Germany Plans More Support for $11 Billion Namibia Hydrogen Plan

(Bloomberg) -- Germany aims to designate an ambitious green hydrogen project in Namibia as strategically significant, paving the way for additional financial support and bringing a plan that could transform the economy of the African nation closer to reality.

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Enertrag SE, which holds a stake in the €10 billion ($10.8 billion) Hyphen project on the south coast of Namibia, said on Wednesday the German government had presented it with a letter spelling out its intentions.

“We are therefore prepared to categorize it as a foreign project, under certain conditions, in the strategic interest of the Federal Republic of Germany and thus provide more support than usual through our foreign trade promotion instruments,” Robert Habeck, Germany’s economy minister, said in the statement distributed by Enertrag.

Germany, the Netherlands and Belgium have been courting the largely desert nation of Namibia for its potential to produce green hydrogen, seen as a future carbon-free fuel, from its abundant solar and wind resources. Green hydrogen, which can be used to fuel ships and industry among other things, is produced by splitting water into hydrogen and oxygen using renewable energy.

Should the project come to fruition it could diversify Europe’s energy sources while boosting the economy of the nation of 2.5 million people, which currently depends on tourism, diamonds and fishing.

Still, production costs will need to fall before the fuel is competitive.

“This opens up completely new economic prospects for the African country and contributes to the development of an international hydrogen market,” Habeck said in a separate statement released at the Berlin Energy Transition Dialogue.

Hyphen plans to generate the fuel and then turn it into ammonia so that it can be transported to Germany.

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