Johannesburg – The European Union (EU) has unveiled two grants amounting to R628 million (€32 mil) in support of South Africa’s green hydrogen agenda.
The EU Commissioner for Energy Kadri Simson, South Africa’s Electricity and Energy Minister Kgosientsho Ramokgopa, and Trade, Industry, and Competition Minister Parks Tau announced the multi-million rand grants in a joint statement on Monday, (9 September 2024).
“The first, a R490 million EU grant is expected to leverage R10bn in private and public sector finance across the hydrogen value chain, covering production, transportation, storage, and downstream industries,” the statement said.
“A second EU grant of R138mil 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.”
Commissioner Simson expressed her support stating: “The announcement today marks a significant milestone in the EU’s partnership with South Africa, and 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.”
This partnership between the EU and South Africa focuses on efforts to build more renewable energy infrastructure, improve energy efficiency, and promote sustainable practices.
By investing in clean energy projects and providing technical expertise, the EU and its Member States support South Africa in making the most of its green potential, promoting sustainable economic development and directly benefiting South Africans.
The EU R490mil (€25 mil) contribution to leverage infrastructure investments along the green hydrogen value chain
The EU said this contribution aims to facilitate and accelerate the efforts of the government of South Africa in the development of a sustainable green hydrogen sector.
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 EU’s R490mil (€25 mil), will be channelled through an EU Member State financial institution, and is designed to leverage substantial additional funding and investment across the hydrogen value chain from the point of production to transportation and storage, and downstream industries.
Through the development of sustainable green hydrogen value chains, the EU contribution will seek to increase local value addition and, thereby, support South Africa to move up higher in these value chains.
Also, it will support efforts toward the creation of a regional green hydrogen hub in the Southern Africa region.
EU contribution to AFD-Transnet Green Hydrogen project
This project’s main objective is to support the development of a green hydrogen ecosystem in South Africa.
“To this end, the project’s beneficiary, Transnet, will receive assistance to achieve its net zero emissions by 2040 goal,” the statement said.
The project will support activities around Transnet’s core operational areas (ports, rail and pipeline, engineering, and facilities) related in particular to:
- executing studies (market, legal, and feasibility studies as well as impact assessments) 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.
“Transnet, as an integrated transportation and logistics company, is expected to play a critical role across the hydrogen value chain for its operations as well as domestic and export markets,” the statement explained.
“The grant will help contribute towards ensuring that Transnet meets its own internal commitments as well as the government’s initiatives relating to the Hydrogen Society Roadmap.
“The EU’s R138 mil (€7 mil) grant will be channelled through AFD.”
