Namibia considers green bonds to fund hydrogen exports

According to a government official, Namibia is considering issuing green bonds to finance projects that use renewable energy to manufacture hydrogen for export.

The southern African nation of little about 2.7 million people has detailed a big construction project, partly due to the favorable conditions for solar- and wind-powered energy required for fuel production. James Mnyupe, the government’s green hydrogen commissioner, stated in an interview at the World Economic Forum in Davos that a number of finance methods are being investigated, with production to begin within four years.

In an effort to transition away from fossil fuels and reduce reliance on Russian energy, the European Union plans to import 10 million tons of hydrogen annually by 2030.

Mnyupe stated that developers will be responsible for generating the majority of financing and equity, while the government will have a call option for up to 24 percent and could raise $500 million for its own shares. Green bonds could be issued, and conversations have begun with lenders such as the European Investment Bank and Climate Fund Managers to secure funds for the country’s investment.

“We believe that if we do a good job planning these projects, we will be able to raise a respectable amount of debt for them,” he said.

In November, Namibia selected Hyphen Hydrogen Energy for a $9.4 billion project. It will be constructed in phases and is anticipated to generate 300,000 metric tons of green hydrogen per year from five gigawatts of renewable production capacity and a three-gigawatt electrolyzer.

Green hydrogen projects are also proposed in the region, with fuel and chemical giant Sasol Ltd. planning to initiate a $10 billion project at South Africa’s Boegoebaai port. Fleetwood Grobler, the business’s chief executive officer, stated last month that the company plans to accelerate development to suit European demand.

According to Mnyupe, the Port of Rotterdam is partnering with Namibia’s state-owned Namport to begin preparing export facilities for ammonia, which hydrogen is transformed into for ship transport. Costs will also be reduced by securing off-take agreements for the fuel by 2024, according to his statement.

Mnyupe stated that Namibia will have greater clarity on “whether it’s a green bond or a sustainable bond or even a blue bond” by the end of the first quarter of the next year.