Cop 27: Namibia makes headway on hydrogen ambitions

Namibia is making progress on its ambition to become a key producer of renewable hydrogen, having inked several agreements at the Cop 27 UN climate conference that could support the development of projects in the country.

Besides signing a strategic partnership with the EU on raw materials and renewable hydrogen in Sharm el-Sheikh yesterday, Namibia also agreed a deal with the European Investment Bank (EIB) for a loan of up to €500mn which could help finance renewable energy and hydrogen projects. With the agreement, the EIB confirmed its intent to provide concessional financing to Namibia, although details on the structure of the loans need to be finalised before an official loan agreement is signed.

In addition, Invest International, a fund backed by the Dutch government, announced a €40mn grant to establish the ‘SDG Namibia One Fund' during the Cop 27 summit. Through the new fund, Invest International will partner with Namibia's state-owned Environmental Investment Fund and Netherlands-based Climate Fund Managers. The fund is designed to channel all renewable hydrogen financing to empower the Namibian government to support chosen projects from early-stage development through to construction and operation. The group hopes to attract other donors and investors to grow the fund to €1bn.

Namibia aims to position itself as a renewable energy hub thanks to plentiful solar and wind power generation capacity as well as substantial land mass, while European countries are hoping to secure access to renewable hydrogen and its derivatives in the future. Through the strategic partnership signed yesterday, the EU and Namibia will look to promote trade, mobilise investment in projects, co-operate on research and align on standards and certification.

EIB to fund hydrogen power plant

The EIB has also announced at Cop 27 a partnership with Hydrogene de France (HDF) on a proposed hydrogen power plant in the Namibian city of Swakopmund. The facility will generate and store hydrogen from solar and wind power using an electrolyser operating at 30MW capacity at peak times. HDF plans to use the hydrogen to generate electricity on demand, with a view to enhancing security of electricity supply in the region.

The EIB deal takes the project closer to its target for financial close in 2023. The project will require $185mn to build and the aim is for it to open in 2024-25, according to Tanya Gumbo, HDF's business developer for southern and east Africa. But the EIB has not yet disclosed the level of its support. The EIB decision was based on "proven investment in South America", the bank's president Warner Hoyer said.

HDF has started construction of a 10MW plant in French Guyana. Besides Namibia, it has also announced plans to replicate the concept in Mexico, Barbados, Indonesia, Cyprus, Italy and New Caledonia. For its Barbados plant, the company has secured support from the World Bank's International Finance Corporation.

By Aidan Lea