Through a collaborative effort, the South African government – in partnership with the Netherlands and Denmark – have launched a U$1bn green hydrogen fund named SA-H2 to accelerate the use of the clean fuel to contribute towards South Africa’s decarbonization efforts.
The energy transition plan outlined by the country will see a green hydrogen ecosystem and export hub being setup and established using only renewable energy sources. The country seeks to use the sustainable fuel it produces within the aviation, green steel and transport industries among others, but Cyril Ramaphosa, South Africa’s president, claims this will cost approximately 319bn rand (U$17.57bn).
The recently announced SA-H2 fund will be run by Climate Fund Managers – a JV formed by FMO, a Dutch development bank, and Sanlam, a South African insurer – which aim to support the country’s green hydrogen sector.
“The SA-H2 Fund initiative will aim to secure U$1bn in funding, to be raised directly in South Africa or indirectly via other channels,” said a Climate Fund Managers spokesperson. At present, South Africa relies on 15 coal-fired power plants for electricity, resulting in the country being the 14th largest producer of carbon dioxide globally. Furthermore, according to the Boston Consultancy Group, South Africa would require 6-7GW of renewable capacity per year for the next 20 years to support a green hydrogen industry. Since 2011, the country has only managed to set up 6GW.