The European Union (EU) has pledged R628 million in grants to support South Africa’s green hydrogen initiatives aimed at accelerating the country’s green industrialisation.

The announcement followed meetings on Monday, September 9 with Kardi Simson, the EU’s Energy Commissioner, and the Minister of Electricity and Energy, Kgosientsho Ramokgopa, and Trade, Industry and Competition Minister Ebrahim Patel about the ongoing collaboration between the EU and South Africa in the just energy transition and sustainable development of strategic value chains.

The first grant, valued at R490 million, is expected to attract R10 billion in private and public-sector investment across South Africa’s nascent green hydrogen ecosystem. This funding will cover green hydrogen production, transportation, storage and downstream industries, accelerating the country’s shift to sustainable energy sources.

The second grant of R138 million is intended to support South Africa’s national freight logistics company, Transnet, as part of its turnaround strategy. This funding will facilitate the green transformation of Transnet’s core operations including ports, rail, pipelines, engineering and related facilities.

The R138 million grant will specifically enhance the AFD-Transnet Green Hydrogen Project, a collaboration with the French Development Agency (AFD), aimed at building a green hydrogen ecosystem in South Africa. The project will help Transnet achieve its net-zero emissions target by 2040, supporting pilot initiatives focused on low-carbon hydrogen production and storage. It will also provide technical assistance to shape Transnet’s green hydrogen strategy and scale up related projects.

The EU’s investment will advance South Africa’s green hydrogen value chain from mineral extraction to end-use applications, Ramokgopa said. “Green hydrogen will enable us to significantly contribute to GDP growth while reskilling and upskilling our workforce for participation in a transitioning economy.

“We are not new to this space. We have the necessary technology. We are now configuring the fuel sources to support hydrogen production.

“These minerals will be key inputs into the electrolysers used to produce green hydrogen, allowing us to advance these projects and benefit as a country. We welcome this investment as it opens a new frontier.”

Simson said: “This announcement marks a milestone in the EU’s collaboration with South Africa, particularly in support of the country's green hydrogen ambitions. It showcases the EU Global Gateway strategy in action, promoting smart, clean and secure energy and transport connections. By investing in clean energy projects and providing technical expertise, the EU is supporting South Africa in maximising its green potential.”