Germany’s RWE Pulls Out of Namibia’s $10 Billion Green Hydrogen Project

German power utility RWE said it has pulled out of Namibia’s $10 billion Hyphen green ammonia venture, dealing a setback to the southern African nation’s ambitions to become a leading hydrogen hub.

The withdrawal shows how some companies are rethinking costly bets on emerging technologies.

RWE had signed a preliminary, non-binding memorandum of understanding with Hyphen in 2022 to buy about 300,000 tonnes of ammonia annually from 2027, according to Reuters.

Ammonia, mainly used for fertiliser, is typically made from natural gas; decarbonising the process involves replacing gas with hydrogen produced from water using renewable energy.

“We can confirm that RWE is currently not pursuing any further projects in Namibia,” the company said in a statement, as demand for hydrogen and hydrogen derivatives such as ammonia develops more slowly than expected in Europe.

“Against this backdrop, we have reviewed the relevant projects at RWE. This included the project with Hyphen in Namibia.”

Hyphen spokesperson Ricardo Goagoseb stressed that RWE had only agreed to explore a potential offtake and had not signed a final purchase contract.

The project has also faced criticism from indigenous rights groups, which wrote to RWE in April saying the planned concession lies within a national park and encroaches on ancestral Nama land.

Andrea Pietrafesa, legal adviser at the European Centre for Constitutional and Human Rights, together with the Nama Traditional Leaders Association, welcomed RWE’s move not “to purchase goods produced on land where indigenous rights are violated.”

RWE said its decision was unrelated to those complaints.

The withdrawal comes at a sensitive moment for Namibia. Under its new administration led by President Netumbo Nandi-Ndaitwah, the country’s first female head of state, the government is trying to regain upper-middle-income status after the World Bank downgraded it to lower-middle-income amid recent fiscal strains.

The administration has set an ambitious 7 per cent growth target, built largely on green hydrogen, renewable energy and value-added manufacturing to boost GDP.

Hyphen was central to that vision. One of its marquee promises was job creation, 15,000 positions during construction and 3,000 permanent roles, as part of a wider plan to generate 30,000 green jobs by 2030.

Scaling back or delaying the project could be particularly damaging in a country where unemployment officially stands above a third of the labour force.

Without a major anchor customer like RWE, Namibia may find it harder to attract financing, secure offtake agreements and hit its green-energy milestones.

The risk is not only lost jobs and revenue but also weakened investor confidence in the country’s hydrogen agenda, a setback just as Namibia is trying to use the sector as a springboard back to higher-income status.