Ramaphosa names six green hydrogen projects as Saldanha Bay plant takes $100m

Six green hydrogen projects have been named as South Africa’s first wave of priorities under the national green hydrogen programme, with the Saldanha Bay electro-Sustainable Aviation Fuel plant leading the list after reaching a final investment decision.

President Cyril Ramaphosa announced the portfolio at the African Green Hydrogen Summit in Cape Town on Tuesday. His address was delivered on his behalf by Electricity and Energy Minister, Dr Kgosientsho Ramokgopa.

The Saldanha Bay project is the one with money committed

The Phelan Green Group electro-Sustainable Aviation Fuel project in Saldanha Bay has secured an off-take agreement and a $100 million equity commitment. Construction is expected to begin in the first quarter of 2027, with first exports of electro-Sustainable Aviation Fuel targeted for the first quarter of 2029.

“This is an important milestone,” Ramaphosa said. “As the World Economic Forum noted earlier this year, ‘the real bottleneck in scaling clean hydrogen is demand, not technology’. Scaling therefore rests on securing long-term offtake agreements. This project gives practical meaning to the challenge we made at last year’s Summit: an investment decision has been taken, equity committed, major equipment ordered and a defined route to construction established. What follows is production and offtakers.”

The remaining five projects span the green hydrogen value chain and are at earlier stages.

The Coega Green Ammonia Project in the Eastern Cape has completed early preparatory work but requires further commercial, technical and financing work before reaching final investment decision. The Saldanha Hydrogen Direct Reduced Iron Project on the West Coast is at pre-feasibility stage and will link green hydrogen to lower-emissions iron and steel production. The Prieska Power Reserve in the Northern Cape is a green ammonia project targeting the domestic market and is currently at development stage. The Green e-Fuels Producers Green Methanol Corridor is at pre-feasibility stage and is targeting European demand. The Green Hydrogen Solutions Project, focused primarily on South African demand, has completed front-end engineering design.

“By designating these as priorities, government and its partners now have a mechanism to help the remaining five projects reach final investment decision, construction and production,” Ramaphosa said. “A second wave of projects will follow, bringing further credible projects into the portfolio.”

A managed portfolio, not an open pipeline

Ramaphosa described the six as a managed priority portfolio that concentrates project preparation, investment mobilisation and government coordination on credible projects with defined milestones. The projects emerged from an assessment process aimed at standardising project bankability and strengthening investor confidence.

He said the shift since last year’s summit is from an undifferentiated pipeline to a portfolio with named priorities.

“Since last year’s Summit, we have moved from an undifferentiated pipeline to a managed priority portfolio,” he said. “This demonstrates that with partner support, public and private financing and proper planning, African nations can move from a concept on paper to projects in development.”

Africa across the value chain, and who pays for it

Ramaphosa said Africa has an opportunity to become a major global hub for green hydrogen, supported by its renewable energy and water resources and reserves of critical minerals. He warned that the continent should not remain merely a supplier of renewable energy, minerals or hydrogen molecules.

“Africa must participate across the value chain as owner, manufacturer, technology partner, producer and market,” he said.

He said the green hydrogen economy must contribute to Africa’s industrialisation through fertiliser production, green iron and steel, sustainable fuels, equipment, engineering and related services, and that the African Continental Free Trade Area will open larger markets and enable regional value chains.

“The green hydrogen economy must harness African talent and capacity for innovation while expanding local procurement, manufacturing, employment and skills transfer,” he said. “It must sustainably support continental energy transition and decarbonisation. It must involve communities as stakeholders, not passive bystanders.”

He called on technology partners to establish manufacturing, training and research capacity on the continent, saying Africa should not simply be seen as a market for imported equipment. He also called on African development finance institutions to increase project-preparation funding and provide financing instruments suited to the risks of first-of-a-kind projects, and on prospective buyers to convert non-binding expressions of interest into long-term offtake agreements capable of supporting project finance.

“African nations must step up practical cooperation on standards, certification, infrastructure corridors and project preparation, including through the Africa Green Hydrogen Alliance,” he said. “While we continue to work with our BRICS and European partners to diversify financing, African development finance institutions must be at the forefront.”

The next dated step is the start of construction at Saldanha Bay in the first quarter of 2027, with the other five projects working towards their own final investment decisions and a second wave to be named.

Source: SAnews (South African Government News Agency), President Ramaphosa announces first wave of green hydrogen projects