President Hage Geingob’s Cabinet agreed this week to sign a feasibility and implementation agreement (FIA) with Hyphen Hydrogen Energy for a $10-billion project to produce two-million tonnes of green ammonia yearly by 2029.
Hyphen, which is a Namibian-registered joint venture between Nicholas Holdings Limited and Enertrag, was awarded preferred-bidder status on the project, earmarked for development on some 4 000 km2 of land within the Tsau //Khaeb National Park, near Lüderitz, in November 2021.
The land was concessioned in line with the Namibian government’s Harambee Prosperity Plan II, which comprises various social and economic recovery plans from Covid and includes ambitious targets to support regional and global decarbonisation.
The FIA, which will be formally signed on May 26, comprises five sequential phases, including a two-year feasibility period, during which Hyphen will prepare a feasibility report that, once validated, is to be followed by project financing, construction and operational phases.
Hyphen is responsible for the technical, financial, environmental, social and commercial delivery of the project, while Namibia is responsible for providing the land and the legal, fiscal and regulatory environment necessary for the establishment of a domestic green-hydrogen industry.
Namibia also has the option to acquire up to a 24% interest in the project, which Hyphen expects will begin producing a million tonnes of green ammonia in 2027 before ramping up to full production in 2029.
Hyphen has signed memorandums of understanding with a number of potential customers in Europe and Korea.
To produce two-million tonnes of green ammonia yearly, the project will require the development of about 7 GW of renewable electricity generation capacity and 3 GW of electrolyser capacity.
In a statement, Geingob noted that the Harambee Prosperity Plan II included the goal of investigating the feasibility of incubating a synthetic fuels industry in Namibia, as a key transforming agent of the 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.”
The FIA includes various socioeconomic development commitments, including job creation and a 30% local-procurement target.
Hyphen estimates that the project will create up to 15 000 construction and 3 000 permanent jobs and is aiming to ensure that 90% of these jobs are filled by Namibians and 20% by youths.
Enertrag CEO Dr Gunar Hering said the company was honoured to be a partner of the Namibian government in creating a competitive green-hydrogen industry.
“Our aim and commitment are to grow Hyphen into a world-class Namibian green-hydrogen company.”