40-year hydrogen concession under spotlight
Hydrogen commissioner James Mnyupe says Hyphen Africa has not yet been selected as the final bidder to develop a green hydrogen industry in Namibia – a deal that would give it a 40-year concession.
He made the comments at a press conference at State House following Namibia’s participation at the annual meeting of the World Economic Forum, held in Davos, Switzerland, last month.
He, however, said Hyphen was selected as a preferred bidder, adding that negotiations will continue until it becomes the selected bidder “that actually goes on to carry out the feasibility study”.
Mnyupe was asked why government had gone the route of considering a 40-year concession while mining companies typically get 20- to 25-year concessions for their projects.
Hyphen intends to set up a renewable energy plant with the capacity to generate two gigawatts of clean energy and 700 000 tonnes of ammonia per annum in its first phase. The company anticipates investing about N$145 billion in the plant.
“The 40-year concession is an item still under negotiation,” Mnyupe explained.
Government will negotiate favourable terms regarding tax rates and royalties before a final decision is made to grant Hyphen the concession, with the commissioner adding that the company presented the most compelling deal to government - of the nine firms that expressed interest to develop the country’s green hydrogen industry.
Best offer
“The 40-year period, the tax rates they have offered, the royalty rates; all of those are different characteristics of their [Hyphen’s] offer. That offer was deemed to be the best of the nine different ones we got. The 40-year concession is a request in the proposal they gave government,” he said.
Government was assessing Hyphen’s proposal with a specialist team, Mnyupe added.
“Government is now in negotiations with that particular developer and the goal is to end up in an implementation agreement where we will agree on these key characteristics before the end of this year,” he said.
Can’t compare
Mines and energy minister Tom Alweendo said comparisons between mining and green hydrogen projects are not feasible because of how different the industries are.
“The comparison between mining licences and this [green hydrogen] is not really comparable because these are two different industries we are talking about. With this one [green hydrogen], the resources are there, they are renewable and, therefore, the time will probably be based on ‘how much time do I need to recoup my investment’ because it is not something which gets finished,” he said.
Government has in the meantime committed itself to announcing its preferred bidder before the United Nations conference on climate change (COP 27), set to be held in Egypt in November.
He made the comments at a press conference at State House following Namibia’s participation at the annual meeting of the World Economic Forum, held in Davos, Switzerland, last month.
He, however, said Hyphen was selected as a preferred bidder, adding that negotiations will continue until it becomes the selected bidder “that actually goes on to carry out the feasibility study”.
Mnyupe was asked why government had gone the route of considering a 40-year concession while mining companies typically get 20- to 25-year concessions for their projects.
Hyphen intends to set up a renewable energy plant with the capacity to generate two gigawatts of clean energy and 700 000 tonnes of ammonia per annum in its first phase. The company anticipates investing about N$145 billion in the plant.
“The 40-year concession is an item still under negotiation,” Mnyupe explained.
Government will negotiate favourable terms regarding tax rates and royalties before a final decision is made to grant Hyphen the concession, with the commissioner adding that the company presented the most compelling deal to government - of the nine firms that expressed interest to develop the country’s green hydrogen industry.
Best offer
“The 40-year period, the tax rates they have offered, the royalty rates; all of those are different characteristics of their [Hyphen’s] offer. That offer was deemed to be the best of the nine different ones we got. The 40-year concession is a request in the proposal they gave government,” he said.
Government was assessing Hyphen’s proposal with a specialist team, Mnyupe added.
“Government is now in negotiations with that particular developer and the goal is to end up in an implementation agreement where we will agree on these key characteristics before the end of this year,” he said.
Can’t compare
Mines and energy minister Tom Alweendo said comparisons between mining and green hydrogen projects are not feasible because of how different the industries are.
“The comparison between mining licences and this [green hydrogen] is not really comparable because these are two different industries we are talking about. With this one [green hydrogen], the resources are there, they are renewable and, therefore, the time will probably be based on ‘how much time do I need to recoup my investment’ because it is not something which gets finished,” he said.
Government has in the meantime committed itself to announcing its preferred bidder before the United Nations conference on climate change (COP 27), set to be held in Egypt in November.
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