According to sources, Hyphen Hydrogen Energy has reached an agreement with the Namibian government for the next phase of a $10bn green hydrogen project, which will produce hydrogen for export to Europe upon completion.

Hyphen's shareholders include German-based Enertrag, which was announced in 2021 as the preferred bidder for the Tsau Khaeb National Park project in the Namib Desert.

On Friday... We set in motion a process that has the potential to change the lives of many in our country, in the region, and around the world. The Namibian government said in a statement.

The plant, which will be built in phases and is expected to reach its expected output by 2030, will eventually produce 2 million tonnes of green ammonia per year for regional and global markets.

Namibia, one of the sunniest and most sparsely populated countries in the world, wants to harness its solar and wind potential to produce green hydrogen and position itself as a renewable energy hub in Africa.

But analysts say it remains to be seen whether the water-scarce country, which is relatively far from its main export markets, will be able to offer a cost-competitive product in the emerging global hydrogen industry.

Hyphen said it had signed memorandums of understanding with some potential European customers over the past year, with the aim of supplying them with about 750,000 tonnes of green ammonia a year. Editor/Xu Shengpeng