Climate Investor Three, through its affiliate SA-H2 Fund, has signed a Development Funding Agreement with Green eFuels Producers to support the creation of South Africa’s first green methanol production facility in Gauteng. The project will process around 90,000 tonnes of municipal sewage sludge annually from the Sebokeng Wastewater Treatment Works, using renewable energy sources including solar and wind power to operate a 10 MW electrolyser that produces green hydrogen. This will enable the production of approximately 14,300 tonnes of green methanol each year, while avoiding nearly 119,000 tonnes of CO₂ emissions. The facility is expected to generate up to 300 construction jobs and 60 permanent operational roles.
The SA-H2 Fund, a blended finance facility with a target size of USD 750 million, is focused on energy transition and the green hydrogen value chain in Southern Africa. It is managed by Climate Fund Managers in partnership with Invest International and supported by public and private investors, including the European Commission, South Africa’s Public Investment Corporation, IDC, DBSA, and Sanlam. For this project, the fund has committed up to USD 4 million in development funding for technical design, environmental and social assessments, permitting, and commercial structuring, with the option to invest up to USD 26 million in equity funding. Financial close is targeted for 2027, with operations expected to begin in 2029.
The project addresses the challenge of sewage sludge management by converting waste into green methanol, a sustainable alternative to conventional methanol produced from fossil fuels. Green methanol is increasingly recognized as a low-carbon fuel for hard-to-abate sectors such as shipping, aviation, and power generation. In addition to producing fuel, the facility will return up to 60,000 cubic metres of industrial-grade water annually to the local utility, reinforcing its circular waste-to-value model and supporting water security in the Vaal region.
Leaders from SA-H2 Fund and Green eFuels Producers emphasized the project’s role in advancing South Africa’s industrial base, creating jobs, and supporting a just transition. The European Commission also highlighted the initiative as part of the EU-South Africa Global Gateway Investment Package, underscoring its contribution to cleaner growth, skilled jobs, and strengthened energy security.
This project supports South Africa’s Hydrogen Society Roadmap and broader decarbonisation goals, laying the foundation for a Green Methanol Corridor across the country. It marks SA-H2 Fund’s second major investment in South Africa, following its support for Hive Hydrogen’s Coega green ammonia plant in 2025, and represents the first external institutional investment in Green eFuels Producers, positioning the company to scale green methanol infrastructure nationwide.
