Africa-Press – Namibia. Namibia’s green hydrogen ambitions face delays as weak offtake markets, financing hurdles and policy uncertainty hinder investment despite international interest and high-level government support.
Offtake agreements remain a challenge not just for Namibia, but neighbouring South Africa too.
Palesa Shipena, the economic policy officer at the embassy of The Netherlands, says despite the growing momentum and international interest, the absence of firm offtake agreements continues to be a challenge.
“Project developers everywhere, whether in Namibia or South Africa, are struggling to secure long-term offtake agreements. Without these, it’s very difficult to unlock the financing needed for large-scale green hydrogen infrastructure,” she says.
Offtake agreements are contracts guaranteeing the purchase of future production.
They are particularly necessary in production projects requiring huge amounts of capital, and are essential for giving investors confidence in the commercial viability of green hydrogen projects.
Shipena says the current market in Europe, one of the primary expected buyers of Namibian hydrogen, is not developing sufficiently.
She says in at least one case, a Dutch company operating in Namibia was forced to scale down operations due to a lack of confirmed buyers, until a government institution stepped in to help stabilise the initiative.
“European countries… the offtake market is just not developing fast enough.
“This is due to a mix of politics, changing governments, and shifting regulatory frameworks. These uncertainties are making it difficult for buyers to commit, “ Shipena says.
She says there is a need for stronger commitments and clearer policy signals from Europe if the funding gap is to be addressed.
“Governments like those of The Netherlands and Germany are already having discussions at European Union Commission level to accelerate the development of the offtake market,” Shipena says.
Speaking in Windhoek during the Global African Hydrogen Summit this week, Hyphen Hydrogen Energy chief executive Marco Raffinetti said a proper policy has to be put in place to motivate investments or offtake agreements.
“There has to be policy certainty due to the large investments that go into the sector. The risk is high,” he said.
Minister of industries, mines and energy Natangue Ithete at the event said the green industry has the potential to have a real impact on livelihoods, access to healthcare services and education.
“We have spoken enough, we have written enough, now let us transform our speeches into real results that our people can see and feel,” he said.
Ithete said the sector is a catalyst to breaking the cycle of exporting raw materials and import dependency.
“Our vision must be to process our minerals here in Namibia and Africa to power our homes and industries with our own renewable resources and build a new economy,” he said.
The conference accommodated over 1 500 participants from 75 countries and will conclude today.
For More News And Analysis About Namibia Follow Africa-Press
