Govt, Hyphen differ on staff housing

Government has "pushed back" on a proposition by green hydrogen partner Hyphen Hydrogen Energy that the state must build accommodation and related infrastructure for all of Hyphen&#039;s employees as well as those working for supply-chain companies in and around Lüderitz.The contents of the draft feasibility and implementation agreement between the parties – released publicly by Affirmative Repositioning activist Job Amupanda yesterday – show that the government negotiating team and Hyphen do not have consensus on the housing issue.The memorandum is one of the critical steps towards the realisation of the US$10 billion (N$170 billion) green hydrogen project, a flagship of the Geingob administration.Housing debateHyphen believes that government, as part of its housing obligation towards its citizens, should be responsible for housing after the commercial operation of the green hydrogen project has commenced.This is because government has a responsibility for "the general social and economic development of the area" where employees will be based."The [government negotiating team] has pushed back on this division of responsibility...", a memorandum by commercial law firm Clifford Chance Europe LLP, representing Hyphen, reads.As matters stand, Hyphen and the government are targeting for construction to start in January 2025, with commissioning of the first phase by the end of 2026. Thousands of jobs have been promised.Synthetic Fuel ActIn April, Namibia’s green hydrogen commissioner, James Mnyupe, announced that government has started working on legislation on synthetic fuels that will govern all things related to green hydrogen and other synthetic fuels.The draft memorandum released by Amupanda shows that Hyphen will play a critical role in the formulation of this law."Because of the importance of this legislation to Hyphen, there is a procedure set out by which [government] will consult with Hyphen and provide it with government’s proposals for the legislation," it reads."Hyphen will then have the ability to comment on that legislation (noting that this right is not exclusive to Hyphen), so government may also consult with other interested stakeholders should [it wish] to do so."In lineNotably, the memorandum reads that if the Synthetic Fuels Act in the end makes the green hydrogen project unfeasible, or if it is not adopted, this would be considered a government risk event – for which government must reimburse Hyphen for its investment in the project.Concern has been raised over Hyphen’s proposal that the Synthetic Fuels Act should be drafted in line with the feasibility and implementation agreement between Hyphen and government – when in fact, this should be a law for the entire industry."...It will be important that drafts of the legislative proposals are reviewed by government to ensure that they are consistent with the [feasibility and implementation agreement] in order not to create unintended conflicts that could give rise to unfeasibility for which government would be responsible...""This means that the fiscal provisions of the feasibility and implementation agreement are essentially determining what the Synthetic Fuels Act should say about the fiscal environment for hydrogen industry entities," it proposes.Taxpayers bear risksHyphen asks that if the Act is changed in the future, Namibia must make an undertaking to "compensate the investors for changes in the law from a baseline date, given that compliance with any change in law imposed will be a requirement of continued operation in good standing.""To be clear, government can always change the law and require Hyphen to comply with that change in law – the issue is which party shall be responsible for the financial consequences of the change in law."A local economist yesterday commented: "It looks like a lot of the risk is being carried by the Namibian taxpayer."Also, it looks like massive tax and other concessions are being demanded and considered, including the writing of an Act that favours Hyphen. They [Hyphen] seem to want exclusivity over hydrogen production, which is clearly anticompetitive; it’s quite alarming at first glance."

Govt, Hyphen differ on staff housing

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Govt, Hyphen differ on staff housing

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