In a groundbreaking initiative, Industrial Promotion Services (IPS), the arm of the Aga Khan Fund for Economic Development dedicated to industrial and infrastructure development, has partnered with Westgass Internasjonal, a Norwegian green energy firm specializing in advancing the shift from fossil fuels to green hydrogen. Together, they’ve inked a joint development agreement (JDA) with the Government of Uganda to establish a green hydrogen-based fertilizer production facility. This collaboration harnesses Uganda’s abundant renewable energy resources for sustainable development.
The project, co-financed by Norfund, the Norwegian Investment Fund for developing countries, alongside grant funding from Norad, the Norwegian Agency for Development Cooperation, aims to annually produce 200,000 tons of fertilizer. Utilizing a local hydropower plant, the partners will supply 100 MW of renewable energy for electrolysis, generating green hydrogen. This hydrogen is then combined with nitrogen, produced via an air separation unit, to yield green ammonia. Subsequently, this is processed with dolomite or phosphates to create calcium ammonium nitrate (CAN) and various nitrogen, phosphorus, and potassium (NPK) fertilizers, in line with regional agricultural needs.
This endeavor marks a significant stride towards sustainability in an industry traditionally reliant on gas-based production, a major contributor to greenhouse gas emissions. By establishing local production of sustainable fertilizer, Uganda is poised to pioneer green technology adoption, fostering economic growth and enhancing local food production while curbing over 200,000 tons of CO2 emissions annually, as highlighted by Kinar Kent, CEO of Westgass.
Access to affordable fertilizer is crucial for bolstering income and food security, particularly in regions like Uganda where reliance on imported fertilizer poses challenges. Through Norad’s grant support and Norfund’s investment via a convertible loan, under the Frontier Facility targeting early-phase ventures, the project aims to not only create 300 direct jobs but also stimulate broader economic growth.
With Uganda’s fertilizer consumption currently below regional averages and only a fraction of agricultural households utilizing mineral fertilizers, the need for local production is paramount. Imported fertilizer costs are prohibitive, exacerbated by global geopolitical events like the Russia-Ukraine conflict. Kent emphasizes that a local production facility will not only reduce costs but also mitigate environmental impact, fostering sustainable agricultural practices.
The partnership combines the industrial prowess of Norwegian Westgass Internasjonal, specializing in green energy transition, with IPS’s six-decade experience in African industry and infrastructure development. In Uganda, classified as a “Least Developed Country” by the OECD, such collaboration represents a significant opportunity for progress. Despite the project’s nascent stage, the involvement of seasoned partners instills confidence in its potential for scalable impact, ultimately enhancing opportunities for sustainable development in the region, as underscored by Tellef Thorleifsson, CEO of Norfund.
