SA-H2 green hydrogen fund reaches R3 billion first close for Southern Africa
Climate Fund Managers closed R3 billion ($182m) for its SA-H2 green hydrogen fund, backed by the EU, South Africa’s PIC, Sanlam and the IDC.
Photo by abdo alshreef on Pexels
Climate Fund Managers announced the first close of its SA-H2 Fund, also known as Climate Investor Three South Africa, at R3 billion (about $182 million), the firm said on August 6, 2026. The blended finance vehicle targets the green hydrogen value chain across Southern Africa, including green hydrogen production, downstream derivatives such as green ammonia and green methanol, and decarbonization of hard-to-abate industries including steel, fertilizer and chemicals. The fund is targeting a final close of R12 billion by mid-2028.
Who is backing the green hydrogen fund
The first close combined a development tranche and an equity tranche. Development-tranche anchors include Invest International, the European Commission through its Global Gateway strategy, and South Africa’s Industrial Development Corporation (IDC). Equity-tranche investors include the Public Investment Corporation (PIC), investing on behalf of South Africa’s Government Employees Pension Fund, alongside Sanlam Life Insurance, Invest International and the European Commission. The Development Bank of Southern Africa also supports the fund. Individual investor contribution amounts within the R3 billion total were not disclosed.
Andrew Johnstone, chief executive of Climate Fund Managers, said the first close “reflects confidence in Climate Fund Managers’ blended finance model and our track record of developing and scaling infrastructure projects in emerging markets.” Jozef Sikela, the European Commissioner for International Partnerships, said the milestone “sends a clear signal: Global Gateway is helping create the right conditions for private investors to enter fast-growing markets.” Lucky Pane, head of research and innovation at the PIC, said the investment “is in line with the Hydrogen Investment Strategy that we adopted as far back as 2022.”
| Metric | Figure |
|---|---|
| First close | R3 billion (~$182 million) |
| Target final close | R12 billion by mid-2028 |
| EU contribution to Climate Fund Managers’ funds to date | EUR 178 million, plus a EUR 205 million EFSD+ guarantee |
| Climate Fund Managers total assets under management | Over $2.8 billion |
Projects already in the pipeline
SA-H2 has already backed two projects in South Africa. Green Efuels Producers is developing a wastewater-to-green-methanol plant in Gauteng Province, which Climate Fund Managers describes as a first-of-its-kind facility. The Hive Hydrogen Coega Green Ammonia Project, at the Coega Special Economic Zone in the Eastern Cape, is intended to be South Africa’s first large-scale green ammonia production plant. Rian Coetzee, divisional executive for industry planning and project development at the IDC, said the first close “demonstrates the confidence that key partners… have in the SA-H2 Fund.” The fund’s structure mirrors approaches used elsewhere to de-risk early-stage clean energy infrastructure in emerging markets, an approach related to green hydrogen storage research such as the $1.4 million geoenergy chair at Canada’s INRS, though that program is focused on underground storage technology rather than fund financing.
More than ten African countries have published national green hydrogen strategies or joined continental initiatives such as the Africa Green Hydrogen Alliance, though most financing for those plans has so far originated outside the continent, with Europe the dominant funder. SA-H2’s blended structure, which pairs concessional development capital with commercial equity, is designed to attract institutional investors such as pension funds into projects that would otherwise carry too much risk for pure private capital.
Background
Climate Fund Managers was founded in 2015 as a joint venture between the Dutch development bank FMO and Sanlam InfraWorks, part of South Africa’s Sanlam Group, and is headquartered in The Hague with offices in Cape Town, Singapore and Bogota. The firm manages more than $2.8 billion in assets across more than 50 active projects, including its Climate Investor One and Climate Investor Two vehicles, which together have mobilized more than $2 billion for renewable energy, water, waste and ocean infrastructure in emerging markets, as well as the Climate Investor Three platform that SA-H2 forms part of. The European Union’s Global Gateway strategy, launched by the European Commission in December 2021, aims to mobilize up to EUR 300 billion in infrastructure investment worldwide and is, per Climate Fund Managers, the firm’s largest public investor. SA-H2’s first close extends that partnership into Southern Africa’s emerging green hydrogen sector, with the fund’s next milestone being progress toward its R12 billion target by mid-2028.
Sources: Engineering News; Climate Fund Managers
Featured image: photo by abdo alshreef on Pexels (free Pexels license).
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I specialize in sustainability education, curriculum co-creation, and early-stage project strategy. At WINSS, I craft articles on sustainability, transformative AI, and related topics. When I’m not writing, you’ll find me chasing the perfect sushi roll, exploring cities around the globe, or unwinding with my dog Puffy — the world’s most loyal sidekick.
