The Netherlands and Denmark will help create a $1 billion green hydrogen fund for investment in South African projects, according to the chief executive officer of the Development Bank of Southern Africa.
The fund, a first for South Africa, will also receive contributions from the DBSA and the Industrial Development Corp. of South Africa Ltd., which are both state finance institutions, Sanlam Ltd., and the Hague-based Climate Fund Managers BV, Boitumelo Mosako said in an interview in Pretoria on Tuesday.
South Africa’s abundant wind and solar resources and industrial capacity have positioned it to potentially become a key producer of the green fuel, which is expected to ultimately replace natural gas.
“This is a first and others will follow,” Mosako said, adding that it would add a blended finance facility, intended to catalyze more private-sector investment in the industry.
The planned fund comes as South Africa prepares to implement an $8.5 billion climate finance pact with some of the world’s richest countries as it seeks to transition away from the use of coal.
Denmark and the Netherlands are in talks to join the so-called Just Energy Transition Partnership between South Africa, the UK, US, France, Germany and the European Union, three people familiar with the matter said earlier this month.
Mark Rutte, the Dutch prime minister, and Mette Frederiksen, the leader of Denmark, will address a conference in the South African capital later on Tuesday.
(Updates with other contributors to fund in second paragraph, CEO’s comment in fourth)
