Why is Germany investing so heavily in Africa’s green hydrogen?

From the newsletter

First published October 30: Germany has doubled down on its investments in Africa’s green hydrogen economy, pledging €4 billion by 2030. The country is deepening partnerships, expanding research cooperation and funding large-scale infrastructure to unlock Africa’s renewable potential. But what truly drives Berlin’s growing footprint across the continent?

• Nearly 80% of public funding commitments for Africa’s green-hydrogen sector originate from European countries, with Germany accounting for roughly13 %

• Beyond financing, Berlin is actively shaping Africa’s hydrogen landscape through industrial partnerships, technology transfer and ecosystem engagement.

More details

• Germany’s heavy investments in Africa’s green hydrogen sector aim at mutual benefit. They reflect a calculated strategy to advance the country’s climate goals, secure domestic hydrogen supply, enhance energy security, strengthen geopolitical influence and capture commercial and industrial opportunities. Africa’s vast renewable energy potential allows it to produce sufficient green hydrogen to meet Germany’s projected needs.

• Central to this strategy is Germany’s ambitious energy transition and commitment to net-zero emissions by 2045, which make green hydrogen a critical tool. Hard-to-abate sectors such as steel, chemicals, fertilisers and long-haul transport require low-carbon solutions, yet Germany currently relies heavily on imported fossil fuels and domestic renewable production alone cannot meet projected demand. By investing in Africa, Berlin ensures access to renewable hydrogen that can reduce carbon emissions across industry and transport, advancing its climate objectives while supporting a sustainable energy transition.

• The climate goals inspire Berlin to transform its energy sources, but achieving these ambitions also requires securing sufficient supply to meet rising domestic demand. Germany’s National Hydrogen Strategy anticipates hydrogen demand of between 95 and 130 terawatt-hours (TWh) by 2030, with domestic production covering only a fraction. To bridge this gap, Berlin aims to import roughly 50–70 percent of its needs, equivalent to 45–90 TWh annually, with total demand expected to rise to 360–500 TWh by 2045. Recognising that domestic capacity alone cannot meet its decarbonisation targets, Berlin has placed international cooperation at the heart of its hydrogen policy. The complementary Import Strategy for Hydrogen and Hydrogen Derivatives sets out measures to secure reliable import supply chains, providing a clear basis for Germany’s hydrogen diplomacy and long-term partnerships in Africa.

• Energy security is also a key driver of Germany’s investments in African hydrogen. By diversifying supply chains and establishing long-term politically stable partnerships with African producers, Berlin aims to reduce its reliance on traditional energy suppliers that have proven volatile, such as Russia and other global exporters of natural gas, oil and coal. African green hydrogen offers a predictable and renewable source capable of safeguarding Germany’s industrial and energy requirements. Mechanisms such as the H2Global auction platform and KfW-backed projects provide financial certainty and incentivise long-term offtake agreements, reinforcing Berlin’s strategy of securing reliable imports while building a more resilient and diversified energy supply.

• Geopolitical considerations further underpin Berlin’s approach. By cultivating strong bilateral and multilateral hydrogen partnerships across Africa, Germany strengthens its influence within European strategic frameworks, including the EU’s Global Gateway, which seeks to mobilise €300 billion for sustainable infrastructure worldwide by 2027. At the 2023 G20 Compact with Africa conference in Brussels, Chancellor Olaf Scholz told African leaders, “Produce green hydrogen and you can rely on us as buyers,” describing Africa as “our partner of choice.” Germany has since signed memoranda of understanding with Kenya, Angola and Egypt, complementing earlier partnerships with Namibia and Morocco. These agreements cover feasibility studies, training and infrastructure development, laying the groundwork for an integrated export corridor linking Africa and Europe and reinforcing Germany’s geopolitical and strategic objectives.

• Commercial and industrial interests provide a final decisive impetus for Germany’s investments. German companies are actively shaping Africa’s hydrogen economy and securing first-mover advantages across the value chain. The Hyphen Hydrogen Energy project in Namibia aims to produce green ammonia for export, while the HyIron GmbH/Oshivela Project is developing Africa’s first green-hydrogen-based iron plant, supported by a €13 million German government grant. Conjuncta GmbH is leading multi-gigawatt hydrogen projects in Mauritania and Angola, and KfW has committed over €23 million to promote hydrogen production in South Africa. These projects allow German firms to capture commercial value, facilitate technology transfer, foster industrial upskilling and secure long-term offtake agreements.

• Driven by these motivations, Berlin has reinforced its ambitions through major funding mechanisms. Platforms such as H2Global, KfW-backed initiatives and European programmes including the EU–Africa Green Energy Initiative and Germany’s PtX Development Fund provide billions of euros to support project financing, infrastructure development and coherent market creation across the hydrogen value chain.

• Germany’s engagement in Africa also forms part of a broader European surge in hydrogen investment. More than 60 proposed projects across the continent feature substantial European participation, including developers from Germany, France, Denmark, Belgium, the UK, Norway and the Netherlands. With deep expertise in hydrogen technologies and strong financial backing, European firms are well positioned to benefit from public funds and strategic partnerships, demonstrating the continent’s intent to build a coherent transcontinental green energy framework.

• Yet despite the momentum, realising these ambitions will be complex. Financing bottlenecks, regulatory fragmentation and infrastructure deficits could hinder progress. Critics also warn that Europe’s pursuit of African hydrogen risks echoing extractive patterns of the past. 

• Nevertheless, the strategic rationale is clear. Analysts estimate that Africa could supply up to 10 million tonnes of green hydrogen annually by 2040, potentially meeting a significant share of Europe’s import demand. For Germany, investing in Africa’s green hydrogen future is both an environmental imperative and a long-term economic play, anchoring its energy transition while catalysing Africa’s own green industrial growth.

Our take

• Germany’s strategy emphasises Africa’s pivotal role in the global energy transition, establishing the continent as a key supplier of renewable hydrogen and a partner in the decarbonisation agenda.

• While Germany’s investments offer economic and climate benefits, Africa risks remaining primarily a supplier of raw hydrogen, with limited local value capture unless deliberate policies are enacted. This is in neither side’s interest and efforts to overcome this are welcome.

• Ultimately, Germany must align its import strategy with robust governance frameworks in Africa, balancing climate goals with equitable and sustainable industrial development to avoid repeating extractive patterns.