Namibia's Green Hydrogen Strategy: A Catalyst For Local Value Addition And Socio-economic Development?

• Law Firm: ENSafrica
• Subject Matter: Energy and Natural Resources, Energy Law, Mining
• Author: Mr Rewaldo Quest and Nicole Tjitendero
• Published date: 29 March 2023

Namibia's emerging green energy industry has the potential to create thousands of jobs and contribute billions to the country's GDP. In November 2022, the Namibian Government released the Namibia Green Hydrogen and Derivatives Strategy Report (the "GH2 Strategy Report") which drew significant attention from locals, who are anticipating the development of legislation for Namibia's green hydrogen sector.

The Namibia GH2 Strategy Report captured ambitious local content aspirations, such as creating local employment of up to 80 000 additional jobs and creating local manufacturing industries that will produce the components required to produce and transport hydrogen and CO2, together contributing up to USD6 billion to GDP, 30% more than 2030 GDP estimates.

Despite its expressed political willingness and expressed local content aspirations, if the current local content policies ("LCPs") - which comprise all legislative and regulatory instruments, policy tools, contracts and licensing arrangements imposed by the government that require firms to purchase and to use of input goods and services available locally in that country - is not investigated, then the current LCPs will not yield the expected socio-economic returns.

Policymakers have a crucial role to play to ensure that the echoed local content aspirations are achieved, particularly, to localise linkages to create local value chains. The current LCPs model utilised in other extractive sectors, such as mining and petroleum does not create sufficient confidence that Namibians will benefit. The LCPs model is yet to yield the expected socio-economic development objectives as envisaged in the Strategic Plan 2017-2022 of the Ministry of Mines and Energy.

The mining sector

In the mining sector, section 50 of theMinerals (Prospecting and Mining) Act, 1992 (the "Minerals Act") contains certain general terms and conditions that form part of all mineral licences, which fall within the scope of LCPs, namely:

• "the employment of employees, give preference to Namibian citizens who possess appropriate qualifications, expertise and experience for purposes of the operations to be carried on in terms of such mineral licence;
• carry out training programmes in order to encourage and promote the development of Namibian citizens employed by such holders;
• with due regard to the need to ensure technical and economic efficiency, make use of products or equipment manufactured or produced, and services available, within Namibia; and
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