The Netherlands – State-backed firms from the Netherlands have joined forces with Namibia to create a sovereign wealth fund dedicated to green hydrogen, according to the Finance Ministry.
The €1 billion ($1.1 billion) SDG Namibia One will serve as a blended financing vehicle to drive green hydrogen investments in the southern African nation. It will involve the participation of Namibia’s Environment Investment Fund, as well as The Netherlands’ Climate Fund Managers BV and Invest International BV. The announcement comes after visits by the prime ministers of the Netherlands and Denmark to Namibia.
The fund, which will receive an initial grant financing of €40 million from Invest International, aims to attract additional capital from local and international institutional investors. Furthermore, a letter of intent was concluded between the European Investment Bank and Namibia at COP27, providing €500 million, a portion of which will be allocated to the fund.
Expanding renewable energy
Namibia, with its favorable solar and wind conditions, plans to significantly expand its renewable energy capacity to produce green hydrogen for export. As demand for this clean-burning fuel surges worldwide as an alternative to fossil fuels, and with Europe seeking to reduce reliance on Russian natural gas, the country’s renewable energy facilities are set to play a crucial role. The European Union has set a target of importing 10 million tons of renewable hydrogen by 2030.
The Namibian government intends to utilize the sovereign wealth fund to acquire a 24% equity stake in the first awarded project being developed by Hyphen Hydrogen Energy. This project, located within Namibia’s Tsau //Khaeb National Park, will be the nation’s first fully vertically integrated GW-scale green hydrogen initiative.
Phased development
With an estimated cost of $10 billion, the project will be developed in phases and is projected to produce 350,000 metric tons of green hydrogen annually from a combination of seven gigawatts of renewable generation capacity and a three-gigawatt electrolyzer. Hyphen Hydrogen Energy is currently conducting a feasibility study and anticipates ammonia production to commence by 2028, with an initial output of one million tons.
In a related development, South Africa also announced the establishment of a green hydrogen fund supported by the Development Bank of Southern Africa, Industrial Development Corp. of South Africa Ltd., Climate Fund Managers, and Invest International.
