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Govt forecasts N$4bn revenues from Green Hydrogen

Government expects to rack-up close to N$4 billion in revenues per annum from Green Hydrogen projects, with contributions towards the Sovereign Wealth Fund and royalties expected to amount to N$627 million per annum, once full production capacity is reached.

James Mnyupe, Economic Advisor to the President and Green Hydrogen Commissioner, said criticism of the government initiative is misguided.

This was after some critics had raised concern over implementation of the project, likely impact on the domestic economy and its ability to create substantial employment.

“It is unfortunate that such 'criticisms' are made without making robust attempts to conduct basic desktop research. The number of jobs quoted in the request for proposals received by GRN were made on the back of a required professional Corporate Social Plan. The information contained in the Corporate Social Plan was used to evaluate the overall bid. The section was assigned a weight of 25 out of 100. In Hyphen’s case the Corporate Social Plan (the Plan) was authored by two respected specialist consulting firms with a track record of over 30 years of experience in socioeconomic development, with a specialization in skills development research and impact modelling,” he told The Brief.

Mnyupe said projected jobs to be created in Namibia through the initial green hydrogen project are based on the multipliers derived from the economic model using the Namibian Social Accounting Matrix, which was updated to represent 2021 labour multipliers.

“The latest estimates from the developers note that their expectations are that 15,000 direct jobs will be created during construction and 3,000 during operation. The feasibility study to be conducted over the coming 18 to 24 months will further concretize these estimates,” he said.

“There is no doubt however, that the high-level estimation of the potential economic benefits clearly illustrates the ability of the project to become a “game changer” and act as a “transformative industry” as outlined in the Harambee Prosperity Plan II.”

The Presidential Advisor said the green hydrogen industry could secure the country’s energy security, turn Namibia into a potential net energy exporter (in the form of electricity and fuels) and possibly reduce the country’s overall cost of electricity, making it easier for Namibia to attract new energy intensive industries.

“These goals provide a response to the assertions that this industry will only have an impact on the economy in '5 to 10 years’ time' and that it will only benefit a few Namibians,” he said.

The pronouncement comes as Government is expected to release a second Request For Proposal (RFP) this year for the development of another large-scale green-hydrogen complex, having announced Hyphen Hydrogen Energy as a preferred bidder for the first such project in early November.

The Institute for Public Policy Research Q4 Economic Review, questioned the awarding process timelines of the RFQ, cost required to construct an integrated green hydrogen facility and the delivery of the product to the end consumer. 

”The weakness is that much of the technology required is at a scale that is untested and needs more development. Furthermore, Namibia possesses little of the industry expertise required meaning foreign expertise will have to be imported. Although expertise can be purchased, it means Namibia will find itself in a weak negotiating position until it develops this capacity itself,” the report noted.

“It is hard to see how the Namibian government is going to play a role of any significance given the current state of the public finances but it would not be a surprise to see the GIPF strong-armed into providing funding. Namibia appears to be putting all its development eggs in the green hydrogen basket. It is to the country’s credit that it has moved so quickly on something so visionary."

 

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Last modified on Thursday, 13 January 2022 17:11

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