23 Jun Development of local Green Hydrogen economy, taking shape
For immediate release
22 June 2023
Dutch funding will help to mitigate SA’s energy deficit in the long-term
The rapid global adoption and development of the Green Hydrogen (GH2) market offers a significant opportunity for South Africa to position itself as a competitor in future green energy markets. Green Hydrogen is an energy carrier that is produced using renewable electricity and water in an electrolyser.
The development of a Green Hydrogen economy will not only create jobs but help boost South Africa’s energy security in the long-term. To this effect, there has been a significant ramp-up of Green Hydrogen projects in the country over the past 24 months and these have caught the attention of international cooperating partners that are keen to accelerate development of the local Green Hydrogen economy.
On Tuesday, SA announced a new R18 billion fund called SA-H2, which is dedicated to financing Green Hydrogen projects in the country. The fund is to be supported by climate-focused blended finance investment firm Climate Fund Managers, the Dutch government’s Invest International, South African life insurer and investment group Sanlam and the development finance institutions – Development Bank of Southern Africa (DBSA) and the Industrial Development Corporation (IDC), among others.
Says IDC Chief Operations Officer Joanne Bate: “Prospects for the development of a vibrant local Green Hydrogen economy are supported by factors including South Africa’s strong renewable energy potential, existing hydrogen industry, abundance of platinum group metals and the proprietary Fischer Tropsh technology. We have made considerable progress in moving the Green Hydrogen commercialisation forward, and this has now caught the attention of both local and international cooperating partners,”
SA-H2 has been initiated with a grant capital from the Dutch government through Invest International, with the rest of the cooperating partners including Climate Fund Managers, Sanlam, DBSA and IDC committing to help raise the rest of the targeted amount. The quantum of the funding from each partner, as well as the form – whether grant, debt, or equity – has yet to be determined.
In November last year, 9 green hydrogen projects were given Strategic Integrated Projects (SIP) status, allowing the development of these projects to be expedited. Among these are Saldanha, Coega and a Green Hydrogen production and export hub in Boegoebaai, in the Northern Cape – partnership between Sasol and the Northern Cape government. The development of a green hydrogen production and export hub in Boegoebaai bodes well for the Northern Cape – a region that is battling a higher unemployment rate.
“Market applications for Green Hydrogen include the production of green chemicals such as green ammonia; mobility, sustainable aviation fuel, marine bunker fuel and decarbonisation of the so called “hard to abate” sectors, economy, for example, green steel production, cement manufacturing and petrochemical production. Funding from SA-H2 will be critical to developing projects that have been given SIP status and others that are still under consideration,” she added.
Bate who is chair of SA’s Green Hydrogen Commercialisation Panel and also serves on the Presidential Climate Commission was quick to clarify that SA-H2 is not part of the Just Energy Transition Partnership (JETP) – which is made up of South Africa, UK, US, Germany, France and the EU – but is supportive of SA’s just transition objectives, among which includes the development of a local Green Hydrogen industry.
Issued by:
Tshepo Ramodibe
IDC Head of Corporate Affairs
For more contact:
Chimwemwe Mwanza
Media Relations
Cel: 073 535 0300
Email : Chimwemwem@idc.co.za