Hyphen Hydrogen Energy and SDG Namibia One Fund Agree on Equity Stake in Country’s First Gigawatt-scale Green Hydrogen Project

Windhoek, Namibia, 22nd December 2023 – 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’’.

 

-ENDS-

 

 

Notes to editors:

For media enquiries contact FTI Consulting: HyphenAfrica@fticonsulting.com

About Hyphen

Hyphen Hydrogen Energy Ltd is a Namibian registered green hydrogen development company, specifically formed to develop green hydrogen projects in Namibia for international, regional and domestic supply.  Hyphen is a joint venture between Nicholas Holdings Limited and ENERTRAG SE.

Hyphen’s project is being developed as the first step in the implementation of the Government’s strategy for the development of a large-scale green hydrogen industry in various regions in Namibia to support both economic growth in Namibia and assist the world in achieving its decarbonisation goals. At full scale development, the project will produce 2 million tonnes of green ammonia annually before the end of the decade for regional and global markets, from ~7GW of renewable generation capacity and ~3GW of electrolyser capacity, cutting 5-6 million tonnes (annually) of CO₂ emissions, with Namibia’s annual 2021 emissions totalling 4.01 million tonnes[1].

About ENERTRAG SE

ENERTRAG is one of the largest renewable-energy companies in Germany. The company develops, builds, owns and operates utility-scale integrated energy plants that produce reliable electricity and green hydrogen exclusively from wind and sun. ENERTRAG produces 2 Terawatt-hours of electricity per year from 1 Gigawatt of owned assets and has more than 10 Gigawatts of wind, solar and green-hydrogen projects under development in ten countries across the globe.

About Nicholas Holdings Limited

Nicholas Holdings Limited is a strategic investment and infrastructure project developer and operator with a 30-year track record of investment and project development in Africa and Europe, mainly through its subsidiary company, Principle Capital.

About Climate Fund Managers

Climate Fund Managers (CFM) is a leading climate-centric blended finance fund manager. It raises and deploys climate finance funds in partnership at scale and at pace. Through its award-winning model, CFM has created a blueprint for a new generation of climate financiers, whose collective impact can help end the climate crisis.

CFM manages emerging market infrastructure funds focused on climate change mitigation and adaptation including Climate Investor One, a ~USD 1 billion fund focused on renewable energy, and Climate Investor Two, a ~USD 1 billion fund focused on water, sanitation and oceans infrastructure. CFM’s latest flagship is Climate Investor Three, a family of Energy Transition and Green Hydrogen funds targeting a total size of US$ 3 billion. The SDG Namibia One Fund forms part of Climate Investor Three.

Established in 2015, CFM is a joint venture between the Dutch development bank, FMO, and Sanlam InfraWorks, part of the Sanlam Group of South Africa with offices in The Hague, Cape Town, Singapore and Bogota. For more information, see www.climatefundmanagers.com.

About Invest International

Invest International is a financing institution owned by the Dutch Ministry of Finance (51%) and the Dutch development bank FMO (49%). Invest International offers tailor-made financing and project development expertise to bring projects in emerging markets to fruition and create an impact on the SDGs while contributing to the Dutch economy and its future earning capacity. It has a catalytic financing capacity of over 2 billion euros, composed of investment capital for public and private projects, as well as grants enabling public infrastructure projects.

Invest International was assigned by the Dutch Government to develop and finance green hydrogen projects in emerging markets, to contribute to local sustainable development and support the energy transition in Northwestern Europe. While deploying its funds, Invest International makes efforts to engage the expertise of Dutch businesses, demonstrate strong environmental and social commitment and strive for local impact and inclusive growth. More information is available on the website https://www.investinternational.nl

About the Environmental Investment Fund of Namibia (EIF)

The Environmental Investment Fund of Namibia (“EIF”) is a national entity and environmental fund that invests in and supports projects and initiatives that protect and maintain the natural and environmental resources of the country, while also fostering the sustainable economic development of Namibia.  EIF is one of only 24 such entities globally and was the first to be accredited and access climate finance directly from the Green Climate Fund (“GCF”) in Southern Africa. EIF has raised more than N$2 billion globally and has deployed more than N$1.7 billion into various climate-related projects in Namibia. For more information, see www.eif.org.na