AR approaches lawyers to demand free govt stake in Hyphen

The Affirmative Repositioning (AR) movement says government should not be made to pay for a 24% stake in Hyphen Hydrogen Energy, which has been tasked to develop the Southern Corridor Development Initiative. This amid concerns by green hydrogen commissioner James Mnyupe that government is competing for capital internationally. Government intends to take up the 24% stake in Hyphen after it received grant funding to finance its equity in the company from Invest International - to the tune of N$819 million.Deal unfavourable However, through lawyer Kadhila Amoomo, AR has hit back at government’s proposed approach, and said the constitution makes provision for state ownership of resources. “[AR] has taken note of this engagement and is particularly alarmed by the fact that the government will be required to fund and thereby make payment in order to acquire a 24% stake in the aforementioned hydrogen project,” Amoomo said. Mnyupe last week defended government’s decision to fund its own equity in the project.He said: “If Namibia had demanded a 24% free equity stake, incoming investors would have to generate a 33% higher return to achieve the same outcome, and consequently Namibia’s hydrogen projects would be more expensive and less attractive to investors”.However, AR reasoned that Namibia was providing the natural resources for free, justifying why it was not necessary for government to pay for an equity stake in the project. “[AR] herewith registers its objection to the abovementioned requirement that the government makes a financial contribution in order to acquire a 24% stake in the aforementioned project, but will also be providing natural resources in the form of land, water and other natural resources including the means of production in the form of labour,” Amoomo said. “According to Article 100 of the Namibian Constitution, land, water and natural resources below and above the surface of the land and in the continental shelf and within the territorial waters and the exclusive economic zone of Namibia shall belong to the state, if they are not otherwise lawfully owned.” Failure to engageGovernment was also blasted for alleged failure to engage widely to inform the public about Hyphen’s green hydrogen plans. “[AR]... registers objection against the secrecy surrounding the negotiation, formulation and finalisation of the green hydrogen project agreement between Hyphen and the government,” he said. Recently, chairperson of the parliamentary standing committee on natural resources Tjekero Tweya questioned the presidency’s rigid firewall around the green hydrogen deal, saying parliament was largely in the dark about the N$192 billion project.This seems to be AR’s observation too, with Amoomo writing: “It is common cause that the public has not been involved in comprehensive consultation. It is also common cause that the Parliament of the Republic of Namibia has also been kept in the dark in as far as the negotiation, formulation and finalisation of the green hydrogen project agreement between Hyphen and the government is concerned.”Maximise probability of success Meanwhile, Mnyupe, in a document seen by Namibian Sun, said Hyphen was a long way off from making money. “Based on our early estimates, the Hyphen project alone could generate up to 20% of Namibia’s current fiscal take every year for the next 30 to 40 years. Importantly, however, government is focused on establishing a competitive and scalable industry, with conservatively 15 to 20 or more equivalent sized projects,” Mnuype said. Therefore, rather than trying to maximise its returns on one project, Namibia is trying to maximise the probability of success of the establishment of this transformative industry, he added. Mnyupe explained that Namibia already received N$819 million in grants from the Dutch government to help with the development of this, which means government still has N$348 million to use to de-risk other hydrogen projects. “We have placed the [N$819 million] in the SDG Namibia One Fund and intend to raise another N$1.22 billion from other sources around the world, all to be used to de-risk the development of this industry in Namibia,” he said.

AR approaches lawyers to demand free govt stake in Hyphen

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Namibian Sun 2024-12-27

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AR approaches lawyers to demand free govt stake in Hyphen

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Namibian Sun 2024-12-27

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