South Africa, the Netherlands, and Denmark created a $1 billion green hydrogen fund to jumpstart an industry crucial to decarbonization.
South Africa’s energy transformation plan calls for a green hydrogen ecosystem and export hub.
The country plans to make the fuel for aviation, green steel, transport, and EU exports. President Cyril Ramaphosa estimates 319 billion rand ($17.57 billion).
SA-H2, managed by Climate Fund Managers, a joint venture between Dutch development bank FMO and South African insurer Sanlam, will promote South Africa’s green hydrogen sector.
“The SA-H2 Fund initiative will aim to secure US$1 billion in funding, to be raised directly in South Africa or indirectly via other channels,” Climate Fund Managers said.
To combat climate change, European nations want to help South Africa, the 14th largest carbon dioxide emitter, green its economy.
Fifteen old coal-fired power stations supply the nation with electricity.
In 2021, France, Germany, Britain, the US, and the EU gave South Africa $8.5 billion for its green transformation, including a green hydrogen sector.
Namibia established a similar green hydrogen fund last year.
Green hydrogen generation requires renewable energy, which is hard to roll out in South Africa.
According to Boston Consultancy Group, South Africa will need to build 6-7 gigawatts (GW) of renewable energy per year for the next two decades to support a green hydrogen sector, compared to the 6 GW it has managed since 2011.
