January 20, 2022 [The Brief] – Germany is considering providing aid for a N$182 billion (€10 billion) hydrogen project in Namibia, according to people familiar with the matter.
Germany’s state-backed development bank KfW is currently in talks with the Namibian government and Hyphen Hydrogen Energy, a joint venture between Nicholas Holdings of the UK and ENERTRAG of Germany, which was selected as the preferred bidder for the country’s first green hydrogen project in November 2021, about a possible state guarantee or loan.
This comes as Namibia’s Green Hydrogen and Derivatives Strategy estimates that up to US$190 billion will be required by 2040 to implement plans of becoming Africa’s first green hydrogen producer and supplier.
German Economy Minister Robert Habeck hinted at financial support for the project during his recent visit to Namibia, where he said “the investment sum of around €10 billion almost equals the annual gross national product of Namibia.”
The project, which will be located near Luderitz, will use solar and wind power for the production of green hydrogen which would then be turned into ammonia and shipped to Germany.
Namibia’s Skeleton Coast on the Atlantic Ocean is ideal for green hydrogen production due to an abundance of sun and wind.
Countries in Europe and particularly Germany are racing to secure alternative sources of energy from across the globe after a shortfall of Russian pipeline gas following its invasion of Ukraine.
German energy giant RWE is currently building a second ammonia terminal back in Germany, and recently signed a memorandum with Hyphen that could see it off take up to 300,000 t/y of green ammonia, a hydrogen derivative that is particularly suitable for transport by ship.
“We have a great demand for green ammonia in Germany,” Habeck said.
The hydrogen plant could produce up to 20TWh, according to Rainer Baake, a special German government envoy for German-Namibian climate and energy cooperation.
A quarter of this energy would be enough to cover Namibia’s power demand, which is currently about 5TWh. Namibia could therefore become the first carbon neutral country on the African continent and become independent of electricity imports from neighbouring South Africa.
Namibia, according to its recently launched Strategy, aims to deliver up to 12 tonnes of Green Hydrogen annually by 2050 and to create an additional 600,000 jobs by 2040, boosting employment for the country’s 2.5 million population.
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