UK-based, privately owned green solutions company Hive Energy is investing $8.5bn (R105bn) to produce green ammonia in Nelson Mandela Bay to help move the needle on addressing unemployment and poverty in the area.
Hive's investment was the largest pledge at the fifth South African investment conference in Johannesburg earlier this month.
The company, which operates in 22 countries, will convert wind and solar energy into a million tons-a-year green ammonia project to be constructed in Gqeberha's Coega Special Economic Zone as part of the transition to cleaner energy. The factory will be constructed in 2025 and commissioned in 2028.
Speaking to Business Times this week, Hive's director of Middle East, Africa, and Indian Ocean operations CEO Colin Loubser said the project is expected to generate 50,000 jobs over four phases of development, including 20,000 in the construction phase.
He said further phases will only be confirmed once phase 1 of the project is completed.
Hive is also developing a hydrogen project in Spain and a green ammonia project in Chile.
He said the company was leading the change from fossil fuels to green ammonia and was among the first globally to develop in this area.
Among the things about South Africa that appealed to Hive was the country's renewable energy resources, including wind and solar; the deepwater harbour at Coeaga; and the real social need for the project.
“Globally this is the best place to put a green ammonia project,” Loubser said, adding that Coega had been chosen to house the factory due to the socioeconomic impact the project will have on the region.
“I can tell you one thing, it was not easy. I had to fight for South Africa. I was fighting against other countries — Australia, Chile, Namibia and Morocco — and we managed to get South Africa in first.
“Gqeberha has the lowest GDP per capita in the country, so there is a lot of poverty and a lot of unemployed people, and this is what fuels us, more than making green ammonia, which is crucial for fixing climate change. The socioeconomic impact was a huge reason for us to come here. That is what won the project for South Africa. It was because we can make a difference for so many unemployed people,” said Loubser.
The socioeconomic impact was a huge reason for us to come here. That is what won the project for South Africa.
— Hive’s director of Middle East, Africa, and Indian Ocean operations.
Hive will rely on renewable energy to power its factory, with 4,000MW of wind and solar projects to be built as part of the first phase.
Loubser said the project was a partnership with a large number of international players, including Japan and others in the Far East, which would buy the ammonia.
“We have been working on those relationships for about three years. We have been working really hard to bring those investors into South Africa, as well as technical investors,” said Loubser.
The company was working with the Linde Group, the largest gas and chemicals company globally, to deliver the project, as well as large European equipment manufacturers, he said, adding: “It is an international effort, not just Hive, but Hive is leading it.”
While red tape and concerns about delays in the granting of licences were risks cited by concerned businesses, Loubser said so far there had been little red tape.
“We planned for the South African environment, so we understand the regulatory framework. South Africa has very strict environment regulations and those take time. That is a factor we accept. In terms of red tape, we are not really experiencing [it], but we planned for the regulatory environment. I think a lot of foreign companies come here trying to do something without understanding the regulations. All [in our team are] South African.”
Loubser said the construction mafia was not a major issue in Gqeberha and Hive was working closely with organised business. “We have been repeatedly assured they will be supportive of the project.”
The company was conducting more than 20 environmental impact studies for the project and was getting all permits and licences. “We have done a prefeasibility study, so we feel all this will be successful.”
Loubser said the hydrogen and green ammonia industry “is extremely new. Only one project to date has reached financial close, and that is in Saudi Arabia. That is the first large-scale project of its type globally and we will be the second one.
"This is a new and exciting phase for the world. It is a green, fossil-free, carbon-negative industrial era and South Africa is right at the forefront of it.”
Green ammonia, which is made “green” because it is produced from renewable energy from water and air, is seen as a substitute for fossil fuels. Ammonia is a gas used to make fertilisers and explosives for the mining industry and is produced from fossil fuels regarded as “dirty energy”.
Loubser said the global shipping industry ran on heavy fuel oil and diesel, which are massive polluters.
“Heavy fuel oil and diesel have to be changed. There was a global drive from COP26 and COP27 to try to make the whole maritime industry green, so all ships will change from heavy fuel oil and diesel to either green ammonia or hydrogen fuel cells”.
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