The Northern Cape is now – and will in the future – be the best global investment destination for investors in mining, agriculture or energy. These are the primary sectors. However, there is the added benefit for the province and for investors of renewable energy being scaled up across the province. This puts the Northern Cape in a good position to have an aggressive industrialisation agenda.
To this end, the 2022/23 financial year began with a positive start as the Northern Cape recorded the lowest unemployment rates in the country together with an improved GDP figure of R130-billion, up from R98-billion in 2019. The key drivers for the Northern Cape’s sterling performance were investments in the mining and energy sectors. These were made possible through good governance and investment facilitation on top of a good resource base.
The Northern Cape is a key contributor towards South Africa’s Just Energy Transition (JET). The Northern Cape Provincial Government, in line with the Green Hydrogen Strategy that was launched in November 2021 at COP26 in Glasgow, has initiated pre-feasibility studies that are championed by its strategic partner and anchor investor, Sasol.
Since the introduction of the national Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), the Northern Cape has attracted a disproportionate percentage of solar and wind projects, worth billions of rands to the local and national economy.
The advent of the green-hydrogen economy has given the Northern Cape the opportunity to hold a key position in this new field as a contributor to country’s green economy. This is enabled by the natural endowments that are available in the province.
The South African response and offer to the global village is well articulated via the South African Green Hydrogen Roadmap that is based on the following tangible references that provide a first-class competitive advantage:
- A well-developed strategy and an existing regulatory and implementation structure that has been developed since 2007
- Having the world’s largest grey-hydrogen producer in the world, Sasol, as the lead investor
- The REIPPPP that has been in existence for more than 10 years, generating more than 5GW of electricity
The Northern Cape has exceptional renewable energy resources. As the biggest South African province by land mass, the province is sparsely populated, has little alternate use for the land and has an uncomplicated topography. Collectively, this amounts to an exceedingly supportive environment for renewable-energy generation and green-hydrogen development.
The renewable energy capacity of the Northern Cape is more than sufficient for what South Africa would require based on its projections, but far-reaching consideration is being given as to how the renewable capacity is developed and scaled up.
The significant support the Boegoebaai project is receiving from both the public and private sectors is highlighting its promise.
Ultimately, an extensive value chain for investment exists, ranging from desalination and electrolyser production, the renewable energy resource required, grid capacity, auxiliary services and ultimately the possibly of manufacturing opportunities for the industry and value addition to local mineral resources.
Part of the feasibility study, Sasol’s final master plan report, will be made public and this will entail more elaborate detail about the value chain. A green-hydrogen-specific Special Economic Zone (SEZ) is envisaged to host the extensive value chain that stems from the production of green hydrogen. The site will be 30 000ha in extent. This will be the world’s leading investment destination for green hydrogen within a green SEZ.
In addition, the existing mining, agriculture, transport and energy sectors need to be transitioned and incorporated into this JET-driven Northern Cape Green Hydrogen Strategy.
For the future, plans must be made for heavy-hauling trucks in the mines and on roads and for green-hydrogen fuelling stations and the like. The array of investment potential within this green economy does not conclude here, though. A range of other demands must be provided for, including extensive developments, infrastructure, logistics and the demand for human capital. Investors are urged to opt in and to secure for themselves a slot in this prime, once-in-a-lifetime investment opportunity.