Anglo-German developer Hyphen Hydrogen Energy has secured its second provisional offtake commitment for a planned multi-billion-dollar green ammonia project in southern Namibia—sufficient to cover the output from the entire 700,000t/yr first phase.

Hyphen, a newly-created joint venture between German clean energy specialist Enertrag and UK-based investment firm Nicholas Holdings, was awarded the rights to develop Namibia’s first major green hydrogen project in November 2021. The bidding process attracted international corporate heavyweights such as South Africa’s Sasol and Australia’s Fortescue Future Industries (FFI), amid growing recognition of the sparsely-populated, sun-rich coastal country’s potential as a low-cost green hydrogen producer and exporter.

However, a goal of signing the final ‘implementation agreement’ with the government—which intends to exercise its entitlement to a 24pc equity stake—before the Cop27 climate change conference a year later was missed, casting some doubt on the developer’s ability to complete phase one as scheduled by 2026.

Despite these delays, Hyphen landed its first offtake deal with German energy company RWE for 300,000t/yr of green ammonia from 2027.

700,000t/yr – Hyphen first-phase ammonia production capacity

On 2 February, Hyphen announced signature of another two non-binding offtake memorandums of understanding (MoUs) – for 250,000t/yr with South Korean industrial hydrogen producer Approtium and 500,000t/yr with an unnamed major chemical company. As the developer’s CEO Marco Raffinetti noted, the Asian firm is an unlikely customer for a project aimed chiefly at serving the closer European markets, particularly given South Korea’s hydrogen import plans have thus far focused mainly on putative Middle Eastern producers.

The $9.4bn Hyphen project aims to produce 700,000t/yr of green ammonia in the first phase, rising to 1.7mn t/yr on completion of the second around the end of the decade. This would entail output of 300,000–350,000t/yr of green hydrogen and installation of 5–6GW of renewables.

Hyphen has also promised to build common infrastructure for future projects planned in the southernmost of the three ‘hydrogen valleys’ envisaged under the government’s Green Hydrogen and Derivatives Strategy. Windhoek estimates c.$190bn in investment is required by 2040 to realise its ambitions, with the annual GDP payoff calculated at a potential $6.1bn. Namibia’s foreign direct investment stock stood at just $6.3bn at the end of 2021, while real GDP came in at around $10.6bn.

Local focus

A suite of smaller-scale renewable hydrogen ventures with a more local focus are moving from drawing board to implementation, buoyed by European funding. President Hage Geingob’s attendance at Cop27 yielded a loan of up to €500mn ($534.9mn) from the EU-affiliated European Investment Bank to support the country’s clean energy ambitions.

The bank has separately agreed to provide unspecified support to an estimated $185mn project planned by privately-owned Hydrogen de France to develop an 85MW hydrogen-based power plant fed by a 30MW solar-powered electrolyser. Output will be fed into the grid under a pending power purchase agreement with state utility Nampower Corporation. The French firm is aiming for financial close in 2023 and startup by 2025.

Undeterred by its controversial defeat by little-known Hyphen to execute the maiden megaproject, FFI in late January signed an MoU with the local Enersense Namibia to support the German-funded first phase of the Daures Green Hydrogen Village project, which will produce around 350,000t/yr of green ammonia from 1GW of renewables. Initial output will provide carbon-free fertiliser to the local agricultural sector. The deal grants the Australian developer a period of exclusivity to carry out due diligence before committing capital to the scheme.

Daures signed its first provisional offtake agreement in December with Zimbabwean fertiliser company Sable Chemicals. The consortium behind the venture is also discussing collaboration with London-listed mining company Afritin, which operates the local Uis Tin Mine, over the potential use of hydrogen in decarbonising its operations.

The first phase of the Daures project was one of four green hydrogen pilots awarded funding of up to €30mn in August under an agreement reached a year earlier with Berlin. The others comprise a hydrogen refuelling station at the port city of Walvis Bay, a bunkering service at the port, and the development of dual-fuel locomotives running partly on hydrogen.

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Author: Clare Dunkley