South Africa, the Netherlands and Denmark join forces for a $1 billion green hydrogen fund

The governments of South Africa, the Netherlands and Denmark have entered into a Heads of Agreement (HoA) with the intention to launch a new SA-H2 fund, an innovative blended finance fund that will facilitate and accelerate the development of a green hydrogen sector and circular economy in South Africa.

The fund is supported by Climate Fund Managers (CFM) and Invest International BV of the Netherlands, Sanlam Limited of South Africa (Sanlam), the Development Bank of Southern Africa (DBSA) and the Industrial Development Corporation of South Africa (IDC) in collaboration with others strategic partners.

The DBSA said the SA-H2 Fund initiative aims to secure $1 billion in funding to be raised directly in South Africa or indirectly through other channels to build large-scale green hydrogen infrastructure projects across South Africa.

Andrew Johnstone, CEO of CFM commented: “SA-H2, once established, will join the recently announced SDG Namibia One fund (which aims to secure US$1 billion in funding to be raised directly in Namibia or indirectly through other channels) as second regional mixed fund of its kind.” Financial fund to develop and finance green hydrogen projects.”

“Hydrogen replaces carbon-intensive fuels and reduces emissions and environmental pollution. It also enables efficient storage and use of energy from renewable sources, which can be more irregular, ensuring a reliable supply. Hydrogen power generation represents a clean, versatile and efficient energy source that can power the transition to a low-carbon economy and help end the climate crisis and ensure a more sustainable and prosperous future.”

Catherine Koffman, Group Leader: Project Preparation at DBSA explained: “We will create and leverage an innovative blended finance architecture and structuring to build an extensive pipeline of green hydrogen projects in South Africa. This will give private developers access to venture capital from an early stage of development through the full construction phase to operations. Additionally, this fund is a significant complement to national efforts to leverage our existing renewable energy infrastructure.”

“With a nationwide target of US$250 billion in green hydrogen investments by 2050, this sector is expected to increase the development impact of the renewable energy industry. It is an exciting development that will boost the economy, train new skills, create jobs, generate export revenue and facilitate the decarbonization of our economy and industry by accelerating the development of critical green hydrogen infrastructure.”

South Africa’s President Cyril Ramaphosa thanked the companies and institutions from the Netherlands, Denmark and South Africa for the investment announcements and partnerships, noting: “It is important for South Africa to develop green hydrogen projects that contribute to the export market while developing the local economy.”

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