South Africa’s green hydrogen plan to need $14b investment

Bloomberg

South Africa will need to attract investment of $14 billion if it is to develop a substantial green hydrogen industry, the head of the government’s climate finance task team said.
An initial amount of $1 billion would be needed to create an industry that could export 20,000 tons of the climate friendly fuel annually and a further $13 billion to attain a 270,000 ton target, Daniel Mminele, the task team head, said in a speech this week, a copy of which was seen by Bloomberg.
Mminele, a former central banker, was this year appointed to negotiate details of an offer of $8.5 billion in climate finance from some of the world’s richest nations to help South Africa cut its reliance on coal. Still, he told a think-tank, some of that money would need to go towards developing green hydrogen and electric-vehicle industries in South Africa. “By decommissioning coal-fired power stations through a managed process and rapidly expanding alternative sources of power, South Africa can achieve greater security of supply,” he told the Mapungubwe Institute for Strategic Reflection.
“In addition, investments in green hydrogen and electric vehicles are essential complementary investments.”
Mminele’s comments highlight South Africa’s desire to strike a balance between developed countries’ aims of seeing their funding reduce climate-warming emissions and the African nation’s need to transition its coal-dependent economy to clean energy without jeopardising jobs and income.
The offer of funds in the form of concessional loans and grants from the UK, US, France, Germany and the European Union was announced at the COP26 climate summit in Glasgow in November. The donors expect the bulk of the funds to go toward closing down coal-fired plants and replacing them with renewable energy, a senior US official involved in the talks said.
“The plan should include components that can be addressed in parallel to the energy investments,” Mminele said. The hydrogen investment need was a government estimate, he said.
Investment in green hydrogen has been spurred by Russia’s
invasion of Ukraine, which has driven up natural gas prices and threatened security of supply.