The government on Tuesday officially notified Hyphen Hydrogen Energy, a company appointed to develop the country’s Southern Corridor Development Initiative (SCDI) green hydrogen of their intent to take a 24% equity making it a co-investor, Finance and Public Enterprises Minister Iipumbu Shiimi announced the multibillion-dollar landmark deal today.
The decision by the government to exercise its rights by taking up the shareholding, comes after it managed to secure €40 million (approximately N$850 million) in grant funding from Invest International, to be channeled through a sovereign wealth fund, SDG Namibia One, which will soon be established. Namibia’s Environment Investment Fund partnering with two Dutch organisations, Climate Fund Managers and Invest International, will oversee the fund operations.
SDG Namibia One is a bespoke blended financing infrastructure fund, which will look to raise money from local institutional investors and investors from around the world to develop Namibian green hydrogen projects and related infrastructure, stated the Minister.
“The government delivering on the vision of HPPII and the first hydrogen valley to be developed, the Southern Corridor Development Initiative (SCDI), recognised the need to strategically mobilise billions of Namibia dollars of funding in a manner that does not place additional fiscal burdens on the country,” Shiimi said.
“Government has sought partners to assist in its realisation and has developed relationships with the European Union (EU) as a block and the countries of the Netherlands and Germany specifically. These strategic relationships have been driven by the significant alignment between the aspirations of HPPII and the objectives of the EU, the Netherlands and Germany in driving the energy transition.”
In addition, Shiimi said, the European Investment Bank and the government concluded a letter of intent at COP27 for the provision of €500 million, a portion of which is to be designated for investment via SDG Namibia One.
“This marks yet another key progressive milestone in the development of a local and transformative Synthetic Fuels Sector,” he said.
Recently the government signed a Feasibility and Implementation Agreement with Hyphen paving the way to begin with the ground works. Through this agreement the government is responsible for ensuring that Namibia is equipped with the necessary legal, fiscal and regulatory environment to enable the implementation of the project.
Hyphen is responsible for the technical, financial, environmental, social and commercial delivery of the project which, if finally approved by GRN, will then be implemented by Hyphen.
The US$10 billion project is planned to be developed in phases, at full development targeting 350,000 metric tonnes of green hydrogen production a year from ~7GW of renewable generation capacity and ~3GW electrolyser. The project once fully developed will employ an estimated 3,000 people, with 15,000 construction jobs supported over the four-year construction period. Over 90% of these jobs are expected to be filled by local Namibians.
“With the conclusion of these milestones, the Government has taken yet another significant step towards realising the potential of the transformative green hydrogen sector for the benefit of all Namibians as envisaged in the HPPII
Furthermore, the NamPort, the Port of Rotterdam, Hyphen, Gasunie, NamPower and Invest International also signed a memorandum of understanding, for the development of a port at Lüderitz, which Shiimi said represents the strategic intent of these partners to work together to realise the vision of the SCDI.
“The development will initially be anchored by the Port of Lüderitz for access to international markets with the development of hydrogen pipelines to connect to South Africa in the medium to long term. The realisation of the SCDI will generate significant energy propelling Namibia to become energy self-sufficient, improve regional energy security by exporting excess electricity to the Southern Africa Power Pool and will supply various international Ports, including the Port of Rotterdam with clean molecules to decarbonize hard to abate sectors,” he explained.
Meanwhile, Climate Fund Managers CEO Andrew Johnstone said the fund is committed to bring to bear its full expertise in order to meet the Namibian and Dutch governments’ ambitions of mobilising fit for purpose capital to drive economic development in Namibia and combat climate change globally.
“We are also humbled to have been given the mandate to build capacity in the Namibian public sector,” he said.
In addition, the EIF CEO, Benedict Libanda echoed the importance of a global partnership in advancing green hydrogen development, especially considering the nascent nature of the sector.
“Collaboration among countries, industry stakeholders, and international players is vital to overcome technological challenges, scale up production, and establish a global sustainable hydrogen economy. By joining forces, we can pool resources, share knowledge, and accelerate the transition towards a low-carbon future powered by green hydrogen,” added Libanda.
