GOVERNANCE & FUNDING
Very few water projects are bankable A water lobbyist and originator for water deals, Redeem Ngadze from Nedbank, talks to Water&Sanitation Africa about the funding of water projects. What is your role in Nedbank? RN As part of a team, I help to create an environment that is conducive to the rollout of water projects. A few years ago, while all eyes were focused on energy issues, the Nedbank board had the foresight to prioritise water as a key factor to achieve sustainable economic development. As a result, I was appointed to interact with stakeholders in both the public and private sector in the water industry and create a solutions-oriented approach for the bank. There is a need to coordinate roles and expectations between private and public stakeholders, but there is a universal agreement that we are facing a water crisis requiring that we collaborate to ensure survival. How do you make water a more attractive investment opportunity? There is no simple answer to this. Water is not just a resource; it’s central to human dignity and is a basic human right. It’s also an economic enabler. This makes the financing of water projects terribly important, but also very complicated. Legislation, politics and funding need to
be synchronised and work in tandem. The water sector is largely comprised of municipal-owned and -run infrastructure such as treatment plants; however, not all municipalities have a credit rating or palatable risk profile that is sufficient to sustain a loan in the eyes of commercial banks. There are, however, examples where financial resources were easily made available for water treatment plants such as Siza and Mbombela (both in which Nedbank is invested) thanks to financial structuring.
Redeem Ngadze, senior client coverage banker: Power and Infrastructure at Nedbank Corporate and Investment Banking
How do you make water projects bankable? There is more than enough money to finance water projects, but very few water projects are currently prepared to bankability. Projects are seldom sufficiently developed to meet funding requirements. Each project presents its own circumstances, which inform how bankability can be achieved for that particular project. There certainly is not a ‘one size fits all’ approach. Some of the factors to be considered M AY / J U NE 2021
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