojects
AFRICA’S push to position itself as a global green hydrogen powerhouse is colliding with commercial reality, with most projects stuck in early development despite eye-catching capacity targets, according to new analysis by the Energy Industries Council.
From North Africa to the southern Atlantic coast, governments have unveiled ambitious green hydrogen strategies backed by vast solar and wind resources. But while project announcements continue to multiply, actual production remains minimal, exposing a widening gap between ambition and execution.
A new report by the UK-based Energy Industries Council (EIC) shows that although Africa accounts for a multi-gigawatt pipeline of proposed green hydrogen projects, only a tiny fraction has reached operation. High capital costs, limited offtake agreements and missing infrastructure are preventing most projects from securing final investment decisions.
Ambition outpaces delivery
The EIC estimates that Africa’s proposed green hydrogen projects amount to roughly 38 gigawatts of planned capacity, representing close to $200bn in potential investment. Egypt, Morocco, Namibia and South Africa dominate the pipeline, positioning themselves as future exporters of green hydrogen and its derivatives to Europe and Asia.
Yet operational capacity tells a very different story. Only two small projects in Namibia are currently producing green hydrogen, with combined output of just 17 megawatts. The rest of the continent’s pipeline remains largely theoretical, sitting at feasibility or pre-investment stages.
According to the EIC, this imbalance reflects an industry-wide tendency to prioritise scale over deliverability.
Offtake uncertainty holds projects back
The report identifies the absence of firm offtake agreements as the single most significant constraint on project progress. Without long-term contracts guaranteeing buyers for green hydrogen or ammonia, developers struggle to secure financing in a still-nascent global market.
While Europe, Japan and South Korea are frequently cited as destination markets, binding import commitments remain limited. As a result, many African projects are exposed to demand risk, making lenders cautious about backing developments that already face political, regulatory and currency challenges.
Infrastructure and cost pressures
Green hydrogen projects require more than renewable electricity and electrolysers. Large-scale developments also depend on desalination plants, transmission networks, ports, storage facilities and export terminals.
In much of Africa, this supporting infrastructure is either underdeveloped or entirely absent. Building it adds billions of dollars to project costs and extends timelines, particularly in countries with weak grids or limited industrial capacity.
The lack of local electrolyser manufacturing further compounds the problem, increasing reliance on imported equipment and exposing projects to supply-chain and foreign-exchange risks.
Rethinking the megaproject model
The EIC argues that Africa’s hydrogen strategy needs a more pragmatic approach. Rather than focusing almost exclusively on gigawatt-scale export projects, the report urges developers and governments to prioritise smaller, phased developments with nearer-term revenue potential.
Serving domestic and regional markets first could help build local skills, supply chains and investor confidence, creating a more credible pathway to scale.
Long-term promise remains
Despite the current slowdown, the EIC stresses that Africa’s long-term green hydrogen fundamentals remain intact. Falling renewable energy costs, stronger policy frameworks and growing global demand for low-carbon fuels could yet unlock the sector.
For now, however, Africa’s green hydrogen story is one of momentum slowed by market realities — a reminder that clean-energy leadership depends not only on natural advantage, but on contracts, capital and credible delivery.
