The legislative framework, rationale and subsequent adopted approach used to launch Namibia’s green hydrogen request for proposal has been explained by the country’s green hydrogen commissioner, James Mnyupe. He noted that the Nature Conservation Act that formed the backbone of the transparent process was utilised to solicit interest from local, regional and global players to partner with government for the 40-year concession to kickstart Namibia’s green hydrogen ambitions.
Responding to queries from New Era, Mnyupe assured the nation that government followed all due processes with the relevant authorities when it handed the multi-billion dollar project to a six-month old Hyphen Hydrogen Energy.
Hyphen Hydrogen Energy is a joint venture between an offshore entity called Nicholas Holdings Limited and the South African subsidiary of German renewable energy company, Enertrag AG. The agreement grants Hyphen the right to operate the project for 40 years with operations set to begin in 2026. Hyphen plans to produce up to 300 000 tonnes of green hydrogen per year that will require a capital investment of some $9.4 billion to establish Namibia as a major power in the production of green hydrogen.
Mnyupe stated that the bidding period ran from 3 August to 16 September, giving interested parties one and half month to submit proposals. He further noted that after all the requests for proposals were handed in, government appointed international experts from the European Union Global Technical Assistance Facility on Sustainable Energy and the National Renewable Energy Lab from Colorado to support local experts (a bid assembled evaluation committee) to review all techno-economic and qualitative aspects of the submissions.
Mnyupe said post the award, a customary standstill period of seven days was observed to give any of the bidders an opportunity to challenge the process: “No challenges were received and on the contrary, many of the unsuccessful bidders congratulated the Namibian government for the professional process run and continue to do so today on various public platforms,” Mnyupe added.
He further noted that Hyphen Hydrogen Energy was awarded preferred bidder status not selected bidder. He explained final negotiations are still ongoing and the process is thus not complete.
“A second preferred bidder was identified and should negotiations fail with Hyphen, deliberations with preferred bidder two will commence,” he explained.
According to Mnyupe, government remains confident that the request of proposals which was launched in August 2021 met the spirit of both the Nature Conservation Act and the policy on Tourism and Wildlife Concession on State Land. He also defended all the procurement processes, saying bidders information has been made available to the public.
Mnyupe further explained that southern Namibia is particularly suitable for hydrogen production due to its large solar and wind resources and proximity to the coast. Hyphen meanwhile has described the area as one of the top five locations in the world for the production of low-cost hydrogen.
Red flags raised
Earlier this week, the Institute for Public Policy Research (IPPR) raised red flags regarding the transparency of the procurement process that led to the appointment of Hyphen Hydrogen Energy.
IPPR in a report questioned procurement matters relating to exactly how Hyphen Hydrogen Energy, a company the institution says has no track record, was able to achieve the best bid for the largest tender in the nation’s history.
“The production of green hydrogen is a highly technical, specialised and expensive industrial activity and a potential multi-billion US dollar contract would have attracted the interest of established firms in renewable energy or green hydrogen production, such as Australia’s Fortescue Future Industries which had been on an exploratory visit to Namibia in early 2021,” stressed IPPR.
The research institute further stated that towards the end of last year, Hyphen was contracted by the National Planning Commission, in the Office of the President. It noted the company was registered with the Business and Intellectual Property Authority (BIPA) on 5 May 2021, roughly six months before it was awarded the tender.
The report noted the track record of Hyphen is pertinent because the Public Procurement Act (15 of 2015) states in sections 35 (4) and (5) that when assessing bids sourced through the request for proposals method, the relevant experience of the supplier is a significant consideration.
“To be fair, one of the entities involved in Hyphen has an established track record in renewable energy production. However, there is no transparency about who the other bidders were,” reads the report.
According to IPPR, to date, the executive summary of the bid evaluation report of this tender has not been made public. It further claimed that according to the public procurement regulations, a public entity is expected to publish on its website a notice of procurement and the summary of the bid evaluation report within seven days of the procurement award.
IPPR questioned why the request for proposals method was used in this instance, instead of the open bidding method.