Germany to Invest Over $45 Million in South Africa’s Green Hydrogen Economy

In pursuit of the development of a green hydrogen economy in South Africa, the German Federal Ministry of Economic Cooperation and Development (BMZ) has commissioned its development agency, the Deutsche Gesellschaft für Internationale Zusammenarbeit (GiZ), to spearhead the H2Global development initiative – in collaboration, and with approval from, the Government of South Africa.

The BMZ will provide $14.2 million in grant funding, as part of a larger $45 million commitment from the German Government to support the initiative.

Plans for the development of South Africa’s green hydrogen economy were announced by the Minister in the Presidency, H.E. Mondli Gungubele, during a site visit to Port Nolloth, near Boegoebaai, in the Northern Cape Province of South Africa on the 17th of January. In the portside town, a new green hydrogen project will be rolled-out by South Africa’s integrated energy and chemical company, SASOL, to produce sustainable aviation fuel.

The Minister was clear that, “The German Government, through its H2Global Initiative, has created a sustainable aviation fuel market trading platform, which is intended to provide funding to green hydrogen products globally.” Minister Gungubele further remarked that, “South Africa has the potential to become a global sustainable aviation fuel hub due to our renewable endowment. SASOL is working with a number of local and international partners on a pioneering sustainable aviation fuel project at the SASOL Secunda Facility.”

The Minister also flagged that the Investment and Infrastructure Office has pledged its commitment to support the project, which has the potential to “contribute to a just [energy] transition”, whilst facilitating the creation of “quality green jobs”.

The production of green hydrogen, which utilizes low-carbon technologies and renewable energy, is set to play a significant role in the global energy transition and the low-carbon transition of industrial sectors – such as aviation, steel, cement and manufacturing, as well as heavy-duty and maritime transport sectors. It is envisaged that the green hydrogen export market could transform into an industry worth over $300 billion per year by 2050.

“Global green hydrogen demand could reach 530 million tons by 2050, displacing roughly 10.4 billion barrels of oil equivalent – around 37% of pre-pandemic global oil production,” Gungubele added during his address.

In addition to the $14.2 million in grant funding towards South Africa’s green hydrogen development, $2.8 million will be allocated to the South African German Energy program, while $28.4 million will be directed towards a financial cooperation project – the Promotion of Green Hydrogen Programme.

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Matthew Goosen

Matthew Goosen

Matthew Goosen is a Video Editor and Content Writer at Energy Capital & Power. He holds an Honours Degree in Film and Media Studies at the University of Cape Town and is currently undergoing his Masters Degree. Born in Pretoria and raised internationally, he has been living in Cape Town since 2013.

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