ACWA Power, a leading Saudi developer, investor, and operator of power generation, water desalination and green hydrogen plants worldwide, has signed a memorandum of understanding (MoU) with the Industrial Development Corporation of South Africa (IDC), a government-owned development finance institution, to explore the development of green hydrogen and its derivatives in South Africa
While the parties have previously collaborated for equity in a renewable energy plant, this marks the first agreement of its kind between them and brings a potential estimated value of US$10bn.
ACWA Power will function as the developer for green hydrogen and its derivatives in South Africa, with the IDC acting as co-developer and equity partner in the proposed projects.
Paddy Padmanathan, CEO and vice chairman of ACWA Power, said, “I am confident that our expertise in developing mega-scale green hydrogen projects in other geographies will enable us to successfully create a new avenue of sustainable energy generation, one that will pave the path to further progress.”
South Africa has a net zero target for 2050 and plans to become a significant producer and exporter of green hydrogen and its derivatives. In line with this, the South Africa Government has mandated the IDC to lead the development and commercialisation of the green hydrogen economy. The IDC, in partnership with the Green Hydrogen Panel, is in the process of finalising the South African Green Hydrogen Commercialisation Strategy (GHCS).
“The IDC recognises the substantial value and benefits that the green hydrogen economy will bring to South Africa. The green hydrogen economy presents new economic, skills, employment and community opportunities for the country. We are pleased to explore potential partnership opportunities with ACWA Power, given its pedigree and expertise in this industry,” commented Joanne Bate, chief operating officer, IDC.
Both parties will carry out a feasibility study, potentially cooperate, jointly develop and co-invest in projects in the green hydrogen value chain in South Africa. This MoU with ACWA Power will support the implementation of the GHCS and will contribute towards the country’s green hydrogen production targets.