Hyphen Hydrogen Energy and the government of Namibia have reached an agreement for the next phase of a significant green hydrogen project, worth $10 billion. Once completed, the project aims to export green hydrogen to Europe. Hyphen, which includes German company Enertrag among its shareholders, was selected as the preferred bidder for the project in the Tsau //Khaeb National Park within Namibia's Namib Desert in 2021.
The official signing of the feasibility and implementation agreement is scheduled for Friday, although concerns have been raised by some community activists regarding the perceived lack of transparency surrounding this substantial deal, which amounts to the country's entire gross domestic product.
Namibia's President, Hage Geingob, expressed optimism about the transformative potential of the project, stating, “On Friday… 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 construction of the plant will be carried out in phases, ultimately aiming to produce 2 million tonnes of green ammonia annually for regional and global markets. The project envisions achieving full-scale output by 2030. Green hydrogen, which is produced using renewable energy, forms the basis of this ambitious endeavor.
Namibia, known for its abundant sunshine and low population density, intends to leverage its solar and wind energy potential to establish itself as a renewable energy hub in Africa. However, analysts remain uncertain about whether this water-scarce nation, geographically distant from key export markets, can deliver a cost-competitive product in the emerging global hydrogen sector.
The selection process and lack of transparency surrounding the deal have also drawn attention. Frederico Links, coordinator of a project monitoring public procurement at Namibia's Institute for Public Policy Research, highlighted concerns about the deal and how Hyphen was chosen as the preferred bidder.
Over the past year, Hyphen has signed memoranda of understanding with several potential European customers, with the aim of supplying approximately 750,000 tonnes of green ammonia annually. Additionally, the company recently signed a letter of intent with Koole Terminals, outlining plans for the import of green ammonia into Europe from the Port of Rotterdam in the Netherlands.
“The potential for Namibia to become one of the primary renewable energy hubs in Africa and worldwide is significant,” stated Ursula von der Leyen, President of the European Commission, in the same official statement.
