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.
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 commercialization of the green hydrogen economy. The IDC, in partnership with the Green Hydrogen Panel, is in the process of finalizing the South African Green Hydrogen Commercialization Strategy (GHCS).
The IDC is currently supporting the development of several catalytic projects in the green hydrogen value chain including green hydrogen and ammonia production, mobility projects and decarbonization of hard-to-abate sectors using green hydrogen. IDC is also exploring bespoke funding solutions with co-founders for green hydrogen projects and supporting the required regulatory and policy changes to foster a conducive environment for the development of this new green hydrogen industry for South Africa.
Given ACWA Power’s experience in the South African renewable energy industry and in green hydrogen projects abroad, the company can play a meaningful role in supporting the objectives of the GHCS. 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.
ACWA Power has had a footprint in South Africa since 2016, and currently has two solar energy plants – Bokpoort and Redstone – in the country. Both projects utilize concentrated solar power technology.
ACWA Power, as part of a joint venture, also recently signed a Joint Development Agreement towards a multi-billion-dollar investment in a world-scale green hydrogen-based ammonia production facility powered by renewable energy in Oman; as well as two Memoranda of Understanding in South Korea with different industrial partners.