CFM Launches €150m Energy Transition and Green Hydrogen Fund

• The fund will focus on producing green hydrogen and developing infrastructure in southern Africa, particularly Namibia and South Africa.
• The motive is to help emerging markets become global green hydrogen hubs.

Climate Fund Managers (CFM), a climate-resilient solution provider across Africa, Asia and Latin America, has launched a new investment fund, Climate Investor Three (CI3), to back energy transition projects in the southern Africa region.

The fund predominantly focuses on green hydrogen projects in emerging markets like South Africa and Namibia.

What is green hydrogen?

Green hydrogen is produced when water is split into hydrogen and oxygen using power from solar or wind. The hydrogen produced using this method is clean because no emissions are generated. Green hydrogen plays a larger role in reducing emissions in hard-to-abate sectors like heavy transport, aviation, steel, and chemicals.

READ MORE: Hysata and ACWA Partner to Expand Green Hydrogen in Saudi Arabia

How does CI3 work?

CI3 has a blended finance model, combining public and private money into one. This approach makes investing in green hydrogen projects less risky for private investors. The fund has two main parts: 1) development tranche, where early-stage financial support is given to transform project ideas into realistic business plans. Here, public money is used to cover higher risks. 2) equity tranche, which attracts private investors by offering lower-risk investment opportunities once projects are more developed.

CI3 will support building renewable energy plants, electrolysis facilities for producing hydrogen, and infrastructure for storing and transporting hydrogen.

The fund will focus on South Africa and Namibia, where abundant sunshine and wind create favourable conditions to produce green hydrogen at competitive prices. This could help them become top suppliers of clean energy in southern Africa and support the region's low-emission economic growth.

READ MORE: Kenya Receives US$100m for Climate Projects and Women-Led SMEs

Sebastiaan Surie, Head of Hydrogen at CFM said: “Green hydrogen is a cornerstone of the global energy transition, and emerging markets, with their vast natural capital, are poised to lead the charge. Through Climate Investor Three, we leverage our expertise in climate-resilient infrastructure to accelerate the energy transition, unlocking private sector investment for a large range of green hydrogen technologies and associated infrastructure, advancing global climate goals and promoting economic development and energy security where it is most needed.”

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Source: CFM