Namibia is closing in on the development of $10 billion green hydrogen project that will export the fuel to Europe once complete, after the government has agreed a deal with Hyphen Hydrogen Energy, whose shareholders include German renewable energy company Enertrag. Hyphen was announced as the preferred bidder in 2021 for the project in the Namib Desert’s Tsau //Khaeb National Park. Government officials said the feasibility and implementation agreement will be officially signed on Friday for the project, in a huge deal that costs as much as the country’s gross domestic product.

“On Friday… we kick-start a process that has the potential to transform the lives of many in our country, the region and indeed the world,” Namibia’s President Geingob said in a statement.

The plant, after all of its phases are completed, will eventually produce 2 million tons of green ammonia per year for regional and global markets when it reaches full-scale output, which is anticipated before 2030.

Namibia, one of the world’s sunniest and most sparsely populated countries, wants to harness its potential for solar and wind energy to produce green hydrogen and position itself as a renewable energy hub in Africa.

Still, it remains to be seen whether the water-scarce country, relatively far away from key export markets, will be able to deliver a cost competitive product in an emerging global hydrogen sector.

The experts and analysts are also concerned over the lack of transparency on the deal and how Hyphen was selected.

Over the past year, Hyphen has signed memoranda of understanding with a number of potential European customers, to which it aims to supply about 750,000 tons of green ammonia annually.