Namibia’s Environment Investment Fund (EIF) will collaborate with two Dutch entities in the establishment of the sovereign wealth fund SDG Namibia One.
The two entities are Invest International and the Climate Fund Managers.
Invest International is providing grant funds in the amount of N$850 million, or 100% of the initial commitment of €40 million.
This comes after agreements were reached this week by the Namibian government regarding the creation and management of SDG Namibia One, the exercise of the government’s option to acquire a 24% interest in the first project awarded that is being developed by Hyphen, and the signing of a memorandum of understanding (MOU) between a coalition of Namibian and Dutch partners.
The wealth fund will seek to raise capital from both local and international institutional investors to develop green hydrogen projects and related infrastructure in Namibia, the EIF said.
The European Investment Bank and the Namibian government signed a letter of intent to raise €500 million during the 27th UN Congress of Parties (COP27), with a portion of the amount planned to be allocated for investment through SDG Namibia One.
Nam-H2 Fund Managers, a collaboration between the EIF Namibia, Climate Fund Managers, and Invest International from the Netherlands, run SDG Namibia One, a EUR 1 billion blended financing vehicle for green hydrogen investment in Namibia.
SDG Namibia One will be jointly managed by NH2 Fund Managers, a newly formed management firm with shareholders including Namibia’s Environmental Investment Fund and Climate Fund Managers.
The conclusion was viewed by Finance Minister Ipumbu Shiimi as “yet another significant, forward-moving milestone in the growth of a domestic, revolutionary synthetic fuels industry.”
The government sought partners to help in its realisation and built partnerships with the European Union (EU) as a whole, as well as the nations of the Netherlands and Germany especially in order to raise the necessary financing.
“With agreements for the establishment of SDG Namibia One concluded, government has issued Hyphen with its Official Notice indicating the exercise of government’s right to take up a 24% equity interest in the project at historic cost.”
According to Andrew Johnstone of Climate Fund Managers, the company is committed to using all of its expertise to help the Namibian and Dutch governments achieve their goals of raising money that is suitable for their purposes in order to promote economic growth in Namibia and combat global climate change.
“We are also humbled to have been given the mandate to build capacity in the Namibian public sector,” Johnstonesaid.
Benedict Libanda, EIF Chief Executive Officer noted that given the fledgling nature of the industry, international collaboration is crucial to advancing the development of green hydrogen.
“Collaboration among countries, industry stakeholders, and international players is vital to overcome technological challenges, scale up production, and establish a global sustainable hydrogen economy. By joining forces, we can pool resources, share knowledge, and accelerate the transition towards a low-carbon future powered by green hydrogen,” Libandasaid.
In addition the MoU which was signed by Namport, the Port of Rotterdam, Hyphen, Gasunie, Nampower, and Invest International is a strategic indication of their will to collaborate to actualise the SCDI’s objective.
The SCDI, according to the government, will produce a significant amount of energy, enabling Namibia to become energy independent, enhance regional energy security by exporting excess electricity to the Southern Africa Power Pool, and supply a number of international ports, including the Port of Rotterdam, with clean molecules to decarbonise difficult-to-abate sectors.
In May 2022, Namibia launched its first sovereign wealth fund, known as the Welwitschia Fund.
The Welwitschia Fund was started with the twin goals of fiscal and official reserve stabilisation as well as saving for future generations.
The fund is intended to be a holding place for investments made in state assets of a specified portion of defined proceeds from the current exploitation of natural resources.