South Africa Green Hydrogen Projects Enter Construction Phase; Six Priority Builds Underwa

South Africa’s green hydrogen programme has moved from planning into active construction preparation, with President Cyril Ramaphosa announcing six priority projects at the African Green Hydrogen Summit in Cape Town on Tuesday. The first of those projects is already on a defined construction timeline.

The Phelan Green Group electro-Sustainable Aviation Fuel project in Saldanha Bay leads the portfolio and is the furthest along operationally. It has secured a $100 million equity commitment and an off-take agreement confirming market demand. Construction is scheduled to begin in the first quarter of 2027, with first exports targeted for the first quarter of 2029. The project’s passage through final investment decision gives the government its clearest proof of concept, a completed milestone it is using to validate the broader programme approach.

Electricity and Energy Minister Dr Kgosientsho Ramokgopa delivered the President’s remarks, framing the announcement as evidence that Africa can move projects from concept to development stage. The government’s strategy concentrates resources on projects with defined milestones and clear pathways to execution, rather than spreading effort across an undifferentiated pipeline. That managed priority approach is designed to strengthen investor confidence by demonstrating bankability and reducing perceived risk.

The remaining five projects sit at earlier stages of the development pipeline. 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 connect green hydrogen production to lower-emissions iron and steel manufacturing. The Prieska Power Reserve in the Northern Cape, a green ammonia project targeting domestic demand, is currently in development stage. The Green e-Fuels Producers Green Methanol Corridor is at pre-feasibility stage with European demand as its target market. The Green Hydrogen Solutions Project, focused primarily on South African demand, has completed front-end engineering design.

By contrast with the Saldanha Bay project, where major equipment has already been ordered and commercial commitments are in place, these five still require government coordination to reach final investment decision and move toward construction and production phases. President Ramaphosa noted that the World Economic Forum identified demand, not technology, as the real bottleneck in clean hydrogen expansion. Securing long-term off-take agreements, he said, is essential to scaling production.

The government has signalled that a second wave of projects will follow, expanding the managed portfolio beyond these initial six. This staged approach allows the administration to concentrate preparation, investment mobilisation and coordination on credible projects while building a pipeline of additional candidates.

On financing, President Ramaphosa called on African development finance institutions to increase project-preparation funding and provide instruments suited to first-of-a-kind projects. He pressed prospective buyers to convert non-binding expressions of interest into credible, long-term off-take agreements capable of supporting project finance. Technology partners were urged to establish manufacturing, training and research capacity on the continent rather than positioning Africa solely as a market for imported equipment.

The President framed the green hydrogen economy as a vehicle for African industrialisation across fertiliser production, green iron and steel, sustainable fuels, equipment, engineering and related services. Africa, he argued, must participate across the value chain as owner, manufacturer, technology partner, producer and market, not merely as a supplier of raw materials or energy molecules.

The African Continental Free Trade Area will support regional value chains and open larger markets for green hydrogen products and services. The President called for practical cooperation among African nations on standards, certification, infrastructure corridors and project preparation, particularly through the Africa Green Hydrogen Alliance, while signalling continued engagement with BRICS and European partners to diversify financing.

Whether the five projects still in early development stages can close the gap to final investment decision, and on what timeline, remains the central operational question the programme now has to answer.