Africa’s hydrogen race is laying the foundations for an industrial future

Africa’s green hydrogen industry is increasingly being built around manufacturing, engineering, financing and industrial policy rather than export project announcements alone.

Recent developments across South Africa, Morocco, Namibia and Libya show countries investing in the capabilities that could anchor a long-term hydrogen industry on the continent.

The latest development came on August 13, when Climate Fund Managers announced that it had raised R3 billion (US$182 million) at the first close of its SA-H2 Fund to finance green hydrogen infrastructure across Southern Africa.

The blended finance fund is targeting a final close of R12 billion (US$728 million) by mid-2028 and will invest across the hydrogen value chain, including green hydrogen production, green ammonia, green methanol and industrial decarbonisation.

The SA-H2 Fund, also known as Climate Investor Three South Africa, was launched by Climate Fund Managers to accelerate the development, construction and operation of green hydrogen infrastructure in South Africa and the wider Southern African region.

It combines public and private capital in a single investment platform to reduce early-stage project risk and attract institutional financing for large-scale hydrogen projects.

The financing announcement came within days of a series of hydrogen developments across Africa.

In South Africa, Sasol unveiled the country’s first locally manufactured hydrogen electrolyser, developed under the Hydrogen South Africa programme. The 2-kilowatt unit will be installed at Sasol’s research and technology campus in Sasolburg to test hydrogen production under variable renewable energy conditions and develop local technical expertise.

The announcement is significant because South Africa produces most of the world’s platinum and iridium, two metals that are essential for hydrogen electrolysers, yet had never manufactured an electrolyser domestically. The project links the country’s mineral base to higher-value industrial production and technology development.

“Hydrogen is an essential element for producing sustainable fuels and chemicals, and this program provides a unique industrial platform to advance locally developed electrolyser technology,” according to Sasol Executive Vice President Sarushen Pillay.

The company also commissioned Envision Energy to undertake a design study for a green hydrogen system at its Sasolburg operations. The study will assess how renewable power generation, energy storage and electrolyser technologies could be integrated to produce green hydrogen for lower-carbon fuels and chemicals.

Engineering work is one of the clearest indicators that projects are moving closer to commercial execution. The design phase is expected to provide the technical and commercial information required to evaluate future investment decisions.

According to Danie Cronje, Sasol’s Senior Vice President for Business Building, the collaboration is focused on evaluating integrated renewable energy and hydrogen systems.

“The design study with Envision is an important step in assessing how integrated renewables, energy storage and electrolyser technologies could support cost-competitive green hydrogen production at Sasolburg,” he said.

The SA-H2 Fund adds a financing layer that many African hydrogen projects have lacked. It supports projects from early-stage development through financial close, construction and operation, and has already signed development funding agreements with South Africa’s first wastewater-to-green-methanol plant in Gauteng and the Hive Hydrogen Coega Green Ammonia Project.

Those investments connect financing directly to industrial production rather than hydrogen exports alone. They also show that green hydrogen is increasingly being developed alongside downstream manufacturing and industrial processing.

Namibia is also building a complementary financing strategy. The country is preparing to apply for up to US$250 million in concessional financing through the Climate Investment Funds’ Industry Decarbonisation Programme to support green industrial projects, enabling infrastructure and local value chains.

The draft investment plan is designed to convert renewable energy resources into bankable industrial investments.

“Its wider purpose is to build a credible national platform through which Namibia can mobilise investment for green industrialisation at scale,” according to Sylvester Mbangu, acting executive director of the National Planning Commission.

Morocco is pursuing a different industrial model. King Mohammed VI used his 2026 Throne Day address to reaffirm support for the country’s Green Hydrogen Offer, which covers integrated developments spanning renewable electricity, electrolysis, ammonia, methanol, synthetic fuels and supporting logistics.

The programme is intended to attract energy-intensive manufacturing, strengthen export competitiveness and expand domestic industrial production. Morocco has selected major national and international consortia to develop large-scale hydrogen and derivative projects linked to future manufacturing and export markets.

The strategy received fresh backing this week when the U.S. Trade and Development Agency awarded a US$5.7 million grant to support engineering studies for a proposed US$4.5 billion green ammonia project in Laayoune, Western Sahara.

The project is expected to produce up to 560,000 tonnes of green ammonia annually using renewable hydrogen and forms part of Morocco’s broader hydrogen programme.

Libya is emerging as one of the newest entrants into Africa’s green hydrogen race, which has largely been dominated by Morocco, Egypt, Namibia and South Africa.

The country, one of Africa’s largest oil producers, is now moving toward a national green hydrogen strategy as it seeks to position itself in the continent’s next generation of energy industries.

The committee responsible for preparing Libya’s National Green Hydrogen Strategy has entered the finalisation phase, with work focused on investment coordination, technical planning and regulatory frameworks.

The strategy is intended to support Libya’s transition to a low-carbon economy and attract investment into renewable energy and hydrogen development.

The committee describe green hydrogen as “a strategic option for supporting the energy sector transition and achieving sustainable development.”

South African hydrogen advisor Thobeka Mchunu argues that building the industry requires more than production technology.

“Industries do not grow on technology alone. They require clear regulations, trusted standards, market certainty and strong partnerships,” she explained.