By: Energy connects

Junaid Belo-Osagie, Executive Director of Investment Banking for EMEA at Mizuho International, identifies the high cost of finance as the most significant barrier to scaling hydrogen projects in Africa. He advocates for strategic financial models to make the continent's hydrogen future viable.

Bridging the Finance Gap

Belo-Osagie states that Africa's primary challenge is not a lack of infrastructure or talent, but the cost of capital. He proposes two core strategies:

Blended Finance: Using concessional capital to de-risk projects and mobilize larger-scale commercial funding.

International Partnerships: Leveraging offtaker agreements supported by export credit agencies (ECAs) and international risk underwriters to reduce costs and improve access to global capital.

He notes that while projects in the US, China, and Europe benefit from substantial government subsidies, African governments lack similar fiscal resources. To compete, Belo-Osagie argues African stakeholders must push for inclusion in Contracts for Difference (CfD) schemes, subsidized by carbon revenues from high-emitting jurisdictions.

Attracting International Investment

To attract investment, Belo-Osagie recommends a modular, phased approach to project development. Scaling from pilot projects to full-scale production demonstrates technical viability and builds investor confidence, making it easier to secure essential offtake agreements.

He also advises moving beyond simple hydrogen production. Projects will be more attractive by aligning with demand from hard-to-abate sectors like steel and heavy transport and by creating integrated demand centres within Africa to support local economic development and reduce export dependency.

Defining Success

For the upcoming Global African Hydrogen Summit, Belo-Osagie hopes to see a strong advocacy push for African-tailored CfD mechanisms and financing strategies that account for the current geopolitical landscape, including shifts in global trade and energy alliances.