Namibia is set to benefit from US$56 million (approximately N$1 billion) in climate financing to support the development and construction of green hydrogen and industrial decarbonisation projects, following the Green Climate Fund’s (GCF) approval of a US$140 million funding package for Southern Africa.
The funding, approved at the GCF’s 46th Board meeting in South Korea, will be channelled through the SDG Namibia One Fund, which is supporting major green hydrogen and industrial projects across the country.
Of Namibia’s US$56 million allocation, US$15 million will finance early-stage project development, while US$41 million will provide equity financing to support projects through construction.
The allocation forms part of the Southern African Industrial Decarbonisation Facility, which aims to mobilise US$1.2 billion in public and private investment across Namibia and South Africa.
South Africa will receive US$84 million from the approved financing package.
In Namibia, the SDG Namibia One Fund has already signed development funding agreements with four major projects, including the Hyphen green hydrogen project, HyIron’s Oshivela green iron project, the Zhero Molecules Walvis Bay green ammonia project and the Dâures green fertiliser project.
The financing is expected to help these projects overcome development and construction funding constraints, while attracting additional private investment into Namibia’s emerging green hydrogen industry.
Environmental Investment Fund of Namibia (EIF) Chief Executive Officer Benedict Libanda said the funding would strengthen Namibia’s ability to develop its green hydrogen industry and support job creation.
“Namibia has significant potential to develop green hydrogen and associated industries, but realising that potential requires capital, specialist expertise and meaningful Namibian participation,” Libanda said.
“GCF’s catalytic financing will help build on this foundation, advancing projects that can create jobs, support industrial development and contribute to Namibia’s transition to a low-carbon economy.”
The SDG Namibia One Fund is managed by Namibia Energy Transition Fund Managers, a partnership involving Climate Fund Managers, Invest International and the EIF.
The broader financing programme targets between 30 and 40 industrial decarbonisation projects across Namibia and South Africa, with plans to install approximately 1.52 gigawatts of renewable energy capacity and avoid an estimated 24.2 million tonnes of emissions.
GCF Regional Director for Africa Catherine Koffman said the facility was designed to unlock large-scale investment in industries where reducing carbon emissions remains particularly challenging.
“By deploying catalytic first-loss equity where risk is highest, the facility aims to unlock a target USD 1.2 billion programme across South Africa and Namibia, finance 30 to 40 projects, install about 1.52 GW of renewable energy and avoid an estimated 24.2 million tonnes of emissions,” she said.
Development Bank of Southern Africa (DBSA) Group Executive for Programmes Phindile Masangane said the financing would help attract private capital into industrial projects while supporting economic growth and employment.
“With USD 84 million allocated to South Africa and USD 56 million allocated to Namibia, the DBSA, with its partners, Climate Fund Managers and the Environmental Investment Fund of Namibia, is well placed to channel the GCF funding into development projects where the emissions are hardest to abate and the economic stakes are highest,” Masangane said.
The DBSA will oversee the programme on behalf of the GCF, including monitoring and reporting on the use of the financing.
Climate Fund Managers Chief Executive Officer Andrew Johnstone said the funding would help address financing challenges that have constrained industrial decarbonisation projects, particularly during their development and construction phases.
The US$140 million approval follows earlier commitments of €150 million from Invest International and the European Commission to Climate Investor Three’s development financing facility.
Climate Fund Managers said it would continue raising public and private capital towards the US$1.2 billion target to finance green hydrogen infrastructure, renewable energy generation and low-carbon industrial development across the two countries
