Nigeria signs first major green hydrogen deal

From the newsletter

The Nigerian government has secured its first major green hydrogen deal, with a Chinese company committing $8.23 billion to develop a project in the country’s southern region. Green hydrogen from the facility will be used in the production of 1.2 million tonnes of green methanol annually, along with by-products like medical oxygen and food-grade carbon dioxide.

• Nigeria is entering the green hydrogen race later than six of its African peers, who have already secured large-scale investments such as Mauritania’s $40 billion Aman Project and Namibia’s $10 billion Hyphen Hydrogen Energy venture.

• Though smaller in scale compared to some African megaprojects, this deal is a critical first step in building a broader hydrogen industry in Nigeria. With its abundant renewable resources, strategic export location along the Gulf of Guinea, and growing policy support, Nigeria has a chance to shape its own green hydrogen narrative.

More details

• Located in Akwa Ibom State in the country’s southern region, the project is a partnership between Chinese green energy company LONGi Green Energy Technology Company Limited and Nigeria’s APPL Hydrogen Limited (AHL).

• According to the Minister of Innovation, Science, and Technology, Chief Uche Nnaji, the project “positions Nigeria at the forefront of green energy innovation, driving industrial development, job creation, and foreign direct investment while reinforcing our global energy market presence.

• Though a late entrant to the green hydrogen race, an Offtake Study suggests that the country’s timing could still allow it to harness its favourable conditions for large-scale production. The study emphasises starting with domestic market development and demonstration projects to validate the concept, technology, and business case. This phased approach could prove advantageous: global hydrogen markets are still maturing, giving Nigeria a chance to learn from early movers, adopt best practices, and avoid early-stage pitfalls.

• While the initial focus is on exports, domestic applications in transportation and power generation could emerge over time, gradually reducing Nigeria’s dependence on fossil fuels. Green hydrogen could also help stabilise the country’s struggling national grid and expand electricity access. According to the World Bank, over 85 million people — 4 out of 10 Nigerians — lack electricity, representing the largest energy access deficit in the world.

• The Nigerian government has signaled its commitment to fostering a green hydrogen economy. While the current project involves an international and government-affiliated local company, the government is actively working to attract private investors. The Energy Transition Plan aims to create a conducive environment for large-scale renewable projects, with ongoing stakeholder engagements clarifying the private sector's role in achieving national energy goals.

• Infrastructure development will be equally critical. As a nation heavily reliant on oil and gas, Nigeria already has existing gas infrastructure that can support a robust domestic green hydrogen market as a first step towards the diversification of its energy and revenue base. This deal could act as a catalyst for developing a national green hydrogen strategy, kickstarting pilot projects, and accelerating focused research and development — all essential for long-term success.

• LONGi Green Energy, a global leader in solar and hydrogen technologies, is an ideal partner for Nigeria. For LONGi, the partnership expands its footprint in Africa and aligns with its global carbon neutrality mission. 

• As a Chinese company, its involvement marks a shift in investor dynamics, as the African cleantech landscape has been predominantly shaped by Western investors. This rare investment in Nigerian green hydrogen may signal China’s strategic interest in securing African energy assets as part of its broader geopolitical and economic ambitions. The partnership also reflects China’s growing focus on renewable energy through its Green Belt and Road Initiative.

Our take

• Given Africa’s track record of ambitious hydrogen projects failing to materialise, a healthy dose of caution is warranted. While Nigeria’s entry into the market is promising, long-term success will hinge on sustained policy support, infrastructure development, and investor confidence. 

• This marks the third major hydrogen project announced in Africa this month, following a period of slowed activity. While it’s too early to call it a definitive trend, the recent surge in announcements signals renewed interest and potential acceleration in the continent’s clean energy landscape.

• Nigeria shares key strengths with Africa’s hydrogen frontrunners — vast renewable resources, industrial capacity, and strategic export access. Yet, to match players like Namibia and Mauritania, it must rapidly scale infrastructure, enact clear policies, and turn ambition into action.