North Africa dominates funding in March

From the newsletter

Countries at the northern end of the continent secured the lion’s share of green hydrogen funding commitments in March, receiving 91.2% of the total, or $55.5 billion, out of $60.8 billion across Africa, driven by large-scale project announcements. Southern Africa secured 8.6%, amounting to $5.2 billion, while northwest Africa received the remaining 0.1%, totaling $82.5 million.

• Morocco secured the largest share of funding at $32.5 billion, making up 53.5% of the total, followed by Egypt with $23 billion (37.8%). Mozambique, with the smallest funding of $540,000, marks a significant step forward as a new entrant in Africa’s hydrogen sector.

• In terms of the number of deals, southern Africa and North Africa got three each, while northwest Africa took one, in a distribution that also included Namibia and Mauritania.

More details

• The funding includes a diverse range of financial sources, such as internal and external investments, sustainability bonds, blended finance and grants, highlighting the multifaceted approach to advancing green hydrogen projects across the continent.

• Morocco, leading the charge, secured an impressive $32.5 billion through various investment consortiums, including ORNX, Taqa and Cepsa. This substantial sum will fund six new green hydrogen projects aimed at producing green ammonia and industrial fuel, further bolstering the country's ambitions to become a clean energy leader in North Africa.

• Egypt also made substantial progress, securing $23 billion in investments. $17 billion of this funding will go into the country’s largest green hydrogen project by investment size, located in South Sinai, which aims to produce green hydrogen for export to Europe via the Suez Canal. The remaining $6 billion will fund a dedicated green hydrogen electricity grid, to be developed by India’s Sterlite Power.

• In Southern Africa, South Africa attracted $5.1 billion from the European Union to support its clean energy sector, with a particular focus on green hydrogen development. Furthermore, the Industrial Development Corporation (IDC) issued South Africa’s first sustainability bond, valued at $112.3 million, to accelerate the commercialisation of green hydrogen projects and attract further investment.

• Mozambique, a newcomer to the green hydrogen landscape, secured $540,000 in initial funding from Germany. This amount will be used for market studies to assess the potential for green hydrogen development in the country. While modest, this investment signals Mozambique’s interest in entering the green hydrogen sector and sets the stage for future funding and project developments.

• Mauritania closed the March funding cycle with an $82.5 million investment from the World Bank for the DREAM project, aimed at enhancing the country's mineral and energy infrastructure, including green hydrogen.

Our take

• North Africa’s dominance in green hydrogen funding highlights its strategic role as a key supplier to global markets. Strong policies, prime location and abundant renewables drive investor confidence, setting a benchmark for other African regions to enhance their attractiveness.

• While securing fewer funds, Southern Africa’s higher number of funding opportunities suggests strong potential. Expanding incentives, streamlining approvals and fostering public-private partnerships could help nations like South Africa and Namibia scale up their green hydrogen ambitions.

• Mozambique’s modest funding signals growing interest in new markets with successful feasibility studies potentially leading to viable projects, the country could attract larger investments.