SA-H2 Fund (“SA-H2” also known as “CI3 South Africa”), managed by a partnership between leading climate finance investor Climate Fund Managers (“CFM”) and Dutch development financing institution, Invest International, has committed up to USD 20mn in development funding to complete the final stage of development of the Hive Hydrogen Coega Green Ammonia Project – South Africa’s first large-scale green ammonia production facility.

SA-H2 is a blended finance facility dedicated to accelerating South Africa’s energy transition and green hydrogen economy. The development funding will cover engineering, procurement and construction selection, front end engineering and design and will also be put toward completion of the advanced stage permitting and environmental and social impact assessments leading to offtake finalisation, and financial close preparation. The agreement also secures the SA-H2 Fund’s right to participate in construction funding for up to USD 200mn. Financial close is targeted for H2 2026, with commercial operations expected to begin in 2029.

The project is being developed by Hive Hydrogen South Africa, a joint venture between UK-based Hive Energy and South African renewable energy and investment company BuiltAfrica. Located in the Coega Special Economic Zone in Nelson Mandela Bay, Eastern Cape Province, the facility will integrate 3.6 GW of renewable energy generation (2.4 GW wind and 1.2 GW solar PV), a 1.2 GW electrolyser, desalination technology, air separation units, bulk ammonia storage and export infrastructure. Once operational, the plant is expected to produce 1mn tonnes of green ammonia per annum, making it the largest green ammonia production facility in South Africa.

The project is expected to avoid 2.6mn tCO₂e emissions annually by displacing fossil fuel-based (grey) ammonia. It will enable up to 20 GW of additional renewable energy plants to connect to the national grid, supporting broader clean energy integration across South Africa. It will also advance national development priorities by creating over 20,000 jobs during construction and operation, revitalising the Nelson Mandela Bay region – the metro with the lowest GDP per capita in South Africa as well as the towns and rural areas around the renewable energy plants in the Cape provinces – and fostering upskilling and skills development through an integrated community development programme.

Sebastiaan Surie, Head of New Ventures at CFM, said:

“This is a landmark first investment for SA-H2 and a defining project for the country’s green hydrogen economy. Hive’s project brings together scale, technical ambition and global relevance – and has the potential to position South Africa as a competitive exporter of low-carbon energy. By deploying public capital to absorb early-stage risk, our blended finance model enables private capital to invest in the construction of this pioneering green ammonia plant on terms aligned with their mandates, accelerating the global energy transition.”

Thulani Gcabashe, Executive Chairman of Hive Hydrogen South Africa, said:

“South Africa has the infrastructure, resources, engineering and industrial capabilities to become a global leader in green ammonia production. The Hive Coega Green Ammonia Project will not only accelerate the just energy transition but also revitalise the Eastern Cape economy through job creation, infrastructure investment and skills development. SA-H2’s investment strengthens our ability to deliver this Lighthouse project to world-class technical, operational, environmental, and social standards, while attracting long-term international investors and partners.”

Green ammonia is produced by combining green hydrogen – generated via electrolysis powered by renewable energy – with nitrogen extracted from the air. It serves as a zero-carbon fuel and chemical feedstock, enabling the global energy transition in hard-to-abate sectors such as fertiliser production, shipping, and power generation. By leveraging advanced technology alongside supportive South African energy regulations, the project will deliver efficient, subsidy-independent green ammonia at competitive prices and scale.

The project targets growing export demand in Asia and the European Union and has signed a comprehensive Memorandum of Cooperation with Japanese conglomerate ITOCHU Corporation for potential involvement as a strategic equity investor and off taker in relation to the project. The project also holds Strategic Integrated Project status granted by the South African Presidency, reflecting its national significance and enabling streamlined regulatory support and has been officially designated as South Africa’s Lighthouse Green Hydrogen Project.

SA-H2’s blended finance structure is designed to de-risk complex infrastructure and unlock private sector participation in climate-critical sectors. It includes a Development Tranche, which provides early-stage concessional capital and three blended Equity Tranches offering a tiered capital structure to enable participation by public and private investors including South Africa’s Public Investment Corporation. The fund builds on the success of CFM’s earlier blended finance facilities Climate Investor One and Climate Investor Two.