By Adrian Ephraim
South Africa is emerging as a green hydrogen powerhouse, with the Western Cape at the forefront of a national drive to harness this clean energy source. From Saldanha Bay to the Karoo, large-scale projects, policy roadmaps, and international partnerships are taking shape, signalling a major shift in the country’s energy landscape and opening significant business opportunities.
At the heart of this movement is the promise of a cleaner energy system that can drive economic growth, attract foreign investment, and reindustrialise key sectors. For South African businesses, the green hydrogen value chain is fast becoming a viable and lucrative proposition.
Strategic vision fuels green hydrogen growth
The Western Cape government has positioned itself as a frontrunner with the release of its Green Hydrogen Strategy in 2024. The plan aims to produce 420,000 tonnes of hydrogen annually by 2035, powered by 15 GW of renewable energy. Key to this vision is infrastructure like the Saldanha Bay Industrial Development Zone (IDZ), now being developed as a multi-modal hydrogen export hub.
Premier Alan Winde has described green hydrogen as a practical, long-term economic strategy capable of attracting billions in foreign direct investment and creating thousands of skilled jobs. The province is also collaborating with the Northern and Eastern Cape on a proposed Green Hydrogen Corridor, leveraging solar and wind resources, deep-sea ports, and export potential.
Flagship projects gain momentum
Several projects are already progressing beyond the planning phase. One of the most significant is the CSIR-led Saldanha Hydrogen Hub. Supported by national and provincial stakeholders, Phase 1 includes master planning for integrated hydrogen production, processing, and export.
In Vanrhynsdorp, Keren Energy is developing a smaller-scale but strategic project targeting 800 tonnes of hydrogen annually. With engineering design and permitting completed, it aims for financial close by late 2025 and production by 2028, offering a proof point for local viability.
Meanwhile, Phelan Green Energy is developing a R47-billion, 2.5 GW solar and wind facility near Saldanha. This massive renewable energy project will supply power for hydrogen production and potentially export surplus electricity.
Global partnerships drive confidence
South Africa’s hydrogen ambitions are attracting global attention. The European Union recently pledged R700-million in grants to help Transnet develop hydrogen-ready infrastructure. In the Eastern Cape, the Coega IDZ secured $5.8-billion for a green ammonia project, underlining rising international appetite.
Speaking at the Africa Green Hydrogen Summit in Cape Town, President Cyril Ramaphosa called green hydrogen “a key pillar of South Africa’s energy and economic future.” That optimism is echoed by investors.
“Africa could become the world’s dominant green hydrogen player due to its abundant solar and wind resources,” says Alberto Gambacorta, Executive Vice President for Scatec in Sub-Saharan Africa. “It could offer the world’s cheapest energy in future, driving growth and competitiveness.”
Business opportunities along the value chain
The green hydrogen economy presents significant industrial opportunities. Engineering and construction firms are needed to build electrolysers, pipelines, and port infrastructure. Manufacturers can produce components such as fuel cells and turbines. Logistics firms will be essential for transport, while financial and legal service providers are needed to structure deals and manage risk.
Research and skills development are also gaining traction. Universities like UWC and Stellenbosch are working with partners to train technicians and engineers for the sector.
Platforms such as Ampli Energy – a Sasol and Discovery joint venture – are helping corporates procure renewable energy through flexible wheeling agreements and innovative purchasing models.
Challenges to address
Despite the momentum, barriers remain. Regulatory uncertainty, slow permitting processes, and high infrastructure costs could hamper growth. Clear policy frameworks, faster approvals, and greater coordination across government will be crucial to unlocking the full potential of green hydrogen in South Africa.
