RWE Withdraws From $10 Billion Namibia Green Hydrogen Project

Wedoany.com Report-Sept. 30, German utility RWE announced on Monday that it has withdrawn from Namibia’s $10 billion Hyphen green ammonia project. The move marks a setback for Namibia’s plans to position itself as a major hydrogen hub.

The logo of the German power supplier RWE is pictured at the RWE headquarters in Essen, Germany, November 15, 2021

The Hyphen project was launched to develop large-scale green ammonia production using renewable energy. RWE had signed a preliminary, non-binding memorandum of understanding in 2022 to secure around 300,000 tonnes of ammonia annually starting in 2027. Ammonia, widely used in fertilizer production, is typically produced with natural gas. Replacing gas with hydrogen derived from renewable energy is viewed as a way to reduce emissions.

RWE explained its decision: “We can confirm that RWE is currently not pursuing any further projects in Namibia.” The company noted that hydrogen and ammonia demand in Europe is developing more slowly than anticipated. “Against this backdrop, we have reviewed the relevant projects at RWE. This included the project with Hyphen in Namibia.”

Hyphen’s spokesperson Ricardo Goagoseb emphasized that RWE had only signed “a memorandum of understanding to explore potential off-take,” rather than a binding purchase agreement.

Some concerns were raised earlier this year. Indigenous rights groups sent a letter in April stating that the project area overlapped with a national park and included ancestral Nama land. Andrea Pietrafesa, legal advisor at the European Centre for Constitutional and Human Rights, together with the Nama Traditional Leaders Association, welcomed RWE’s withdrawal, saying it was positive not “to purchase goods produced on land where indigenous rights are violated.”

RWE clarified that its decision was unrelated to these concerns, stressing that the review was based on market dynamics and the pace of hydrogen development in Europe.

The Hyphen initiative remains a significant part of Namibia’s renewable energy ambitions. Despite RWE’s withdrawal, the project continues to seek partners and financial backing to move forward. With an estimated cost of $10 billion, it is designed to use wind and solar resources to produce hydrogen for conversion into ammonia, supplying both domestic and international markets.

The decision by RWE reflects broader challenges in the global hydrogen sector, where large investments are needed but demand and infrastructure are still in early stages. Namibia, with strong renewable resources, maintains its objective to play a role in the emerging hydrogen economy, while international companies continue to assess commercial and environmental conditions before committing to long-term agreements.