State-backed firms from the Netherlands have partnered with Namibia to create a sovereign wealth fund focused on green hydrogen, the Finance Ministry said.
SDG Namibia One, a €1 billion ($1.1 billion) blended financing vehicle for green hydrogen investment in the southern African nation, will include the participation of Namibia’s Environment Investment Fund and The Netherlands’ Climate Fund Managers BV and Invest International BV, the ministry said in an emailed statement on Tuesday, a day after the Dutch and Danish prime ministers visited the country.
The fund which will receive initial grant financing of €40 million from Invest International aims to attract additional capital from local and international institutional investors, the ministry said.
The European Investment Bank and Namibia concluded a letter of intent at COP27 for the provision of €500 million, a portion of which will go toward the fund.
The southern African nation of just under 2.7 million people has outlined a significant build of renewable energy facilities, largely due to ideal conditions for solar- and wind-powered energy to produce green hydrogen for export.
Demand for the clean-burning fuel is surging as the world looks for alternatives to climate-warming fossil fuels and Europe seeks to lessen its dependence on Russian natural gas, supplies of which have proved unreliable due to the political tension created by the war in Ukraine. The European Union is looking to import 10 million tons of renewable hydrogen by 2030.
Equity Stake
The government plans to use the fund to acquire a 24% equity stake in the first awarded project being developed by Hyphen Hydrogen Energy at historic cost, the ministry said.
Namibia chose Hyphen Hydrogen Energy in 2021 to develop the nation’s first fully vertically integrated GW-scale green hydrogen project within the Namib Desert’s Tsau //Khaeb National Park. The $10 billion project will be developed in phases and is expected to produce 350,000 metric tons of green hydrogen a year from seven gigawatts of renewable generation capacity and a three-gigawatt electrolyzer.
The Hyphen Hydrogen Energy is currently undertaking a feasibility study and might start producing the first million tons of ammonia in 2028.
Neighboring South Africa on Tuesday also announced the launch of a green hydrogen fund backed by the Development Bank of Southern Africa, Industrial Development Corp. of South Africa Ltd., Climate Fund Managers and Invest International.