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23 Nov 2022
BY Stefanie Busch AND Nicola Reitze

Namibia: Setting the stage for a greener future

Namibia struck up numerous alliances with key strategic partners during COP27, inching one step closer to becoming a key player in the global green hydrogen industry. We take a look at Namibia’s progress during the 27th Conference of the Parties in Sharm El-Sheikh, Egypt.

Substantial climate finance by the EU 

Namibian and EU representatives came prepared. Three days into the summit the two parties had already agreed on a sovereign loan facility of up to EUR500-million with a clear focus on facilitating Namibia’s green hydrogen and renewable energy infrastructure. According to Namibia’s President, Hage Geingob, the loan will represent the largest amount of concessionary finance to combat the effects of global warming which Namibia has secured to date. Financing will run through the European Investments Bank (“EIB”).

Strategic partnership with the EU 

Namibia and the EU concluded a strategic partnership on sustainable raw materials and renewable hydrogen. The memorandum signed by the President of the European Commission, Ursula von der Leyen, and President Geingob proposed a number of pillars for the cooperative effort. These include:

  • integration of raw material and renewable hydrogen value chains;
  • cooperation with the aim of leveraging ESG criteria that align with global standards;
  • mobilisation of funding for the development of soft and hard infrastructure;
  • capacity building and skills development across entire value chains; and
  • cooperation regarding regulatory alignment, standards and certification.

The parties agreed to create an operational roadmap for 2023-2024 and to implement joint actions within six months of signature of the memorandum.

Launch of the SDG Namibia One Fund

Namibia’s green hydrogen efforts will now be backed by a blended financing platform in partnership with Invest International (a fund supported by the Netherlands), the Environmental Investment Fund of Namibia (Namibia’s state-owned fund) and Climate Fund Managers.

SDG’s goal is to streamline access to public, private and philanthropic capital and to channel renewable hydrogen financing. This is meant to empower the Namibian Government in supporting chosen hydrogen projects. For now, the fund has been launched with a EUR40-million grant from the Netherlands. SDG’s partners hope to attract further investors to grow the fund to EUR1-billion over the next 10 months. 

EIB support of planned hydrogen projects in Namibia

The EIB also announced a partnership with Hydrogen de France (“HDF”) in respect of HDF’s development of the first Namibian hydrogen-to-power plant in Swakopmund. The deal takes the USD185-million project closer to its target for financial close in 2023. 

In addition, the EIB signed a EUR35-million agreement with Hyphen Hydrogen Energy to finance the early-stage development of Hyphen’s large-scale project to produce green ammonia in the south of Namibia near Lüderitz. 

Project in partnership with the DSE Consortium

Germany’s DSE Green Technology consortium further revealed its plans to establish a Namibia-based electrolyser production project with a capacity of 30 GW per year by 2030. DSE will sign final contracts amounting to USD2.5-billion with the Namibian Government on 4 December 2022. 

Stefanie Busch
Senior Associate

Nicola Reitze

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