By Wallace Mawire
Climate Fund Managers, a climate-focused blended finance investment manager, today announced the first close of SA-H2 Fund (SA-H2), also known as Climate Investor Three (CI3) South Africa, with ZAR 3.0 billion (~USD 182 million¹) commitments.
SA-H2 invests in large-scale energy transition projects across the green hydrogen value chain, including green hydrogen production, downstream derivatives such as green ammonia and green methanol, and the decarbonisation of hard-to-abate industries.
A blended finance facility, SA-H2 combines public and private capital in a single platform. Public capital is deployed strategically to balance risk, enabling institutional capital to participate. It comprises a Development Tranche, providing early-stage risk capital and technical assistance to prepare projects for final investment decision (FID) and blended Equity Tranches to progress from financial close to project construction.
Commitments to SA-H2’s Development Tranche were secured from fund anchors Invest International and the European Commission via its Global Gateway strategy, as well as the Industrial Development Corporation of South Africa (IDC). Commitments to SA-H2’s Equity Tranches were secured fromSouth Africa’s state-owned asset manager, the Public Investment Corporation (PIC) on behalf of the Government Employees Pension Fund (GEPF), South African financial services company Sanlam Life Insurance Limited (Sanlam Life), Invest International and the European Commission. The fund is also supported by the Development Bank of Southern Africa (DBSA).
The first close reflects growing investor confidence in green hydrogen and its derivatives as a solution for decarbonising hard-to-abate sectors, including steel, fertiliser, e-fuels and chemicals.
Andrew Johnstone, CEO of Climate Fund Managers,said: “As the energy transition progresses, industrial decarbonisation requires solutions beyond electrification, and 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.”
Jeroen Plag, CIO of Invest International, said:“Reaching first close of the SA-H2 Fund is a strong signal of investor confidence in the green hydrogen opportunity in Southern Africa. At Invest International, we strongly believe that unlocking this opportunity requires close collaboration between the public and private sectors. 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.”
European Commissioner for International Partnerships, Jozef Síkela, said: “This milestone sends a clear signal: Global Gateway is helping create the right conditions for private investors to enter fast-growing markets with high potential. In South Africa, it supports the transformation of the country’s renewable energy potential into lasting benefits for its citizens. Our cooperation with SA-H2 demonstrates this in practice. It supports job creation and industrial development in partner countries, while contributing to the decarbonisation of international industry.”
Lucky Pane, Head of Research and Innovation at the PIC, said: “Our investment in the SA-H2 Fund is in line with the Hydrogen Investment Strategy that we adopted as far back as 2022. The investment in hydrogen gives the PIC the ability to assist its clients in diversifying their energy needs and meeting their net zero targets. This also assists the PIC in decarbonising its portfolio. Furthermore, the PIC supports the United Nations’ Sustainable Development Goals. One of the key goals under SDG 7 is affordable and clean energy, which seeks to increase the proportion of renewable energy in the global energy mix. We believe that hydrogen can play a significant role in the realisation of that energy mix. This investment has been made possible by the Government Employees Pension Fund, who have given us the mandate to make investments that have positive impact and contribute to long term sustainability.”
Mlondolozi Mahlangeni, Chief Actuary & Chief Risk Officer of the Sanlam Group, said:“As a shareholder in Climate Fund Managers, Sanlam has been a committed partner in driving climate finance solutions across emerging markets. Having invested in both Climate Investor One and Climate Investor Two, we are proud to continue this successful collaboration with Sanlam Life as an anchor Tier 2 investor in Climate Investor Three via the SA-H2 Fund. This flagship vehicle will accelerate the development of green hydrogen projects that are essential for the decarbonisation of South Africa’s industrial sector, supporting a just energy transition, sustainable economic growth, and long-term value creation for our stakeholders and the country.”
Rian Coetzee, Divisional Executive, Industry Planning and Project Development at the Industrial Development Corporation, said:“This key milestone – reaching first close at ZAR 3 billion demonstrates the confidence that key partners as well as stakeholders have in theSA-H2 Fund. For us as the IDC, this development will augment our commitment to invest in large-scale energy transition projects spread across the green hydrogen value chain, including green hydrogen production, downstream derivatives such as green ammonia and green methanol, and the decarbonisation of hard-to-abate industries. This also aligns with our strategic focus on building industrial capacity in emerging sectors, advancing localisation, and unlocking South Africa’s potential to compete globally in the clean energy economy.”
Greg Fyfe, Chief Investment Officer at the Development Bank of Southern Africa, said:“DBSA is committed to investing in creating a green hydrogen economy through funding the development of infrastructure in the green hydrogen value chain through various funding instruments. This is a reflection of DBSA’s mission to advance a just energy transition by unlocking infrastructure that enables sustainable and inclusive growth. SA-H2’s blended finance model allows raising of capital in a way that catalyses private sector investment at scale. This is a strategic approach to drive development in a critical new sector while supporting South Africa’s long-term infrastructure goals.”
Mphokolo Makara, CEO of SA-H2 Fund Managers, said:“South Africa’s combination of world-class renewable resources, a strong industrial base and growing demand for low-carbon fuels positions it to play a leading role in the emerging green hydrogen economy. 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.”
To date, SA-H2 has signed development funding agreements with Green Efuels Producers, a first-of-its-kind wastewater-to-green-methanol plant in South Africa’s Gauteng Province, and the Hive Hydrogen Coega Green Ammonia Project, South Africa’s first large-scale green ammonia production plant.
This first close of ZAR 3 billion, enables SA-H2 to demonstrate traction and progress in the green hydrogen sector, supported by market activity, to achieve final close at the targeted total fund size of ZAR 12 billion by mid-2028.
The Fund builds on the track record of Climate Fund Managers’ Climate Investor One and Climate Investor Two equity funds, which have together mobilised over USD 2 billion for renewable energy, water, waste and oceans infrastructure in emerging markets. The manager has recently expanded into private credit through the GAIA Climate Loan Fund, which reached first close in 2025 and targets a final close of USD 1.48 billion in 2027.
