RWE withdraws $10 billion Namibia Green Hydrogen Project

RWE, the German energy utility, announced on Monday it was withdrawing from Namibia's $10 Billion Hyphen green ammonia Project. This is a blow for Namibia's ambitions of becoming a hydrogen hub.

The pullback represents the latest example where companies are reconsidering their investments in a new technology that costs a lot to develop.

RWE signed an initial non-binding Memorandum of Understanding with Hyphen in 2020 to take approximately 300,000 tonnes of ammonia per year - a compound that is mainly used to make fertilizer - starting 2027.

Decarbonising the process of ammonia production, which is typically produced with natural gas, requires that hydrogen be extracted from water by renewable energy sources.

The company confirmed that it is not currently pursuing any new projects in Namibia, as the demand for ammonia and other hydrogen derivatives in Europe has been slower than expected.

This included the project with Hyphen in Namibia." "This included the project in Namibia with Hyphen."

Ricardo Goagoseb, spokesperson for Hyphen, said that RWE only signed a "memorandum to understand potential off-take," and not a final purchase agreement.

In April, indigenous rights groups complained to the German group that their concession was located inside a national parks and infringed on their ancestral Nama lands.

In a joint press release with the Nama traditional leaders association, Andrea Pietrafesa - legal advisor at the European Centre for Constitutional and Human Rights - applauded a decision to "not purchase goods produced in land where indigenous rights have been violated."

RWE claimed that there was no link between the decision it made and these complaints. Reporting by Nyasha Nyaungwa and Christoph Steitz, Windhoek; Editing by Wendell Roelf and Tim Cocks.

(source: Reuters)