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Hyphen Hydrogen Energy and the Namibian government have reached an agreement for the next phase of a $10 billion green hydrogen project. Once completed, the project aims to export hydrogen to Europe. On Wednesday, both parties confirmed this development. In 2021, Hyphen, which includes Germany’s Enertrag among its shareholders, was announced as the preferred bidder for the project located in Namibia’s Tsau //Khaeb National Park within the Namib Desert.

The feasibility and implementation agreement is scheduled to be officially signed on Friday, according to officials. However, some community activists have expressed concerns about the lack of transparency surrounding this significant deal, which costs as much as Namibia’s gross domestic product.

Namibia’s President, Hage Geingob, stated in a press release, “On Friday, we initiate a process that holds the potential to transform the lives of many in our country, the region, and even globally.”

The plant will be constructed in phases and is expected to produce 2 million metric tons of green ammonia annually once it reaches full-scale output, which is anticipated before 2030. Green hydrogen is produced using renewable energy.

Namibia, known for its abundant sunshine and low population density, aims to harness its solar and wind energy potential to become a renewable energy hub in Africa. However, it remains uncertain whether the country, which faces water scarcity and is relatively distant from key export markets, can deliver a cost-competitive product in the emerging global hydrogen sector, according to analysts.

Frederico Links, coordinator of a project monitoring public procurement at Namibia’s Institute for Public Policy Research, highlighted the lack of transparency in the deal and the selection process of Hyphen as a major concern.

Hyphen has signed memoranda of understanding with several potential European customers over the past year, aiming to supply approximately 750,000 metric tons of green ammonia annually. Additionally, it recently signed a letter of intent with Koole Terminals regarding the proposed import of green ammonia into Europe from the Port of Rotterdam in the Netherlands.

Ursula von der Leyen, President of the European Commission, expressed her belief that Namibia has the potential to become a significant renewable energy hub in Africa and worldwide, emphasizing this in the same statement.

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