Courtesy of The Africa Report, an article on new additions to Africa’s Green Hydrogen Alliance:

Ethiopia and Angola will be announced as new members of the Africa Green Hydrogen Alliance (AGHA) at the Africa Climate Summit in Nairobi from 4-6 September, Jonas Moberg, CEO of the Global Green Hydrogen Organisation, tells The Africa Report.

The decision by the governments of the two countries to come on board is a sign of their confidence in green hydrogen’s potential, and “sends a strong signal to the private sector”,  Moberg says.

The AGHA currently has Egypt, Kenya, Mauritania, Morocco, Namibia and South Africa as its members. The GGHO, led by Moberg, provides the alliance’s Nairobi-based secretariat. In its latest annual report, the organisation noted expanded engagement with other countries including Djibouti, suggesting that more new AGHA members may be on the cards.

Green hydrogen is produced by electrolysis, with water being separated into hydrogen and oxygen using renewable electricity. Blue hydrogen and grey hydrogen, by contrast, are made by using natural gas or methane.

Unfulfilled potential

The current pipeline of green hydrogen projects, Moberg says, remains a long way off fulfilling the potential that exists to help the transition away from fossil fuels. Yet, he argues, it’s hard to see how the transition can be achieved without green hydrogen.

Interest in African green hydrogen, Moberg says, has been constrained by the US Inflation Reduction Act (IRA) of 2022. The act has stimulated interest in hydrogen projects in the US, some of which might otherwise have been directed to Africa. Offtakers who are also willing to invest in African projects are not coming forward “as fast as people had hoped. Customers are not buying a green product,” he says.

Multilateral development banks and public finance institutions need to “step up” to increase interest in African green hydrogen, Moberg says.

Currently, commercial banks have rules which limit their exposure to small African economies. A country such as Namibia may be stable, but the low overall exposure limit is written into rulebooks. Those rules, he argues, need to become more flexible, but African governments can’t afford to provide the financial backing that would encourage commercial banks to do so.

Demand signals

European governments, argues Moberg, need to come up with demand signals to force buyers to purchase green products, by providing instruments that allow commercial banks to take larger country risks. He gives the example of German and Dutch government funding for green hydrogen projects in Namibia, and says the World Bank needs to become a “vehicle for the international community”.

If public institutions serve as catalysts for investment, then Moberg sees “huge potential” for green hydrogen to help African industrialisation.

Steel production, he argues, will shift away from proximity to coal and become concentrated on areas with access to green hydrogen. Green ammonia, which is derived from green hydrogen, has potential as a bunker fuel, and ports in Egypt and East Africa are well placed to benefit, he says.

Green ammonia can also improve African fertiliser production and contribute to food security, which could be of great benefit to smaller land-locked countries such as Rwanda, Moberg adds. “Public institutions need to step up and make it happen.”