- SA H2 Fund reaches first close with R3 billion in commitments to support green hydrogen and energy transition projects across Southern Africa.
- Investors include the European Commission, Invest International, PIC, GEPF, Sanlam Life and IDC.
- Fund targets final close of R12 billion by mid 2028 to accelerate industrial decarbonisation.
Climate Fund Managers has reached the first close of its SA H2 Fund with R3 billion in commitments, marking a significant milestone for green hydrogen investment and the energy transition in Southern Africa.
Also known as Climate Investor Three South Africa, the blended finance private equity fund will invest in large scale projects across the green hydrogen value chain. This includes green hydrogen production, downstream products such as green ammonia and green methanol, and projects that help decarbonise emissions intensive industries.
The fund combines public and private capital within a single investment platform. Public sector funding is used to reduce project risk and attract institutional investors. A development tranche provides early stage risk capital and technical assistance to help projects reach final investment decision, while equity tranches support projects from financial close through to construction.
Development tranche commitments have been secured from Invest International, the European Commission through its Global Gateway strategy and the Industrial Development Corporation of South Africa. Equity commitments have come 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.
The first close reflects growing investor confidence in green hydrogen and its derivatives as practical solutions for reducing emissions in sectors that are difficult to decarbonise, including steel, fertiliser, electronic fuels and chemicals.
Andrew Johnstone, Chief Executive Officer of Climate Fund Managers, said industrial decarbonisation requires solutions beyond electrification as the energy transition gathers pace.
“Green hydrogen has a critical role to play. With Climate Investor Three, we are developing and scaling projects that enable industrial users to transition to low carbon alternatives. 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 for two flagship projects. These include Green Efuels Producers, which is developing South Africa’s first waste water to green methanol plant in Gauteng, and the Hive Hydrogen Coega Green Ammonia Project, the country’s first large scale green ammonia production facility.
Climate Fund Managers said the R3 billion first close provides momentum for the fund as it works towards a target final close of R12 billion by mid 2028.
The fund builds on the investment manager’s previous Climate Investor One and Climate Investor Two funds, which have mobilised more than US$2 billion for renewable energy, water, waste and ocean infrastructure projects across emerging markets. The company has also expanded into private credit through the GAIA Climate Loan Fund, which reached its first close in 2025 and is targeting a final close of US$1.48 billion in 2027.
Author: Bryan Groenendaal
