- Nam-H2 Fund Managers commits development funding to HyIron’s Oshivela Project
- The first plant in Africa to produce climate-neutral iron using green hydrogen, helping decarbonise the hard-to-abate iron and steel sector
- Once completed, the project will avoid 3.6 million tonnes of CO2 emissions annually, creating 900 permanent and 6,000 construction jobs
Windhoek, 25 October 2024: Namibia Hydrogen Fund Managers (Pty) Limited (“Nam-H2 Fund Managers”), an infrastructure fund manager focused on incubating Namibia’s green hydrogen sector, has signed a Development Funding Agreement (DFA) with HyIron, a green iron developer. The funding will accelerate the expansion of HyIron’s pioneering Oshivela Project, Africa’s first climate-neutral iron plant, significantly advancing global climate goals.
The industrial-scale Oshivela Plant, located in Namibia’s Erongo Region, will avoid 3.6 million tonnes of CO2 emissions annually upon completion, directly decarbonising one of the planet’s most polluting and hard-to-abate sectors: steelmaking. The project reinforces Namibia’s position as a global hub for green hydrogen innovation and will drive long-term social and economic development in the country, creating approximately 900 permanent jobs and 6,000 construction jobs during Phases Two and Three.
HyIron is a partnership between Namibian and German renewable energy and engineering companies. It has developed a proprietary process to reduce iron ore in a rotary kiln using green hydrogen as the reducing agent, producing direct reduced iron (DRI) that is entirely carbon neutral.
Nam-H2 Fund Managers, co-owned by Climate Fund Managers (CFM), the Environmental Investment Fund of Namibia (EIF), and Invest International, manages SDG Namibia One – a USD 1 billion target blended finance fund designed to incubate Namibia’s green hydrogen sector and related infrastructure.
The Oshivela Project builds on HyIron’s successful pilot in the TS Elino laboratory in Germany, which concluded in 2023. Construction of Phase One began in November 2023, and the site is scheduled for commissioning in Q4 2024 with an annual output of 15,000 tonnes of green DRI. Already at this stage, the project is expected to avoid 27,000 tonnes of CO2 emissions per year, equivalent to 50% of the annual CO2 emissions of Namibia’s Power industry. Development is already underway for Phases Two and Three, which will be co-funded by SDG Namibia One and will expand production capacity to 200,000 tonnes and 2 million tonnes green DRI per annum, respectively.
Johannes Michels, Managing Director of HyIron, said: “The iron and steel industry is responsible for 9% of global greenhouse gas emissions and, due to its heavy reliance on fossil fuels, is one of the hardest sectors to decarbonise. By harnessing green hydrogen, we demonstrate that iron can now be produced in a way that dramatically reduces emissions while also making economic sense. We are confident that our partnership with Nam-H2 Fund Managers, who bring deep local market expertise and extensive emerging market infrastructure experience, will help us reach financial close and scale this technology to deliver sustainable, carbon-neutral iron to the global market.”
Mercia Geises, CEO of Nam-H2 Fund Managers, said: “SDG Namibia One was established in 2023 to advance projects in the energy transition and green hydrogen sector, acting as a catalyst to Namibia’s Green Industrialisation Plan. HyIron’s Oshivela Project is a groundbreaking initiative that significantly reduces the carbon footprint of heavy industry. We view this project as a prime investment opportunity, driving industry, job creation, and socio-economic development in Namibia while positioning the country as a globally competitive exporter of green iron. We believe that success with this project will set a precedent for reforming the global steel industry, with the potential for replication in other regions. We look forward to a long and impactful partnership with the HyIron team.”
SDG Namibia One announced a EUR 25 million investment from the European Commission at the Global Hydrogen Summit in September 2024. Additional investors include Dutch development financing institution Invest International and USAID Southern Africa Mobilizing Investment.