Article from The Brief

The Government Institutions Pension Fund (GIPF) says it is keenly watching developments in the country’s lucrative oil and green hydrogen space and is waiting for possible investment opportunities.

Namibia is set to become one of Africa’s largest oil and green hydrogen gas producers after it recently discovered the natural resources. Several multinationals including Shell and Total Energies are already making huge investments in the country.

GIPF CEO David Nuyoma told The Brief that the pensions administrator was currently consulting widely with the relevant stakeholders and is looking forward to seeing at what phase will it be appropriate for the GIPF to come in, bearing the appetite and risks. 

“We have a developmental Investment Policy which guides us on what and which areas to invest in, such as the Infrastructure and Agricultural sector, including renewable energy. So, it’s under the renewable category that we consider investing in, although this is prone to due diligence analysis of all risks involved and the entire operations,” he said.

“Once there is a convincing case, obviously we are all in, as open minded as we are.”

GIPF is a statutory pension fund which provides guaranteed pension and related benefits to 98,623 civil servants, and employees of participating employers in Namibia and has an asset base of N$152 billion according to its latest financials. 

Nuyoma also noted that the state-owned pension fund was already invested in the renewable energy space through its unlisted managers, having pumped N$2.7 billion in the financial year ended 31 March 2022.

“We are in fact already involved in the production of renewable energy. Since the Electricity Control Board created legislations enabling independent power producers, through this policy the Fund has invested into the energy sector. And I am happy to say that these investments have enabled an additional 20% capacity of energy production in Namibia,” he said. 

“On that note, I am ecstatic to see that we are active. In terms of this policy [developmental investment policy] be it green hydrogen or oil; on our side we continue to embrace our appetite to see those kinds of economic activities that have a long lifespan. This is so, considering that pension funds are long term. Therefore, these are the kinds of projects we want to invest in, even though it is a new concept, we need to understand it.”

This comes as the government is upbeat about the country’s prospects of becoming a major player in oil and green energy industries.

Two oil majors, TotalEnergies and Shell, are currently carrying appraisals on oil discoveries off the coast of Namibia and have invested billions in their ongoing oil exploration activities, after the discovery of light oil in the Orange basin early 2022. And in collaboration with the National Petroleum Corporation of Namibia (NAMCOR) the giant companies in March, 2023 announced a third major discovery.

In the same vein, Namibia has committed to overcoming energy poverty through the green hydrogen initiatives, which according to its Green Hydrogen Strategy, is targeting to create a green fuels industry with a production capacity of 10-12 million tonnes per annum (Mtpa) of hydrogen equivalent (H2) by 2050.

The Project will be undertaken by Hyphen Hydrogen Energy, a company that will self-fund a N$200 billion feasibility and implementation of a green hydrogen project in the South. Government has a 24% equity option, thus GIPF as a state entity, has potential to invest.

Cobus Theyse
Author: Cobus Theyse

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