Going green: The EU and South Africa have announced a deal worth R628 million to support the green hydrogen agenda. (Waldo Swiegers/Bloomberg via Getty Images)
South Africa and the European Union have announced a deal worth R628 million to support the country’s green hydrogen agenda.
The European commissioner for energy, Kadri Simson, Electricity and Energy Minister Kgosientsho Ramokgopa and Minister of Trade, Industry and Competition Parks Tau announced the two grants in a joint statement, saying the partnership will focus on building more renewable energy infrastructure, improve energy efficiency and promote sustainable practices.
“The first, a R490 million EU grant, is expected to leverage R10 billion in private and public sector finance across the hydrogen value chain, covering production, transportation, storage and downstream industries,” they said in the statement on Monday.
This is in line with South Africa’s plans to expand the green hydrogen sector and comes after the announcement of an agreement to launch a $1 billion blended finance fund to help accelerate its development.
The EU grant will be delivered in two tranches, the second of which is meant for Transnet, the state-owned company that manages the country’s rail ports and pipelines.
“A second EU grant of R138 million to assist Transnet in its turn-around strategy, is expected to leverage additional funding for the green transformation of its core operational areas, including ports, rail, pipeline, engineering and related facilities,” the statement read.
The topic of green hydrogen is polarising, with proponents arguing that it is a cleaner energy alternative and can play a significant role in reducing carbon emissions. It can be used in electricity production, fuel, powering vehicles, and manufacturing sectors like steel. Detractors say green hydrogen is problematic because it requires a lot of land and energy to produce. And, unless the energy is renewable, green hydrogen will not be a clean source.
“The main objective is to increase investments in green hydrogen infrastructure and contribute to: reducing global greenhouse emissions, notably in sectors where this is particularly challenging, and promoting local development and economic growth by creating jobs, providing water treatment, and increasing access to [green] energy,” the statement said.
The project aims to help Transnet reach net zero carbon emissions by 2040 through studies and pilot projects “focused on the production and storage of low-carbon hydrogen, and mobilising technical assistance to structure Transnet’s green hydrogen strategy and allow for the scaling up of green hydrogen projects in South Africa”.
Simson said partnering with South Africa “shows the EU Global Gateway strategy in action, boosting smart, clean and secure connections in the energy and transport sections”.
“Our cooperation in support of South Africa’s green hydrogen agenda aims to accelerate the green transition, drive sustainable development, create new economic opportunities, and build a more sustainable future for the region,” she added.