Climate Fund Managers has announced the first close of its SA-H2 Fund, securing ZAR 3.0 billion (about USD 182 million) in commitments to invest in green hydrogen projects across Southern Africa.
The fund is described as a blended finance private equity vehicle focused on the green hydrogen value chain and the wider energy transition, the European Commission reported on Thursday.
Green hydrogen is produced using renewable electricity rather than fossil fuels, and is used as a lower-emissions fuel or feedstock in some industrial processes.
SA-H2 will invest in green hydrogen production and related products such as green ammonia and green methanol, as well as projects intended to cut emissions in “hard-to-abate” sectors such as steel, fertiliser, e-fuels and chemicals.
Commitments were secured from the European Commission via its Global Gateway strategy, Invest International, South Africa’s Public Investment Corporation on behalf of the Government Employees Pension Fund, Sanlam Life Insurance Limited, and the Industrial Development Corporation of South Africa.
The Development Bank of Southern Africa is also supporting the fund.
The fund structure includes a “Development Tranche” for early-stage risk capital and technical assistance to prepare projects ahead of a final investment decision, alongside equity tranches intended to support projects through financial close and construction.
Early projects and next target
Two development funding agreements have already been signed — one for Green Efuels Producers, described as a wastewater-to-green-methanol plant in Gauteng, and one for the Hive Hydrogen Coega Green Ammonia Project, described as South Africa’s first large-scale green ammonia production plant.
The ZAR 3.0 billion first close is intended to support progress towards a targeted total fund size of ZAR 12 billion by mid-2028.
European Commissioner for International Partnerships Jozef Síkela said the fund’s first close “sends a clear signal” about Global Gateway’s role in creating conditions for private investment.
