Hyphen Hydrogen Energy, the company in talks with government over a planned US$10 billion green hydrogen project in the south of the country, has recently signed a memorandum of understanding with the German multinational energy company RWE AG that could see the latter buying up to 300000 tons of green ammonia per year from Namibia.
Hyphen is the appointed preferred bidder by government in a 40-year deal to develop the first green hydrogen project in Namibia for export.
The deal also involves an area of more than 4000 square kilometres in the Tsau //Khaeb National Park.
“We are delighted to reach this agreement with RWE. This milestone underpins our ambitious targets to export green hydrogen globally from Namibia. By establishing strong connections with policymakers and off takers across Europe, we are working with the Government of Namibia to develop the industry which will spearhead southern Africa’s role in achieving regional and global decarbonisation goals,”said Marco Raffinetti, chief executive officer of Hyphen Hydrogen Energy.
The deal could possibly signal that Hyphen and government are closer to finalising an implementation agreement for the large-scale green hydrogen project.
The government and Hyphen have been in negotiations to finalise the deal, which includes reported demands from the energy company for the Namibian government to construct houses and other infrastructure for all of its employees, including its supply chain companies’ employees in and around Lüderitz.
Mines and energy minister Tom Alweendo denied in parliament last month that government was considering this.
Chief commercial officer of RWE supply &trading, Ulf Kerstin said, “Green molecules are the only way for many industries in Germany to achieve their climate targets. In the long term, Germany’s demand for them will have to be met mainly through imports. That’s why we’re looking forward to progressing the off-take discussions with Hyphen – to bring green ammonia from Namibia to Germany.”
RWE aims to develop a globally diversified portfolio of long-term off-take agreements for green hydrogen and its derivatives, such as ammonia.
Earlier this year, the company announced that it plans to build a terminal for green ammonia in Brunsbüttel, Germany, by 2026. This terminal could serve as one potential port of destination for Namibian ammonia.
By 2027, Hyphen’s green hydrogen project aims to annually produce 1.7 million tonnes of green ammonia – a hydrogen derivative that is particularly suitable for transport by ship. German renewable energy project developer Enertrag is a joint venture partner of Hyphen.
Ammonia is one of the key materials in the chemical industry. More than 180 million tonnes are produced annually worldwide.
About 80% of the ammonia produced by industries is used in agriculture as fertiliser. Ammonia is also used as a refrigerant gas for the purification of water supplies and in the manufacture of plastics, explosives, textiles, pesticides, dyes and other chemicals.