7 minute read
A monthly wrap-up of News Worth Knowing
GIPF registers 8.6% growth in asset base to N$147.9 billion
The Government Institutions Pension Fund (GIPF) has registered a 8.6% growth in its asset base from N$136.2 billion to N$147.9 billion for the financial year ended 31 March 2022.
“The Fund has a liability-driven investment strategy that is comprised of a robust Asset Liability Modelling (ALM) process. The ALM feeds into the risk and return parameters known as the Strategic Asset Allocation (SAA), which GIPF, as a longterm investor, uses to implement its investment strategy. The ALM process allows the Fund to adapt to prevailing economic market conditions relative to its liabilities and factors in variables that will ensure that GIPF not only safeguards the assets of the Fund but also grows them through investing in return-seeking investment opportunities.”
GIPF’s benefits paid out to its members increased by 7.5% to N$5.54 billion from N$5.15 billion prior year.
“The GIPF’s core business is to ensure that pension and related benefits are paid once they mature, and that income, in the form of member contributions, is invested wisely to generate returns. As a defined benefit pension fund, GIPF provides guaranteed benefits to its members as defined by the Rules of the Fund. Therefore, sufficient assets are needed to cover the payment of liabilities that stretch far into the future.”
TotalEnergies Namibia oil discovery appraisal set for 2023
TotalEnergies is targeting to start the appraisal process of its Namibian oil find in the third quarter of 2023 and the second quarter of 2024.
The oil major, which has already submitted its application for an Environmental Clearance Certificate with the Ministry of Mines and Energy and the Ministry of Environment Forestry and Tourism, recently contracted SLR Environmental Consulting (Namibia) to begin work on the Environmental and Social Impact Assessment.
According to SLR, the exploration and appraisal process is set to be undertaken in block 2912 off the Coast of Southern Namibia, with upto 10 exploration and/or appraisal wells targeted, a process expected to take between three and four months to complete drilling and testing of each well.
TotalEnergies, alongside National Petroleum Corporation of Namibia, QatarEnergy, and Impact Oil and Gas early this year announced the Venus-1X discovery, located approximately 290 kilometres off the coast of Namibia, in the deep-water offshore exploration thought to straddle block 2913B and 2912, which covers approximately 8,215 km².
Consultant Wood Mackenzie estimates the Namibia oil find could contain about 6.5 billion barrels of oil equivalent of recoverable reserves. According to the Namibia Petroleum Operators Association, exploration companies have sunk in over N$30 billion in the country since independence searching for commercially viable oil finds.
Namcor estimates that Namibia could generate US$5.6 billion in revenue for the country at peak production from its two oil finds, which have the potential to double the country’s economy, which Bloomberg estimates at US$11 billion by 2040.
HDF Energy secures N$179m green hydrogen funding
The European Investment Bank has given Hydrogène de France (HDF) Energy a N$179 million (€10 million) grant to implement Namibia’s first green hydrogen power plant.
HDF Energy is developing the Renewstable® Swakopmund, which consists of an 85MW solar park and a green hydrogen production unit, with the facility expected to begin commercial operations in 2024.
The project is expected to enhance local clean electricity generation and grid supporting services, directly contributing to security of electricity supply in the country.
The new green hydrogen partnership was announced by President Dr. Hage Geingob, European Investment Bank President Dr. Werner Hoyer and EU Commission President Ursula von der Leyen during the ongoing COP27.
“This partnership represents a concrete step in delivering Namibia’s clean energy ambition. This new investment demonstrates Namibia’s leadership in green hydrogen.” said President Geingob. HDF’s Director for Southern and East Africa Nicolas Lecomte said the EIB grant brings the project to financial close next year, a development which will allow construction to start.
“I would like to thank the European Investment Bank for the continuous support to the development in Swakopmund. The signature today is a key step of our longstanding engagement with the EIB for the project that takes us closer to reaching financial close in 2023 and starting construction of the first large-scale green hydrogen project in Africa.” Lecomte said.
Meanwhile, Hoyer said the EIB works with leading partners to support clean energy investment across Africa.
“I am pleased that the EIB is working closely with HDF Energy to harness Namibia’s solar and wind potential and unlock opportunities for the energy transition. Our agreement confirmed at COP27 today with HDF will help to accelerate large-scale deployment of green hydrogen infrastructure in Namibia based on proven investment in South America.”
The HDF agreement was signed by Maria Shaw-Barragan, EIB Director of lending in Africa, Caribbean, Pacific, Asia and Latin America and Nicolas Lecomte, HDF’s Director for Southern and East Africa, and witnessed by Finance Minister Ipumbu Shiimi.
The agreement between HDF Energy and the European Investment Bank was unveiled alongside the announcement of a new sovereign loan facility of close to N$9 billion (€500 million) by Ursula von der Leyen, President of the European Commission and President Geingob, to develop the Namibia’s green hydrogen sector.
Namibia targets N$17.8bn raise with new green hydrogen fund
The government on Tuesday launched the SDG Namibia One at the United Nations Climate Change Conference, COP27, a new investment platform that will convene and coordinate activities related to the transition to, and exploitation of, the green hydrogen industry in Namibia and aims to mobilise up to N$17.8 billion (€1 billion) of investment capacity over the next 10 months.
“SDG Namibia One is a blended financing platform managed in partnership between Invest International, Climate Fund Managers, and the Environmental Investment Fund of Namibia. Despite this great opportunity for Namibia, we recognise that the green hydrogen industry is in its infancy, and it is difficult to predict how the market will develop in the long term and that we will face challenges relating to finance, technical capacity, and many others still to be unforeseen. However, we will work closely with our international partners to mitigate such risks, hence a blended finance in the form of SDG Namibia One was launched today with the premise to attract a diverse group of players in our development journey,” a release issued by the government said.
Dutch Prime Minister, Mark Rutte announced a Grant Facility of N$714 million (€40 million) as seed capital to establish the SDG Namibia One during its launch on Tuesday.
“A funding agreement for an initial development capital of €40 million was signed between the Namibian Government and the Dutch Government during the launch, while the strategy is to use the grant to catalyse additional development capital to the SDG Namibia One. This will subsequently derisk private capital and facilitate further investments at scale to support the development of high-quality green hydrogen assets and associated value chains. Infrastructure development is faced with challenges such as scale, risk sharing, speed and competition.”
The platform is therefore designed as a programme, with a multiphase approach that includes a development fund, construction fund and operational fund.
“Such design facilitates successful fundraising and investments in untested markets and projects, as well as able to attract sponsors with limited track record of operating in a market, or innovative schemes with limited proofs of concept. Consequently, suited to enhance participation of domestic financing market and business entrepreneurs.”
The SDG Namibia One, according to the Namibian government, is also premised on a partnership which relates to capacity building as the joint venture allows the unique international expertise and investors’ relationship of the Climate Fund Managers to be harnessed while connecting domestic expertise of the Environmental Investment Fund of Namibia and giving them exposure to sophisticated capital raising designs and deal structuring elements.
”The Environmental Investment Fund of Namibia will therefore benefit from capacity building by being directly involved at the fund manager level from the outset, including development of fund management, investment, fund-raising and capital mobilisation abilities. Moreover, additional skilled bandwidth and bench strength will thereby be created at Environmental Investment Fund of Namibia and ultimately within the government of Namibia.”
