The UK will support SA’s green hydrogen plans with grants

President Cyril Ramaphosa shakes hands with King Charles III and Camilla, Queen Consort of the United Kingdom during his welcoming ceremony at Horse Guards.

  • The UK will support South Africa’s green hydrogen plans with grant-funded technical assistance.
  • Additionally, a $5 billion investment in the development of a green ammonia plant in South Africa is expected to create local jobs.
  • President Cyril Ramaphosa is on a state visit to Britain this week.
  • For more financial news go to News24 Business front page.

The UK government intends to support South Africa’s plans to develop a green hydrogen sector with grant-funded technical assistance.

The announcement was made Tuesday morning as President Cyril Ramaphosa left for a state visit to the UK this week.

The grant funding – a number has not yet been announced – is part of the UK’s contribution to the Just Energy Transition Partnership.

At COP27, Ramaphosa said he had asked International Partners Group, which originally pledged $8.5 billion to support South Africa’s transition and which includes the UK, to improve the grant funding component of their pledge.

Green hydrogen – which is produced using renewable electricity and is therefore less carbon intensive than traditional fuel sources – is one of the green industries South Africa hopes to develop through JETP. Other sectors critical to the decarbonisation of the South African economy that will benefit from JETP are the electricity sector and transport, particularly through the development of electric vehicles.

The green hydrogen initiative is linked to the UK program Partnering for Accelerated Climate Transitions (UK PACT). UK PACT has already been involved in knowledge sharing for the development of the South African Hydrogen Society Roadmap, which was published earlier this year. The program has also funded studies into the employment opportunities and skills needed for South Africa’s green hydrogen economy.

The partnership between the two countries involves ongoing knowledge sharing, with the UK sharing its experiences and lessons learned from the development of the Tees Valley Hydrogen Hub. South Africa also wants to develop its own hydrogen valley. That is why the Minister for Higher Education, Science and Innovation, Blade Nzimande, intends to visit Teesside to learn about the regional development opportunities made possible by a green hydrogen sector.

There will also be academic collaboration between the UK’s Teesside University and Stellenbosch University in South Africa, allowing for sharing and exchange of best practice. The British Teesside University was instrumental in setting up a regional hydrogen economy.

The UK government also announced an upcoming US$5 billion investment by a UK company – Hive Energy – to build a green ammonia plant in South Africa. The facility will create local jobs while also providing an economic opportunity for the UK and other companies involved in the project.

Secretary of State James Cleverly said the two countries would also announce the formation of a minerals partnership for future clean energy technologies, as the countries of the South African region are leading producers of clean technology minerals. These include, for example, platinum group metals used to generate hydrogen; and vanadium and manganese, used for battery storage. The partnership will focus on the “responsible” exploration, production and processing of these minerals.

There is also a new education and skills partnership between countries to promote youth employment. The details have not yet been unpacked – but UK funds will be used to develop technical and entrepreneurial skills in green sectors such as electric vehicle manufacturing.

infrastructure

In a statement, British Prime Minister Rishi Sunak also said the two countries will continue to work together on their infrastructure partnership.

“…We have ambitious plans to boost infrastructure investment and economic growth together,” Sunak said.

“I look forward to welcoming President Ramaphosa to London this week to discuss how we can deepen the partnership between our two great nations and capitalize on shared opportunities in trade and tourism as well as security and defense,” he added.

The UK and South Africa signed a memorandum of understanding earlier this year, allowing the UK to share technical knowledge, advice, skills and expertise with South Africa to fill capacity gaps in preparing infrastructure projects to attract finance in the market.

“The infrastructure partnership will help South Africa turn budget commitments into higher quality, bankable projects that can be brought to market,” the UK government responded to questions from News24.

In return, UK companies would – in line with South Africa’s procurement legislation – participate in tenders to take part in infrastructure projects worth £5.37 billion (R110 billion) over the next three years.

READ | The UK is increasing its support to strengthen SA’s capacity to carry out infrastructure projects

“Our partnership with Infrastructure South Africa has already supported the development of a high-quality pipeline comprising approximately R400 billion in priority projects to be brought to market…” the UK government said.

South Africa is the UK’s largest trading partner in Africa, trading at £10.7 billion (R220 billion) a year.

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