The Daures Green Hydrogen Village’s ambition to convert its abundant renewable-energy resources into commercially viable industrial fertiliser received a major boost this week after the signing of a N$57 million (US$3.6 million) development financing agreement. SDG Namibia One, part of Climate Fund Managers’ Climate Investor Three Fund, has committed up to US$3.6 million to advance the green hydrogen project, with the development funding supported by the European Union’s Global Gateway initiative and Invest International.
The agreement announced yesterday marks an important step for the project as it moves beyond its successful pilot phase toward a planned commercial facility, which will eventually require an estimated N$4.2 billion in capital expenditure.
The Daures project, located about 50 kilometres inland in the Daures Constituency, will use abundant solar and wind power to produce green hydrogen, which will then be converted into green ammonia and ultimately fertiliser.
Production capacity
Once operational, the commercial facility is expected to produce up to 20 000 tonnes of green ammonia and 80 000 tonnes of ammonium sulphate fertiliser annually for domestic and regional markets.
The latest financing is particularly significant because early-stage capital remains a major obstacle for first-of-a-kind green-hydrogen and green-industrial projects.
SDG Namibia One will provide up to US$3.6 million towards a total development budget of US$7.07 million and will act as co-developer alongside Enersense Energy Namibia.
The funding will support key activities like engineering design, market development, permitting, environmental and social studies, and converting market interest into bankable offtake agreements. Financial close is targeted for Q2 2028, with operations beginning in Q1 2030. Mercia Geises, CEO of Namibia Hydrogen Fund Managers, said the project offers a chance to move beyond exporting or using renewable resources in raw form, to producing higher-value industrial products.
“The Dâures Green Fertiliser Project aligns strongly with Namibia’s green industrialisation ambitions, creating greater value from the country’s renewable resources by using green hydrogen to produce a critical agricultural input at home,” said Geises.
She added that domestic production could reduce Namibia’s dependence on imports while strengthening agricultural value chains and food security.
“By producing low-carbon fertiliser for Namibian and regional markets, the project has the potential to reduce reliance on imports, strengthen agricultural value chains and support food security,” Geises said.
The project’s significance is amplified by Namibia’s heavy dependence on imported fertiliser, while drought and climate variability continue to place pressure on agricultural productivity.
Energy requirements
The commercial project will be powered by 60MW of solar photovoltaic generation, 10MW of wind generation, and a 65MWh battery energy-storage system. A 40MW electrolysis facility will use renewable electricity to produce green hydrogen, which will then be converted into green ammonia and fertiliser.
Once operational, the facility is expected to avoid around 48 000 tonnes of CO₂ emissions annually by replacing traditional fertiliser production with grey ammonia. It also aims to create up to 115 permanent jobs in a rural area with limited employment. For Daures Green Hydrogen Interim CEO Martin Nambundunga, the project directly supports Namibia’s food-security ambitions.
“A country cannot truly be independent if it cannot feed its own people, and our farmers cannot produce enough food if we continue depending on expensive fertiliser imports,” Nambundunga said.
He explained that the project would use renewable resources and otherwise unproductive land to manufacture agricultural inputs locally.
“Our goal is simple: manufacture these inputs locally to make them accessible to farmers in Namibia and beyond, create jobs, support local industries with cleaner products, and improve livelihoods,” said Nambundunga.
Enersense Energy Namibia, a fully Namibian, youth-owned energy and infrastructure company, is developing the project based on the Daures Green Hydrogen Village pilot. Approximately US$17.7 million has been mobilised for pilot and proof-of-concept activities with support from the German Federal Ministry of Education and Research, the UN Industrial Development Organisation, the United Kingdom Government, and Enersense.
Commercial scale
The pilot is expected to produce Namibia’s first locally manufactured green fertiliser by the fourth quarter of 2026, providing operational data to inform and optimise the commercial-scale development.
The new funding therefore does not represent the full financing requirement for the commercial project but rather provides development capital intended to take it closer to bankability and eventual financial close.
This distinction is crucial because the developers still face major commercial hurdles, including the price premium attached to green ammonia, securing reliable offtake agreements, attracting strategic equity partners and obtaining debt financing at acceptable costs.
The wider Phase 2 development is estimated to require about US$210 million, or roughly N$4.2 billion, in capital expenditure.
The developers are pursuing a financing structure comprising approximately 30% equity and 70% debt, with potential participation from development-finance institutions, commercial banks and other funding mechanisms.
The project nevertheless offers Namibia an opportunity to connect its renewable-energy potential directly to agriculture and manufacturing.
European Commission Director for the Green Deal and Digital Agenda Erica Gerretsen said the project demonstrates how green hydrogen can contribute to agricultural development rather than being viewed solely as an energy-transition technology.
“The Dâures Green Fertiliser Project is a powerful example of how green hydrogen can become a driver of agricultural development and food security,” Gerretsen said.
She added that local production could reduce import dependence, strengthen agricultural resilience and create opportunities for farmers, businesses and rural communities.
For Namibia, the immediate challenge is now to convert the N$57 million development commitment into a bankable commercial project capable of attracting the substantially larger capital required for construction.
If successful, Daures could demonstrate that Namibia’s renewable-energy resources can be transformed into higher-value industrial products while simultaneously addressing fertiliser dependence, creating rural employment and strengthening food security.
The financing agreement therefore represents more than a capital injection. It tests whether Namibia can move its green-hydrogen ambitions from promising demonstrations to commercially sustainable manufacturing that delivers tangible economic value.
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