WATER GOVERNANCE & FUNDING
though innovative funding
There is a dire need to invest in the water sector, but it is an extremely difficult space to finance. While the availability of funding is not an issue, the bankability of water projects and project pipelines need to be addressed to access that funding. By Kirsten Kelly
T
he Infrastructure Investment Programme for South Africa (IIPSA) is working to tackle these challenges. An EU-funded programme managed by the Development Bank Southern Africa (DBSA), IIPSA is designed to fast-track infrastructure delivery in municipalities by capacitating them through the development of long-term financing plans and project management assistance in preparing infrastructure projects for funding. IIPSA is tasked to mobilise debt financing from participating development finance institutions (DFIs) and promote blended financing options with the private sector. “Funding from
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IIPSA is used to raise additional capital than what was originally possible,” says Alwyn Coetzee, technical advisor, IIPSA. The €100 million (R1.7 billion) programme is directed towards the SADC region, of which €42 million (R714 million) has already been assigned to various infrastructure projects in the energy, roads, ICT and water sectors. Of the 22 projects currently being implemented, eight of these projects are in the water sector in South Africa. Selecting projects A list of priority infrastructure projects was compiled by the IIPSA steering committee, which has been established by National Treasury, involving key
government departments. The DBSA then appraises those projects, presents them back to the steering committee, concludes contracts and implements them. Within the water and sanitation sector, IIPSA reviews projects that improve water source management, enhance water management capacity, improve maintenance of water and wastewater infrastructure, and promote environmentally friendly technologies. “Before any work is done on projects, IIPSA engages at municipal level to verify if the project is indeed a priority,” says Coetzee. He adds that funding from IIPSA creates added value – it must be in
