GRAHAM HOPWOOD
Green hydrogen projects in Namibia should apply the highest standards of good governance from the outset.
That means complying with the Green Hydrogen Standard. Looking at the programme of the recent Green Hydrogen Summit held in Windhoek, there were plenty of discussions focussing on business models, marketing mechanisms, offtake support, and green industrialisation, but scant mention of governance and corruption challenges.
This in a country that has experienced the Fishrot corruption scandal and the collapse of the SME Bank within the last few years. As with both those scandals, we live in denial until it’s too late.
The money’s gone and the corrupt have fled or are dodging culpability for as long as they can. Occasionally, they might be held to account. There’s no reason to believe the green hydrogen sector is immune to similar risks.
At present, Namibia’s green hydrogen projects face the following risk factors:
- A lack of transparency – as seen in the refusal to release key documents and agreements
- Opaque processes particularly concerning access to finance and land
- Inadequate community consultation
- Concerns over how certain companies and groups of individuals are selected to run projects
- The presence of Politically Exposed Persons (PEPs) and their proxies in company structures and licence arrangements
Renewable energy projects, including green hydrogen, should take heed of the lessons learned from anti-corruption efforts in the extractives sector.
The Extractive Industries Transparency Initiative (EITI), launched in 2003, aims to address issues of weak governance and widespread corruption by promoting greater transparency in the oil, gas, and mining sectors, while enhancing the accountability of governments and companies.
The principles of the EITI Standard should be applied to green hydrogen and other renewable projects.
In essence, this would mean publishing information relating to contract transparency, beneficial ownership, production and export data, tax revenues and payments, CSR payments, and social and environmental impacts.
Such reporting would be assessed for its veracity and appropriateness by multi-stakeholder oversight committees that include the government, the private sector and civil society.
Transgressions would lead to public warnings, suspensions, and ultimately in a project being halted. It is crucial that Namibia’s green hydrogen projects are perceived as being implemented responsibly. Only in this way will they gain the trust of the public.
Fortunately, a Green Hydrogen Standard has already been developed by the Swiss Based Green Hydrogen Organisation which aims to promote green hydrogen in collaboration with government, industry, and other stakeholders.
The Standard was only launched in 2022 but is already gaining ground.
The Standard requires companies to take a proactive approach to disclosures and sets expectations for reporting on licences, approvals, and financial transactions. It also expects companies to report on tax payments and subsidies, beneficial ownership, and community benefit arrangements.
While the Green Hydrogen Standard has picked up some industry support in Namibia, there are two key areas for improvement: raising its visibility and ensuring its comprehensive adoption.
Moving forward, it should serve as a benchmark for ensuring the legitimacy of green hydrogen projects through proper accreditation and certification.
Companies and projects in Namibia should already be aligning with the Standard to ensure future compliance. By overlooking the corruption risks tied to green hydrogen, we set ourselves up for failure.
Corruption isn’t a secondary concern – it poses a direct commercial risk, as it threatens the viability of both projects and businesses. If corruption takes root, leaving communities marginalised and benefits not shared equitably, these projects are bound to the founder. The sooner we recognise that GH projects cannot thrive on hype alone, but require strong governance frameworks, the better their chances for success.
Graham Hopwood is the Executive Director of the Institute for Public Policy Research (IPPR). This article was first published in the Green Hydrogen Monitor
