North Africa may be rapidly emerging as a global green hydrogen hotspot, but it is not the only region in Africa with the resource potential to become an international player. Further south, West Africa also boasts exceptional renewable energy reserves and several governments are starting to think about how best to attract investors.

In 2023, the Economic Community of West African States developed a comprehensive green hydrogen policy targeting greater socioeconomic growth. The political union of 12 countries set out the ambitious target of producing 0.5mt/yr of green hydrogen by 2030.

“There are certain Western African countries that are managing to leverage green hydrogen to achieve their renewable energy development goals, with the aim of positioning themselves as key players in the global green hydrogen market,” said Eugenio Tranchino, partner at global law firm Watson & Farley. “Two interesting examples of this outlook are Mauritania and Nigeria.”

“Nigeria is endowed with abundant renewable energy resources including solar, biomass, hydropower and wind” Esan, Olaniwun Ajayi

The Saharan country of Mauritania particularly stands out. The government has already set out a roadmap to add 335MW of solar capacity by 2030, aimed at helping accelerate the country’s hydrogen industry.

In September, the Mauritanian National Assembly also approved a new green hydrogen code, establishing a regulatory framework for the hydrogen sector. The code complemented the 2020 national strategy, which sought to increase the share of renewable energy in the country’s energy mix to 60% by the end of the decade.

“Further to these frameworks, the country has unveiled ambitious plans to produce 12.5mt of green hydrogen annually by 2035, aimed at capturing up to 1.5% of the global hydrogen market,” said Wolemi Esan, deputy managing partner at Nigerian law firm Olaniwun Ajayi. “The Project Nour initiative, developed by a private investor, set the first-phase target of 3GW of renewable energy capacity and 1.6GW of electrolysis capacity.”

Other deals have also been penned. A consortium of investors including German project developer Conjuncta signed a memorandum of understanding (MOU) with the Mauritanian government in 2023 to develop a $34b green hydrogen project. Once operational in 2028, the project will hold 10GW in electrolysis capacity to produce up to 8mt/yr of green hydrogen or other hydrogen-based end products.

Another landmark initiative, the Aman Project, aims to build out a 30GW wind and solar power-to-x hub in the Sahara Desert. Renewable energy developer CWP signed a $40b MOU to construct the production facility, which will ultimately output 1.7mt of green hydrogen and 10mt of green ammonia.

Playing catchup

Nigeria is another country looking to get in on the act. In February, the federal government signed a €7.6b ($8.2b) agreement with a consortium including Chinese solar firm LONGi to develop a green methanol project in Akwa Ibom state. Once operational, the venture will produce 1mt/yr of green methanol, alongside medical-grade oxygen and food-quality carbon dioxide. In 2023, US-based FuelCell Energy also signed an MOU with Oando Clean Energy Limited for the large-scale development of a 5–15MW green hydrogen power plant.

“Nigeria is endowed with abundant renewable energy resources—including solar, biomass, hydropower and wind—along with the potential to generate 15,510TWh/yr of green hydrogen by 2050,” added Esan. “Although Nigeria's National Hydrogen Policy is still in development, the government has already established policies that align with the country's objectives for sustainable development. Those include the Nigeria Energy Transition Plan (ETP) which outlines the strategy to attain a net-zero emission energy system by 2060.”

The ETP stresses the integration of renewable energy sources and identifies hydrogen as a key component for decarbonising the energy sector, which still accounts for around 65% of Nigeria’s greenhouse gas emissions.

500,000t/yr – 2030 target

Other West African countries are also looking to boost investment in the green hydrogen economy. In 2023, The Gambia signed an MOU with a subsidiary of green hydrogen developer HydroGenesis to assess the commercial viability of hydrogen production. The government then signed another MOU that year with Swiss firm NEK Umwelttechnik to develop a 200MW onshore windfarm aimed at scaling green hydrogen.

Senegal is another nearby neighbour with several hydrogen projects in the pipeline. In June, the government announced the establishment of the National Fund for the Promotion of Green Economy to kickstart investment in the energy transition. The fund has already supported hydrogen projects such as Lekela Power, the largest pure-play renewable energy producer in Africa. The firm plans to build a 160MWh battery storage plant next to its 159MW wind power plant, which will then be used to produce green hydrogen.

Risk profile

“West Africa has abundant renewable energy resources that could be leveraged for economic development, particularly through production and sale of green hydrogen, however, the development of green hydrogen projects in West Africa faces several challenges,” noted Tranchino.

Political instability and lack of clear regulatory frameworks increase the risk profile for investors and are among several reasons why North Africa has made significantly more progress so far. West Africa has seen plenty of political shake-ups, including military coups, disputed elections and frequent government changes in recent years, which often disrupt large energy and infrastructure projects.

“Just in the past few years, countries like Mali, Burkina Faso, Guinea and Niger have [all] gone through military takeovers, adding even more uncertainty,” said Esan. “On top of that, ongoing conflicts and terrorist attacks make things even worse, as investors worry their projects could be damaged or destroyed.”

Lack of adequate infrastructure is another problem. Power grids often remain unstable and undeveloped, while North Africa also benefits from existing pipeline infrastructure that could be repurposed as well as closer proximity to European markets.

This is already translated into investment disparity. In March, Morocco approved a host of green hydrogen projects valued at around $32.5b, while the Egyptian government signed an agreement with French utility EDF and UAE-based Zero Waste to develop a €7b green hydrogen project near the Gulf of Suez.

Transmission developer Sterlite Power also recently proposed a $6b green hydrogen electricity grid in Egypt, while Indian renewables firm is in talks with the Egyptian authorities over an $8b green hydrogen plant in the Suez Canal Economic Zone.

“Over the years, North Africa has fostered strong trade and energy partnerships with European counterparts, accelerating the development of its hydrogen sector,” continued Esan. “For instance, in 2023, Morocco hosted the executive vice-president of the EU for the European Green Deal, leading to the signing of an MOU for a green partnership between the two parties. Around the same time, the EU also signed an MOU with Egypt, establishing a strategic partnership on green hydrogen.”  

By contrast, West Africa has yet to establish comparable trade partnerships and financial commitments, resulting in a much slower pace of hydrogen market development. The region also suffers from limited experience and technical know-how developing green hydrogen projects. Over-reliance on foreign skills could yet impede innovation as well as add extra cost to a sector that will have to compete with blue hydrogen as well as other energy alternatives.

“The technology for green hydrogen production is rapidly evolving and the market demands for demonstration of technical feasibility and reliability of projects,” stressed Tranchino. “West Africa suffers a shortage of skilled labour and technical expertise, which poses a significant challenge to the development of a green hydrogen economy.”

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Author: Marat Aslan