Namibia is one of the few countries that can produce green hydrogen at a reasonable cost
Exclusive interview with Nangula Uaandja, President of the Namibian Investment Promotions Development Board. At the upcoming Africa’s Green Economy Summit, she is an expert panellist in the session on “Accelerating Green Investment in Africa”.
Please tell us about your background and the organisation that you are heading up I'm a chartered accountant by profession and I've worked in the private sector for about 24 years of my life. I transitioned to the public sector where I'm now in investment promotion since January 2021. I am currently the chairperson and the CEO of the Namibia Investment Promotion and Development Board. The board is targeted with promoting investment and facilitating investment into Namibia, but at the same time also coordinating SME activities across all the levers of the economy. So, our main mandate is really about how do we attract both foreign and domestic direct investment so that we can use those ones as a tool to create employment for our people in Namibia and to solve our socio-economic challenges. So, that is really who we are and why we exist.
Are there any specific exciting projects focused on developing a greener economy in Namibia or on the continent even that you are involved in?
Currently, there is a project that we are excited about and it's not one project actually, it’s an entire industry, green hydrogen. So, green hydrogen is something which is a revolutionary project for the world. And we know that the world is talking about net zero in 2050. If we are talking about net zero and every country have come up with their national determined contribution, every country is trying to reduce their carbon emissions, so that we can come to a planet that is sustainable and where we can keep on living for all of us.
In order to reduce the use of fossil fuels and the likes, one of the solutions is green hydrogen. Green hydrogen is of course used in hydrogen, which can be used to power whether it is vehicles, whether it is aeroplanes, whether it is industries, but of course, it will be done not in the form of green hydrogen, but in the form of various synthetic fuels. Hydrogen becomes green when you produce it with energy. So, you take water, and then you use electrolysis, and then you produce green hydrogen, and when it is green is when you have used energy that is coming from renewable sources.
Now it has been found that Namibia, because of our abundant resources of solar and wind, plus large vast land, because we are the second least densely populated country in the world, as well as the proximity to the sun, where we have 1,500 kilometres neighbouring the sea. We are one of the few, probably one of the top four, countries in the world that can produce green hydrogen at a reasonable cost.
Because of that, what the government did, then our President identified green hydrogen as one of the game changer projects for Namibia. And it's an industry that we started to champion in September 2020, when the President made the announcement at the United Nations General Assembly. In March, he put it in our Harambee Prosperity Plan II. And then, around August 2021, we went on a request for proposal to get the first project that will target to produce green hydrogen that will be converted maybe to ammonium at large scales. Since then, we announced the winning preferred bidder at COP 26 in November 2021. By November 2022 at Cop 27 in Egypt, we made a commitment as to when we are going to sign the feasibility study implementation agreement with the developer that had been identified, we reached an agreement with the EU, where they are going to support Namibia with green hydrogen as well as critical raw minerals that are required in the development of these new technologies.
And then, of course, we are also talking about various other institutional changes that we need to meet within Namibia. So green hydrogen as a new industry and looking at the various projects in that industry is something that is exciting. The Namibia Investment Promotion and Development Board is one of the four institutions that has been appointed by the President to the inter-ministerial committee that is coordinating this project in Namibia.
Sounds very exciting with lots of opportunities. What have been the challenges so far?
Yes, of course, the challenge is speed, because number one, the industry is very, very new. And therefore, there are a lot of things in the development of green hydrogen that are not yet established. So for example, if you are talking about green hydrogen itself, you cannot just transport green hydrogen from Namibia to Europe, where the current demand is. Therefore, you need to find ways of saying yes, you can produce green hydrogen in Namibia but you need to convert it to something else in order to be able to transport it. So we’re talking about how do we work on that? And then, the cost of green hydrogen. First of all, fossil fuel has been here for a long time, and therefore the cost is known, but with green hydrogen, currently, the cost is very high. And therefore, whatever project is going to produce green hydrogen is going to produce it at costs that at this stage are much higher than fossil fuel, and therefore, the replacement is quite high. And therefore, you need to find governments that are interested in so much decarbonisation that they will almost offer subsidies for the development of green hydrogen.
The other one is the regulation. Because it's a new industry, we have been working on it where there is not yet a regulatory regime, and why it took us very long to implement the feasibility agreement between us and the developer who was identified more than a year ago, and we are still to sign the agreement, is because of all these unknowns, and because one cannot really commit because there are a lot of changes that are coming through. And what they are saying is, of course, the first green hydrogen projects will be much more expensive than the second wave or the third wave, and therefore, the first developers will have to pay the cost for the future ones that are coming. Therefore, the current developer will want to be compensated when other developers come in the future, and their projects are cheaper. So, you cannot say, okay, wait until we put the regulations in place, because then that will not help you speed the process up. But at the same time, you cannot say, just speed up without regulation, you do need to understand the implication. So that complication, because it's a nascent industry, that is actually what one of the challenges are.
Of course, the comparison of the costs when it comes to comparing it with fossil fuel is another challenge. However, we have, of course, formed very good relationships with various development partners. The good thing is that there are many countries in the world that are committed to decarbonisation. Therefore, the point is, how do we find solutions? So it's countries like Germany, who say, definitely we are going to with green hydrogen. And if we are going to go to with green hydrogen, how do we support countries that are committed to developing this nascent? Industry? So yes, that is the level where we are currently at.
At the upcoming Africa’s Green Economy Summit, you are part of a session on “Accelerating Green Investment in Africa”. What will be your message at the event?
My message will be that yes, when we go into something we have to be committed, but at the same time, how do you fast track something while at the same time being realistic as to what is possible. Like I've talked about how with green hydrogen, the cost implication is quite challenging. But the benefit in the long run, it's quite beneficial. So you have to give up something while at the same time push for something. And if you have got two people at the extreme ends of both of these conversations, then you end up in a place where you can be paralysed and you don't want to make a decision. Because one is saying, it doesn't matter what the cost is, this planet is the only one that we have let us push. But the other one is saying, if we cannot afford it, and we push it, we are going to have people that are poor today and then we have nobody to live on the planet that we're saving.
The point then is, how do we listen to each other so that we get away from a conversation of either or, and a conversation of this one or that one. So, if we talk about, for example, the energy sector, and we talk about a just transition, Namibia is a classic example, where we have had a recent discovery of oil, and the question is: “Namibia, can you go on exploring your oil? Will it not do damage? Should you not just stick to green hydrogen?” The point is, yes, but at this stage, the demand for green hydrogen, the costs for green hydrogen, the investment for green hydrogen, it will take time and it has challenges. But at the same time, we have got high levels of inequalities, we've got high levels of poverty, we've got high level of unemployment, and we need something that can help us change that. So, how do we talk about a just transition that will help us deal with the problems that we have today, while at the same time making sure that we are committed to the solutions of tomorrow, so that net zero by 2050 is not compromised by Namibia being the one that is giving up everything but every country being committed to the commitments that we have made individually.