Namibia launches 10 billion dollar-hydrogen project with German participation

In cooperation with German investors, Namibia has commissioned Sub-Saharan Africa’s largest green hydrogen production project. The government cabinet approved the entry into the 10 billion dollar project with Hyphen Hydrogen Energy, whose shareholders are renewable power developer Enertrag and infrastructure developer Nicholas, the company said. The plan is to build wind farms and photovoltaic plants with a total capacity of seven gigawatts (GW) to produce green ammonia, a hydrogen derivative which can be transported more easily. “The total project capital investment of 10 billion dollars is roughly equivalent to the country’s annual GDP,” Hyphen said. “At full scale development, anticipated before the end of the decade, the project will produce 2 million tonnes of green ammonia annually for regional and global markets.”

The Namibian government and Hyphen said they are confident that the feasibility and implementation agreement will be signed later this week and “will set a new global benchmark, creating a template for the sustainable and equitable development of other green hydrogen projects.” EU Commission president Ursula von der Leyen said that the former German colony in southern Africa had the potential to become one of the main renewable energy hubs on the African continent, and even worldwide. “I am proud that [EU investment initiative] Global Gateway has allowed the EU and Namibia to invest in a shared future fighting climate change together, making Namibia energy-independent and creating jobs and prosperity.” Namibia’s president Hage Geingob said the agreement kickstarted a “process that has the potential to transform the lives of many in our country, the region and indeed the world.” Hyphen said the project will create up to 15,000 new jobs during the construction phase, and 3,000 permanent jobs during its operation.

Green hydrogen and its derivatives are considered key to decarbonising sectors that can’t be electrified directly; such as steelmaking, chemicals and aviation. Germany counts on importing the large quantities it expects to need to become climate neutral. But some experts doubt that green ammonia will ever be shipped in significant quantities to be reconverted to green hydrogen because of the associated inefficiencies and costs. They argue that only hydrogen imports via pipeline will make economic sense, and that traded green ammonia will mainly be used to make fertiliser. Analysts told newswire Reuters that it remains to be seen whether water-scarce Namibia — which is relatively far away from key export markets — will be able to deliver a cost competitive product in an emerging global hydrogen sector, while activists raised concerns over a perceived lack of transparency around the huge deal. Earlier this week, Saudi Arabia announced the financial close of a 8.4 billion dollar project to make green ammonia.