Namibia’s central green hydrogen valley is quickly becoming the epicentre of the country’s burgeoning green hydrogen industry, and small and medium-sized enterprises (SMEs) are reaping the rewards. In a major boost for local businesses, SMEs have been awarded contracts totaling N$170 million to support the development of green hydrogen pilot projects in the region.
This was recently revealed by Eline van der Linden, Head: Impact and ESG, Namibia Green Hydrogen Programme, who further highlighted that the green hydrogen sector can move Namibia into a higher economic growth trajectory, bringing along many Namibians through jobs and business opportunities.
“At present, the pilot projects and projects on private land in the Central Valley are employing over 200 people, with an approximate N$170 million contracted to SME companies for various parts of the build-up of these green hydrogen projects. It is early days with each job in this emerging sector, a truly new and additional job,” van der Linden said.
This influx of investment is already having a transformative effect on communities that have historically struggled with high unemployment and limited economic opportunities.
In 2022, under the Ministry of Mines and Energy (MME), GRN concretized the HPPII ambitions in the Green Hydrogen and Derivatives Strategy. This strategy identifies three green hydrogen valleys: the Northern Valley, the Central Valley, and the Southern Valley, which is also known as the Southern Corridor Development Initiative, or SCDI.
Economic modelling by McKinsey and Company (Harvard University) provides an estimate of 250,000 jobs by 2040. This includes 180,000 direct jobs in the green hydrogen industry and 70,000 direct, indirect, and induced jobs from green manufacturing.
“These jobs will train up a new generation of highly skilled workers that will benefit not just the hydrogen industry but will be a catalyst for further industrialization across the country in many other sectors. In addition, jobs and business opportunities will be created through infrastructure upgrades (e.g., port and rail), the expansion of Lüderitz town to provide housing, healthcare, education, security, recreation services, etc. to those taking up jobs in the green hydrogen sector (and other emerging economic sectors such as oil and gas and commercial mariculture), and generally the services sector (financial, hospitality/MICE, research, media, publicity, etc.),” van der Linden further expressed.
The green hydrogen sector provides considerable employment opportunities for individuals and Namibian businesses across the country, not just in those areas near the green hydrogen production facilities. Many economic services are required, such as construction, technical services, maintenance and repair, transport, hospitality, and financial services. Buildings, wind and solar farms, pipelines, port facilities, etc. will need to be constructed and subsequently maintained. Environmental and social impact assessments (ESIAs), technical design studies, and other specialist work will need to be undertaken in support of the various projects.
Hyphen Hydrogen Energy will require some 15,000 workers during the construction phase and a further 3,000 permanent employees for its gigawatt green hydrogen and green ammonia production facility in the SCDI. This large-scale project further targets 30% local procurement of goods, services, and materials during the construction and operational phases.
“The Namibian economy has been largely moving sideways since 2016, and GRN had to find new growth opportunities to move Namibia beyond what is termed the “middle income trap.” How will the Namibian economy absorb the unemployed, who represent more than 30% of the country’s work force and more than 40% of the youth? New, additional productive activity had to be secured, and given Namibia’s competitive advantage in solar and wind resources, which are both necessary for large-scale green hydrogen production, green hydrogen itself has been identified as a strategic input to clean manufacturing,” van der Linden said.
In addition, van der Linden highlighted that to offer an alternative source of income and new business opportunities to people and enterprises in Namibia, the country needs to diversify its economy and move beyond the middle-income trap.
“The economy must become more complex with greater forward and backward linkages between various sectors to boost economic growth. The beneficiation of minerals is a case in point. The country can no longer afford to ship raw materials and not use its own abundant wind and solar resources to add value, thereby creating jobs and economic value.”