President Hage Geingob has urged Namibians to support government efforts, emphasising that opposition to national projects may hinder much-needed developmental progress. Speaking at State House on Friday, Geingob was specifically referring to the much-anticipated green hydrogen project, which he said holds the tremendous potential to entirely transform the domestic economy.
He cited a previous example of the now- abandoned Epupa Dam project, which he said was left due to local resistance. “We learned a lesson from the Kunene region, where we were trying to have the Epupa Dam. It would have changed the face of that poor area. But because of interference from local people, that project died. Therefore, the area is still poor. We should hold hands to work together because it is not for us, it is for the people,” stressed the President.
Geingob was speaking at the signing ceremony between the Namibian government and Hyphen Hydrogen Energy on the feasibility and implementation agreement (FIA) of the billion-dollar green hydrogen project. The signing was effected in Windhoek following last week’s Cabinet approval.
At the occasion, he noted that government has a mandate to create jobs and is trying to deliver, despite facing challenges such as an economic downturn and drought, amongst others.
Friday’s agreement will give Hyphen Energy the go-ahead to govern the development, implementation and operation of sub-Saharan Africa’s largest and only fully vertically integrated green hydrogen project.
Hyphen Hydrogen Energy is a joint venture between Nicholas Holdings and Enertrag South Africa. As the preferred bidder, Hyphen was selected for a 40-year deal to develop Namibia’s US$10 billion green hydrogen project in the Tsau //Khaeb National Park.
The partnership represents the first step in Namibia’s journey to unlocking the potential of becoming one of the world’s leading green hydrogen production hubs by leveraging the country’s world-leading wind and solar resources, vast open spaces and stable investment climate, underpinned by strong democratic values.
“Thank you very much Hyphen for trusting our political system and our corporate governance architecture. Let us now work together, and we will deliver for the Namibian people,” continued Geingob.
At the same occasion, Hyphen CEO Marco Raffinetti said: “This first Hyphen project is only the first stepping stone in Namibia’s ambitions to being a regional green hydrogen hub. The project on its own, being the single-largest project ever proposed to be undertaken in Namibia, has the potential to be transformational for Namibia and its economy, driving job creation and the economy”.
Raffinetti noted that with the FIA now signed, the next phase starts. He admitted that this is not going to be easy, as creating a project and industry on the scale envisaged by government is a daunting task.
Gunar Hering, CEO of Enertrag, added his voice, saying the journey will not only make Namibia the first country in Africa to reach net zero by 2030, but will also support the entire region in a just energy transition.
“If successful, this will come along with an unparalleled boost for the Namibian economy and many new jobs for the Namibian people, creating opportunities for the Namibian youths to deploy their energy, their brightness and their willingness to shape the country in attractive, future-proof, well-paid jobs so that they can provide for their families and to have the prospect of a fulfilled life,” said Hering.
Under the FIA, Hyphen is responsible for the technical, financial, environmental, social and commercial delivery of this massive project. Government, on the other hand, is 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.
Obeth Kandjoze, director general of the National Planning Commission and chairperson of the Green Hydrogen Council, said government will over the next few years look to deepen its understanding and capacity in the industry through a dedicated office in the mines and energy ministry to ensure maximum skills’ transfer and supervision over this strategic opportunity.
Project financing
Meanwhile, finance and public enterprises minister Iipumbu Shiimi clarified that the green hydrogen project is a private sector- driven project, with government only being involved at the receiving end.
“The next stage in the project is the feasibility study. During the feasibility study, the money that is going to be used is from Hyphen. Once the visibility is proven to be viable, again, Hyphen will have to go and look at its own resources, and probably complement those resources,” Shiimi elucidated.
The finance minister added that government, in terms of the agreement, is going to receive money through leasehold during the feasibility study. Through this agreement, government is going to receive around €12 million, said Shiimi.
He further stated that government will only pay if it decides to buy into the 24% project equity as an available option in the agreement between the two parties.
“So, we will go back to the drawing board and see whether it will make financial sense for us to buy that equity. And the decision will be accompanied by a financing plan. And secondly, just to clarify that, yes, government can only refund the developer for the costs or the money they would have spent on the feasibility study if government fails to do certain things, for example entry in the park,” the minister noted.
For his part, green hydrogen commissioner James Mnyupe said government is committed, through its requests to Hyphen, to include locals in the project through local and youth employment and local procurement.
He affirmed that government has learned from its past experiences, and has ensured it is on the same page as Hyphen.
“In estimation, this particular project could produce almost 20% of today’s fiscus take of government. It is without a doubt looking to be a significant contributor to the Namibian fiscus,” Mnyupe added. –mndjavera@nepc.com.na