South Africa’s proposed $5.8-billion green ammonia project at Coega in Nelson Mandela Bay is moving closer to construction, as its developer advances technology selection, renewable-energy development and preparations for financing.
The project, developed by Hive Hydrogen South Africa, is designed to produce more than one million tonnes of green ammonia a year at the Coega Special Economic Zone in the Eastern Cape. Construction is targeted for the coming years, with the project expected to move towards a final investment decision as engineering, financing and commercial arrangements progress.
Hive has selected Danish technology company Topsoe to provide an integrated 850 MW solid-oxide electrolyser system and ammonia-loop technology. The selection represents a significant engineering milestone for the project and is intended to improve the efficiency of converting renewable electricity into hydrogen and subsequently ammonia.
Hive estimates that the completed facility could produce more than one million tonnes of green ammonia annually. It has also indicated an indicative free-on-board price of approximately $650 a tonne. These remain projections, however, and the commercial viability of the project will ultimately depend on capital costs, electricity prices, technology performance, financing conditions and the ability to secure long-term buyers.
The project’s renewable-energy infrastructure is being developed alongside the ammonia facility. Hive’s plans include approximately 1.43 GW of solar generation and almost 1.5 GW of wind capacity. Environmental authorisation has already been secured for the 1,000 MW Carissa Wind Energy Facility near Beaufort West, while permitting has progressed for other renewable-energy developments linked to the project.
The model reflects a broader feature of South Africa’s emerging hydrogen economy: renewable electricity may be generated hundreds of kilometres from the industrial facilities that consume it. The country’s strongest renewable resources are concentrated in areas such as the Northern Cape, while industrial and export infrastructure is concentrated around established economic centres such as Coega.
Coega offers an important strategic advantage. The industrial zone is connected to the Port of Ngqura, providing access to international shipping routes and existing industrial infrastructure. This could allow green ammonia to serve both international markets and potential domestic industrial applications.
The project has also attracted development finance. The SA-H2 Fund committed up to $20-million in development funding to Hive Hydrogen, with the possibility of providing up to a further $200-million towards construction. The fund brings together South African institutional investors and international development-finance partners, reflecting the increasingly important role of blended finance in projects that require substantial capital before commercial revenues can begin.
For South Africa, the significance of green ammonia extends beyond energy exports. Ammonia is already an important industrial commodity, particularly in fertiliser production. Green ammonia could also become a carrier for hydrogen and potentially contribute to the decarbonisation of shipping and other sectors where direct electrification is difficult.
The wider economic question is whether such projects can generate lasting industrial capacity rather than simply export renewable energy in another form. South Africa has established capabilities in mining, chemicals, engineering and energy, providing a foundation for developing domestic supply chains around hydrogen and ammonia.
That question is relevant across the region. Namibia is pursuing its own large-scale green hydrogen programme, while other African economies are examining opportunities to use abundant renewable resources to develop new industrial and export industries.
Yet the expansion of the sector is not assured. Green hydrogen projects internationally have faced high financing costs, uncertain demand, infrastructure constraints and difficulties securing competitive long-term offtake agreements. The gap between announcing a major project and reaching financial close can be substantial.
South Africa is simultaneously investing in the research required to develop a domestic hydrogen technology base. Sasol has commissioned a 2 kW proton-exchange membrane electrolyser at its Sasolburg research facility, developed through collaboration involving the Department of Science, Technology and Innovation, North-West University and the South African National Energy Development Institute.
Although small compared with the Coega proposal, such research could have strategic significance. Developing local expertise in electrolysers, fuel cells, platinum-group-metal applications and hydrogen systems could enable South Africa to capture more value from the emerging industry rather than relying predominantly on imported technology.
The regional opportunity is similarly broader than the export of ammonia. If investments in renewable generation and hydrogen production stimulate manufacturing, engineering services, research, logistics and skills development, they could contribute to industrialisation across southern Africa.
For the Eastern Cape, the potential employment and investment benefits are significant. SA-H2 estimates that the Coega project could support more than 20,000 jobs during construction and operations, although these are projections rather than guaranteed outcomes.
The decisive stage now is execution. Hive must translate its technology and permitting progress into bankable financing, firm offtake commitments and a final investment decision.
The Coega project therefore represents both an opportunity and a test for South Africa’s green industrial ambitions. The country has substantial renewable resources, established industrial capabilities and strategically located ports. But those advantages will only translate into sustained economic value if large-scale projects can become commercially viable while building domestic capabilities.
For Africa, the wider lesson is that renewable resources alone will not deliver industrial transformation. The more consequential question is whether emerging green-energy value chains can be anchored within African economies, creating skills, enterprises, infrastructure and manufacturing capacity alongside export revenues.
Coega could become an important test of whether that transition can be achieved at scale.
