Africa’s green hydrogen pipeline tells a story of scale without execution: while developers have announced roughly 38 gigawatts of planned clean hydrogen capacity across the continent, only about 17 megawatts are currently operational.
That gap, highlighted in the Energy Industries Council’s latest report, underscores a structural mismatch between ambition and readiness in a market increasingly shaped by export narratives rather than grounded demand.
According to the EIC, 78 green hydrogen projects representing an estimated $194 billion in capital expenditure have been proposed across Africa, with Egypt, Morocco, and South Africa accounting for around 80 percent of planned investment. Much of this activity is driven by expectations of overseas demand, particularly from Europe seeking alternative supplies of renewable hydrogen and its derivatives, alongside interest from Japan and South Korea in long-term imports from sub-Saharan Africa. However, the report suggests that these export-led strategies are advancing faster than the underlying commercial frameworks required to support them.
The imbalance is most visible in offtake alignment. While project announcements often reference future European or Asian buyers, few have secured binding offtake agreements at prices that can support final investment decisions. This mirrors challenges seen in other regions, where green hydrogen costs remain well above fossil-based alternatives without sustained policy support. For African projects, the risk is compounded by limited domestic hydrogen demand and underdeveloped local markets that could otherwise provide early revenue streams.
Infrastructure constraints add another layer of complexity. Large-scale hydrogen production requires reliable renewable power, water access, transmission capacity, and export infrastructure such as ports, pipelines, or ammonia terminals. In many African markets, these systems are either incomplete or competing with existing development priorities. The EIC report points out that moving directly to mega-scale export projects can strain national grids and logistics networks that are not yet equipped to handle such loads.
Supply chain readiness also remains uneven. While Africa holds strong potential in solar and wind resources, local manufacturing, engineering capacity, and skilled labor for electrolyzer deployment and plant operation are still limited. Heavy reliance on imported equipment raises costs and exposes projects to global supply chain volatility, weakening the economics that underpin many investment cases.
The report argues for a more incremental approach that prioritizes realistic offtake, domestic use cases, and regional value creation before scaling exports. Applications such as fertilizers, mining, refining, and heavy transport could anchor early demand, reduce reliance on speculative export markets, and help justify infrastructure investments. Building these local ecosystems would also improve bankability by shortening supply chains and lowering execution risk.
