The Minister of Finance and Public Enterprises, Iipumbu Shiimi, says the government is not going to make any funding contribution towards the Hyphen Green Hydrogen project.
Shiimi said the investment is to be made only if the state decides to acquire the 24% equity in the project.
“The question is where is Namibia going to find the money, the thinking of many is how the government is going to fund the project. It is therefore important to understand that this is a private sector driven project. In fact, now after the agreement, which will see the induction of a feasibility study, Hyphen is going to source the money and finance,” he said on Friday.
Government, however, has the option to acquire equity in the Hyphen Green Hydrogen project, which is likely to cost U$10 billion (approximately N$200 billion).
“Once the feasibility is proven to be viable, Hyphen is going to source more funding again for the full-scale implementation. So, if you think I am going to get grey hair pondering where to get the money, it won’t be the case.”
Instead, Shiimi said, the government will be the one receiving money as Hyphen will be leasing the land in the park upon which to operate, and we are likely to get about N$252 million (€12 million).
“After the feasibility stage, we are going to determine the fees to be paid thereafter. But during the leasehold government is going to receive and not pay anything. Government can only pay money if we decide to buy equity following an evaluation of whether such an investment is viable. Hence that is the only time the government will spend, as we shall try where to source the funds, and it will be done in accordance with the financial plan,” explained Shiimi.
In addition, he said, the government can only pay funds to the developer if it fails to provide access or meet certain things.
The funds will be a reimbursement for the cost incurred during the feasibility period, other than that the government rolls freely as it eyes benefits from royalties, taxes, employment provision and socio-economic upliftment.
Shiimi made these remarks after signing a Feasibility and Implementation Agreement with Hyphen Hydrogen Energy, the entity appointed to roll out the project.
Meanwhile, Green Hydrogen Commissioner James Mnyupe said all decisions relating to how the government is going to handle the 24% available equity up for investment will be dealt with now post-agreement signing.
“All related investments will be done now, where we will need to evaluate the investment equity and after which the government will nominate a potential beneficiary to hold that equity,” he said.
In the meantime, the government last year set up the Welwitschia Sovereign Wealth Fund, a vehicle that will harness such types of investments.
Mnyupe also dispelled notions of 99 years leasing of the land upon which the project will be established, stating that is another element to be studied, discussed and determined. Government has three months to reveal its plans from the day of signing.
