- SDG Namibia One Fund, Namibia’s dedicated green hydrogen blended finance vehicle and the designated funding partner to Government of Namibia’s green hydrogen initiatives (the “Fund” or “SDG Namibia One”), and Hyphen Hydrogen Energy (“Hyphen”) have concluded a share subscription agreement.
- The Fund will take up a 24% stake in the country’s landmark Hyphen green hydrogen project (the “Project”).
- The Fund’s equity subscription will be backed by an initial EUR 23 million development funding to the Project.
SDG Namibia One is a blended finance vehicle focused on green hydrogen projects and related infrastructure in Namibia. Blended finance is seen as critical for the nascent green hydrogen industry, offering the advantage of reducing transaction costs and accelerating high-quality project development, ultimately leading to quicker investment decisions, expedited project delivery, and proof of concept. The Fund seeks to raise USD 1.0 billion from public and private investors in Namibia and globally.
The Fund is jointly managed by Climate Fund Managers (“CFM”), a climate-centric blended finance fund manager, Dutch development financing institution Invest International and the Environmental Investment Fund of Namibia (“EIF”). EIF’s involvement ensures direct access and ownership for the Government of Namibia (“GRN”) in the Project, whereas CFM and Invest International bring in the required institutional and funding capacity.
The Project, which will be developed on 4,000km² of land within the Tsau ||Khaeb National Park, is Namibia’s first fully vertically integrated GW-scale green hydrogen project and the largest green hydrogen production project in Sub-Saharan Africa. Upon completion of Phases 1 and 2, it will produce 2 million tonnes of green ammonia (a hydrogen derivative that is easier to transport) annually from ~7GW of predominantly wind and solar renewable energy generation capacity and ~3GW of electrolyser capacity. The Project will avoid an estimated 5-6 million tonnes of CO2 emissions a year.
The Hyphen project will be a catalyst for economic growth in Namibia and will turn the country’s green hydrogen ambitions into reality.
Hyphen estimates that the project across Phases 1 and 2 will create up to 15,000 new jobs during the construction phase and 3,000 permanent jobs during its operation on completion of both phases, with the target for 90% of these jobs to be filled by Namibians with 20% specifically targeted for youth. The project further estimates 30% local procurement of goods, services and/or materials during the construction and operational phases. These figures will be validated by Hyphen and GRN through comprehensive baseline studies conducted during the feasibility phase, with GRN undertaking its own baseline studies in parallel.
Hyphen, whose shareholders include renewable power developer Enertrag and infrastructure developer Nicholas Holdings Ltd, was announced as the preferred bidder in 2021 for the project.
Author: Bryan Groenendaal