SUPPLY SECURIT Y & DEMAND-SIDE MANAGEMENT
The business As a non-profit organisation (NPO) dedicated to increased job creation and investment into green water technologies and services, GreenCape has created the 2021 Water Market Intelligence Report (MIR), that has identified investment opportunities in the municipal water market. Kirsten Kelly interviews two water sector analysts responsible for the 2021 MIR.
(Photo credit: Western Cape Department of Agriculture)
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reenCape’s 2021 MIR has identified the following investment opportunities in the municipal water market: • reducing non-revenue water (NRW) • beneficiation solutions for wastewater sludges • non-sewered sanitation systems (NSSS).
Have you seen any trends regarding the financing of water and sanitation projects?
RB In the past, infrastructure projects have been funded by government grants, and loans to municipalities with a good credit rating. Currently, many municipalities struggle to access finance at low interest rates for infrastructure projects that have a low capital cost. Big development finance institutions (DFIs) tend to fund projects or a programme of projects with a value of R1 billion or more. It is highly unlikely that a small municipality will need an infrastructure project of that size. National government is leading the way in creating new and interesting financing mechanisms to address this problem. The Infrastructure Fund is combining a number of bulk water infrastructure projects by packaging them together in one fund. This makes their combined value great enough to be of interest to funders that can offer low interest rates. They are encouraging a blended finance model that uses both public and private finance. GreenCape was involved in a provincial version of the Infrastructure
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Ashton Mpofu (AM), senior water sector analyst, GreenCape
Fund where the Western Cape Provincial Government and the French Development Bank partnered together and created a mechanism called the Sustainable Infrastructure Development and Financial Facility (Sidaff). Most of the small, creditworthy municipalities are in the Western Cape. Most of the projects that fall within the Western Cape Provincial Government’s priorities and can meet the UN Sustainable Development Goals that attract financing are water and sanitation projects. The next phase of Sidaff is to prepare these projects to bankability and attract additional finance through combining the projects into a higher-value programme of projects. AM A promising development in 2021 is that a third of the Department of Water and Sanitation’s (DWS’s) budget has been allocated towards community development for improving water and sanitation services throughout the country, including in informal settlements.
Rudi Botha (RB), senior water sector analyst, GreenCape
Are there any mechanisms in place to assist with the introduction of new technologies to municipalities?
AM Many technology suppliers simply do not have the capital to sponsor their own trials. There are a number of initiatives that support technology trials. The Viability and Validation of Innovations for Service Delivery programme is being implemented by the Department of Science and Innovation (DSI) – in partnership with the South African Local Government Association and the Department of Cooperative Governance and Traditional Affairs – with funding from the EU and National Treasury. The programme will help municipalities to pilot technologies and innovations that could assist in improving basic service delivery – namely water resource management, sanitation, waste management, as well as green and renewable energy solutions. We also have the Water Technologies Demonstration Programme, The Water Hub, as well as the Bremen Overseas
