By: Nghiinomenwa Erastus
They say where there is a political will; everything will flow. The green hydrogen idea that started floating around last year and enhanced after the release of the HPPII is increasingly turning into a practical concept.
The government has appointed Hyphen Hydrogen Energy as the preferred bidder to develop the country’s first large-scale integrated green hydrogen project in the Tsau //Khaeb National Park.
A notice of award was issued early this month, as the Southern Corridor Development Initiative (SCDI) and the valuation committee finished their evaluation.
In September, the country received nine commercial proposals to develop large scale six Green Hydrogen Projects for the SCDI, and they were opened on 18 September.
According to the presentation done by the Namibia Southern Corridor Development Initiative, three bidders reached 50% or more across the three technical criteria.
One bidder was identified as the preferred bidder for the two sites considered for the projects- the bidder being the Hyphen Hydrogen Energy.
Hyphen collaborates with infrastructure financing and developer and renewable energy companies from Germany and South Africa.
The project worth is estimated at US$9,4 billion. It is envisioned to produce 300,000 tons of green hydrogen per year for regional and global markets, either as pure green hydrogen or in derivative form (green ammonia).
The deal is part of the government efforts to attract private sector investment in a potential new sector of green hydrogen, which also aligns with the strategy to decarbonise the country and the region.
The government indicated that the positive response to the Request for Proposals (RFP) indication to go forward.
Subject to confirmation of the feasibility of the two identified sites, the Springbok and Dolphine.
It has also been highlighted that the planned green hydrogen project can attract over N$7 billion in Foreign Direct Investments (FDI) in the coming years.
Moreover, create well over 20,000 jobs during the construction phase, and raise about N$100 million in annual concession fees for the government.
More than 90% of all these jobs created are expected to be filled by Namibians.
In addition to taxes, Hyphen will pay concession fees, royalties, a sovereign wealth fund contribution and an environmental levy to the government.
In the future, more sites will be placed on auction shortly.
LOCALISATION OF THE PROJECT
In evaluating the bids, some of the criteria were critical in the allocation and included local people on the projects.
The bidders were asked about the number of jobs created (1-year full time) during the construction phase and production.
The bidders were also required to have a Development and Usage Plan/ Environmental Impact (including a detailed rehab fund).
At the same time, given the envisaged sovereign fund, they were required to state how much they would contribute annually to the wealth fund.
The successful bidder was also asked to make additional shareholding available for purchase by local investors and others.
The criteria also stated that the successful bidder should indicate the percentage of Namibian employees hired during feasibility and construction at the management level.
To state the average annual wage rate for the non-management employees.
The bidding criteria also required the successful bidder to indicate the percentage of local SMEs and local companies involved during Feasibility and Construction.
Moreover, to what extend youth participation will be given a chance.
The government economic recovery programme has promised to generate new and diversified frontiers of growth by optimising natural resources and public assets while proactively pursuing opportunities in the blue and green economies.
According to assessment, the Tsau //Khaeb national park is among the top 5 locations globally for low-cost hydrogen production, benefiting from a combination of co-located onshore wind and solar resources near the sea and land export routes to market.