Banking on Bankability: Commercializing Green Hydrogen in Africa
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Banking on Bankability: Commercializing Green Hydrogen in Africa
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June, 2023
In the wake of the global energy transition amid the threat of climate change, countries across the globe have set decarbonization goals to achieve net zero greenhouse gas emissions by 2050. Global energy demand is expected to rise 25-30% by 2040, implying that economies reliant on fossil fuels will emit more carbon (IV) oxide. Amidst renewable energy alternatives, Green Hydrogen (hereafter GH) emerges as a fairly nascent but suitable decarbonization catalyst.
GH is the new ‘it’ fuel in the energy sector. Around 60 countries have unveiled national strategies on hydrogen. Prospective importers of hydrogen, including Belgium and Germany, have ramped up their hydrogen diplomacy with a number of potential exporters across Africa, the Middle East, and South America. By 2040, it is forecast that around 206 gigawatts or 30 million tons of GH projects will be completed around the globe.
The World Hydrogen Council expects that GH production costs will decline by 50% by 2030, which could encourage an increased uptake of projects on the African continent. In this Brief, Botho analyzes where Africa stands in the global GH value chain today and provides three key recommendations for how Africa should position itself in this value chain in the months and years to come.
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