By 2030, Africa could emerge as a key supplier of green hydrogen to Europe—but only if European policy interventions address the continent’s prohibitive financing conditions.
According to the study Mapping the Cost Competitiveness of African Green Hydrogen Imports to Europe (Nature Energy, June 2025), Africa’s renewable potential alone won’t make its hydrogen cheap. Without substantial de-risking, green hydrogen shipped as ammonia is projected to cost between €4.2 and €4.9 per kg—well above Europe’s own projected domestic costs of €3–5 per kg H₂ by 2030.
Using geospatial modeling across 10,300 sites in 31 coastal African countries, the researchers assessed the full supply chain—from renewable generation and ammonia synthesis to shipping and reconversion in Rotterdam. Their conclusion is blunt: Africa’s comparative advantage in wind and solar does not translate into price competitiveness when financing realities are considered. The average cost of capital (COC) for commercial green hydrogen projects in Africa stands at 15.5%, compared with 6–8% typical in Europe. When public de-risking policies such as European offtake guarantees are applied, the COC drops to 9% on average—a 42% reduction that significantly narrows the competitiveness gap.
The difference is more than statistical. Under current market conditions, only 2.1% of the 10,300 locations modeled would deliver hydrogen cheaper than European production. With effective de-risking and a low-interest environment, that share could expand to 11%—translating to 214 potentially viable export sites. The lowest-cost hydrogen in the study—€3.2 per kg H₂—emerges from Mauritania, followed by Algeria and Namibia. These nations combine high wind availability with geographic proximity to Europe and access to export ports.
Yet, economic feasibility is only half the challenge. Many of the cost-competitive areas identified—including parts of Western Sahara, central Algeria, and the Sudanese–Egyptian border—lie in regions with recurring security risks.
Multilateral guarantees such as those from the World Bank’s MIGA are unlikely to apply, leaving private investors exposed. Moreover, project scale raises macroeconomic red flags: Mauritania’s Aman project alone requires US $40 billion in investment—four times the country’s GDP.
From an infrastructure standpoint, 34 African hydrogen projects are planned for operation by 2030, totaling ~41 GW of electrolyzer capacity, with 74% dedicated to ammonia production. However, 89% of these remain at the concept or feasibility stage. Only one small-scale facility, a 3.5 MW project in South Africa, is currently operational. The largest pipelines—Egypt’s 14 GW portfolio and Mauritania’s 7 GW (Nour and Aman)—reflect ambition more than certainty.
Technically, wind energy—not solar—is the primary cost driver for competitive hydrogen. Consistent wind output reduces reliance on expensive battery storage, a major factor in optimizing Levelized Cost of Hydrogen (LCOH). The study’s least-cost breakdown shows renewable generation dominating total project expenditure, followed by electrolysis and ammonia conversion.
A 20% reduction in wind or electrolyzer capital costs could lower LCOH by €0.5 per kg—enough to shift some regions toward viability but insufficient without financial intervention. Shipping, often cited as a cost barrier, proves marginal. The modeling confirms that logistics—including maritime ammonia transport to Rotterdam—add little to total cost variability. This implies that economies of scale or pipeline repurposing would yield limited cost gains compared to the impact of interest rates or financing structures.
Globally, Africa’s hydrogen ambition will face competition from countries with stronger financial ecosystems. Chile, Oman, and Saudi Arabia already combine low renewable costs with stable institutions and better access to capital. Even within Europe, Spain’s €2.8 per kg bid in the European Hydrogen Bank auction underscores the challenge: African exporters must match not only natural resources but institutional efficiency.
The study concludes that a viable Africa–Europe hydrogen corridor hinges on collaborative de-risking mechanisms—offtake guarantees, concessional loans, and blended finance—to mitigate systemic investment risks. Without them, Africa’s abundant wind and sun may remain stranded assets rather than engines of a transcontinental green fuel trade.
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