South Africa green hydrogen fund hits first close

The SA-H2 Fund, managed by Cape Town- and Hague-based Climate Fund Managers, announced first close on 6 August. It is targeting a final size of ZAR 12 billion ($728 million) by mid-2028. The “SA” in the fund name stands for South Africa, and both of the projects the fund has backed so far are located in the country.

SA-H2 will invest across the green hydrogen value chain, including green hydrogen production, green ammonia, green methanol, and the decarbonisation of hard-to-abate industries such as fertilizer, steel and chemicals.

The fund blends public and private money. Public money goes in first to reduce risk, which then allows big institutional investors such as pension funds and insurers to commit. Backers of this first close include the European Commission through its Global Gateway strategy, Dutch state-backed Invest International, South Africa’s Public Investment Corporation on behalf of the Government Employees Pension Fund, Sanlam Life, and the Industrial Development Corporation of South Africa. The Development Bank of Southern Africa is also supporting the fund.

“As the energy transition progresses, industrial decarbonisation requires solutions beyond electrification, and green hydrogen has a critical role to play,” said Andrew Johnstone, chief executive of Climate Fund Managers. “This first close reflects confidence in Climate Fund Managers’ blended finance model and our track record of developing and scaling infrastructure projects in emerging markets into institutional-grade assets.”

SA-H2 has already signed development funding agreements with two South African projects: Green eFuels Producers, a wastewater-to-green-methanol plant in Gauteng Province, and the Hive Hydrogen Coega Green Ammonia Project, described as South Africa’s first large-scale green ammonia production plant. South Africa’s strong solar and wind resources, combined with export infrastructure at Coega, have made it one of the more closely watched green ammonia locations globally.

SA-H2 is one of several country funds under Climate Fund Managers’ Climate Investor Three platform, which also includes a separate green hydrogen fund for Namibia (SDG Namibia One). The manager’s earlier Climate Investor One and Climate Investor Two funds have, it says, together mobilised more than $2 billion for renewable energy, water, waste and ocean infrastructure in emerging markets.