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Namibia targets N$17.8bn raise with new green hydrogen fund

The government on Tuesday launched the SDG Namibia One at the United Nations Climate Change Conference, COP27, a new investment platform that will convene and coordinate activities related to the transition to, and exploitation of, the green hydrogen industry in Namibia and aims to mobilise up to N$17.8 billion (€1 billion) of investment capacity over the next 10 months.

“SDG Namibia One is a blended financing platform managed in partnership between Invest International, Climate Fund Managers, and the Environmental Investment Fund of Namibia. Despite this great opportunity for Namibia, we recognise that the green hydrogen industry is in its infancy, and it is difficult to predict how the market will develop in the long term and that we will face challenges relating to finance, technical capacity, and many others still to be unforeseen. However, we will work closely with our international partners to mitigate such risks, hence a blended finance in the form of SDG Namibia One was launched today with the premise to attract a diverse group of players in our development journey,” a release issued by the government said.

Dutch Prime Minister, Mark Rutte announced a Grant Facility of N$714 million (€40 million) as seed capital to establish the SDG Namibia One during its launch on Tuesday.

“A funding agreement for an initial development capital of €40 million was signed between the Namibian Government and the Dutch Government during the launch, while the strategy is to use the grant to catalyse additional development capital to the SDG Namibia One. This will subsequently derisk private capital and facilitate further investments at scale to support the development of high-quality green hydrogen assets and associated value chains. Infrastructure development is faced with challenges such as scale, risk sharing, speed and competition.”

The platform is therefore designed as a programme, with a multiphase approach that includes a development fund, construction fund and operational fund.

“Such design facilitates successful fundraising and investments in untested markets and projects, as well as able to attract sponsors with limited track record of operating in a market, or innovative schemes with limited proofs of concept. Consequently, suited to enhance participation of domestic financing market and business entrepreneurs.”

The SDG Namibia One, according to the Namibian government, is also premised on a partnership which relates to capacity building as the joint venture allows the unique international expertise and investors’ relationship of the Climate Fund Managers to be harnessed while connecting domestic expertise of the Environmental Investment Fund of Namibia and giving them exposure to sophisticated capital raising designs and deal structuring elements.

”The Environmental Investment Fund of Namibia will therefore benefit from capacity building by being directly involved at the fund manager level from the outset, including development of fund management, investment, fund-raising and capital mobilisation abilities. Moreover, additional skilled bandwidth and bench strength will thereby be created at Environmental Investment Fund of Namibia and ultimately within the government of Namibia.”

 

 

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Last modified on Tuesday, 08 November 2022 17:58

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