The Government of Namibia and Hyphen Hydrogen Energy have agreed on a deal that will pave way for the development, implementation and operation of sub-Saharan Africa’s largest green hydrogen project, to be built at an estimated investment of US$10 billion.
The parties will sign the pioneering Feasibility and Implementation Agreement (FIA) on 26 May 2023, which will govern the process under which Namibia’s first green hydrogen project will be realised.
Hyphen was announced as the preferred bidder for the mega project in 2021. The facility will be located in the Namib Desert’s Tsau //Khaeb National Park, and is set to position Namibia as one of the major developers of green hydrogen globally.
“We are delighted to have concluded the FIA and look forward to delivering on the next phase of development of this ground-breaking project,” said Marco Raffinetti, CEO of Hyphen Hydrogen Energy.
“I would like to thank the Government for its unwavering support and relentless commitment to unlocking Namibia’s green hydrogen potential. We are 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,” he adds.
Under the FIA Hyphen is responsible for the technical, financial, environmental, social and commercial delivery of the project. The government of Namibia will be responsible for providing the land on which the project will be established, and developing and implementing the required legal, fiscal and regulatory environment necessary for the establishment and sustainable operation of Namibia’s green hydrogen industry.
The President of Namibia, said: “The Harambee Prosperity Plan II noted that the Namibian Government would investigate the feasibility of incubating a synthetic fuels industry in Namibia, as a key transforming agent of our economy. On Friday the 26th of May 2023, we 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.”
Green hydrogen project to significantly boost Namibia’s economy
With the investment of US$10 billion, the green hydrogen project’s investment is almost equivalent to Namibia’s GDP. The project is expected to significantly boost Namibia’s economy and is projected to create up to 15,000 new jobs during the construction phase, 3,000 permanent jobs during its operation, with the target for 90% of these jobs to be filled by Namibians and 20% by youths.
The project is further targeting 30% local procurement of goods, services and materials during the construction and operational phases.
The project is expected to generate significant income for the Namibian fiscus through the payment of land rentals, royalties on all project revenues and taxes. Namibia’s government also has an opportunity to be a co-investor in the project with the right to take up to a 24% equity interest at cost.
“Namibia has the potential to become one of the main renewable energy hubs on the African continent and even world-wide. Today’s agreement is 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,” said Ursula Von Der Leyen, President of the European Commission.