Climate Fund Managers, a blended finance investment manager focused on climate, on August 7, 2026, announced the first close of the SA-H2 Fund (SA-H2), which is also known as Climate Investor Three – CI3 South Africa, with ZAR 3.0 billion or USD 182 million in commitments.
It is well to be noted that SA-H2 fund from Climate Fund Managers invests in large-scale energy transition initiatives across the entire green hydrogen value chain, such as green hydrogen production and downstream derivatives like green ammonia, as well as green methanol and the decarbonization of hard-to-abate sectors.
Notably, SA-H2 is a blended finance facility that brings together public and private capital on a single platform. Strategic deployment of public capital to manage risk allows institutional capital participation. It consists of a Development Tranche offering early-stage risk capital and technical assistance for project preparation toward a final investment decision – FID and blended Equity Tranches for moving from a financial close to project construction.
Fund anchors of the Development Tranche of SA-H2 include Invest International, the European Commission as part of its Global Gateway strategy as well as the Industrial Development Corporation of South Africa – IDC. The Public Investment Corporation of South Africa, which is a state-owned asset manager, PIC, on behalf of the Government Employes Pension Fund – GEPF, South African financial services company Sanlam Life Insurance Limited – Sanlam Life, Invest International, and the European Commission committed to SA-H2’s Equity Tranches. The fund is also backed by the Development Bank of Southern Africa – DBSA.
The first close indicates increasing investor trust in green hydrogen and its derivatives as a means of decarbonizing difficult-to-abate sectors such as steel, fertilizer, and e-fuels, as well as chemicals.
The CEO of Climate Fund Managers, Andrew Johnstone, said that “As the energy transition progresses, industrial decarbonization 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, the CIO of Invest International, says that “reaching the 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 mobilize institutional investment at scale, supporting investment-ready projects and long-term value creation in the energy transition.”
Jozef Síkela, the European Commissioner for International Partnerships, remarks that “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 decarbonization of international industry.”
The Head of Research and Innovation at the PIC, Lucky Pane, says that “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 decarbonizing 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 realization 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 a positive impact and contribute to long-term sustainability.”
The Chief Actuary & Chief Risk Officer of the Sanlam Group, Mlondolozi Mahlangeni, says that “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 decarbonization 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.”
The Divisional Executive, Industry Planning and Project Development at the Industrial Development Corporation, Rian Coetzee, says that “This key milestone – reaching first close at ZAR 3 billion demonstrates the confidence that key partners as well as stakeholders have in the SA-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 decarbonization of hard-to-abate industries. This also aligns with our strategic focus on building industrial capacity in emerging sectors, advancing localization, and unlocking South Africa’s potential to compete globally in the clean energy economy.”
The Chief Investment Officer at the Development Bank of Southern Africa, Greg Fyfe, is of the opinion that “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 catalyzes 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, the CEO of SA-H2 Fund Managers, says that “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 decarbonize industry, drive long-term economic growth, and support a Just Energy Transition.”
SA-H2 has entered into development funding agreements with the Green Efuels Producers, which is a pioneering wastewater-to-green-methanol plant in Gauteng Province, and the Hive Hydrogen Coega Green Ammonia Project, which is the first massive green ammonia production plant in South Africa.
This first close of ZAR 3 billion allows SA-H2m fund from Climate Fund Managers to show traction and progress in the green hydrogen sector, backed by market activity, with the aim to accomplish a final close at the targeted total fund size of ZAR 12 billion by mid-2028.
Interestingly, the Fund builds on the proven track record of Climate Investor One and Climate Investor Two equity funds from Climate Fund Managers, which have together mobilized more than USD 2 billion for renewable energy, water, waste, and ocean infrastructure in developing markets. The manager recently expanded into private credit via the GAIA Climate Loan Fund, which first closed in 2025 and is targeting an eventual close of USD 1.48 billion in 2027.