Namibia’s cabinet has approved an agreement with Hyphen Hydrogen Energy on a $10 billion project.
The plan is for sub-Saharan Africa’s largest – and only fully vertically integrated – green hydrogen project. At peak, the facility should produce 2 million tonnes per year of green ammonia for regional and global markets.
Namibia President Hage Geingob said the country would sign a feasibility and implementation agreement (FIA) on May 26. This will see the country “earnestly embark on that journey, as we kick start a process that has the potential to transform the lives of many in our country, the region and indeed the world”.
The FIA will set out the process to govern the green hydrogen project in Namibia. Namibia and Hyphen said the FIA would “set a new global benchmark, creating a template for the sustainable and equitable development of other green hydrogen projects”.
European Commission President Ursula Von Der Leyen said the deal was a “major step for the production of green hydrogen in the country. I am proud that Global Gateway allows the EU and Namibia to invest in a shared future fighting climate change together, making Namibia energy-independent and creating jobs and prosperity.”
Today’s agreement is a major step for the production of green hydrogen in Namibia.
Proud that #GlobalGateway allows the EU and Namibia to invest in a shared future.
Together we will fight climate change, make Namibia energy-independent and create jobs and prosperity. https://t.co/MIn8NNMcrA
— Ursula von der Leyen (@vonderleyen) May 24, 2023
Under the FIA, Hyphen will have responsibility for the technical, financial, environmental, social and commercial aspects of the project.
Meanwhile, Namibia will provide land for the project. It will also develop and implement “the required legal, fiscal and regulatory environment necessary for the establishment and sustainable operation of Namibia’s green hydrogen industry”.
The facility will have around 7 GW of renewable generation capacity and 3 GW of electrolysers.
Hyphen, earlier in May, signed a letter of intent with Koole Terminals. This involved the supply of green ammonia into the port of Rotterdam.
Hyphen CEO Raffinetti said the company aimed to provide a “first supply of ammonia from our project into Europe by early 2028”. It aims to reach 2mn tpy of ammonia by 2029.
During construction, the Hyphen project will create up to 15,000 new jobs. During operation, it will employ around 3,000 people. Of these jobs, it aims to find Namibians to fill 90% of the spots. It also aims to secure local goods and services for 30% of its needs.
Hyphen CEO Marco Raffinetti said the company was “confident in our ability to work hand in hand with the people of Namibian to drive lasting change through economic development and job creation, whilst paving the way for a greener and brighter future”.
Namibia has an option to acquire up to 24% of the project at cost. The country has mobilised funding from Invest International and the European Investment Bank of more than 540 million euros ($581mn). This will go to funding development of the industry and its share of the Hyphen project.
Namibia has already mobilised more than 40mn euros ($43mn) to de-risk its involvement in the project.
The FIA is split into five stages. The first will run for up to six months, during which Namibia is expected to take up its 24% stake.
The second phase runs for two years and will involve a feasibility assessment. After this, Namibia has 120 days to consider the project design. This will be followed by financing and construction. The fifth stage involves Hyphen handling operations and maintenance – and ultimately decommissioning.
Hyphen is a joint venture of Nicholas Holdings and Germany’s Enertrag.
Updated at 6:54 pm with pictures.