A blended finance fund supporting green hydrogen and industrial decarbonisation projects in Southern Africa has secured R3 billion in commitments at its first close.
The SA-H2 Fund, also known as Climate Investor Three South Africa, is targeting a final fund size of R12 billion by mid-2028.
SA-H2 has signed development funding agreements with Green Efuels Producers for a proposed wastewater-to-green-methanol plant in Gauteng and with the Hive Hydrogen Coega Green Ammonia Project.
The fund will invest in green hydrogen production, derivatives such as green ammonia and green methanol and projects to decarbonise industries including steel, fertiliser, e-fuels and chemicals, according to Climate Fund Managers.
The blended finance structure comprises a development tranche providing early-stage risk capital and technical assistance to prepare projects for final investment decisions and equity tranches intended to finance projects from financial close into construction.
Commitments to the development tranche were secured from Invest International, the European Commission through its Global Gateway strategy and the Industrial Development Corporation.
The equity tranches received commitments from the Public Investment Corporation on behalf of the Government Employees Pension Fund, Sanlam Life, Invest International and the European Commission. The Development Bank of Southern Africa is also supporting the fund.
“Through this layered capital structure, we can deploy capital more effectively, de-risk early-stage development and help mobilise institutional investment at scale, supporting investment-ready projects and long-term value creation in the energy transition,” Invest International Chief Investment Officer Jeroen Plag said.
“Through SA-H2, we are developing a pipeline of commercially viable projects that will help decarbonise industry, drive long-term economic growth and support a Just Energy Transition,” SA-H2 Fund Managers CEO Mphokolo Makara said.
