A new investment fund has raised ZAR 3 billion, about $182 million, to finance green hydrogen projects in South Africa as investors look to build new industries around the country’s renewable energy resources.

The SA H2 Fund, also known as Climate Investor Three South Africa, reached its first close with backing from public institutions, pension funds and private investors.

The fund aims to eventually raise ZAR 12 billion ($650 million) by mid 2028. It will invest across the green hydrogen supply chain, including hydrogen production, green ammonia and green methanol, as well as projects aimed at cutting emissions from industries that are difficult to electrify.

Green hydrogen is produced using renewable electricity to split water into hydrogen and oxygen. It is being explored as a lower carbon alternative to fossil fuels in industries such as steel, fertiliser, chemicals and shipping.

The fund is being managed by Climate Fund Managers, a climate focused investment manager that uses public and private money to finance projects in emerging markets.

Its structure is designed to reduce some of the risks faced by private investors in early stage projects.

Public money will provide development capital and technical support to help projects reach a stage where they can secure final investment decisions. Equity funding will then help projects move from financial close into construction.

“The first close reflects confidence in Climate Fund Managers’ blended finance model and our track record of developing and scaling infrastructure projects in emerging markets into institutional grade assets,” said Andrew Johnstone, chief executive of Climate Fund Managers.

The European Commission is backing the fund through its Global Gateway strategy, which aims to mobilise investment in infrastructure and development projects outside the European Union.

Invest International, the Industrial Development Corporation of South Africa and the European Commission are among those backing the fund’s development tranche.

The equity tranches include investment from South Africa’s Public Investment Corporation, which manages money for the Government Employees Pension Fund, as well as Sanlam Life, Invest International and the European Commission.

The Development Bank of Southern Africa is also supporting the fund.

For South Africa, the investment comes as the country seeks to develop industries around renewable energy rather than relying mainly on exporting raw resources.

“South Africa’s combination of world class renewable resources, a strong industrial base and growing demand for low carbon fuels positions it to play a leading role in the emerging green hydrogen economy,” said Mphokolo Makara, chief executive of SA H2 Fund Managers.

The fund has already signed development funding agreements for two projects.

One is a wastewater to green methanol plant in Gauteng being developed by Green Efuels Producers. The other is the Hive Hydrogen Coega Green Ammonia Project, which is described by the fund as South Africa’s first large scale green ammonia production plant.

Green ammonia can be used in fertiliser production and is also being explored as a lower carbon fuel for shipping.

The European Commission sees the investment as part of a wider effort to attract private capital into emerging clean energy markets.

“This milestone sends a clear signal: Global Gateway is helping create the right conditions for private investors to enter fast growing markets with high potential,” said Jozef Síkela, the European commissioner for international partnerships.

He said the partnership would support job creation and industrial development while helping cut emissions from international industry.

The investment also reflects growing interest among African pension and development institutions in financing the energy transition.

South Africa’s Public Investment Corporation said its investment followed a hydrogen strategy adopted in 2022.

“Our investment in hydrogen gives the PIC the ability to assist its clients in diversifying their energy needs and meeting their net zero targets,” said Lucky Pane, the PIC’s head of research and innovation.

The fund is part of a wider expansion of climate finance in emerging markets.

Climate Fund Managers says its previous funds, Climate Investor One and Climate Investor Two, have together mobilised more than $2 billion for renewable energy, water, waste and ocean infrastructure.

The new fund will need to raise a further ZAR 9 billion to reach its target.

Its success will depend on whether projects can move beyond early stage development and attract enough capital to reach construction and commercial operation.

For South Africa, that could determine whether its renewable energy advantage translates into a larger industrial base built around hydrogen and its derivatives.

OPA News Agency

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The agreement, which spans 25 years, will ensure a steady supply of natural gas from the Calub field in the Ogaden Basin. The gas will be transported via a 108-kilometer pipeline to a fertilizer plant under development in Gode.

The fertilizer facility, estimated to cost $2.5 billion, is expected to produce up to 3 million tons of urea annually once operational, with completion targeted for 2029. The project is a joint venture between Dangote Group, which holds a 60% stake, and Ethiopian Investment Holdings, which owns the remaining 40%.

Ethiopia currently relies heavily on imported fertilizer to support its agricultural sector, bringing in millions of tons each year. The new plant is expected to significantly reduce this dependence by meeting domestic demand while also supplying neighboring markets across East Africa.

By integrating natural gas production with fertilizer manufacturing, the project establishes a full domestic value chain that could enhance productivity in agriculture and strengthen food security in the region. It also positions Ethiopia as a potential fertilizer export hub, helping stabilize supply and prices in a market often affected by global disruptions.

Beyond agriculture, the initiative is expected to drive broader economic benefits, including job creation, infrastructure development, and increased industrial capacity. It also reflects a growing trend of strategic partnerships between African industrial players and international energy firms, particularly from China.

The deal underscores Dangote Group’s continued expansion beyond Nigeria and its commitment to large-scale industrial projects across Africa. If successfully executed, the Ethiopia fertilizer plant could become one of the largest in the region, reinforcing the continent’s efforts to harness local resources for sustainable development.

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A newly executed supply agreement between carbon asset manager Econetix and SCB Environmental Markets signals that African‑origin credits are moving toward eligibility under the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), the framework overseen by the International Civil Aviation Organization to curb airline emissions growth.

The deal, involving credits sourced from projects in the Democratic Republic of the Congo, reflects a broader push to position African carbon assets within compliance markets rather than the voluntary offset space, where prices have been volatile and scrutiny over environmental integrity has intensified.

It is also part of Econetix’s goal to originate, certify and commercialise high‑integrity carbon credits that fully comply with the requirements of the aviation reduction scheme.

“This deal marks the starting point for Econetix as a leading CORSIA supplier. We have demonstrated our ability to originate, certify and transact high‑integrity carbon assets at the level and integrity the aviation market demands,” said Jakob Zenz, founder of Econetix.

CORSIA, which enters a more demanding phase later this decade, is expected to generate demand for hundreds of millions of tonnes of eligible credits through 2035.

While much of that supply has historically come from Latin America and parts of Asia, African governments and project developers are increasingly seeking to align with Article 6 mechanisms under the Paris Agreement to ensure credits meet international compliance standards.

Market participants say the shift requires navigating complex authorisation procedures, including corresponding adjustments to prevent double counting and registry labelling processes that satisfy both host governments and airline buyers.

“For African countries, this is less about one transaction and more about building institutional capacity,” said one market adviser involved in the deal. “Compliance markets require a different level of governance.”

Econetix, which is active in 16 African countries, has been working with national authorities to structure projects capable of meeting CORSIA eligibility requirements. SCB Environmental Markets will distribute the credits to aviation buyers through its global network.

“For Africa, this is not just about carbon credits — it is about long‑term investment, institutional capacity building and predictable revenue streams for governments and local communities,” said Paul Nimmerfall, founder of Econetix. “Through this and upcoming CORSIA transactions, millions of dollars will flow directly into African project countries.”

Econetix has developed expertise in navigating the regulatory and certification processes required to bring African carbon credits to full CORSIA eligibility, giving it an edge in the market. This includes Article 6 authorisations, corresponding adjustment procedures and registry labelling.

The successful execution of this transaction shows that Econetix can originate high‑integrity African carbon assets and structure and close large‑scale international CORSIA transactions. It positions the company among a small group of global players with technical expertise and a commercial track record in the multi‑billion‑dollar aviation carbon market.

Analysts say the emergence of compliance‑grade supply from Africa could reshape how carbon finance flows into the continent. Voluntary carbon markets have often been criticised for unpredictable pricing and limited fiscal transparency.

By contrast, CORSIA‑aligned transactions require host‑country approval, potentially creating more stable revenue streams for governments.

The Democratic Republic of the Congo, home to vast tropical forest reserves, has been positioning itself as a key player in Article 6 carbon markets, though implementation remains at an early stage across much of the continent.

If additional projects progress through certification, Africa could begin to occupy a more central role in the aviation carbon market, providing compliance‑ready supply at a time when airlines face tightening emissions obligations.

Whether that translates into sustained development gains will depend on governance, price stability and the integrity of credit issuance. For now, however, the transaction signals that African carbon assets are edging into one of the world’s most regulated offset markets.

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Total capital raised rose to $3.2 billion, up from $2.2 billion in 2024, yet the number of companies securing more than $100,000 remained largely unchanged.

Latest data from Africa The Big Deal, a research initiative that tracks start‑up investment across the continent, shows that while headline figures improved, the underlying structure of the market continued to consolidate around a small group of capital‑intensive companies.

Fintech retained its position as the continent’s largest sector, attracting $1.2 billion across 124 companies. But the breadth of activity continued to narrow. The top five fintech recipients — M‑Kopa, Wave, MNT‑Halan, Moniepoint and ValU — accounted for 52 per cent of all capital raised in the sector, down from 58 per cent in 2024 but still indicative of a market dominated by repeat mega‑raisers.

Debt played a growing role, with Wave’s $137 million facility and MNT‑Halan’s bond issuance helping lift the sector’s total despite fewer funded companies. Fintech also led on liquidity, contributing 19 of the year’s 49 exits, more than double the 22 recorded across all sectors in 2024.

The most dramatic shift occurred in energy, where funding nearly doubled to $857 million, returning to levels last seen in 2023. The sector has become structurally dependent on large debt packages: 71 per cent of all capital raised came through debt, with d.light’s $300 million facility and Sun King’s $156 million raise accounting for much of the total.

The top five companies absorbed 82 per cent of all energy funding, underscoring the extent of concentration. Analysts say the pattern reflects both investor caution and the capital‑intensive nature of distributed energy models.

Outside these two dominant sectors, activity was more diffuse. Logistics and transport raised $309 million across 63 companies, almost entirely through equity. Healthcare attracted $211 million, though nearly half of that came from a single $100 million round for LXE Hearing. Agriculture and food remained modest in capital terms at $122 million but continued to show broad participation, with 62 companies securing funding.

Climate tech — which cuts across energy, agriculture, logistics and other verticals — has emerged as one of the continent’s most resilient themes. Companies in the category raised $1.2 billion in 2025, representing 38 per cent of total funding, in line with 2023 levels and up from 34 per cent in 2024.

Participation has risen steadily, with climate‑linked ventures accounting for 29 per cent of all funded companies, compared with 18–20 per cent just three years earlier.

The data suggests a market bifurcating between a small cohort of capital‑intensive platforms able to secure large debt and equity rounds, and a broader base of early‑stage companies raising modest sums. While the headline rebound in 2025 signals renewed investor appetite, the underlying concentration raises questions about the depth and resilience of Africa’s venture ecosystem as it enters 2026.

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Finance Minister Ahmed Kouchouk said the planned issuance is expected in the second half of the 2025/26 fiscal year, which runs from July 2025 to June 2026. The move aims to attract a wider pool of international investors while easing reliance on short-term domestic borrowing and bilateral or multilateral financing.

The eurobond will form part of Egypt’s wider external funding programme, under which total international bond issuance is projected to be capped at around $4 billion in 2026. Authorities say the approach is designed to strike a balance between maintaining market access and managing debt sustainability.

Egypt last tapped international capital markets in January 2025, raising $2 billion through five- and eight-year bond tranches. The issue drew solid investor demand despite relatively high yields, reflecting cautious but improving sentiment toward the country’s debt.

The planned eurobond issuance comes as Egypt continues discussions with the International Monetary Fund under its Extended Fund Facility and Resilience and Sustainability Facility, while pursuing fiscal reforms aimed at stabilizing public finances and easing pressure on borrowing costs.

By diversifying funding instruments and extending maturities, the government hopes to improve debt management, lower refinancing risks and support macroeconomic stability amid ongoing economic adjustments.

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The institute is led by Anaïse Kanimba, daughter of Rwandan activist Paul Rusesabagina, whose story inspired the film Hotel Rwanda. Backed by the Human Rights Foundation and the Massachusetts Institute of Technology (MIT), the initiative aims to ensure that research and policy on Bitcoin reflect African realities rather than being shaped solely by global precedents.

Kanimba emphasized that many African governments often adopt digital currency policies modeled on international examples, overlooking local needs and challenges. The institute intends to address this gap by promoting Africa-driven research, leadership, and innovation in the Bitcoin space.

The move comes as Bitcoin adoption accelerates across Africa, driven by unstable currencies, inflation, and costly cross-border transactions. From community-level use in places like Nairobi’s Kibera settlement to institutional experiments in countries like Kenya, the continent has become an important testing ground for digital financial solutions.

By placing African experiences and perspectives at the center, the Africa Bitcoin Institute seeks to ensure that the continent is not just a passive recipient of digital finance trends but an active contributor to shaping them.

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According to fresh data from Africa: The Big Deal, the milestone was reached in August—weeks earlier than in comparable years—putting 2025 on course to outpace last year’s totals with less than $250 million still to go.

The crossing of the threshold carries symbolic weight in a market where confidence has been fragile since the global venture slowdown. 

“It is a good performance in itself, and encouraging if we compare to previous years,” the Africa-focused tracker noted, recalling that the $2 billion level was only hit in August during both 2021 and 2023. The early arrival of the mark this year suggests funding momentum is steadily returning.

The shift is being powered by a series of large-ticket deals and renewed participation from a wider pool of investors. Already in the first half of 2025, startups on the continent had secured more than $1 billion, with April standing out as one of the strongest months on record. In that single month, companies raised $343 million in transactions above $100,000—4.5 times more than April 2024.

South Africa and Egypt have provided much of the firepower. HearX, a South African healthtech company, drew $100 million through a merger with U.S.-based Eargo, marking the year’s first mega-deal. 

Payments platform Stitch added $55 million from existing backers to extend its end-to-end services, while Egypt’s Islamic fintech Bokra raised $59 million via a sukuk issuance—just a year after its pre-seed round.

These deals not only expanded balance sheets but also mended investor sentiment. Analysts say the pipeline of substantial rounds has been critical in pulling the ecosystem out of its post-pandemic stagnation. “This is the kind of momentum we like to see,” Africa: The Big Deal observed in an earlier note.

Exit activity has also injected confidence. Egyptian fintech ADVA was bought by UAE’s Maseera, Nigerian firm C-One Ventures acquired Bankly, and South Africa’s Peach Payments snapped up PayDunya to enter Francophone West Africa. Such moves highlight a maturing ecosystem where consolidation is beginning to shape regional strategies.

Beyond headline-grabbing transactions, the breadth of engagement has widened. By April, 225 unique investors had participated in African startup deals above $100,000, underscoring a diversification of capital sources. 

While U.S. and European funds remain influential, Middle Eastern and Asian players are increasingly active, creating alternative avenues of financing.

This diversification is viewed as a stabilising factor. It reduces dependency on a handful of traditional sources and aligns with governments’ efforts to deepen cross-border investment partnerships. 

For example, several Gulf funds have been scouting African fintech and renewable energy ventures, while Asian investors are expanding exposure to e-commerce and logistics.

Sectorally, fintech retains its dominance, but health tech, agritech, and clean energy are gaining traction. Angel investor groups had flagged these areas as growth drivers earlier this year, a prediction that appears to be materialising as more deals close in non-fintech verticals. 

The demographic shifts and digital adoption rates across the continent continue to underpin demand for solutions in these sectors.

The recovery in activity can be traced back to late 2024, when Nigerian payments firm Moniepoint closed a $110 million Series C round, becoming a unicorn with a valuation above $1 billion. South Africa’s Tyme Group followed in December with a $250 million Series D that raised its valuation to $1.5 billion. 

These back-to-back announcements served as inflection points, reasserting Africa’s relevance on the global startup map.

Momentum carried into 2025, as funding flows accelerated and the ecosystem reached the halfway mark of $1 billion by June. At that point, funding was already 43% higher than the same period in 2024. The progress since then reflects a consolidation of that trajectory rather than a one-off rebound.

For startups themselves, the return of investor appetite translates into sharper competition for capital but also larger potential payouts. Companies are being urged to demonstrate clearer paths to profitability as investors apply lessons from the global “funding winter.” Leaner operations and more disciplined scaling strategies are now part of the pitch deck expectations.

The early crossing of the $2 billion milestone sets the stage for a strong finish to 2025. If the pace holds, this year could be one of the continent’s best since the record-breaking highs of 2021. Analysts caution, however, that the funding landscape remains vulnerable to global economic shifts and investor sentiment swings.

Still, the numbers suggest that Africa’s startups have re-entered a growth phase, backed by deeper capital pools and widening sectoral interest. As new players arrive and established ones double down, the market appears to be building resilience that was absent during previous cycles.

The question now is less about whether funding will surpass last year’s totals, and more about how high it can climb in the months ahead.

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Digitel’s most visible leap came last year when it launched South Sudan’s first 5G trial, beating long-established players like MTN and Zain to market. 

The pilot, conducted in partnership with Chinese vendor ZTE, clocked download speeds of 1.2 Gbps in Juba’s Hai Neem district. 

Digitel believes that if there is a new technology out there that can help connect the people, it will try to bring that technology to South Sudan.

The company’s strategy hinges on local insight. Digitel offers phones with extended battery life to suit areas with limited electricity, and its data bundles are priced to match the spending power of a population where 85% remain offline. The firm is also working toward building its own towers and backhaul systems, aiming to reduce dependence on imported bandwidth and leased infrastructure.

South Sudan’s telecom market has long been dominated by MTN, which held over 60% of mobile subscriptions by the end of 2024. The South African operator added 1,556 4G sites across its African footprint last year, helping drive a 25% increase in mobile subscribers in South Sudan alone. 

But Digitel’s entry has begun to shift the competitive landscape. While full market data remains scarce, Digitel insiders say the company is adding users at a faster clip than its rivals, particularly in underserved urban corridors.

The expansion comes amid severe economic headwinds. The civil war in neighbouring Sudan has disrupted oil exports, South Sudan’s primary source of foreign currency. Inflation has surged, and the South Sudanese pound has weakened sharply against the dollar, making it harder to import telecom equipment. Insecurity in several states has delayed tower construction and forced operators to reroute logistics.

Still, telecoms have proven resilient in conflict zones. “Telecom companies should be quite familiar with war,” Nzioka Waita, Africa director at the Tony Blair Institute told The Economist. He pointed to Somalia’s thriving mobile sector and Ethiopia’s state-owned Ethio Telecom, which posted record revenues despite ongoing unrest.

Digitel’s growth is concentrated in Juba, Wau, and Malakal, where mobile broadband penetration is highest. But the company is also testing renewable-powered towers to push coverage into rural counties, where infrastructure is sparse and electricity unreliable. The firm’s long-term goal is to blanket the country with basic voice and data services, eventually enabling mobile money and cloud-based enterprise tools.

The startup’s ambitions have drawn cautious optimism from analysts. “Digitel is one of the first serious homegrown attempts to expand digital access in South Sudan,” said Martin Macharia, a technology analyst based in Nairobi. “They’re trying to build a digital ecosystem.”

The company’s leadership team includes Paul Onek, chief technology officer, and Wilson Kyumba, chief operations officer, both of whom have backgrounds in regional telecom deployments. Their focus has been on operational efficiency and local hiring, with Digitel recruiting engineers and technicians from South Sudanese universities and vocational programs.

Government support has been limited but not absent. The Ministry of Information has praised Digitel’s 5G trial as a “gateway to unprecedented opportunities,” and the Universal Service and Access Fund has called for rural deployment beyond Juba. However, regulatory clarity remains a challenge, and tax exemptions granted to Digitel have sparked debate over market fairness and fiscal sustainability.

Digitel is betting that local engagement will give it an edge, since foreign firms don’t always understand the nuances of that complex market.

On the wall behind Awuol desk hang portraits of Che Guevara and Tupac Shakur the Economist reported—figures he says represent defiance and vision. 

Whether Digitel can emulate their legacy in the telecom space remains to be seen. But in a country where connectivity is still a luxury, the startup’s rapid expansion is already reshaping expectations.

Second Eye Africa

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Seth Onyango, Second Eye Africa 

African startups have surged past expectations in the first half of 2025, raising over $1.4 billion in deals exceeding $100,000 — a striking rebound from the slower pace of 2024.

Buoyed by a robust $365 million haul in June alone, the continent’s venture capital activity is proving that last year’s funding freeze may well be behind it.

June’s milestone marks the strongest monthly performance in nearly a year and seals a promising H1 for Africa’s startup ecosystem.

Monthly funding has consistently exceeded $250 million on four occasions this year, with a monthly average of $237 million — up from $133 million in H1 2024 and $187 million across all of 2024.

This 78% year-over-year increase underscores the ecosystem’s accelerated momentum and places H1 2025 on par with H2 2024, despite a modest 1.5% dip.

Equity funding saw a healthy climb with $950 million raised, significantly outpacing the $531 million recorded in H1 2024.

Debt financing also saw a rebound, closing at $400 million, up 55% year-over-year, thanks largely to June’s explosive $227 million in debt deals, including $137 million raised by Wave, the highest monthly debt total in more than two years.

After a protracted chill in Africa’s venture capital (VC) activity, the continent’s startup scene had already begun showing strong signs of revival earlier in the year.

Mega deals in the period helped restore momentum. South African healthtech hearX merged with U.S.-based Eargo in a $100 million transaction, while Egyptian fintech Bokra issued a $59 million sukuk, and Stitch raised $55 million from existing investors.

Exits have also been active, with Egypt’s ADVA acquired by Maseera (UAE), Nigerian firm Bankly taken over by C-One Ventures, and Peach Payments of South Africa acquiring PayDunya to expand into Francophone West Africa.

From January to April, startups raised $803 million across 163 deals, a 43% rise over the same period last year. Notably, at least 225 unique investors participated in deals over $100,000, signalling broader engagement across the ecosystem.

The end of 2024 laid the groundwork for this surge. Unicorn announcements from Moniepoint and Tyme Group reignited interest, while more diverse capital sources—including Middle Eastern and Asian investors—began flowing into the continent’s tech sector.

With robust numbers and a diversified investor base, African startups appear poised for sustained growth across fintech, healthtech, agritech, renewables, and e-commerce. The freeze may be over—and this time, the warmth seems here to stay.

SEA

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