The future of Africa’s green energy landscape received an electrifying jolt on Tuesday, as South Africa’s ambitious hydrogen energy plans secured a billion-dollar boost.
The government has entered into a landmark agreement with the Netherlands and Denmark to raise $1bn in funds, thus cementing the pathway towards a greener, more sustainable future.
The financial injection, bolstered by support from the private sector, will be channeled into the construction of a “substantial pipeline of green hydrogen projects.” These initiatives aim to reduce South Africa’s dependence on fossil energy, heralding a significant stride towards a carbon-neutral future, as reported by BusinessLive.
This groundbreaking fund, christened SA-H2, was launched during a visit to South Africa by the Prime Ministers of the Netherlands and Denmark, Mark Rutte and Mette Frederiksen. The leaders concluded heads of agreement with President Cyril Ramaphosa, marking the planned launch of this green energy fund.
SA-H2 is designed as a blended finance fund, aiming to raise $1bn either directly within South Africa or indirectly via partnerships between private and public sector enterprises, as well as domestic and international financing institutions. The goal is to fast-track the development of extensive green hydrogen infrastructure across the country.
Backing this ambitious project is Climate Fund Managers (CFM), a joint venture between the Dutch development bank FMO and Sanlam InfraWorks, alongside Invest International B.V., a financing institution owned by the Dutch Ministry of Finance (51%) and FMO (49%). Further support comes from the Sanlam group, the Development Bank of Southern Africa (DBSA), the Industrial Development Corporation (IDC), and other strategic partners.
Andrew Johnstone, CEO of CFM, envisions green hydrogen as both the pathway and the solution to the global energy transition. “South Africa combines deep technical and capital markets with world-class conditions for generating renewable electricity through solar and wind power, key drivers in the production of green hydrogen,” he expressed.
He also highlighted that the SA-H2 initiative is well-aligned with the framework of the Just Energy Transition, a commitment to ensuring a fair and equitable shift from fossil fuels to renewable energy. Through this project, South Africa is poised to claim its rightful place as a world leader in the burgeoning green hydrogen sector.
The advent of the SA-H2 fund signals a momentous milestone in South Africa’s journey towards a cleaner and more sustainable energy landscape. This innovative move reaffirms the nation’s commitment to climate action, offering a blueprint for other African nations to follow.