Climate Investor Three backs green methanol project in Gauteng using sewage sludge

Climate Investor Three, through its SA-H2 Fund, has signed a development funding agreement with Green eFuels Producers for a green methanol facility in Gauteng, South Africa. The project will process 90,000 tonnes of municipal sewage sludge annually, using renewable energy to produce 14,300 tonnes of green methanol, avoiding approximately 118,950 tonnes of CO₂ equivalent emissions per year.

Climate Investor Three, through its affiliate SA-H2 Fund, has signed a Development Funding Agreement with Green eFuels Producers to support the development of a first-of-its-kind green methanol production facility in Gauteng, South Africa, according to an official announcement. The facility will process approximately 90,000 tonnes of municipal sewage sludge per year sourced from the Sebokeng Wastewater Treatment Works. Renewable energy, including 50 MW of co-located solar power and additional wind power procured through South Africa's wheeling framework, will power a 10 MW electrolyser to produce green hydrogen, enabling approximately 14,300 tonnes of green methanol annually.

Climate Investor Three/SA-H2 Fund is a USD 750 million target blended finance facility managed by Climate Fund Managers in partnership with Invest International, focused on energy transition and the green hydrogen value chain in Southern Africa. The fund has committed up to USD 4 million in development funding to support technical and engineering design, environmental and social impact assessments, permitting, and commercial structuring, securing the fund's right to participate in equity funding for up to USD 26 million. Financial close is targeted for the second half of 2027, with commercial operations expected to begin in 2029.

This development matters for South Africa's circular economy and energy transition, where wastewater treatment facilities generate sewage sludge as a by-product, and managing this material sustainably is a growing challenge for utilities. By converting it into green methanol, the project diverts waste from conventional disposal pathways while creating a valuable low-carbon alternative fuel for shipping, power generation, and aviation. The project will return approximately 50,000-60,000 cubic metres of industrial-grade water annually to the local water utility, reinforcing its circular waste-to-value model and supporting improved water security in the Vaal region.

For the renewable fuels industry, the project is expected to avoid approximately 118,950 tonnes of CO₂ equivalent emissions per year and create up to 300 construction jobs and 60 permanent operational roles. Stakeholders including wastewater utilities, industrial methanol users, and local communities stand to benefit from the project, which also includes a Community Development Programme focused on skills development and socio-economic upliftment in the Vaal region.