South Africa: 37mn USD fund boosts green hydrogen

The SA-H2 fund, supported by international partnerships and local institutional backing, mobilises 37 million USD to develop export-oriented green hydrogen from South Africa, with an initial concrete project announced.

Share:

South Africa is taking a new step in developing its green hydrogen sector with the launch of the SA-H2 fund. Funded with 37 million USD jointly contributed by the Public Investment Corporation (PIC), the Industrial Development Corporation (IDC), and the Development Bank of Southern Africa (DBSA), the fund aims to accelerate the emergence of a local green hydrogen industry oriented toward exports.

Structured international partnerships

Managed by Climate Fund Managers and Invest International, SA-H2 results from an international partnership involving South African public stakeholders and international private investors. On June 12, the fund announced its first investment of 20 million USD in Hive Coega, an industrial project located in the Eastern Cape province. The plant aims to annually produce 1 million tonnes of green ammonia, derived from green hydrogen, with commercial operations expected to begin in 2029.

Structured financing relies on a blended finance model combining public and private resources. Lebogang Seperepere, Acting Executive Director of the Project Preparation division at DBSA, stated: “Our investment in SA-H2 reflects DBSA’s mission to advance a just energy transition by developing infrastructure that promotes sustainable and inclusive growth. This fund’s blended finance model enables us to mobilise our capital to catalyse large-scale private sector investment.”

National strategic framework

The creation of SA-H2 is part of a broader strategy initiated during a June 2023 meeting between South African, Dutch, and Danish leaders. At that time, a blended finance platform capable of mobilising up to 1 billion USD was announced. The fund also benefits from the involvement of notable private investors, including the South African group Sanlam.

The South African government actively supports the development of a competitive and structured green hydrogen sector, considered essential for decarbonisation and for positioning the country on the global energy market. Authorities rely on the country’s natural resources, including intense sunlight and steady winds, to produce green hydrogen at competitive costs.

Tangible industrial development

The Hive Coega project concretely illustrates the industrial momentum fostered by SA-H2. This industrial facility aims to export green ammonia, a hydrogen derivative, to promising international markets. With its announced capacity of 1 million tonnes per year, Hive Coega positions itself as a potential benchmark for South Africa’s emerging green hydrogen sector.

Planned investments indicate a clear intention to establish a complete value chain, from renewable hydrogen production to industrial transformation. This industrial structuring aligns with strategic guidelines defined by South African authorities, supported by encouraging regulations designed to attract more international capital to this promising sector.

A 5,500-horsepower harbour vessel was bunkered with green ammonia at the Dalian terminal, marking the creation of a full value chain for this fuel and a technical milestone for the maritime sector.
Air Liquide begins construction of the ELYgator electrolyser in Rotterdam, a 200 MW project, supported by the Dutch government and an investment exceeding €500 mn.
A pilot project in Germany aims to produce green hydrogen at sea directly from untreated seawater on offshore wind farms, using marine bacteria and robust materials.
BP withdraws from the Australian Renewable Energy Hub, a major renewable hydrogen and ammonia project in the Pilbara region, marking a new stage for energy investments in Australia.
Next Hydrogen raises CAD1.5mn from its management and a commercial lender to strengthen its cash flow and retain teams, while maintaining its review of financial and strategic solutions.
The first European citizen funding campaign dedicated to green hydrogen enabled Lhyfe to collect €2.5mn from nearly 1,200 investors, strengthening the development of new sites in France and Germany.
In the face of renewable energy intermittency, Power-to-Hydrogen-to-Power (PtP) technology could revolutionize energy storage. However, its adoption still depends on cost reduction and efficiency improvements.
South Korean company YPP and Kazakh Invest have signed a framework agreement for the development of a green hydrogen production project in Kazakhstan, with investments potentially reaching $3.1 billion.
The Dutch government has granted major funding to HyCC for its H2eron electrolysis project, aimed at producing renewable hydrogen in the Delfzijl industrial zone.
ACWA Power has signed several agreements with European partners to develop a green energy export chain between Saudi Arabia and Europe, as part of the India-Middle East-Europe Economic Corridor project.
Manufacturer Stellantis halts production of its hydrogen-powered commercial vehicles, citing a lack of commercial prospects and an insufficient market, according to a statement released by the automotive group.
Malaysia reaches a decisive milestone in its energy roadmap with the launch of a hybrid floating hydro-solar project and the first large-scale green hydrogen hub in the state of Terengganu.
Hynamics UK and Hy24 have signed an exclusive agreement to develop the Fawley Green Hydrogen project, backed by the UK HAR2 scheme, to supply green hydrogen to ExxonMobil's petrochemical complex.
China has approved the construction of a strategic pipeline to transport green hydrogen from Inner Mongolia to Beijing, facilitating supply to industrial zones around the capital and boosting a rapidly expanding energy economy.
The European Commission introduces a greenhouse gas emissions methodology for low-carbon hydrogen, establishing a long-awaited regulatory framework for the sector and paving the way for new industrial investments.
French company Lhyfe has carried out its first successful green hydrogen combustion tests in Spain, delivering three tonnes over three weeks to the Valencian ceramic industry, opening a new potential alternative to industrial fossil natural gas.
Envision announces the official commissioning of the world's largest green hydrogen and ammonia plant in China, powered by an autonomous renewable energy system and entirely AI-driven, with exports planned from late 2025.
Sumitomo Corporation announces a strategic investment in Independence Hydrogen aimed at developing new decentralized hydrogen production and distribution projects in the United States, targeting industrial, logistics and critical infrastructure sectors.
80 Mile announces that it has increased its stake in Hydrogen Valley to 49% and signed a memorandum of understanding with Tecnoparco for the supply of 40,000 tonnes of biofuel per year, aiming to reduce palm oil dependency.
The Hive Coega project, South Africa’s most ambitious green ammonia initiative, enters its operational phase with the release of tenders for essential infrastructure, marking a major step forward for the country in renewable energy production.