SA's green hydrogen plan needs over R220bn in investment, says Daniel Mminele

accreditation
Daniel Mminele. Photo: Gallo/Images/Foto24.
Daniel Mminele. Photo: Gallo/Images/Foto24.

South Africa will need to attract investment of $14 billion (around R224 billion) if it is to develop a substantial green hydrogen industry, the head of the government’s climate finance task team said. 

An initial amount of $1 billion would be needed to create an industry that could export 20 000 tons of the climate friendly fuel annually and a further $13 billion to attain a 270,000 ton target, Daniel Mminele, the task team head, said in a speech this week, a copy of which was seen by Bloomberg. 

Mminele, a former central banker, was this year appointed to negotiate details of an offer of $8.5 billion in climate finance from some of the world’s richest nations to help South Africa cut its reliance on coal. Still, he told a think-tank this week, some of that money would need to go toward developing green hydrogen and electric-vehicle industries in South Africa. 

"By decommissioning coal-fired power stations through a managed process and rapidly expanding alternative sources of power, South Africa can achieve greater security of supply," he told the Mapungubwe Institute for Strategic Reflection. "In addition, investments in green hydrogen and electric vehicles are essential complementary investments."

Mminele’s comments highlight South Africa’s desire to strike a balance between developed countries’ aims of seeing their funding reduce climate-warming emissions and the African nation’s need to transition its coal-dependent economy to clean energy without jeopardizing jobs and income.

The offer of funds in the form of concessional loans and grants from the UK, US, France, Germany and the European Union was announced at the COP26 climate summit in Glasgow in November. The donors expect the bulk of the funds to go toward closing down coal-fired plants and replacing them with renewable energy, a senior US official involved in the talks said in March. 

"The plan should include components that can be addressed in parallel to the energy investments," Mminele said. The hydrogen investment need was a government estimate, he said in a response to a question from Bloomberg. 

While South Africa is currently dependent on coal for more than 80% of its electricity, its abundant solar and wind power potential make it an ideal location for green hydrogen, which is produced using energy from renewable sources to split water to generate the clean-burning gas. 

South Africa doesn’t produce electric vehicles, although its car industry is one of the nation’s biggest export earners. European countries are imposing regulations that will see a rapid shift to the use of electric vehicles.


We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For 14 free days, you can have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today. Thereafter you will be billed R75 per month. You can cancel anytime and if you cancel within 14 days you won't be billed. 
Subscribe to News24
Rand - Dollar
15.75
+0.6%
Rand - Pound
19.82
+0.1%
Rand - Euro
16.83
-0.2%
Rand - Aus dollar
11.19
+0.2%
Rand - Yen
0.12
+0.9%
Gold
1,853.49
+0.4%
Silver
21.78
+0.1%
Palladium
1,997.00
+1.4%
Platinum
957.50
-0.1%
Brent Crude
112.55
+0.5%
Top 40
61,788
+1.3%
All Share
68,367
+1.2%
Resource 10
74,616
+2.8%
Industrial 25
73,018
+0.1%
Financial 15
15,916
+1.1%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot