AfDB selects $23bn green-hydrogen pipeline across Egypt, Morocco, Namibia and South Africa for proposed grants

The African Development Bank (AfDB) has selected four green-hydrogen and derivatives projects representing an estimated $23bn prospective investment pipeline for proposed reimbursable development grants totalling $20mn, subject to approval by the bank’s board.

The projects in Egypt, Morocco, Namibia and South Africa were selected under the AfDB’s Africa Green Hydrogen Programme following a call for proposals held from April 10 to May 11, the bank said on September 18.

The Sustainable Energy Fund for Africa (SEFA), a multi-donor fund managed by the AfDB, would provide the reimbursable grants to finance pre-investment work intended to move the projects towards investment readiness. The $23bn figure represents estimated investment in the four underlying projects rather than financing committed by the AfDB.

The proposed allocations are $3.55mn for Egypt’s DAI Infrastruktur-sponsored Project Ra, $5.28mn for Morocco’s Nareva-backed Guelmim Green Hydrogen Valley, $5.93mn for Namibia’s Hyphen project and $5.24mn for South Africa’s Saldanha Hydrogen DRI project.

The Saldanha project is being developed by German renewable-energy company Enertrag in collaboration with ArcelorMittal South Africa (JSE: ACL) and is intended to use renewable power and green hydrogen to produce low-carbon direct-reduced iron. The other three projects target hydrogen-derived fuels for marine and aviation markets.

Collectively, the four projects envisage about 20 gigawatts (GW) of solar and wind generation capacity, 7GW of electrolyser capacity and 2,950 megawatt-hours of battery storage, according to the AfDB.

The grants target a persistent bankability gap in Africa’s green-hydrogen pipeline. The International Energy Agency said in its Global Hydrogen Review 2026 that only one of 31 low-emissions hydrogen projects in Africa’s 2030 pipeline had reached a final investment decision, while the Green Hydrogen Organisation has identified financing, risk allocation and institutional coordination as major barriers to bankability in Egypt and Morocco.

The funding also addresses a demand and bankability problem highlighted at the Africa Green Hydrogen Summit on September 15, where a speech delivered on President Cyril Ramaphosa’s behalf by Electricity and Energy Minister Kgosientsho Ramokgopa cited the World Economic Forum’s assessment that the sector’s “real bottleneck” was demand rather than technology. The speech argued that long-term offtake agreements, project-preparation funding and instruments suited to first-of-a-kind risks were needed to move projects forward.

That challenge is already evident at Hyphen. German utility RWE (Xetra: RWE) withdrew in September 2025 from a non-binding 2022 memorandum of understanding under which it had considered buying around 300,000 tonnes a year of green ammonia from the project from 2027. RWE cited slower-than-expected European demand for hydrogen and its derivatives, while Hyphen said no final purchase agreement had been concluded.

Separately, the AfDB had already deepened its involvement in Hyphen in December 2025, when its board approved a $10mn SEFA loan to finance front-end engineering design work covering renewable generation, battery storage, electrolysers and desalination infrastructure. The newly proposed $5.93mn reimbursable grant would therefore represent additional development-stage support for the project.

More broadly, an Energy Industries Council report identified 78 proposed African green-hydrogen projects with about $194bn of planned investment but said most remained far from a final investment decision, with a lack of binding offtake agreements among the main obstacles, IntelliNews reported in January.

“Africa’s exceptional renewable energy resources give the continent a unique opportunity to become a competitive player in the emerging global green hydrogen and derivatives market,” AfDB renewable energy and energy efficiency director Daniel Schroth said. He said the programme was intended to move high-potential projects closer to investment readiness.

The Africa Green Hydrogen Programme’s call attracted 81 proposals covering projects in 18 African countries. The AfDB said the programme is intended to catalyse private investment by improving project bankability and supporting development work before major capital commitments are made.

It can fund feasibility studies, engineering design and transaction advisory services needed to advance projects towards final investment decisions or financial close. The grants therefore target development-stage work rather than construction of the estimated $23bn project pipeline.