[{"bbox": [85, 154, 323, 186], "category": "Section-header", "text": "2 RATIONALE"}, {"bbox": [85, 220, 234, 247], "category": "Section-header", "text": "2.1 Context"}, {"bbox": [96, 266, 1134, 400], "category": "Text", "text": "Namibia is an upper middle income country characterised by a low population density and a high vulnerability to climate change. Despite its good development trajectory since independence, Namibia has serious structural challenges such as high inequality, multidimensional poverty and youth unemployment. The structure of the economy based on the exploitation of its natural resources, mainly mining (diamonds, uranium) does not create enough jobs for the growing youth population."}, {"bbox": [96, 410, 1134, 515], "category": "Text", "text": "Politically, the country established an overall good governance record and enjoys relative political stability since independence in 1990. The ruling party SWAPO, currently under President Geingob's presidency, held a two-thirds majority in parliament from 1994 to 2019, although its political dominance declined in recent election results."}, {"bbox": [96, 529, 1134, 689], "category": "Text", "text": "Namibia has been in recession or only registered negligible economic growth since 2016, leading to a high and rising public debt (above 70% in 2021 – despite being just 15% in 2011). Following a deep recession in 2019-2020 due to COVID-19 pandemic, the macroeconomic situation is recovering with a 3% growth rate recorded in 2021 and 2022, thanks to a rebound in mining, tourism, and fishery activities. The Namibian macroeconomic outlook remains however weak, due to the high public debt (over 70% of the GDP) and a rising inflation (over 6%), within a context of Government's limited fiscal space."}, {"bbox": [96, 701, 1134, 914], "category": "Text", "text": "In 2021, President Geingob launched the *Harambee Prosperity Plan II (HPPII) 2021-2025*, the government's strategy for economic diversification and recovery, with a special emphasis on green growth, governance and social inclusion. Among the main drivers of growth, the HPPII identifies renewable energy and the development of the green hydrogen cluster. Since it was first announced, the Government was successful in attracting significant interest from international investors, positioning Namibia as a frontrunner in the production of green hydrogen in Africa. The future development of “Green Hydrogen³” (GH2) industry and the creation of diversified and local value chains in the mining sector has the potential to be a real game changer for Namibia in terms of economic and social development."}, {"bbox": [96, 925, 1134, 1007], "category": "Text", "text": "In this context, the signature of a Memorandum of Understanding (MoU) on green hydrogen and critical raw materials (CRM) between the Republic of Namibia and the European Commission at the COP27 conference in Egypt, is of particular importance."}, {"bbox": [96, 1018, 1134, 1152], "category": "Text", "text": "Through an open tender process (supported by the EU), Namibia has attracted a whole number of investors (mainly European). The Hyphen project alone, which was awarded preferred bidder status for the development of the Southern Corridor Development Initiative (SCDI), is expected to mobilise EUR 9 billion in investments (equivalent to the country's GDP), install 5GWh of renewable energy capacity, produce 300,000 tpa of hydrogen (equivalent to 1,700,000 tpa of ammonia) and employ 16,000 people during the development phase."}, {"bbox": [96, 1163, 1134, 1270], "category": "Text", "text": "Likewise, the production of low-cost green hydrogen in Namibia is likely to attract other downstream investments in the value chains, e.g., for e-fuels, derivatives and other energy intensive industries, such as green steel. The transformative impact of these developments on the country's population could be profound and lift many people out of poverty."}, {"bbox": [96, 1281, 1134, 1335], "category": "Text", "text": "Despite the evident benefits, there are however also various risks associated with the scale of the planned investments in the context of a small economy and in a sensitive and fragile environment."}, {"bbox": [96, 1347, 1134, 1402], "category": "Text", "text": "Local communities need to be consulted and understand the benefits of the various investments, otherwise without local ownership and acceptance the overall green hydrogen project is poised to fail."}, {"bbox": [96, 1412, 1134, 1517], "category": "Text", "text": "The Government is committed to civic participation mechanisms and transparency, which are policy objectives included in the Harambee Prosperity Plan II. In addition, the national Green Hydrogen Strategy emphasizes citizen engagement as a key enabler for its success. The MoU, signed with EU also stresses the importance in cooperating in the area of Environmental, Social and Governance standards."}, {"bbox": [85, 1597, 1143, 1646], "category": "Footnote", "text": "³National Green Hydrogen and Derivatives Strategy https://gh2namibia.com/wp-content/uploads/2022/11/Namibia-GH2-Strategy-Rev2.pdf"}, {"bbox": [1038, 1681, 1143, 1706], "category": "Page-footer", "text": "Page 5 of 20"}]