In an unprecedented move, the Netherlands and Denmark have committed to establishing a $1 billion green hydrogen fund for South African projects, revealed the Development Bank of Southern Africa’s CEO. Reported by Bloomberg, this initiative is South Africa’s first fund of this kind and showcases the nation’s determination to transition away from coal reliance.
As well as contributions from Denmark and the Netherlands, the green hydrogen fund will benefit from investments by local state finance institutions, namely the Development Bank of Southern Africa (DBSA) and the Industrial Development Corporation of South Africa Ltd. Additionally, Climate Fund Managers BV, a Hague-based organization, and Sanlam Ltd., will participate in the funding initiative, according to Boitumelo Mosako in a recent interview in Pretoria.
South Africa has been positioned as a potential significant producer of green fuel, thanks to its abundant wind and solar resources and robust industrial capacity. Green hydrogen, which is likely to supersede natural gas eventually, could indeed be the future of the country’s energy landscape.
“This is a first and others will follow,” Mosako expressed confidently, further detailing plans for a blended finance facility designed to attract more private-sector investment into the industry.
South Africa’s decision to implement this fund aligns with their $8.5 billion climate finance pact with some of the world’s wealthiest countries. Their mission? Transition away from coal utilization.
Earlier this month, reports emerged of Denmark and the Netherlands discussing participation in the Just Energy Transition Partnership. The alliance currently includes South Africa, the UK, US, France, Germany, and the European Union.
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