Windhoek: In a setback for Namibia’s plans to become a central hub for clean energy, German power company RWE has announced its withdrawal from the multi-billion-dollar Hyphen green ammonia project, reports Mint.
The decision is the latest instance of companies reevaluating investments in new clean fuel technologies, which often require significant spending to develop.
RWE had initially signed an early agreement with Hyphen in 2022. That deal explored the possibility of RWE buying up to 300,000 tonnes of ammonia from the project each year, starting in 2027. This type of ammonia is typically made with natural gas, but the Hyphen project aims to create a “green” version by using renewable energy to produce hydrogen instead.
In a statement, RWE confirmed it is no longer moving forward with projects in Namibia. The company explained that the demand for hydrogen and related products in Europe has been slower to grow than initially anticipated.
“Because of this, we have reviewed our projects,” the company stated, which included the agreement with Hyphen.
A spokesperson for Hyphen, Ricardo Goagoseb, clarified that RWE’s initial agreement was only a preliminary step to explore a potential supply deal and was not a final contract to purchase the ammonia.
The project had also faced criticism from indigenous rights groups. In April, these groups wrote to RWE, expressing concerns that the project was located inside a national park and on the ancestral land of the Nama people.
A human rights legal advisor, Andrea Pietrafesa, along with the Nama Traditional Leaders Association, welcomed RWE’s decision, stating it was positive that the company would not be “buying goods produced on land where indigenous rights are not being respected.”
RWE stated that its decision to leave the project was not related to these complaints.
