Africa’s Green Hydrogen Race: Balancing Global Demand With Local Benefits

Africa is rapidly emerging as a focal point in the global race for green hydrogen, a clean fuel seen as essential for decarbonizing the world’s energy systems. The continent’s abundant wind and solar resources make it an ideal location for large-scale renewable energy production, attracting international investors and European nations seeking to meet net-zero targets. Countries such as Morocco, Namibia, Egypt, and South Africa have the intense solar irradiation and strong wind speeds necessary to generate low-cost renewable electricity, which can then power electrolyzers to split water into hydrogen and oxygen. The European Commission has set guidelines emphasizing “additionality,” meaning that hydrogen production must rely on new renewable energy projects rather than using existing electricity from local grids.

Despite the opportunities, the development of green hydrogen in Africa faces significant financial and ethical challenges. These projects are highly capital-intensive, and investors often demand substantial risk premiums for projects on the continent. This raises costs and limits bankability, creating a paradox where Africa’s natural advantages are counterbalanced by expensive financing. Commercial off-take agreements, necessary to secure long-term buyers, are also difficult to establish, particularly for early adopters who must navigate the risks of untested technologies and high initial costs.

Beyond financial hurdles, there is growing concern over whether the green hydrogen boom could mirror historical patterns of resource exploitation in Africa. Critics argue that if production is primarily aimed at European exports, local communities may see little benefit while millions of Africans continue to lack reliable electricity. The idea of exporting clean energy while domestic populations remain energy-poor presents a sensitive social and political issue, raising questions about fairness and long-term sustainability.

Some initiatives, however, are attempting to address these concerns. In South Africa, blended finance mechanisms are supporting the development of green ammonia plants, which could benefit local agriculture and industry. Morocco is pursuing hydrogen projects alongside broader reforms to attract private investment and enhance grid stability. Other countries, such as Mauritania and Djibouti, are being positioned as potential hubs for green hydrogen due to their low population densities and large renewable energy potential, attracting international partners eager to invest in these untapped markets.

For green hydrogen to deliver meaningful outcomes in Africa, it must go beyond being a mere export commodity. Success will depend on the ability of projects to create jobs, strengthen domestic energy security, and drive sustainable development. As competition intensifies for sites with access to water and logistical infrastructure, both African governments and international investors face the challenge of building partnerships that avoid repeating past exploitative patterns. The ultimate goal is to ensure that the continent benefits alongside the world, using green hydrogen not only to fuel the global energy transition but also to support Africa’s industrial and economic growth.

This emerging green hydrogen industry represents a crucial opportunity, but its long-term impact will be judged by whether it can balance international demand with local needs, creating a future where Africa is both a supplier and a beneficiary of the clean energy revolution.