African nation aims to be a hydrogen superpower
“So now, finally, we’re on the map,” says Philip Balhoa of Lüderitz, a town in southern Namibia, where arid desert meets pale ocean.
The port city once benefited from the diamond and fishing booms, but now struggles with high unemployment rates and aging infrastructure.
A proposed green hydrogen project is expected to be “Lüderitz’s third revolution,” said city council member Mr Balhoa.
He hopes the project will train and employ the local population, or “Buchters” as they affectionately call themselves, which will lower the city’s unemployment rate to 55%.
“For a city that’s been really struggling economically over the last 10 or 15 years, maybe more, that’s something people really get excited about,” he says.
The project will be based near the city in Tsau // Khaeb National Park, and will ultimately produce around 300,000 tonnes of green hydrogen per year.
Simply put, the renewable energy from the sun and the wind will be used to separate the hydrogen molecules from the desalinated water.
These hydrogen molecules in their pure form or in the derivatized green ammonia can make up a variety of products, including sustainable fuels.
Preferred bidder, Hyphen Hydrogen Energy, is expected to begin production in 2026 and will have the rights to the project for 40 years, once the necessary feasibility processes are completed.
The company says the four years of construction are likely to create 15,000 direct jobs and another 3,000 in full operation – and that 90% of them will be filled with locals.
Mr. James Mnyupe is the Presidential Economic Advisor and Hydrogen Commissioner for the Namibian government. He explains that Lüderitz’s location is ideal, due to the vast solar and wind resources and the proximity to the ocean, both as a water source and as a port.
Mr Mnyupe says this is all part of President Hage Geingob’s plan for change in Namibia. “The President was very keen to craft a responsive, globally relevant and systemic stimulus package.”
This is part of a much larger development powered by green hydrogen for which the government hopes to find funding, expanding into agriculture, logistics and energy. Mr. Mnyupe talks about green hydrogen trains and pipelines to trade with neighboring countries.
It is hoped to create renewable electricity, both for export and as an alternative to coal-fired electricity imported from South Africa.
“The idea is to make Namibia not only a green hydrogen hub, but a powerhouse for the synthetic fuel industry,” he says.
The impact promises to be international, with agreements already signed with Germany, Belgium and Rotterdam in the Netherlands.
This comes with some funding deals, but Namibia is considering more options, such as green or sustainable bonds, towards the roughly $ 9.4 billion (£ 7.1 billion) needed for the initial project. .
To put the size of the investment in perspective, Namibia’s total GDP in 2020 was only $ 10.7 billion.
“People might start to take us seriously as a trading partner, not as a net recipient of development assistance,” Mnyupe said. “To ordinary Namibian it means hope.”
Mr Balhoa expects the expected influx of people and businesses to strengthen infrastructure in Lüderitz, such as roads and hospitals, and that the project will attract more central government investment to the region.
But with optimism comes corresponding concerns. Mr Balhoa says previous large projects have not reinvested in the community as hoped. There are fears that the small town will not be able to meet the growing demands for infrastructure – affordable housing is already a big challenge.
“I think this will be a game-changer, not only for Namibia, but for the African continent,” says Kennedy Chege, researcher and doctoral student at the Mineral Law in Africa research chair at the University of Cape Town.
But he cautions that the main challenge is funding: “Trying to develop renewable energy plans normally requires so much funding, and the government itself is unable to provide that funding through its budget. This therefore requires mobilizing funding from both the public and private sectors. “
Mr. Chege says Namibia’s international partnerships are a positive sign.
Another challenge is the amount of water required to produce hydrogen. Doing this by desalination, as Namibia predicts, can be expensive – just like the electrolysis processes used later in the hydrogen manufacturing process.
Mr Chege says concerns about the viability of the project and creating the kind of infrastructure needed are valid, but he is optimistic given Namibia’s comparative advantages.
While several African countries, such as South Africa, Kenya and Nigeria are developing green hydrogen plans, Namibia is the most advanced. “But in terms of implementation, there hasn’t been a lot of progress in this regard, across Africa.”
While there is much to do, Namibia is moving forward, so much so that the government could announce a call for proposals for a second green hydrogen project as early as January 2022.