Namibia

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GH2 Country Portal – Namibia

Green hydrogen vision

Namibia is emerging as one of the most promising nations for harnessing renewable energy to produce competitively priced green hydrogen. Boasting abundant solar and wind resources, Namibia is poised to become a global leader in green hydrogen production, with projections showing it could achieve some of the world’s lowest production costs by 2030—second only to Chile. The Namibian government has strategically prioritised green hydrogen and its derivatives as a cornerstone for economic growth and global decarbonisation efforts.
In 2022, Namibia strengthened its green hydrogen ambitions by signing a strategic partnership with the European Union (EU) to foster the development of Namibia's green hydrogen sector. This collaboration formalised through a Memorandum of Understanding (MoU), serves Namibia’s goal of leading in the green hydrogen market and the EU’s drive to diversify its energy sources and meet its climate commitments.

National Strategy

Namibia’s Green Hydrogen Council launched its green hydrogen strategy at COP27 in Sharm El-Sheikh, which supports the country’s commitment to the Paris Agreement on climate change, with the ultimate goal of reducing emissions to net zero by 2050. 

The strategy will also allow Namibia to become a net exporter of energy by unlocking its potential to meet global demands of 10 million metric tons by 2030 while playing a pivotal role in energy security for the region.

The strategy will also enable the country to continue its global outreach campaigns and foster hydrogen diplomacy to inform potential investors, project developers, and international development partners about Namibia's hydrogen opportunity.

The activities required to achieve the objectives as set out in the strategy include:

  • Establishing an appropriate and fit-for-purpose structure to help develop the green hydrogen industry. The envisaged structure will also be responsible for planning, procuring, and monitoring future green hydrogen projects developed on state-owned land.
  • Crafting and enacting the Synthetic Fuels Act as a comprehensive regulatory framework to create an enabling environment. This legislation will ensure compatibility with international green fuel, certification, health and safety, and environmental standards.
  • Launching pilot projects to build knowledge, local EPC companies and capabilities to construct and deliver local component manufacturing.
  • Planning and developing an ownership and governance model and shared ecosystem for Common User Infrastructure to lower development costs and risks.
  • Putting in place training programmes and policies to enable Namibian citizens to participate in the hydrogen economy and supply talent to the industry.

Capacity and price

  • The new Namibian green hydrogen strategy targets a production of 10-12 million tonnes per annum hydrogen equivalent by 2050.

  • Through the pilot project of HYPHEN Tsau Khaeb, Namibia has set a Hydrogen production target of 300,000 tonnes per year  

  • The electrolyser capacity target for the Hyphen Tsau Khaeb project is 3 GW. 

  • McKinsey estimates that Namibia could be producing green hydrogen at US$1.5/kg by 2030. 

Impact targets

By the year 2030, the hydrogen sector could add as much as US$6 billion to GDP, representing a 30% increase compared to GDP projections without the hydrogen industry. This growth is expected to create up to 80,000 new jobs by 2030 and potentially 600,000 by 2040.

Manufacturing with local content, particularly in areas like renewable energy components and sustainable biomass harvesting, will further promote economic growth. The Government plans to utilize this extra income to further its socio-economic objectives. 

In a net-zero scenario, the projected total hydrogen demand in the import markets where Namibia is optimally positioned is expected to reach approximately 13 Mtpa of hydrogen equivalent by 2030 and around 100 Mtpa by 2050. 

Policy Spotlight

  1. Green hydrogen bidding: In 2021, the Namibian government (through the public intermediary Green Hydrogen Namibia and with support from the Namibia Investment Promotion and Development Board) issued a request for proposal for renewable energy and green hydrogen project developers to bid for feasibility study rights with an option to develop renewable assets. A preferred bidder was announced after five months after a competitive tender process. The government is planning to launch a second tender process in 2022, through a competitive tender process under its Southern Corridor Development Initiative. 
  2. €50m is allocated for Namibian and South African green hydrogen investment funds to enhance production, transportation, storage, and downstream industries. In collaboration with Germany, the EU will contribute €2.7m to the EU-Get.transform programme, aiding the Ministry of Mines and Energy in energy planning and expanding Namibia’s renewable capacity. As stated by European Commissioner Kadri Simson, the Namibia Green Hydrogen Programme has also secured €1.2m to establish a robust support mechanism for the sector. She emphasized the EU's commitment to assist Namibia in achieving green industrialisation, energy security, and prosperity, aligning with the Harambee Prosperity Plan and Vision 2030. In March 2024, Germany identified Hyphen Hydrogen Energy’s ammonia project in Namibia, producing two million tonnes per year, as a “strategic foreign project.” 
  3. The U.S. government has announced a grant of N$19 million (US$1 million) through the USAID Mobilizing Investment project to Namibia Hydrogen Fund Managers (Pty) Limited. This funding will support the N$22 billion (US$1.15 billion) Sustainable Development Goals (SDG) Namibia One Fund. 

Project Spotlight

Following a public tender to select a green hydrogen project developer, the government is entering into an agreement with Hyphen Hydrogen Energy for a $9.4 billion project. The project is based in an area of ~4,000 km2 of land within the Tsau Khaeb National Park, near the coastal town of Luderitz and will ultimately produce around 300,000 tonnes of green hydrogen per year.  

The project will start production in 2026 and the rights to the project has been granted to Hyphen for a 40-year period. The cost of green hydrogen produced in Namibia will be between $1.73- $2.30 per kg, with exports foreseen to start before 2025. The project is expected to create 15,000 direct jobs during the first four years of construction and further 3,000 permanent jobs, with 90% being locals. 

Financing

  • An estimated investment of US$190 billion will be necessary by 2040 to establish Namibia’s green hydrogen sector. This figure comprises about US$95 billion aimed at new upstream production and infrastructure, including renewable energy sources, electrolysers, storage, and pipeline systems. Additionally, around US$30 billion will be allocated for midstream infrastructure, such as derivative plants, ports, and transport vehicles, leveraging synergies across various projects. 
  • Introduced during the United Nations Climate Change Conference COP-27 in November 2022, the SDG Namibia One Fund serves as Namibia’s primary green hydrogen finance mechanism and its official funding partner for green hydrogen initiatives. This fund will oversee infrastructure projects related to the production, transportation, transmission, storage, and use of green hydrogen and its derivatives. Ultimately, this initiative aims to contribute to a more sustainable energy grid, boost job creation, reduce emissions, and promote sustainable economic growth in Namibia. 

  • The total investment required in the project is estimated at $9.4 billion. Hyphen expects to begin producing from its first 2 GW phase in 2026, costing $4.4bn.  

  • The Government is considering holding 24% equity in the project in Khaeb National Park and looking at options for mobilising finance to cover its share. 

  • EUR 40 million has been provided with technical assistance by the government of Germany for the pre-feasibility stage. 

Government green hydrogen lead