SDG Namibia One Fund Acquires 24% Stake in Nation’s First Gigawatt Green Hydrogen Project
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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, following which 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.
COP28, which recently took place in Dubai, was focused on bringing financial investment to the Global South. To Hyphen’s knowledge, this is the first large-scale project, where a government has procured and contracted a significant green ammonia initiative in Africa and through an innovative financing partnership.
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.
Marco Raffinetti, CEO of Hyphen Hydrogen Energy, stated that “Ever since we started working with Government, we have ensured that this project creates a new global standard for the sustainable and equitable development of international large-scale green hydrogen projects. Namibia’s equity stake and its management through this new fund is truly world leading and provides a template for future projects in Namibia and abroad. We would like to show our gratitude and thanks to Government and our partners in this project.”
Joost Oorthuizen, CEO of Invest International said: “Today’s announcement reinforces Namibia’s position as a leader in the global green energy movement and the Government’s continued commitment to realizing the potential of the green hydrogen sector for all Namibians.”
Andrew Johnstone, CEO of Climate Fund Managers said: “Green hydrogen has a pivotal and unique role to play in achieving net-zero targets by 2050. The Hyphen project, groundbreaking in both scale and impact, is a masterclass in how the public and private sectors can work together to unlock the potential of this exciting new sector, driving economic growth for Namibia and a greener, more resilient future.”
Benedict Libanda, CEO of the Environmental Investment Fund of Namibia said: “With the acquisition of a 24% equity stake in the Hyphen Green Hydrogen Project, we are not just investing in a project, but we are catalyzing Namibia’s journey towards global leadership in green hydrogen production. This milestone is also a stepping stone for green industrialization in Namibia, marking our commitment to shaping a cleaner and more sustainable tomorrow’’.