Namibia sees green bonds as a way to fund hydrogen exports buildout

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(Bloomberg) – Namibia is considering green bonds to fund projects using renewable energy to produce hydrogen for export, according to a government official.

The country of South Africa, with a population of less than 2.7 million, has significantly outlined a build of facilities, largely due to the ideal conditions for solar- and wind-powered energy needed for energy production. In an interview with the World Economic Forum in Davos, the government’s Green Hydrogen Commissioner, James Maniup, said a number of financing options were being considered by setting the output in four years.

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Far from fossil fuels and reducing its dependence on Russian energy, hydrogen production is set to increase, with the European Union aiming to import 10 million tonnes a year by 2030.

Developers will be responsible for raising most of the debt or equity, while the government will have the option to call up to 24% and raise a potential $ 500 million for their own equity, Mnyupe said. Issuance of green bonds is a viable option and discussions have begun with lenders, including the European Investment Bank and the Climate Fund Manager, to raise capital for the country’s shares.

“We think if we do a good job in developing these projects, we can raise quite a reasonable amount of credit for it,” he said.

Namibia has chosen Hyphen Hydrogen Power for its 9.4 billion project in November. It will be developed in phases and is expected to produce 300,000 metric tons of green hydrogen per year from a five-gigawatt renewable production capacity and a 3-gigawatt electrolyzer.

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Port Masterplan

Other green hydrogen projects are also planned in the region, with fuel and chemical producer Sassoul Ltd. looking to start at the South African port of Bogoibai at an initial cost of approximately $ 10 billion. Chief executive Fleetwood Grobler said last month that the company plans to accelerate growth to meet European demand.

The port of Rotterdam is partnering with Namibia’s state-owned port of Namibia to facilitate the export of ammonia, which is converted to transport by hydrogen ships to Europe, according to Mnyupe. The line-up of off-tech contracts for energy will also reduce costs aimed at securing funding by 2024, he said.

At the end of next year, Namibia will have more clarity “whether it’s a green bond or a durable bond or even a blue bond,” Mnyupe said.

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