Although Namibia ranks number 141 as a contributor to global emissions, the southern African country, with a population of 2,6 million, wants to reduce greenhouse gas emissions by 91% by 2030.
Namibia also aspires to use its natural resources to support the global transition to net zero and deliver socio-economic benefits to its people through broadly shared prosperity.
With plans at an advanced stage to develop sub-Saharan Africa’s biggest green hydrogen plant, Namibia is working on creating policies to regulate the sector.
In November 2022, the mines ministry published Namibia’s Green Hydrogen Strategy, setting expectations and an action plan.
Our fourth edition carried extracts of the Green Hydrogen Strategy.
Action Plan to March 2025
• Delivery infrastructure.
Enhance the Presidential Delivery Unit to help develop the hydrogen industry and commission the Implementation Authority Office to plan, procure and monitor future green hydrogen projects developed on state-owned land.
• National strategic and legislative framework.
Enact the Synthetic Fuels Act as a comprehensive regulatory framework to create an enabling environment with legislation for hydrogen projects and ensure compatibility with international green fuel, certification, health and safety, and environmental standards.
• Investor support office.
Establish a single point of contact for investors and developers to streamline processes and ensure swift and smooth support.
• Local industry ecosystem development.
Launch pilots to build knowledge, local EPC companies and capabilities to construct and deliver local component manufacturing.
• Common Use Infrastructure.
Plan requirements, develop an ownership and governance model and build a shared ecosystem to lower development costs and risks.
• Robust talent strategy.
Put in place training programmes and immigration policies to enable Namibian citizens to participate in the hydrogen economy and supply talent to the industry embedded in a strong network of partners.
• Mobilisation of finance.
Work with international development partners to make de-risking financial instruments available, including export credit guarantees, first-loss equity, low-cost loans and political risk insurance, building on SDG Namibia One.
• Regional green ecosystems.
Engage with regional partners to explore and agree on collaboration opportunities to foster cross-border green ecosystems, e.g., shared use of port infrastructure and pipelines.
• Hydrogen diplomacy.
Continue the global outreach campaign to inform potential investors, project developers and international development partners about Namibia’s hydrogen opportunity and identify collaboration opportunities with other governments and the private sector to create shared prosperity for Namibians
• Socio-economic development.
Update and develop the Harambee Prosperity Plan II to lay out a clear path for economic development (including promoting local manufacturing and identifying adjacent green growth opportunities) and invest Government proceeds from the hydrogen industry in healthcare, education and other social benefit.
• Inclusive citizen engagement.
Host roundtables to engage key internal stakeholders (civil society, labour unions, traditional communities) in building Namibia’s hydrogen economy and incorporate their feedback in plan development.
• Environmental safeguards.
Create a permanent task force to assess and manage the biodiversity concerns in the hydrogen industry under the Community-Based Natural Resource Management Programme framework. Namibia will develop catalytic financing instruments with domestic and international partners. Developing Namibia’s green hydrogen industry will require an estimated US$190 billion of investment by 2040.
This includes US$95 billion for new upstream production and infrastructure (RES, electrolyser, storage and pipeline infrastructure) and about US $30 billion for midstream infrastructure (e.g., derivative plants, ports and trucks) with project synergies. Namibia recognises the importance of minimising WACC to reduce hydrogen and derivative production costs.
The Development Finance Assessment (DFA) Report commissioned by the National Planning Commission in collaboration with the Ministry of Finance articulates the need to deploy a blended financing approach to raise fit-for-purpose capital to build the nation robustly and sustainably.
To this end, the Government will launch an infrastructure fund – SDG Namibia One – that will initially mobilise US$1 billion in concessionary and commercial capital to develop the SCDI.
The fund will link three funds to provide capital for the three project development phases: development, construction and operations.
Each will have a different risk-return profile achieved by ‘blending’ donor and development finance institution capital to attract commercial investors according to their mandate requirements.
US$40 million of catalytic funding has already been secured from the Dutch Government through Invest International to seed the fund.
Such an architecture has been deployed successfully in emerging market nations to finance climate infrastructure projects.
Namibia expects the fund to help achieve a highly competitive WACC for the hydrogen industry’s investment needs and, ultimately, for globally competitive hydrogen and derivative production costs.
Namibia will set the bar on environmental and community-responsible development. Biodiversity is critical to Namibia, where 70% of the population depends on natural resources for their livelihood.
Namibia is a global leader in conservation and nature-based rural development.
For example, as early as 1990, Namibia introduced the Community-Based Natural Resource Management Programme (CBNRM) to promote sound environmental management and the sustainable use of natural resources to empower local communities to share the responsibilities and benefits.
This programme is globally recognised as a prime example of biodiversity conservation and sustainable use.
Namibia will apply CBNRM tools and mechanisms to anticipate and address any biodiversity implications of the planned land developments in advance by, e.g.,
• Taking a multistakeholder approach that involves and coordinates all participants across communities, local organisations (e.g., forest farmer groups), NGOs, project developers and the Government.
• Putting in place policies and enforcing laws to prevent violation of environmental standards.
• Applying conflict management mechanisms to support processes to manage natural resource conflict among stakeholders.
• Monitoring and evaluating all participants to promote learning, trust and accountability
• Enforcing social and gender equality around the access to and control of natural resources. The Hyphen project is an excellent example of sustainable and responsible land management.
With a relatively small footprint of 5% in its current land allocations, it focuses on regions with the best solar and wind resources and avoids sensitive environmental areas.
An at-scale hydrogen industry will boost GDP and quality employment. An at-scale hydrogen industry could grow Namibia’s economy substantially.
By 2030, it could contribute US$4.1 billion (in real 2022 dollars) to GDP, 32% more than 2030 GDP estimates with no hydrogen industry. By 2040, it could generate an additional US$6.1 billion, 32% higher than current GDP estimates.
The hydrogen industry would also grow the domestic labour market by creating an estimated 280,000 jobs by 2030 and 600,000 jobs by 2040. Of these, about 30% would be direct (in the industry), 20% would be indirect (through goods and services), and the increase in household incomes would induce 50%.
Jobs would be higher-skilled (about 10% of direct employment, e.g., in engineering or management positions), lower-skilled (about 66% of direct jobs, e.g., in manufacturing or administration) and unskilled (about 25% of direct jobs in basic occupations).
Namibian citizens currently do not have the skills to fill all these jobs so the Government will invest in training and tailored immigration policies.
Local content manufacturing will boost economic development.
Local content manufacturing – of the components required to produce and transport hydrogen and CO2 – will also boost economic growth.
In renewable energy, local manufacturing will need the right incentives and enabling conditions, which Namibia is working to implement.
Local tower and blade manufacturing could generate a US$7 billion direct GDP impact in 2035- 40 and is forecast to accelerate as green hydrogen production ramps up.
These activities are also expected to create an additional 7,000 annual direct jobs. Localising solar cell and module manufacturing could generate a US$4 billion direct GDP impact in 2035-40 and 4,000 direct jobs annually by 2040. Solar localisation is expected to increase as the central region develops in the mid-to-late 2030s.
Core electrolyser component production is complex and requires intense R&D.
Manufacturing will likely remain overseas in the medium term. However, BoP/assembly facilities could be localised when domestic demand rises (beyond the minimum required scale of 3-4 GW per year).
Localising stack (non-membrane) and BoP manufacturing could generate a US$5 billion direct GDP impact in 2035-40 as green hydrogen production scales up and installed electrolyser capacity grows.
It could create an additional 5,000 jobs in 2035-40.
The sustainable biomass harvesting and CO2 production infrastructures required to produce methanol and e-kerosene offer a feasible, high-impact opportunity for local content manufacturing.
Biomass power plants can be developed and built locally as they are not very complex.
Additional benefits include direct job creation and optimal land use by effectively controlling bush encroachment.
The Namibia Green Hydrogen Research Institute (NGHRI) will conduct R&D and help localise the value chain. It will function as a distributed Science and Technology Park for university industry-government consortia to conduct R&D and capacity building, promote entrepreneurship and incubate innovative projects.
Self-contained mini campuses in Lüderitz, Windhoek, and Walvis Bay will have state-of-the-art infrastructure, fully equipped laboratories, R&D stations, private sector and government representative offices, an entrepreneurship and start-up incubation centre and training facilities.
As part of R&D capacity-building, the NGHRI will offer formal degree programmes (Masters, PhDs) and a training centre for short skill/upskill/reskill programmes. It will receive funding from the Government and external funding from grants, donations and commissioned research.
A skill development strategy will create sufficient talent. The hydrogen industry could create an estimated 85,000 direct jobs by 2030 and 185,000 by 2040 (mostly in construction, business services, transportation and durable manufacturing) and 60,000 indirect jobs from additional spending in the economy by 2030, rising to 130,000 in 2040. By 2030 – without targeted interventions – Namibia’s talent pool could number 35- 40,000: 25-30,000 unskilled workers, 5-10,000 low-skilled workers and 5-10,000 skilled workers, including new STEM graduates.
This leaves a talent gap of 55-60,000 workers, which could rise to 120-130,000 by 2040. To fill this gap, Namibia’s skill development and labour supply strategy will map out the resources and skills needed, identify how to close gaps and develop programmes.
Up- and reskilling the passive labour force through vocational programmes for the unemployed and recent graduates in alignment with the Namibian Training Authority could fill a large share of lower-skilled jobs, e.g., technician roles, by 2025.
Engaging and training the next generation could increase the number of STEM and non-STEM graduates.
For example, the Southern African Science Service Centre for Climate Change and Adaptive Land Management (SASSCAL) set up a Youth for Green Hydrogen (Y4hydrogen) Scholarship for Namibian students, attracting 1,154 applicants in 2022.
Immigration would be an essential source of highly skilled labour (when policies are eased) and would transfer skills to the local labour force. Hydrogen development projects will be carefully sequenced to manage spikes in labour demand and provide continuous employment.
