State-backed firms from the Netherlands have joined forces with Namibia to create a sovereign wealth fund focused on green hydrogen, as announced by Namibia’s Finance Ministry.
The collaboration aims to establish SDG Namibia One, a blended financing vehicle worth €1 billion ($1.1 billion) dedicated to green hydrogen investments in the southern African nation. The fund will involve the participation of Namibia’s Environment Investment Fund, as well as the Netherlands’ Climate Fund Managers BV and Invest International BV.
Initial grant financing of €40 million from Invest International will kickstart the fund, with the objective of attracting additional capital from local and international institutional investors. Furthermore, a letter of intent was concluded between the European Investment Bank and Namibia during COP27, securing €500 million, a portion of which will be allocated to the fund.
Namibia, with its favorable conditions for solar and wind energy, has outlined ambitious plans to develop renewable energy facilities that will facilitate the production of green hydrogen for export. The rising demand for clean and sustainable energy sources, driven by the global pursuit of alternatives to fossil fuels and Europe’s efforts to reduce dependence on Russian natural gas, has further amplified the need for green hydrogen. The European Union aims to import 10 million tons of renewable hydrogen by 2030.
The government of Namibia intends to utilize the sovereign wealth fund to acquire a 24% equity stake in the first awarded project developed by Hyphen Hydrogen Energy. The project, situated within Namibia’s Tsau //Khaeb National Park, will be the nation’s first fully vertically integrated GW-scale green hydrogen project. With an estimated cost of $10 billion, the project will be implemented in phases, eventually generating 350,000 metric tons of green hydrogen annually from seven gigawatts of renewable generation capacity and a three-gigawatt electrolyzer. A feasibility study is currently underway, and ammonia production is projected to commence in 2028, with the first million tons expected to be produced.
In addition to the collaboration between the Netherlands and Namibia, South Africa also announced the launch of a green hydrogen fund supported by the Development Bank of Southern Africa, the Industrial Development Corp. of South Africa Ltd., Climate Fund Managers, and Invest International.