The Public Investment Corporation (PIC), which is South Africa’s state-owned asset manager, has committed a significant amount of money—R656 million—to the SA-H2 Fund. This fund is a blended finance project focused on helping South Africa move faster towards using green hydrogen as a key part of its energy future. This pledge shows how the PIC is supporting projects that promote clean energy and fit well with South Africa’s goals for national growth and development.
The SA-H2 Fund started in June 2023, bringing together important players from different sectors. Besides the PIC, other partners include the Industrial Development Corporation (IDC), a government agency that helps develop industry in South Africa, and the Development Bank of Southern Africa (DBSA), which funds important infrastructure projects across the country. The fund also includes Climate Fund Managers (CFM), an investment company that focuses on climate change solutions, Invest International, a Dutch government agency that supports global investments, and Sanlam, a big financial services company in South Africa.
Together, these partners want to raise about $1 billion. This money will be used to support big green hydrogen projects across South Africa. The country has a lot of renewable energy resources like solar and wind, which can be used to produce green hydrogen. This makes South Africa well-positioned to become a major player in the global green hydrogen market, especially since the country can also export hydrogen to other parts of the world.
Green hydrogen is made by using clean energy sources such as solar and wind to split water into hydrogen and oxygen. It is seen as a clean and sustainable alternative to fossil fuels, which cause pollution and climate change. Green hydrogen is especially important for industries that are hard to decarbonize, like heavy manufacturing, shipping, and transportation. Because these sectors produce a lot of pollution and are difficult to change, green hydrogen offers a way to reduce emissions while still supporting economic growth.
The SA-H2 Fund is expected to have a big impact on South Africa’s economy and society. It will help create new jobs by developing new industries and training workers with the right skills. It will also lead to the building of important infrastructure needed to produce, store, and distribute hydrogen. South Africa could become a key exporter of green hydrogen, opening new markets and earning valuable foreign exchange. On the environmental side, the projects supported by the fund will help lower the country’s carbon emissions and support the transition to a cleaner, low-carbon economy.
The PIC’s R656 million commitment to the SA-H2 Fund is part of a wider effort by South African institutions to support sustainable energy and infrastructure projects. The IDC and DBSA have also contributed to the fund, showing a joint commitment by public agencies to invest in the country’s green energy future. Climate Fund Managers and Invest International bring expertise and funding from abroad, helping to grow the fund’s reach and impact.
This green hydrogen initiative aligns with South Africa’s broader goals to reduce greenhouse gas emissions and create a more sustainable energy system. It also supports economic transformation by fostering new industries that can generate jobs and contribute to growth. The projects financed by the SA-H2 Fund will benefit communities by offering new opportunities and improving the environment.
While green hydrogen is still a relatively new industry, South Africa’s abundant renewable energy resources and strategic location give it an advantage over many other countries. With the right investments and policies, the country can become a leading producer and exporter of green hydrogen. The success of the SA-H2 Fund could also inspire similar initiatives in other African countries, helping to promote green energy across the continent.
The collaboration between South African institutions and international partners shows the importance of working together to address global challenges like climate change. By supporting the SA-H2 Fund, the PIC and its partners are not only investing in profitable projects but also contributing to a cleaner, safer planet.
In conclusion, the PIC’s investment in the SA-H2 Fund is a clear step towards a green and sustainable future for South Africa. It highlights the growing focus on renewable energy and clean technology in the country. Through this fund, South Africa aims to develop its green hydrogen sector, create jobs, reduce emissions, and position itself as a global player in this emerging market. The commitment from both local and international partners shows confidence in the potential of green hydrogen to drive economic growth and environmental sustainability.
