Climate Fund Managers secures $182 million first close for South Africa's SA-H2 Fund
Climate Fund Managers, a climate-focused blended finance investment manager, has reached the first close of its SA-H2 Fund, also known as Climate Investor Three (CI3) South Africa, with $182 million in commitments to support large-scale energy transition projects across the green hydrogen value chain.
The fund will invest in green hydrogen production, downstream derivatives including green ammonia and green methanol, and projects focused on decarbonising hard-to-abate industries such as steel, fertiliser, e-fuels and chemicals.
SA-H2 brings public and private capital together through a blended finance structure designed to reduce investment risk and attract institutional capital to projects at different stages of development. Its Development Tranche provides early-stage risk capital and technical assistance to prepare projects for final investment decision, while blended Equity Tranches provide financing from financial close through project construction.
Commitments to the Development Tranche have come from fund anchors Invest International and the European Commission through its Global Gateway strategy, alongside the Industrial Development Corporation of South Africa (IDC).
The Equity Tranches have attracted commitments from South 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; Invest International; and the European Commission. The Development Bank of Southern Africa (DBSA) is also supporting the fund.
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.”
The European Commission is positioning the fund within its Global Gateway strategy, which seeks to mobilise investment in infrastructure and sustainable development in partner countries.
Jozef Síkela, European Commissioner for International Partnerships, 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.”
SA-H2 has already signed development funding agreements with Green Efuels Producers, which is developing a wastewater-to-green-methanol plant in South Africa’s Gauteng Province, and the Hive Hydrogen Coega Green Ammonia Project, which is developing what is described as South Africa’s first large-scale green ammonia production plant.
The $182 million first close gives SA-H2 a platform to build its investment pipeline and demonstrate further activity in South Africa’s emerging green hydrogen sector. The fund is targeting a final size of $738.18 million by mid-2028.
SA-H2 builds on Climate Fund Managers’ experience with Climate Investor One and Climate Investor Two, two equity funds that have together mobilised more than $2 billion for renewable energy, water, waste and oceans infrastructure projects in emerging markets.
Climate Fund Managers has also expanded into private credit through the GAIA Climate Loan Fund, which reached its first close in 2025 and is targeting a final close of $1.48 billion in 2027.
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