The government of Namibia has approved to sign an agreement with Hyphen Hydrogen Energy (Hyphen) to govern the development, implementation and operation of the $10bn Southern Corridor Development Initiative (SCDI) green hydrogen project in Namibia.

The SCDI project is believed to be the largest and only fully vertically integrated green hydrogen project in sub-Saharan Africa.

As an initial step in bringing the government’s broader green hydrogen strategy, the feasibility and implementation agreement (FIA) between the parties will regulate the procedure by which the green hydrogen project will be realised.

The parties expect to sign the FIA on 26 May 2023.

Namibia President Hage Geingob said: “The Harambee Prosperity Plan II noted that the Namibian Government would investigate the feasibility of incubating a synthetic fuels industry in Namibia, as a key transforming agent of our economy.

“On Friday the 26th of May 2023, we earnestly embark on that journey, as we kick start a process that has the potential to transform the lives of many in our country, the region and indeed the world.”

Under the FIA, the green hydrogen development company will provide technical, financial, environmental, social and commercial deliverables of the SCDI green hydrogen project.

The FIA is categorised into five consecutive phases, namely the preliminary phase, feasibility phase, validation phase, financing and construction phase and operational phase.

To be located within the Tsau Khaeb National Park, the SCDI green hydrogen project is expected to produce two million tonnes of green ammonia annually for regional and international markets at its full-scale development.

The full-scale development of the Namibian green hydrogen project is anticipated to be achieved before the end of the decade.

The SCDI green hydrogen project is expected to generate up to 15,000 new jobs during the construction and 3,000 permanent jobs during operation.

Besides, the project aims for 30% local procurement of goods, services and materials during its construction and operational stages.

Hyphen Hydrogen Energy CEO Marco Raffinetti said: “We are delighted to have concluded the FIA and look forward to delivering on the next phase of development of this ground-breaking project.

The Namibian government will be a co-investor in the project with the right to take up to a 24% equity interest at cost.

Namibia has raised funding of over €540m from Invest International and the European Investment Bank to finance the development of the green hydrogen sector and to fund equity participation in the project.