Unpacking Namibia's Green Hydrogen Revolution

From CNBC Africa https://www.cnbcafrica.com/

As the fight against climate change and the race for net zero – HOTS UP, Namibia is embarking on arguably, one of the largest and potentially transformational projects on the African continent and perhaps the world.

In studio today joined by James Mnyupe, economic advisor to president Hage Geingob and the drive of the country’s Harambe Prosperity Plan to Namibia’s economic blueprint covering effective governance, economic advancement social progression and infrastructure development, among others.

He’s also the Hydrogen Commissioner for Namibia.

A warm welcome James. I think at the start let’s get the lay of the land here. What is the Harambe Prosperity Plan2 and where does the hydrogen revolution that we’re talking about come in.

Absolutely, thank you so much Godfrey for having me. It’s good to be back on CNBC.

Now the Harambee Prosperity Plan 2 is essentially our president’s social economic development plan. It is a second version and of course it coincides
with his second term.

Within the Harambee Prosperity Plan 2 there are of course five pillars as you’ve mentioned and one of them is economic advancement and within that economic advancement pillar there is a specific goal number three that aspires to develop a green and blue hydrogen economy in Namibia.

In fact this particular plan then actually goes to cover really a lot of the key elements that were also first crafted in Vision 2030 which of course our president is a cabinet member in the founding government also contributed to [it] as well.

So that really then begins to lay the foundation for the green hydrogen ambitions that we lay. It really is a vision that requires an “All of Government” approach in order to provide an opportunity to industrialise the country as has been envisioned by our leaders.

Now in my intro I used high sounding words because the figures that you have provided me with here do sound scary to a degree for a small country and economy such as Namibia.

But, before we talk about the numbers, I want to talk about a little bit about that vision that you outlined that the president is pursuing.

What exactly are the overarching goals there and what sort of time frames are we talking about.

Before we even get to the really big ambitions and the timelines, you know as members of government we are aware that sometimes those ambitions, they really need to be housed and supported by a key implementation mechanism for them to come alive, especially given that this is the last term of this president.

One of the things that he has brought from the first Harambee Prosperity Plan is, he has strengthened the ability to implement, monitor and project manage these large ambitious goals that we put in HBP2 and so Namibia has actually launched the first performance delivery unit which is essentially a lesson we’ve learned from peers around the world.

And that is also housed in Harambee Prosperity Plan.

So there’s a very strong will and now an ability to implement on time but in a nutshell what we’re looking to do is for this year we’re actually looking to put out a global Request For Proposal.

So we are inviting private sector players both from Namibia. Obviously the region, Africa and of course the world to come and build world-class what they call PTX.

Power to X green hydrogen projects in Namibia, we want to put out this RFP Godfree in July already we then want to work extremely hard with the PDU that I mentioned and we want to be awarding this particular contract by November at COP26.

That’s the ambition Godfrey. We’re going to have to work very hard some of us won’t be sleeping very much but but that should get us to COP26.

Beyond COP26 we want to then complete a feasibility study for one of these larger projects by 2023. We then want to deliver a final investment destination before the end of this particular presidency.

The sort of projects we’re talking about Godfrey, they range anywhere between five to seven gigawatts in terms of the installed capacity and of course we’re
looking at between 6 billion US dollars to 8 billion US dollars.

These are the formal proposals that Namibia has received from private sector developers so we’re not making these up ourselves this is what we’ve been given in pen and paper and of course for anyone who knows Namibia we’re about a 12 and a half billion dollar economy from a GDP perspective so eight billion dollars you’re really beginning to look at north of seventy percent of our GDP.

Those big grades are usually were justified because we’re talking about an investment that could potentially double the size of the Namibian economy so let’s get to the exciting part let’s talk about those projects where do we start in terms of what you are working on now.

This is quite an interesting and dynamic opportunity of course green hydrogen sits at the center of it but in order to evacuate this green hydrogen which is essentially you take water and you split it using a a machine called an electrolyser and it’s the fact that the green energy going into that electrolyser is of a renewable source so that’s why it’s called green hydrogen.

You know that in itself, that plant the massive solar plants, the transmission, all of that is in the middle. But on this side Godfrey upstream you would have to evacuate that green hydrogen to potential markets so you could you might think of piping it into South Africa and you might think of of course shipping it into Europe for example.

And downstream there’s a whole chemicals industry that could come alive, you could begin to make green ammonia by idling nitrogen from the air using an
air separation unit to that particular hydrogen and of course the ammonia can be used in urea, into manufacturing fertiliser.

You may also provide that ammonia into power stations that actually could use this green fuel and of course you could sell the green [electricity] into the Southern African power pool.

Okay so the projects now that are coming at us are are quite dynamic as you can imagine in range as we as we as we prepare in Namibia to build the larger projects we’re actually also going to be looking at launching smaller pilot projects so they are we’re spending between five to ten million US dollars to put in place demonstration projects.

I need you to actually give us some of those projects James so that people have an idea of what we’re talking about here because I see here you talking about Ports, you talking about transmission. you’re talking about as you said earlier spin-offs in agriculture, research and development.

Give people a sense of some of the identified projects up to date.

Let’s get into some specifics. We for example have already finished a pre-feasibility study between our power utility and the Port of Rotterdam.

And there we looked at the whole ecosystem but we specifically identified that the port of Walvis Bay and the port of Lüderitz are both fairly capable of
exporting this either green hydrogen or ammonia and so for example there will be a feasibility done to either be building a bay or a deep water port in Lüderitz.

We’ve been approached by various players to do that at some point in time
Myers have approached us to do this and at some point in time you know a Fortescue Metals Group has formed a company called FFI Fortescue Futures
Industry and this is a big company from Australia I think they’re about the fourth largest iron ore exporter and they’ve potentially expressed an interest as well as Myers to work on a Lüderitz port.

When we look at Erongo Region there we’re talking about a big company called
CMB Tech. So they’re a Belgian based company and they’re in partnership with a local company called O&L Group Ohlthaver & List.

It’s one of our larger conglomerates and they want to build you know about a 32 billion they wanted to put together 32 billion Rands worth of investments into the Erongo region in Namibia to build a green hydrogen hub.

So essentially what they were looking to do there was to build a a liquid terminal a bulk liquid terminal at the port and of course an ammonia plant there as well.

So these are at least the port related projects right in-house we’ve got a large player called CWP they wanted to put together a six in fact a seven gigawatts green hydrogen facility and they were saying they could spend about eight billion dollars to do that.

Now CWP is doing the same thing in Australia that project on that side is called AREH Asian Renewable Energy Hub and they have ambitions to do this up in North Africa and in South America as well so Godfrey that begins to give you a flavour of the players the sizes of the projects and the location of some of these projects as well.

So you’re telling me some of these projects are already up and running or at least at the beginning, at the start of our implementation i’m imagining someone listening to this perhaps sitting in Johannesburg or perhaps in Nairobi or a Lagos and thinking where do I come in are there still opportunities here.

As you know all of our leaders and elders have worked extremely hard to try and give the concept of an African continental free trade agreement real legs so for example I was in Hamburg earlier this month and we met with various other African players at a conference called the Africa/Bahrain energy summit and there we spoke to our colleagues from West Africa and of course the hydrogen part of that particular summit SASOL for example was actually the main
sponsor and we’ve already been in discussions with some of our South African colleagues so to give you maybe a practical idea Godfrey from South Africa there’s already some interest from the chemicals side of things.

There are people who are seeing an opportunity to make hydrochloric acid in Namibia given that we will you know we already have by the way Godfrey the
largest desalination plant in Southern Africa as we speak and it’s it’s currently servicing our minds so we will have a lot of brine already and with a lot of this hydrogen being produced there’s a very good opportunity to make hydrochloric acid which of course has been in short supply from India.

So that already begins to show you that there are potential exports of ammonia or hydrochloric acid into South Africa and then of course we mentioned the electricity into the southern African powerful so Botswana, Zambia, Zimbabwe and of course South Africa where we currently import most of our power from.

Yeah actually that was going to be my next question because as you can see James i’ve been around quite a little bit and I remember in the mid 1980s exciting conversation about how the Grand Inga Dam was going to transform Southern Africa and there was this talk about the SADEC power pool.

Sadly we know that remains a pipe dream when do we start to see the benefits out of this grand project that you are talking about I think at the beginning you mentioned something like seven gigawatts.

I understand those things very slowly so take us through how from what you’re suggesting this is going to come into play and from when and the difference that is going to make of course in our energy starved region may I emphasise

Fantastic point and let me use some numbers to give some scale currently in the media I think. Peak power consumption is about 640-620 megawatts per annum for the whole country right and we import almost 40 percent of our power from South Africa and of course we know that South Africa has its power challenges already from Eskom right so 640 megawatt compared to seven gigawatts.

Seven gigawatts is seven thousand megawatts so you know we’re looking up again here more than 7x the annual capacity of Namibia is what we’re being told we may be able to produce in our country.

Now the green hydrogen players is one part of that equation on the other side of the equation you’ve got the Namibian government with the Botswana government in partnership with USAID and US Power Africa okay.

Essentially with the the Biden administration coming together and signing a memorandum of intent to develop what we’re calling a mega solar project okay so mega solar power plants between Botswana and Namibia which obviously have world-class solar.

Direct natural radiation okay now if you think about it Godfrey the the the green hydrogen needed clean electricity and here we are signing an MOI between
two countries and one of the largest superpowers in the world to build that clean energy facility so I think you know that we have a very good opportunity here to give you some hope Godfrey.

From where you’ve come from you know the the committees within this mri have already been formed certainly in the media we are ready okay and we are integrating them into a green hydrogen discussion and then maybe just one last thing obviously the infrastructure already exists Namibia already actively trades power from South Africa from Zambia from Zimbabwe so it it if we build this plant it will merely be switching that particular flow of electrons instead of us importing power that obviously comes from carbon emissions we would love to get to be giving back to our brothers and sisters.

Cleaner energy yeah it sounds to me like what you are saying here James is
that we are combining the public and the private sectors here and playing together so I want to know the funding for these projects and also I want to know
a little later the issues around research and development and I’ll explain to you why I want to understand that one right now we are talking about the need for Africa to build manufacturing capacity for vaccines we don’t have the knowledge and we need to develop on that front so on this one I want to know after you’ve answered the first question how we’re going to make sure that the technology that will come to make a difference in our lives like this is going to stay and make a difference and build our ability to be able to develop it even further after the power begins flowing absolutely massively relevant question and this is something that you know in the media we’ve been thinking about now for four months we were crafting this particular plan with our president and our whole government.

You know really from December already last year on the 29th of September our president told the united nations at the United Nations General Assembly that we wanted to change the structure of our economy and we were going to use innovative financial tools to do that and at the time he referenced green bonds blue bonds and social bonds as well.

The money Godfrey is there if you sort of look at some of the reports that look at sustainable financing so climate financing you know these green bonds and blue bonds are really going through the roof because the world as it plans to get to climate neutrality by 2050 is really putting its money where its mouth is so Namibia for example already has more than 150 percent of our GDP in institutional savings sure okay so pension fund savings and of course long-term insurance savings are very similar to South Africa right so that capital is there and there’s a local asset requirement aka there’s a requirement for those assets to find a home locally okay similarly because we’ve brought the private sector into play they’re saying to us the funding is the least of their worries they can go and find funding from.

As you know Godfrey these pension funds around the world if you even look at the Norwegians over in welfare they would really love to get their hands on an asset like this because it could really change the the the mechanics the makeup of the Southern African region and as you say we are power hungry so the money isn’t the biggest issue right let’s come to the part yeah because you you did still need to answer the second part of my question right.

Exactly so when we now started looking at how do we involve our people in this in this cycle fully one of the key things we thought about was easily easily the r d because as Namibia we’re now going to be very proactive about capturing as much value of this particular ecosystem as possible yeah so there we’ve already been in discussions with for example the ministry of research and education from Germany called the BMBF we have met for example our counterpart there called Mr Stefan Kaufman who’s the green hydrogen commissioner in Germany and between the two governments we are actually exploring an MOU that is going to be unlocking a fairly significant amount of grant funding towards the r d aspect of this green hydrogen opportunity our universities already have been approached and in fact one of them the university of Namibia has already put forth a 25 proposal with various projects research projects pilot plan proposals feasibility studies and of course a scholarship program that is aligned with the government’s vision of building a green hydrogen industry I was very excited when I got this particular document from the pro vc of unum because it showed that academia was listening to the government and responding as well to the calls from the private sector so one last thing we’ve done is government Godfrey it is an actual category that will be measured in the rfp your corporate social responsibility but also your socio-economic footprint so we’re actually going to measure the proposals to see how it is that they’re going to be engendering the very requirement that you have just asked for which obviously all applicants at this point in time are asking absolutely very important that there’s a legacy that we can look to and we are able to maintain it you have just reminded me as well that you are also the hydrogen commissioner for Namibia give me a sense of what you do on a daily basis and wearing that hat in addition of course to the other one where you advise the president one of the things we really looked at this opportunity is we realised that we needed to be nimble aggressive and assertive and certainly visionary in in the way it is that we structure ourselves as a government to pursue this particular opportunity.

Certainly in the next four years before the end of this presidency and all the way to 2030 where we envision will be exporting this particular commodity already into our markets so the president did the following, he organised a government okay so he put together a green hydrogen council which is an inter-ministerial committee combined with the central bank governor our the head of our investment promotion agency and myself so that we can work together to steer this particular vision to its intended conclusion as the economic advisor.

I obviously was instrumental in helping the president craft this particular vision and so as a green hydrogen commissioner the president has essentially tasked me with a few things a to support all the activities of the green hydrogen council to actually meet the objectives of goal number three activity two of the economic advancement bill of hpp2 so that’s a key KPI of mine i’ve also been tasked to make sure that the public sector is very familiar with each and every aspect of this vision.

I’ve also been tasked to make sure that I take this message into the houses and homes of every Namibia so that they fully understand how they can be a part of this particular revolution or at least opportunity and then lastly really to take it to the to the world as I’m doing now on CNBC to make sure that the world knows that Namibia is an open tension and that we’re inviting investors from around the world to partner with us to do this job yeah so you said at the beginning that some of us won’t be sleeping I think we can see some of those that are not going to be sleeping in describing all the projects that we’ve talked about today.

I think we forgot to make the connection between those projects and the difference they are going to make in the fight against climate change and may I also ask is there an opportunity here for Namibia to get into the market for carbons because we do know that this is going to become a big feature of the greener economy that the world is bringing is building going forward?

Absolutely you know this this is crucial it’s a very crucial component of why this particular project is a globally attractive project right so Namibia of course has national determined contributions pledges to reduce climate emissions as do many countries around the world and this normally happened you know at the Paris climate agreement.

To give you some context Godfrey, Namibia is very strategically positioned from a continental perspective we are positioned right next to unfortunately the largest carbon emitter on the continent which is South Africa we emit five times less carbon dioxide per capita than South Africa or Germany by the way Germany and South Africa can you imagine are equal there we need 10 times less than the usa per capita and 23 times less than than Qatar so from a carbon and meter perspective we we are very small but the potential here to decarbonise the largest emitter in on the continent and and our peers around the region is massive so you can see here we’re asymmetrically positioned we’re at David you know amongst Goliaths but we can certainly punch above our weights to help the region as a whole get closer to carbon neutrality as you know a lot of these developed economies have actually signed up to become climate neutral by 2050.

Germany being one of them the EU, America the united states of course China has said they’d like to do so by 2060 as well yeah those countries in that path to carbon neutrality they need to do two key things electrify as many sectors as possible and for those hard to abate sectors they need alternative clean fuels and green hydrogen or green ammonia is one of those and so Namibia can not only help South Africa to reach those climate neutral goals but also larger companies or countries like Germany and that’s why we’re partnering with the EU and Germany and pretty much the whole world to provide them with that fuel.

Given that the answer that you’ve just given my next question is going to sound silly but I gotta ask it because I need to know who you’re going to be selling all this energy to and also this you need customers there’s carbon units that you are talking about?

You know and so given that context country and given where the world is is is going the customers are dynamic right so we’ve got countries who would really love for this to happen you know we were lucky enough to to to meet the Belgian prime minister when we visited Europe in early June we’ve met the EU vice president Frans Timmermans and and those are countries that are saying we we need your fuel but more specifically we’re also talking to companies.

So for example Anglo-American is a company that is based in both of our countries Godfrey both in South Africa and of course in Namibia and they’re saying we need this clean fuel as well for the Anglo-American group as an example to reach their climate neutral targets for the beers for example to start producing green diamonds you know because these will be diamonds that are for example carbon neutral in the process that is used to extract them so so our our customers would include companies like Anglo-American, Fortescue Metals Group, another one CMB and of course the one we would really love to talk to Godfrey and maybe you can connect me to them is this sustainable is by far one of the largest polluters in the world they’re right you know their neighbours right here so if we can find a way to get our green hydrogen to them I know there might be some talks of building a pipeline into the northern cape in which case we can just build a small one into the Northern Cape but yeah those are some of our customers.

I can tell you that SASOL yesterday that is what the second of July go to a new chief financial officer I shall be knocking on his door and telling me hey I heard there’s an opportunity over in Namibia as a parting shot and I don’t expect you to answer this one I wanted to say you could behave or could be the OPEC of a green energy come the completion of all of those projects.

James let’s leave it there for today thanks very much indeed for joining us garden free we’ll see you next time and in fact as I say goodbye.

With all of these green hydrogen activities and we’ll be putting out some good global hashtag num kanga scholarships Godfrey I couldn’t leave you without plugging that one because the youth absolutely have to get involved in this particular opportunity thanks for having me Godfrey for prosperity.

James thanks very much indeed james newpair economic advisor to president of Namibia talking about what appears to be a fantastic opportunity, a generational opportunity for the people of Namibia and the African continent that’s it for this year’s CNBC Africa special thank you very much indeed for joining us until next time goodbye.