AN OVERVIEW OF THE HYDROGEN ECONOMY AND THE ROLE OF DEVELOPMENT FINANCE INSTITUTIONS IN ITS ESTABLISHMENT
Keywords:
Green hydrogen, development finance, renewable energy, hydrogen economy institutionsAbstract
Hydrogen has the potential to power the future with clean, limitless energy and zero emissions. This research aims to define the properties of hydrogen, its production from various sources, its uses, and the challenges in establishing a hydrogen economy. It also identifies key opportunities and roles for development finance institutions (DFIs) in advancing the green hydrogen economy in South Africa, with reference to the broader Southern Africa context. The study employed a systematic review of existing literature on the hydrogen economy, complemented by interviews and questionnaires with key informants. Findings reveal that DFIs can play a pivotal role in scaling up renewable energy capacity for green hydrogen production, creating an enabling environment for investment, developing hydrogen infrastructure, preparing project facilities, and deploying innovative financing instruments to catalyse investment. These insights offer practical implications for development finance practitioners by outlining actionable initiatives to support the growth of the green hydrogen economy. The study’s value lies in its recommended approaches for DFI interventions that foster climate resilience and accelerate the energy transition from fossil fuels to renewable sources. By aligning financial strategies with sustainability goals, DFIs can help unlock the potential of hydrogen as a transformative energy source. A noted limitation of the study was the low response rate to interview requests and completion of administered questionnaires, which may have constrained the breadth of stakeholder perspectives. Nonetheless, the research provides a foundational framework for guiding future investment and policy development in the hydrogen economy.
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