en.Wedoany.com Reported - Climate Investor Three, through its associated fund the SA-H2 Fund, has signed a development financing agreement with Green eFuels Producers (GeFP) to support the construction of a first-of-its-kind green methanol production facility in Gauteng Province, South Africa. The fund is a blended finance mechanism managed by Climate Fund Managers in partnership with Invest International of the Netherlands.
The facility will process approximately 90,000 tonnes of municipal sewage sludge annually from the Sebokeng Wastewater Treatment Works. The project will utilize 50 MW of on-site solar power, along with additional wind power procured through South Africa's transmission framework, to drive a 10 MW electrolyzer for green hydrogen production. This will enable the production of approximately 14,300 tonnes of green methanol per year, creating a circular waste-to-fuel solution. Based on projected annual output and preliminary life cycle assessment models, the project is expected to avoid approximately 118,950 tonnes of CO2 equivalent emissions annually once operational, while creating up to 300 construction jobs and 60 permanent operational positions.
The SA-H2 Fund is a blended finance fund with a target size of USD 750 million (approximately ZAR 12.7 billion), focused on the energy transition and green hydrogen value chain in Southern Africa. The fund is managed by Climate Fund Managers, with Invest International as a partner, and is supported by public and private sector investors including the European Commission (through the EU-South Africa Global Gateway Investment Package), Invest International, the Public Investment Corporation (PIC) of South Africa, the Industrial Development Corporation (IDC) of South Africa, the Development Bank of Southern Africa (DBSA), and the Sanlam Group.
The fund has committed up to USD 4 million (approximately ZAR 65.8 million) in development funding to support technical and engineering design, environmental and social impact assessments, permitting, and commercial structuring to advance the project to financial close. The agreement also secures the fund's right to participate in equity financing of up to USD 26 million (approximately ZAR 430 million). The project's financial close is targeted for the second half of 2027, with commercial operations expected to commence in 2029.
Sewage sludge generated by wastewater treatment facilities presents a sustainable management challenge. By converting waste into green methanol, this project diverts waste from traditional disposal pathways while creating a valuable fuel. Methanol is a widely used industrial chemical traditionally produced from fossil fuels; green methanol, made from renewable energy and sustainable carbon sources such as biomass waste and captured carbon dioxide, is emerging as a low-carbon alternative fuel for hard-to-abate sectors like shipping, power generation, and aviation.
In addition to producing sustainable fuel, the project will return approximately 50,000 to 60,000 cubic meters of industrial-grade water annually to the local water utility, reinforcing the circular waste-to-value model and supporting improved water security and resource resilience in the Vaal region. The project will also support a community development program focused on skills development and socio-economic upliftment in the area.
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