ACWA Power, Industrial Development Corporation to explore green hydrogen projects in South Africa

Saudi’s ACWA Power and the Industrial Development Corporation of South Africa (IDC), a government-owned Development Finance Institution, signed an extensive memorandum of understanding (MoU) exploring a partnership in the development of green hydrogen and its derivatives in South Africa.

This partnership coincides with the state visit of the South African President Cyril Ramaphosa to the Kingdom of Saudi Arabia. The agreement was digitally signed by Paddy Padmanathan, Vice Chairman and Chief Executive Officer of ACWA Power; Clive Turton, Chief Investment Officer of ACWA Power; Rian Coetzee, Head of Industry Planning and Project Development at IDC; and Russell Wallace, Manager of Legal Services at IDC, with agreement copies exchanged at a gathering attended by executive dignitaries.

This is the first agreement of its kind between ACWA Power and the IDC, but the parties have previously collaborated for equity in a renewable energy plant in South Africa. The potential value of this MoU is estimated at US$10 billion. 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.

"With tangible renewable energy development commitments in South Africa already contributing to the country’s clean energy goals, the signing of the MOU with the IDC for the development of green hydrogen is a significant step towards further investing in diversifying the country’s energy mix and accelerating its green economy," said Paddy Padmanathan, Chief Executive Officer and Vice Chairman of ACWA Power.

“As a company that is driving energy transition, ACWA Power is proud to work closely with the IDC with whom we share a robust working history, and today we are delighted to take our collaboration further. 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” he added.

South Africa has a net zero target for 2050 and plans to become a significant producer and exporter of green hydrogen and its derivatives. Accordingly, the 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," noted 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.